Planning Commission - Regular Meeting

to everyone. It's good to see everybody here tonight. We will open our budget meeting and I'm going to ask Commissioner Smith to leave us in our invocation and Commissioner Vorin in our pledge. Let us please stand.

Let's pray together. Lord God, thank you for the opportunity you give us to live in this community, this state. Father, we are blessed people. Even during rough times, we are very blessed people. Father, I pray tonight that you'll help us as uh we study the needs of this town. Help us as we try to uh figure out just how much of the taxpayers money that we have to spend and how and give us wisdom on how to best spend it. Pray for our department heads that they'll be given the resources they need to deliver the services our community that are needed. Father, we thank you for the folks that's worked so hard on this. People in our finance department, our management team, all of our department managers. We know they put in the work and we just praise you for that. Thank you for having good people who do good work to work with us on these things. Father, pray tonight you'll give us as elected officials wisdom as we try to make the right decisions for our town. And I pray when it's all finished tonight, Lord, that you'll be pleased with our work, that it will be a work of wisdom and hard work and compromising in the right places and putting priorities in the right places. I just pray for your hand to be on every bit of this tonight, Lord. God, we again we thank you for our community. Pray pray that you'll continue to bless View Arena. Watch over our public safety. People are out working this evening keeping us safe. God, we ask all these things in Jesus name. Amen.

Amen. Amen. Thank you. Please join me for the pledge of allegiance. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all.

Thank you very much. Again, I'd like to say good evening to everyone and I just want to make a couple of opening comments that one of the most serious acts of government is uh the budgetary process. And I think that um tonight what we are preparing is just is more than a document. It's a it's a statement of our priorities as a community, our vision, and our values when it comes to preparing the budget. The budgetary process is a collaborative process and it shows how we plan to invest in our community. One thing that we've done that puts us ahead of other communities, I think, is that we have a strategic plan that we've had a conversation about already. And every dollar aligned uh with the strategic plan gives us a good opportunity to understand how our decisions will make an impact on our community. key to the budgetary process is transparency and accountability and this budget I believe will present that. So as we continue to for discussion tonight I think it's important for us to consider those core values that are outlined in our strategic plan and to look for the alignment uh with that and and the proposed budget for for tonight. I also would like to to thank the town manager and to thank the staff for preparing the budget. I know it's not an easy process. It's very complicated process, but it's one of the things that if we are held ever to be held accountable by the public is how we we we manage uh taxpayer dollars. And I encourage each commissioner if you have

questions or comments, this is the time that we go through to uh ask questions in regards to what the proposed budget is. So at this time, I will defer to our town manager, manager Mitchell. Thank you, Mayor. It's on you. Thank you.

All right. Good evening, mayor. Good evening, board. It's good to be with you tonight. We've got uh fair amount of information to review this evening on both the general fund and the enterprise utility fund. And so I'm going to get right into it um with the goal of presenting this information as efficiently and effectively as possible while at the same time um reserving enough time to answer any questions that you may have about any specific matters. Um let me make sure before we get going I want to just take a moment so I don't forget to recognize uh some members of our our team. Of course, we have our department directors here uh this evening that have all given input uh to the development of a budget proposal for you this evening to discuss during the workshop. But I will specifically give recognition to uh Mark and Jim, both assistant managers who have been instrumental in the development of this plan. Mark Stevens, our finance director, and Nicole Stevens, our assistant finance director. Uh and most importantly, Katie Lum, our budget and fiscal strategy manager. Katie, I can't tell you how many countless hours and working uh in e on evenings and on weekends to help make sure that we are ready for you this evening. So, definitely want to say thank you to to all of you, Katie. Thank you to you and your time and effort on this uh this matter. Uh the mayor mentioned it and it is at the core of uh all of what I'm going to present to you tonight. Our strategic plan, advancing our strategic plan, um our vision statement and our mission statement I have here on the screen. I won't spend time necessarily re reviewing those. You are well familiar with those. But what I will do is take a moment just to remind you all of the core values in our strategic plan. effective government and governance, fiscal strength, safety and security, economic vitality, preserving character and identity and quality of life. And

these are the pillars of our uh our budget process. Specifically, preserving quality of life. This year's budget focuses on preserving Fquway Arena's quality of life during uncertain economic times. The proposed budget focuses on preserving quality of life, providing core services efficiently and effectively, maintaining assets the town has invested in, and delivering on the promises and commitments made in previous town budgets and five-year plans. The fiscal year 27 and 5-year plan budgets were developed with the uncertain economic conditions facing both the town and its citizens and taxpayers in mind. And the state legislation that proposes initiating u property tax growth measures or restrictions has added more economics uncertainty uh to the budget development process and five-year plan process and we'll spend more time talking about that as we go through this presentation this evening. We did get uh public feedback on our uh budget early in the process so that we could use that to help in the development and formation of this list. Talk FV was open for pre-budget development feedback from January 6 through February 6 17th of this year. This word cloud that's on the screen in front of you uh captures or represents the responses with the size of the words reflecting the frequency the word was used. And so you can see greenways is the largest word on here. That was the the most frequent word we saw in the pre-budget public feedback. Roads and sidewalks. No, no surprise there. Infrastructure and growth. Character. Mayor, you've spoken about this quite a bit uh since taking um the taking office as mayor. Uh maintaining our character

as a community. um public safety obviously uh uh in the front and forefront of the minds of our of our citizens that gave feedback uh as well as pollution and I think a big part of that is littering but also storm water pollution and you can see some of the other words that showed up frequently in our in our feedback. So, uh, the town continues to invest in, uh, a number of of ways that address the feedback that we received, uh, and in in fiscal year 27 proposed budget specifically in roads and sidewalks. This budget, uh, proposes, uh, to invest $1.2 million in street resurfacing funding and $450,000 in sidewalk uh, repair funding. We heard quite a bit in our uh citizen satisfaction survey as well as in the public feedback that uh focusing on sidewalk repair and sidewalk maintenance is fundamental. We have been previously budgeting about $200,000 a year for that, but we have ramped that up in fiscal year's 27 budget to $450,000. public safety. We're addressing uh the feedback we've received on public safety by uh adding additional police officers and firefighters annually. And with recreation activities and programming, there's a $28 million investment in parks and facilities over the five-year uh horizon. Um and so, you know, this uh that $28 million is independent of uh the Austin Ridge Greenway, which should be complete in fiscal year 27. But and it does address the priority of avoiding capping sports participation and expanding uh programming capacity. Hilltop Needmore Town Park improvement athletic fields and the armed services memorial project increases capacity for youth and adult sports. Fleming loop

turf and pickle ball court project maximizes capacity for youth and adult sports by turfing fields and adding capacity for outdoor pickle ball. The South Park Community Center renovation and expansion increases capacity for programming at the location and improves the user experience for those playing or attending uh athletic activities. And then of course, we've begun to direct our focus on parks in our downtown with the Piney Woods Park concept, creating an improved community gathering space to ensure events like the follow me to Fugquway Vina concert series can continue when the mixeduse development project occurs next door. Additionally, uh infrastructure and growth transportation projects will continue to be at the forefront of our focus. We now have seven transportation projects that we've recently completed. Three of those will be three additional of those will be completed in 2026. There will be three that will be completed in fiscal year 27. Five completed in fiscal year 28 and then there will be four left to complete uh with our program of work uh from at fiscal year 29 and beyond. Um and then character and growth. We're constantly focusing our attention on our land use plan to make sure that we are addressing appropriate uses and the land development ordinance that addresses uh the look in our community and the capital section will review the status of 17 transportation projects in more detail. It's been a long process of completing these projects. As you know, we've been partnering with uh our partners like DOT and that can sometimes be a slow process when you're utilizing federal funding. uh the planning department updates the land use plan in the LDO as necessary to ensure proper development type occurs in the right place with the right look to preserve the character of Fugquway Verina. I want to take just a brief moment to remind

you of the budget schedule. We started this process in November of last year with the budget kickoff materials to department heads. We presented the budget calendar to the board on January 5th. the public budget input on let's talk FV like I mentioned January 6 through February 17th we began focusing on revenue and expenses for the year end fiscal year 26 so that we had a good uh grasp of how our our current budget year outlook was going as well as beginning making some projections for fiscal year 27. The town board retreat as you all were there occurred on February 5th through February 7th. We did have a last day to input departmental operating budgets for our department directors on February 13th. Our pre-budget public hearing took place on Tuesday, February 17th, and the board was able to also give some additional input that night at that board meeting. And then we had a series of budget meetings uh with department directors, our team that I previously recognized, and uh management. Those all took place between March 2nd and March 27th. Here we are tonight uh for the draft budget review and work session. And then beyond that, I plan to present to you based on any feedback I received this evening a recommended balanced budget on May 4th at the May 4th town board meeting. Uh in addition to that uh we will offer the public after I make that presentation on May 4th uh an opportunity to give additional input on that proposal between May 5th and May 19th through let's talk FV. On May 19th at that town board meeting we will uh ask the town board to hold a scheduled public hearing to get public feedback in person from

the proposed budget that I deliver on May 4th. And then it is my recommendation uh that unless there's any alterations or changes that comes from that public hearing that the town board consider adoption of the budget ordinance and budget document on Monday, June 1st at our June 1st town board meeting. Assuming the town board adopts the budget on June 1st, as is customary, the adoption the first meeting in June, then it provides town staff the opportunity to uh do all the necessary steps that we have to get the budget on the system and prepared for operation on July 1 of 2026. We do have a statutory responsibility to have an adopted a budget by June 30th, 2026. And if I along the way if you have questions feel free to interrupt, but I'm going to kind of keep moving unless unless may or you or the board members stop me for for questions and discussion.

Go right ahead. Okay. Thank you.

All right. Just some highlights for our general fund. We're only talking about the general fund right now, not the utility enterprise fund. Some highlights. This uh draft budget tonight recommends uh adding 2 cents to the current property tax rate of 35.8 8 cents to support quality of life and public safety capital projects. It also includes a 3% uh market cost of living adjustment for town employees, a 3% performance merit increase based on annual performance appraisals of town employees, and this budget does include the addition of 14 new full-time equivalent positions, which I will review uh throughout this conversation. We'll discuss the uh in depth the rationale for the two cent property tax rate increase as we go forward with these uh slides. Uh specifics on the proposed new general fund personnel will be provided also later in this presentation and then we will provide details on utility fund positions when we do the uh discuss the utility enterprise. Okay. So just as in any town budget uh and most any budget in general there's two sides of the income statement. the revenues and the expenses. Uh we're gonna take a moment and look at revenues first. This is the revenue makeup for the proposed fiscal year 27 budget. A total of $83.3 million. Um and you can see how it breaks out. The majority of that is in revenue from advalorum taxes with the second largest revenue stream from sales and use taxes. The fiscical year 27 recommended general fund operating budget again is 83.3 million which represents a 8.4% increase from the fiscical year 26 budget of 76.6 million. This increase is primarily driven by growth of existing salaries and benefits the addition of

new positions and increases in capital outlay budgets and capital transfers. And I'll discuss in the next slides the assumptions that are built into these revenues. Again, I mentioned the 2 cent property tax rate recommendation. This supports priority, and I mentioned priority because these are projects that the town board has previously stated are priority projects. Quality of life and public safety capital projects. There are some cash contributions that decrease future debt service payments. Property tax is the only major revenue that the town controls. timing due to uncertain future of uh normal tax rate decision process is being factored into this recommendation and the normal process property re-evaluation provides updated assessed value and our five-year plan future needs equal the requested tax rate. Fway Arena has a balanced fisc year 27 budget and five-year plan. The five-year plan considers town needs not only for the next fiscal year but also for the future. specifically vital capital projects that are essential to maintaining the quality of life and public safety in Fugquway Verina. And these projects do come at a cost. Property tax again is the only major revenue source that the town controls and it represents over 50% of the town's revenues. The town is facing a sea change in how the town can plan to support these priorities. There are legislative efforts right now in place to curtail local government taxing authority and the uncertainty of how it will be implemented. And this prompts the recommendation for all of this collectively prompts a recommendation for a two-cent tax rate increase in fiscal year 27. So what are these quality of life and public safety capital projects that this two cents will help to cover? Well, the the projects fall into two categories as

I mentioned public safety and parks and recreation. Public safety is fire station number five. We know that in the next five years, we are going to need to be under construction with a fifth fire station. Really for two main purposes. One is to be able to keep uh it is vital to be able to keep the town's ISO1 rating which saves home saves on home and business owners insurance costs. And secondly, it is vital to delivering the industry standard response times and response rates. Um, everyone wants to be ensured that when they're uh faced with an emergency that our fire department can be present um in a very quick amount of time. Um, with parks and recreation, the four quality of life projects that this two cents uh helps to to to pay for are the Fleming Loop turf and pickle ball courts. Uh total project cost um there is out of local dollars 6.25 million projected to go along with a $4.25 million grant that the town has received through the Wake County Hospitality Tax uh program. Additionally, the South Park Community Center renovation and expansion project and the KBEC Road Town Park project. Um, without the two cent tax rate increase, the town cannot move forward with these projects. Uh, so I want to underscore and emphasize that we need to know by the end of this presentation that this town board is committed to these projects before the town begins to incur pre-construction cost. Although these projects, the debt service for these projects may not come online until fiscal year 28, fiscal year 30, further down the road, we are beginning to, we will be beginning to incur preconstruction costs on these projects, design, in some cases rideway,

um, in some cases permitting. And there's no need for us to begin incurring those expenses if we're not committed to moving these projects forward. We'll spend more time talking about these projects, but this chart here is the use of the two cent uh uh tax rate increase. Again, I mentioned Fleming Loop Park, the South Park Community Center, the KBEC Road Town Park, and then land for fire station 5, and construction of fire station 5. Um there's cash funding of these capital projects and debt service. I want to make sure you understand that the two-cent increase is solely dedicated to cash funding capital projects and decreasing the debt service associated with the quality of life capital projects. It does not support departmental operation expenses. We do not need a 2cent property tax rate increase to support the operating budget for fiscal year 27. We need it if we're going to advance these four projects that I mentioned. The base 5-year plan had already budgeted paying uh cash for the police facility expansion. So, we're able to advance that without the additional need for a tax rate increase. The additional 2 cents allows the town to fully cash fund fire station number five land purchase, cash funding portions of these capital projects by 31% decreases the associated debt service by the same 31%. So by advancing the property tax rate increase to fiscal year 27, number one, we're able to deliver less of a tax rate increase and we're also able to um inc or realize debt service savings because we're able to pay cash for some of these capital projects.

Would you repeat that again, Adam? I'm sorry. Okay. So the two cents that is being recommended allows us number one to deliver these projects with less of a tax rate increase than we would if we did not do the two cents in fiscal year 27 and we spread it out into fiscal year 28 and fiscal year 30 assuming we have the authority to do that. Okay. Okay. That's number one. And number two, by uh implementing a two-cent tax rate increase in fiscal year 27, it allows us to cash fund a majority of these projects versus borrowing on these projects the full full amount, thereby saving the town on that debt service. Okay. Thank you.

So there there are advantages to the tax rate increase in fiscal year 27 versus deferring those to a later year. Either way, we know we're going to need a tax rate increase to fund these four projects. Either way, it can either be a cumulative more tax rate increase over the next five years, or it can be less by putting it into fiscal year 27 and it reduces the amount of debt service we have to borrow for these projects. Okay. Again, continuing on the use of the twocent tax rate increase cash funding capital projects, uh, $8.5 million will be allowed to do so. Under this scenario, it decreases debt service. It's a debt service savings of 13.3 million over the life of the debt over 20 years. We're saving about 13.3 million. So, you could essentially calculate that as a total benefit of 21.85 85 million by advancing the property tax rate increase into fiscal year 27. And again, it saves a half cent. We believe if we defer this, we would have to do a 1 and a.5 cent increase in fiscal year 28, assuming we have the authority, and a 1 cent increase in fiscal year 30, 2.5 cents cumulative. This saves a half cents on the property tax rate. Um, again, it is I just can't underscore this enough. It's solely dedicated to cash funding these four capital projects and decreasing the debt service associated with these projects. It does not support any departmental operating expenses. We can do that without the need of it. Uh the additional two cents allows the town to fully cash fund fire station 5 land purchase and cash fund portions of these capital projects. All right. So, let's talk about if we implement a 2centent tax rate increase in fiscal year 27, what does that look like compared to our peers? This is a

chart of Fugquway Verina's um tax rate compared to everyone else's current tax rate. And you can see we're in the better half of of of all tax rates in Wake County at 35.8 cents. And if you compare it to Raleigh and Apex, you know, we are um uh you know, essentially close to the same 35 and a half, 35.6. We're at 35.8. Morrisville at 35. We spent a lot of time last year talking about um you know, Kerry and Holly Springs ability to have a lower tax rate. A lot of that has to do with the tax value that they possess in their communities. A lot of large industry helping to offset uh the need for a larger tax rate. Um, Fugquway Verina's tax rate is sixth of 14 on this list. If we were to implement two cents in fiscal year 27 and everyone else was to keep their tax rates exactly the same, nobody else does any to their tax rates. We would still be six out of 14, just a little higher. Uh, but still six out of 14. Um there are indications that although not not confirmations indications but not confirmations that other Wake County municipalities are considering tax rate increases essentially for the same reason Fuway Verina is one to fund uh prioritize capital projects that they may have and two uh to uh ensure that those projects are able to be completed in the face of uncertain uh future of taxing authority. Fiscical year 27 recommended budget increases the tax rate by 2 cents to 37.8 cents. The original fiscal year 27 5-year plan included again two uh property tax rate increases in fisc one in fiscal year 28 and one in fiscal year 30 a cumulative 2.5 cents. Adding the two cents in fiscal year 27 decreases the need uh to two cents versus two and

a half um as proposed in the original plan we worked up. And so what does that look like for a uh average single family tax bill? Right now at 35 a.5 cents, Fquway Verina has the second lowest average uh single family tax bill based on the average home price in in our community compared to the average home price in other communities. Uh this is just municipal. This is not uh municipal and county. So when you see $1643, that's just town taxes, not town and county taxes. You can also see on this chart where Wake County uh would charge $2,739.

Manager, is that a a median or is that like a mean this average here? That is a that is the average. So it would be the the median have med this is on the tax bill on the average tax value single family home. Okay. In F Arena which is 456,000. Sounds good. Thanks. Yes sir.

With the two cent increase we would still be the second lowest if no one else made any changes to their uh property tax rate. And again, there's indications that that will not be the case, but no confirmations yet because everyone else is going through these same processes. It would take it from643 on a $456,000 house to 1735 which to put it in other terms would be an increase to a homeowner with the average pukeway home value uh I should I said 456 458 by $92 for the year or $767 per month or a 5.6% increase. So for $7.67 per month uh as a citizen you will fund a fifth fire station. You will fund uh converting Fleming Loop Fields from grass to turf and adding six outdoor outdoor pickle ball courts. You will fund the renovation of the South Park Community Center. and you will fund um the development of the KBEC road town park which all addresses our ability to service youth and adult athletics and uh enhance quality of life in our community. About the cost of a Starbucks coffee these days, it seems like little bit of background on our 10-year property tax rate history. Um uh you can see that uh generally we've been overall flat. We've had some some higher years. Certainly in 2024, we were up to a little over 45 cents per on the hund per $100. Um, of course you can see the impacts of reevaluation years in fiscal year 21 and fiscal year 25. And uh currently we're at 35.8 cents, which we've been at since the reval. And if the town board did agree with the two cent recommendation, it would take us to

37.8 cents. Um, this results in the second lowest single family tax bill if other municipalities don't raise their tax rates. We just went over that. And as Fquway Verina grows, the town has been able to adjust the tax rate downward as we have continued to see the benefits to grow. So now let's talk about some other revenue assumptions that are factored into calculating this $83.3 million of revenue for fiscal year 27. Taxbased estimates are provided annually by Wake count the Wake County Tax Administration Department. New value as of January 1st, 2026 is 11.4 billion. Billion with a B. So that means that one penny on our tax rate generates just over a million. Million66,000 is what one penny generates. Uh we also uh see the benefit of other taxes in our in our budget and that's generally vehicle tag fees and vehicle rental fees and we are assuming a 1% growth from the previous year on those revenues and it assumes a 3% increase in sales and use tax from our estimated fiscal year 26 collections. Sales tax has noticeably slowed over the last year. sales tax will meet budget expectations in fiscal year 26 and the 3% increase we believe is conservative but realistic given the recent trends. Property tax again is the largest revenue source accounting for about 52% of the general fund operating revenues. It's the only revenue source that the town controls. Last year's 5-year plan estimated annual growth at 6 and a half%. The assessed value growth from fiscal year 26 to fiscal year 27 growth is less than expected. Fiscal year 27 property tax is estimated at 4.8% over fiscal year 26. We're growing but we've just not growing at the same uh

velocity that we have been in past. revenues conservatively are estimated in some cases uh to uh see a growth decrease uh in both the fiscal year 27 and 5-year plan. Um and I mentioned about other taxes and sales tax. Sales tax, I will just underscore it is our second largest revenue representing about 19% of our general fund revenue. It is extremely unpredictable which makes it difficult to estimate not only year-end numbers but for the next fiscal year as well. We have tracked and analyzed sales tax receipts on a monthly basis to ensure that we are aware of how this revenue is acting relative to our budget estimates so that we can pivot our spending if necessary. All right, continuing on with revenue assump assumptions. We have unrestricted revenues. Those typically are made up of utility sales taxes, distributions from the alcohol and beverage commission, beer and wine, and we're showing that at a 1% growth uh over previous year. Restricted and other grants. These are based on known grants or reimbursements. For example, Wake County reimbures us for two school resource officers. The reimbursement doesn't fully cover the cost of those officers, but we do get a reimbursement, and that's uh prescribed by state statute. Uh we have two elementary school school resource officers that were funded in fiscal year 25 through an appropriation, but they're now fully covered by the town. And then Wake County reimbures us for spec uh fire operations and fire station 4 debt service.

Just two of

uh POW bill is 1% over the fiscal year 26 state distribution. POW bill has a formula that's based on population and road mileage and uh we believe that we'll see some modest growth there. Fiscal year 27 estimates are 1% increase over 26. Um fiscal year 27 allocations have not been confirmed in the state budget. However, POW bill has fund balance in it and we are able to fully fund our 27 expense appropriations. It also reflects $151,000 of PAL bill fund balance appropriation so that we can fully cover the 1.6 million or 1.65 million of spending. Remember 1.2 two for street resurfacing, 450,000 for sidewalk maintenance and repairs. So, we will draw a little bit out of our PAL bill fund balance so that we have enough revenue total to offset the expenses. Other revenue assumptions involve permits and fees. Permit and fee revenue for fiscal year 26, our current fiscal year, is expected to meet budget estimates. However, based on current and fiscical year 27 expected activity, permits and inspection fees are budget at 11% less than fiscal year 26 year end estimates. Uh we're just not seeing the the same numbers and metrics that we have seen in years past and we're adjusting down to make sure that we're a being realistic, b being conservative, and c not getting caught with a uhoh moment midway through the budget year. solid waste revenue of 5.4 almost $5.5 million. This includes a recommended $1 fee increase. We spent some time talking about that at the town border retreat. That is a best practice. We've been a long many years where we did not do an increase in solid waste revenue or solid waste fees and then we had to do a big jump in increase which was a little bit

of a shocker or a goal. That was several years ago. At that time we said we're going to operate more on industry norm. The cost of providing service continues to go up. The cost of taking uh solid waste to the landfill into the recycling center goes up. The cost of operating goes up. So we're going to do small incremental increases almost annually to make sure that we're accounting for th those additional costs. And then additionally in our revenue assumptions on this slide, sales and services revenue is 9% budgeted over fiscal year 26 year in estimates. And this is based on departmental revenue estimates for programs and activities primarily parks and recreation programs and activities, youth sports and arts center uh programs and activities. Um, just as a uh measure of understanding, a $1 fee increase on solid waste covers the uh the rising cost of sanitation, recycling, and debris collection services, and it generates about $24,000.

Adam, I have a question. Yes, sir. on the permit and fee revenue for 2026 and the expectation of that being budgeted at approximately 11% less is that is that due to the current growth uh rate a pattern here in FA? Yes sir. And we'll have some charts that show that it'll it is it is stabilized or slowing down. How would you define that? I would define it as we are still seeing growth but we are not seeing growth at the same rate or speed that we have in years past and we believe that it is beginning to stabilize. Okay. All right. Thank you. Yes sir. Mhm.

Investment earnings have been budgeted at 95% of the fiscal year 26 year end estimates based on our current analysis of the likelihood of interest rates cuts over the next 18 months and generally just following the sort of val uh volatility of the markets. And so we're not trying to budget at 100%. We're not trying to give ourselves uh extra cushion by budgeting at more than 100%. We're trying to be more conservative on this and budgeting at 95. They are a bright spot in our town revenue projections because we have seen some additional revenues in the last few years compared to uh you know the previous five or seven years. But uh conservative estimates are based on actual interest earned um not only interest rate cuts or cash balances. Um, we also do reflect in this budget a $1.5 million general fund balance appropriation to support u doing some interim uh measures on advancing the Piny Woods Park capital project. You remember we had about a million dollars of unused money that we were focusing on the library park and at a previous board meeting we said we would take that million plus put another million and a half to it to do some temporary uh enhancements and improvements on the Pineywoods Park concept creating an event lawn creating a nice entryway into the site and using that as sort of the newly located site for follow me to fway concerts and other town events as well as holding some on the verina side from time to time until we're ready to do a much larger scale project for our Piney Woods concept. And so a total of two and a half million using 1.5 out of our general fund balance to support that. So mayor, to sort of get into your question, we weren't far off. So permit activity, we look at some trends when we make decisions and recommendations about

budget revenues. Permit activity is one of the trends we look at. some of the data we look at um it is how we help to gauge our growth. Now I want to draw your attention to the uh record year for the town coming right out of CO we had 1,891 for the year single family permits that we issued for new construction uh in 2022. This year we're estimating that we will end the fiscal year at 495. So, still growth, close to 500 single family permits, and this is not including u resident including um uh non-residential uh permits that we issue, but it is definitely a slowing trend compared and that's there's a lot that goes into that. cost of construction. Home prices are higher, interest rates are higher, and we're just not seeing the type of um permits being pulled that we used to see from developers where they would pull 50, 60 permits at a time. Now, they might pull five, six, 10 permits at a time, build those houses, get those houses sold, and then come back in for another five, six, 10 permits. So, they're they have adjusted their strategy as well. mortgage rates are tied to the US 10-year Treasury rate and this is increased due to our uh economic conditions. And so we we look at that as one metric for how we plan and budget for growth. We also look at certificates of occupancy because not only do we have when developers and builders are pulling permits, but when houses are actually being sold and people are going into new homes. Um there seems to be a higher number there because there's more inventory on the ground um than permits being pulled and so those numbers are adjusted. But certificates of occupancy affect the town's future property assessed value. It also indicates growth of solid waste and utility customers. So, we really give a close focus on uh

what our certificate of occupancy trends are because that helps inform how many new customers we'll have for for garbage and recycling service, how many new customers we'll have for water and sewer service. The fiscal year 26 year-end estimate is 687 which is 149 or 18% less than the previous year. We're growing just at a slower pace.

Okay. Um, we also have some fee change recommendations in this fiscal year budget as well that that that contribute to revenue. Um, we have identified that some of our inspection fees are not keeping pace with industry norms or necessarily with uh our peers. And so, uh, for inspection fees, we're proposing to, um, make those adjustments and modify it, uh, for up to,200 square feet. We're going from 40 $490 to $600. And then from 20 cents to 25 cents per square foot thereafter. So, you can see the increase there. For residential accessory structures, we're going from $40, we're recommending going from $40 to $80 per trade inspection required. and for non-residential permits move from the non-residential pool inspection from residential section. So that's just more of a of a a wording uh move within their fee schedule, but then also going from $80 to non-residential permit fee schedule based on total project cost. Um this is reflective of workload. If inspectors are having to do inspections, a fee should be charged to support that service and to align with our peer municipalities and industry norms. Also proposing some additional fee changes uh with the inspections for demolitions from $80 to $100, for daycare and group home going for from nothing to $100, and for ABC locations from $0 to $100. again to uh reflect our workload and to align with our peers and industry norms. We're also proposing to make some modifications to fees related to parks and recreation. Uh summer camp resident a $25 increase to $150 per week. Cost to

provide these services are just going up. And non-resident $31 increase to $188 per week. And then community center all access pass. were proposing an annual pass um before that structure has been a little bit bifurcated with a lot of different um different components uh which has been somewhat confusing and so we're proposing an all access pass. If you're a resident, $216. A non-resident, $432. If you're a senior resident, $144. And if you're a non resident senior, $216. Community center all access pass will provide a discount for paying for all the amenities rather than an allocart approach, which can be confusing and is institute. We're proposing to implement this due to customer feedback.

Is that done? that fee collected on a annual or monthly basis for those those would be annual fees. Annual fees. So a senior would have to pay that amount one time that onetime fee once per year. Mayor once per year correct if they choose the all access pass. They will continue to have the option if this is approved to pay for a fitness room membership, a pickle ball membership, a raetball membership separately on a monthly basis if they choose to do so. Great.

But if they want to get a discount and pay for kind of everything all inclusive at once, we're offering the all access pass, which is something that many of our customers have been asking for. Okay. Thank you. Thank you. What's considered a senior? I think it's 55. 55 and over. 55. You there yet? Not yet. I mean, I I kind of round to it. Okay. Said like a numbers man. Good job. Good. Thank you. That was that was the question.

Yes, sir. Additional parks and recreation fees. Um, active adult social pass, an annual pass for that as well, $0 for residents, $25 for non-residents, adult athletic softball and flag football, a resident and Fugquway Vina employee fee of $60 and a non fee of $90. Um, it cost us to replace membership cards and so we're passing those costs along $10 uh for a membership card replacement. And again, these are industry norms and and aligned with our peers. And all recreation programs will have a 50% non-resident registration rate over the resident rate. Okay, that hits the revenues for the general fund and the assumptions and the data that we look at to go into those revenues. Now, the expense side of the income statement and how that that all works to balance out. The fiscical year 27 recommended general fund operating budget again is $83.3 million which represents an 8.8% increase over the fiscal year 26 budget. The 27 base operating costs net of transfers are 67.9 million an increase of 5.3 million or 8.4% compared to prior year. And this increase is primarily driven by growth of existing salaries and benefits, the addition of new positions, and increase in capital outlay budgets and capital transfers. Personnel, capital equipment, department and capital project costs will be discussed in further slides in detail. But this is our various departments and what their annual operating expense budget is projected. You can see public safety are our two largest uh with police and fire with parks and recreation coming in third. You take all of those departmental budgets and then you add to them existing debt, new debt, transfers,

capital projects, um, and any appropriation to fund balance. We have that line item there, but we're not proposing any appropriation to fund balance. That would be if we had a surplus, but we don't. Um, and the total expenses is $83.3 million, which matches total revenues, $0 is the balance there, which is a balanced budget. And it's worth noting that um the estimated beginning fund balance at the beginning of fiscal year 27 is $35.5 million and the change in fund balance is 1.6. That's the $1.5 million to go towards advancing the temporary measure at Pineywoods Park plus the additional $151,000 of PAL bill fund balance to go towards our POW bill uh investments. So, we anticipate that at the end of the fiscal year of 27, we will be at somewhere at $33.8 million if everything ran according to plan. And we know that's not the case. Sometimes revenues will be more, sometimes revenues will be less, sometimes expenses will be more, sometimes expenses will be less. We have a historical trend here of having a surplus at the end of the year and being able to put it back to fund balance. I can't guarantee that year after year, but that's been our historical trend. Um, again, 73 million and 668, that's debt, that's general fund transfers to debt service. $296,000 is uh paid by Wake County towards fire station 4 and fire engine debt. $839,000 is paid by the enterprise fund for its share of the public service center debt service. I mentioned the additional $295,000 in transfer. That's a transfer from the general fund vehicle fee revenues to support future transportation debt service. And we have transfer to capital projects. Um a general fund cash funded. Uh $35,000 for the Hilltop Needmore

clubhouse roof replacement. These are just some highlights that I'm going to hit further in the budget as well, but I want to mention them now. 135,000 is included in this budget for Action Park ballfield light uh ballfield 3 light replacement. Uh 250,000 is cash contribution towards fire station number five land. That's not the total land cost. That's just a cash contribution that we're going to be put towards acquiring property for fire station 5. $500,000 applied toward the police facility expansion design. $700,000 cash contribution that will be applied towards the eventual construction of the KBEC Road Town Park project. $1.5 million cash contribution that will be applied to the eventual renovation of the South Park Community Center. $2.5 million cash contribution towards the public service center expansion. and 1.5 I mentioned funded with fund balance towards the Pontane Woods Park temporary measure. So all of this balances out uh over the course of the fiscal year. While this budget is balanced, development of this budget requiring close to 3 uh required close to a 3.353 million gap equivalent to three cents. I got to give our department directors and our budget team some credit. When we started this, we had a gap of $3.53 million and we made $3.53 million worth of cuts so that we could get to a balanced budget. These are items that were identified by our department directors as being recommended, but we prioritized and and came came up with this plan that we have here tonight. Okay. I want to take a brief moment to go through a series of slides. I don't intend to spend a long time on these slides unless you have questions, but I want to just give you a general idea of what changes or what's noteworthy in the operating budgets for our different departments. Uh administration, I'll start there. There's no major new investment. We are continuing with

efficient and effective support of town priorities, managing all the town departments and the five-year strategic plan and overseeing the annual budget recommendations and initiatives. our communications department. No big significant increase or investment, new investment there. Continuing efficient and effective support of our town priorities. Um and uh clear and transparent communication of town information, engaging residents and stakeholders regarding important issues and utilizing a broad range of media channels to ensure information reaches the people who need it. The finance department. This budget does include a new position, a utility billing specialist, 30% of which is funded in the general fund. The other 70% is funded out of the utility operating fund. Um the utility billing specialist uh will assist with billing matters but also adds the capacity to preemptively analyze water usage to ensure accurate billing. We want to make sure that every bill that goes out of this organization is accurate and is u reflective of what the customer expects. And having this position in house will allow us to do quality control uh further quality control to make sure that our customers have the utmost confidence in the bills that they receive from us. Uh continuing efficient and effective support of town priorities, daily financial transactions, accounts receivable, payable, bill, billing, oversight of procurement process and compliance, oversight of debt issuance process and compliance, oversight of daily and annual budget process and compliance, preparation of the annual consolidated financial report and preparation of the annual budget book. Finance ensures that the town runs financially solvent and pays its vendors and staff on time. Our engineering department, we do have some uh equipment uh replacement staff uh

vehicles in this department and it otherwise continues to operate as normal uh providing oversight of transportation projects and oversight of town storm water prevention activities. No new major investment in public buildings. Continuing to maintain clean and safe facilities for staff and visitors is a priority, as well as oversight of the Hilltop Nemore Town Park maintenance roof replacement project, which is included in this budget. There's no major new investment in information technology, but if you will remember, uh we did advance the purchasing of of a large contract order for replacement computers in the fiscal year 26 budget to try to offset rising marketplace IT costs there. Otherwise, there's no new major investment in the IT department. Uh they continue to ensure the safe and secure communications of town employees, ensure safe and secure financial transactions with the town, cyber security efforts to protect personal da d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d data and purchased anticipated computers. Again, we're 26, not 27.

Um, just a quick question. Yes, sir. We have someone in house to concentrate on cyber uh security. Yes, sir. Last year the town board funded a position a cyber security administrator. that person has come on board and is doing that job. That's a full-time position. It is a full-time position. Okay. All right. Thank you. Thank you.

Human resources. This budget does include the recommendation of a human resource analyst. Other than that, no major new investments in our human resources department. They are responsible for the recruitment and retention of high quality serviced driven employees, providing training opportunities for all staff and employee wellness. police. There are two new police officer positions recommended in this budget, as well as a records custodian. The records rec custodian will be primarily responsible for maintaining, organizing, and safeguarding official records and reports, ensuring that the documents are properly filed, scanned, archived, and retrievable upon request and processing records requests from the public, law enforcement personnel, and legal representatives while ensuring compliance with applicable laws and confidentiality requirements and retention policies. In addition, there's new equipment and replacement equipment included in the budget. Two new patrol vehicles for those two new positions, replacement patrol vehicles, and we are investing in ad enhancing our drone fleet within our police department as we recognize that drones um have been proven to be effective in being a quick first response to a scene, eyes on the scene before even a police officer can get there. we can pre-plan and be ready for what we have in front of us with these drones. And they can also be used for situations where um we might have sensitive situations where we don't want to send a human into a scene. We want to send uh a piece of technology in there to see what kind of situation we're actually dealing with. So, this is becoming a more modern practice with law enforcement and uh we're beginning to uh put some investment to that. Commissioner Haynes, I think you spoke about that some at a previous town board meeting. We were already thinking along

those lines and so this aligns with um an interest that you had addressed as well. What happened to the motorcycles? Motorcycles are here. They have been striped and they'll be on the road very soon. Our officers are going through a training process right now that uh we want to make sure that they uh have in place uh before getting out in the community, but they will be out in the community very soon. If not,

sir, about the same time the new dog shows up. About the same time new dog shows up. That's right. We'll have a little uh we'll have a little carrier on the back of it if we need to. The equipment would not include a side car for for our new camera.

No. Um and this budget does include the design of the police facility expansion project. as it pertains to fire. Three firefighters to uh complete a medical response unit one staffing uh for each shift. And this addition of medical response personnel allows staff to cover both medical and fire response calls and continuing efficient and effective support of town priorities related to fire service. Augmenting medical response unit staffing one provides the capacity to respond to medical calls. Continued focus on facility and facility maintenance. continue focus on fire prevention and community partnerships and the advancement of fire station 5 planning efforts. The inspections department other than normal operations, there is a replacement staff vehicle in that department as well as continuing to focus on state required inspection time frames. Not sure how many of you are familiar with this, but state legislation changed not so long ago that requires inspections to be done within a certain time frame. And that is not always the easiest to achieve. But we have the staff we believe in place to be able to do that now, especially with some slowing trends and um we're meeting those standards and meeting the demand for community growth. Public works streets specifically. We have some equipment in this budget. The replacement of a tandem dump dump truck and plow and spreader, which we use quite a bit this year. Uh replacement brine spreader, replacement single axle dump truck, and a replacement asphalt spreader. When we get to our five-year plan, we'll spend some more time on those. And continuing road maintenance, sidewalk maintenance, litter pickup, holiday decorations and flags, proactive storm water inspections, and other maintenance and repairs. The debris department in the public works, u we have a replacement knuckle boom in this in this year's budget, as well as debris removal efforts and 80% of debris collection activities contribute to storm water mitigation. So, it's a very

important function that this department does. the public works sanitation department. Uh this does include a new sanitation crew that was planned for uh based on uh metrics of growth as well as the equipment to support this crew and new garbage packer and the replacement of a scheduled garbage packer. The addition of the crew reflects customer growth and will maintain high customer satisfaction. And we we all know that u some of the best customer satisfaction feedback we get is from the uh sanitation department here at the town of Fway Arena. How many is part of that crew? Excuse me. How many? Three. Three. Yes, sir.

Uh the planning department, no new major investments outside of normal operations. The planning department will continue to maintain and update the land use plan as needed, ensuring that the proper type of development occurs in the right place and maintaining and updating the land development ordinance as needed. Ensuring development appearance preserves the character of Fugquway Verena. Economic and downtown development. No new major investments here. They will continue to focus on downtown generational plan projects and attract and support business and industrial partners. Downtown generational plan efforts preserve the character of Fuway Arena while helping both downtowns thrive and partnering with uh the Fugway Arena Downtown Association and the economic development efforts diversify our tax base relieving some of the tax burden on homeowners. Parks and recreation, we do have some new positions here. An assistant parks and ground superintendent and an athletics program specialist. Quality of life capital projects that are included in the budget include the Hilltop Nemore Town Park improvements, athletic fields and armed services memorial, the Fleming Loop turf and pickle ball courts, the Kbec road town park, Piney Woods Park and Action Park ballfield 3 light replacement uh and enhancement. I will say that the assistant parks and ground superintendent, one of the things that we want to continue to make sure we give focus to is the quality of care of our parks. they are in first impression that many people uh see when they go to our town of parks and it's important that we put a good foot forward in that and this position will help us to identify opportunities for improvement and also also make sure that our crews are prioritizing the work that needs to be done in a timely manner and of course our athletic program specialists need I say more we've got one of the fastest growing youth sports and adult sports programs in the county for sure but even in the region and the state and this position is needed to make en sure that

the customer experience continues to be one that is great. This budget also includes a theater coordinator for our art center. It's always been in the plan that we um uh sort of enhance the organization chart at the art center over time so that um our director and assistant director and other staff aren't getting spread too thin and we can focus the right people on the right things to make sure we're continuing to provide excellent experiences for our uh our patrons. And it also begins to create an opportunity. Um, not that I think Moren is she signed about a 20-year contract, so she's not going anywhere anytime soon, but it does provide for some succession planning in the future. Right, Moren? She

All right. See,

um, it al the budget also includes the creation of office space for the new position within the department as well as some program performances and community event focus. storm water expenses in the general fund. Uh 80% of public works debris collection costs help with storm water, but we do have uh some replacement over the next five years that will address storm water expenses as we begin to continue uh furthering our storm water study and make recommendations on storm water utility funds in the future. We do have a leaf truck programmed in the fiscal year 27 budget, a storm sewer jet in fiscal year 28, storm drain inspection camera in fiscal year 29, and a bolt pickup truck in fiscal year 29. And we'll spend some more time in our five-year plan presentation talking about uh storm water. So the summary here uh specific to the general fund, specific to personnel, new capital equipment and projects. Just those three items alone represent $50.7 million. Let's look at personnel. And again, mayor board, if you have any questions, feel free to stop me. I'm going to keep on rolling forward. We're looking at personnel. Um on the left hand side of the column where it says current funded fiscal year 26, we currently have 397 posi positions. But I want to draw your attention that also includes uh the utility fund positions, but 397 total organizational positions. We're recommending 21 new positions, 14 in the general fund. I mentioned 14 earlier in the general fund. Uh if approved by the town board, it'll take our total uh employees to 418 full-time equivalent positions. Uh this is townwide. Um more detail on the general fund positions I'll discuss on the next slide, but to give you some

comparison, uh 418 if approved by the town board. Right now, uh Holly Springs has 478 employees and they don't even have a sanitation department. We have uh 23 make it 26 if approved with the budget in our sanitation department. They have 40 478 and don't even have a sanitation department. If you had it 26 people uh for sanitation, they'd be over 500 people compared to our 418. I share that as a comparison to say we do a lot with a little and we we try to be lean but we we are very good at being effective. And I think that goes back to our staff from top to bottom, bottom to top. They're professionals. They know what they're doing and they're getting the job done. Fiscal year 27 personnel recommendations. Uh maintain outstanding service levels and co and customer focus. Under that category, sanitation collection equipment operator and two workers. Uh Commissioner Haynes, that's the three people you mentioned earlier uh or you asked about earlier. Utility billing specialist in our finance department. We talked about that position. and the arts center theater coordinator. Um, again, the theater coordinator provides a dedicated position for theater operations, allowing the events coordinator, program coordinator, and director to focus on their primary responsibilities. Um, under quality of life programming and facilities, an assistant parks and grounds superintendent, and athletic program specialist. I already went into what those positions will be doing. uh mentioned about the two police officers and one records custodian and the three firefighters uh for the EMS response unit. And then the human resources uh human resource analyst um that uh that position is to essentially help with the growing force uh human capital force that we have within our organization.

This budget does include a 3% cost of living market adjustment and up to 3% performance increase merit based on annual review. Uh there are no additional new benefits, excuse me, new benefits uh added. Um other current benefits include FICA contributions, which is 7.65% 65% of salary. The North Carolina retirement contributions, which is now 15.1% of salary for nonsworn employees and 17.1% of salary for sworn employees. We do a 401k contribution of 5% of salary. We do medical we pay for medical insurance um and uh life insurance. Uh we also offer vacation leave acrruel consistent with our peers. Uh we offer a dash more time off which was a benefit approved by the board a few years ago. 32 hours to encourage a healthy work life balance for our employees. Parental leave, elder care leave. And we continue to offer tuition assistance for employees that may be furthering their um their development. All right. Okay. In terms of new equipment recommendations, and these pictures are uh uh representative, but maybe not exactly, but what we're uh uh what we would get necessarily, but we do have two new patrol cars for new positions and then the drone program uh in police and then in public works uh sanitation truck for the new sanitation crew and a leaf truck for our streets department. Um, so I mentioned those. This here is just a a picture of of capital project recommendations, but the picture is just an overview slide. I'm going to go into some detail in terms of capital project recommendations. Um, in terms of public uh work, street maintenance, and storm system maintenance, this is funded, the storm system maintenance is funded at $135,000.

Uh, the street maintenance I mentioned earlier, $1.2 million. um PAL bill street resurfacing and sidewalk repairs at $450,000. These projects support the town's goal of improving travel within our community. Storm water repair. Um that picture right there is uh the um sort of top middle is the Vance Street Culver Repair just as a an a representation of storm water repair. and the POW bill sidewalk repairs. Again, we are increasing from 200,000 to 450,000 and we're keeping that 450,000 annually uh in the five-year plan. Projects that support the town's goal of improving travel within our community. When we talk about uh sidewalk repairs and why we're increasing the budget, uh we're not just increasing the number. We actually have a plan. We look at these maps and we identify opportunities where we uh have identified either breaks in the sidewalk or lips in the sidewalk or panels that need to be replaced or pedestrian crossings that need to be improved. And so these maps so show some general representation of of what we have identified and what we will work as a program of work to try to accomplish with the funds as far as we can make them go. Other capital project recommendations, there's $385,000 uh for Action Park ballfield 3 light replacement. Uh we'll pay some of that in general fund cash and some of that will be paid for out of the recreation fee and l funds. Uh there's $10 million identified through debt financing for the Hilltop Nemoretown Park improvements and armed services memorial. um $1.5 million again funded with general fund balance to go towards the Piney Woods Park temporary measure um

for a event lawn space and uh gateway into that park and then $10 million to fund the Fleming Loop turf and pickle ball courts. $4.25 million funded by Wake County Hospitality Tax Grant and then the other $6.25 $25 million paid for um through a combination of cash and debt uh that we will use uh the two cents uh that I'm proposing in the budget to help offset. Additionally, under quality of life improvements, the South Park Community Center renovation expansion, we're estimating this to be about $6 million. We'll pay some of that in cash, some of that will be debt funded, and that this is only possible with the two cent recommended property tax rate increase. Same thing with the KBEC road town park. Um uh again we'll we'll begin that project in the fiscal year 276 budget as well 27 budget as well. And again we want to ensure that Fugway Arena remains one of the safest communities in North Carolina. By doing that we will continue to uh invest in public safety with this fiscal year 27 budget. Uh we plan to do some maintenance and improvements at many of our fire stations. Uh, we're going to replace carpet and flooring at at fire station number one at the tune of $25,000. Doing an interior and bay painting at fire station number two at $16,000. And we have some air intake inducers at fire station number two for $3,000. There's a $250,000 cash contribution toward fire station number five land. That's not the full cost of what we anticipate land to be, but we'll begin making cash contributions towards that paid for with the two cent property tax rate increase that is being recommended. And then we also have the design of the fire station or the police station expansion facility in the fiscal year 27 budget with construction coming thereafter. The

fiscical year 27 budget also practices good stewardship of town facilities with the public buildings uh projects of the hilltop need more maintenance building roof replacement. We have $35,000 allocated for that project and the construction of the expansion of public service center uh phase two. Uh $18.5 million is what we anticipate that project to cost. 12.3 million will be the general fund share. 6.2 2 million will be the utility operating fund share. Mr. Mayor, that covers uh the operating um departments in the general fund. I still have to discuss uh debt service and capital reserve transfers before we get to the five-year plan, but do you have any questions on the operating departments

and what I have reviewed? I think it's been a good overview so far. You're doing a good job.

All right. Keep keep moving forward. Thank you. So, as we talk about the debt service fund, we do have a dedicated debt service fund. As of June 30th, 2025, it had a balance of 2.3 almost $2.4 million. The debt service for fiscal year 26 um is a total of $9.4 4 million of which $839,500 is paid by the utility enterprise fund for the public service center and $296,000 is funded by Wake County towards fire station number four and fire engine debt service. The recreation fee and loo revenue co can no longer support Fleming Loop Park and community center debt service. So, our debt service fund will have to do that and we'll have to have the revenues to accommodate that and $295,000 from the vehicle tag fee will also be transferred to debt service fund balance to service transportation debt. The five-year plan, which we'll talk about more in a moment, includes the use of $5,000 of general debt service fund balance towards transportation debt service. So we'll take five of this $2.3 million we'll be we'll take 5,000 out of it to help fund debt service and for transportation. Uh our aggressive program of transportation projects and cost escalation necessitates an additional revenue stream for foregoing transportation projects. Management recommends the use of that vehicle fee revenue to support transportation projects being completed without having to do a separate tax rate increase. The estimated fiscal year 2031 ending fund balance will be basically $25,000 less than the $2.383 million that's currently there. The new debt service in fiscal year 27 will be the $18.5 million for the public service center expansion. $10 million for the Hilltop Needmore Town Park Improvements, athletic fields

and armed services memorial. $3.75 million for the Fleming Loop turf and pickle ball courts and $4.5 million for the South Park Community Center renovation. Why not the full amount? Because the tax increase will allow us to blend it between cash and debt service, thereby saving us money. $250,000 transfer from recreation payment and L fees to the general fund capital projects to uh fund proposed recreation enhancement projects, specifically the action park light project. And $280,000 will be transferred from the sanitation truck capital reserve fund to the general fund to support the new sanitation truck purchase for the new sanitation crew. So, all of that makes up the $83.3 million is the general fund budget. So, I'm going to now transition to the five-year plan. The five-year plan will look at fiscal year 27, which we just reviewed, as well as fiscal year 28, fiscal year 29, fiscal year 30, and fiscal year 31.

Go right ahead. Good.

Why do we do a five-year plan? Number of reasons. One is to align projected revenue and expenditures for that forecasted period. Number two, to identify the needs of the town for that planning period. To be thinking ahead so that we're not surprised about what our future needs may or may not be. To stagger our projects to align with projected revenue and priorities. To identify long range budget shortfalls and attempt to avert them. To identify funding for major projects or capital. to re and we review our five-year plan annually and modify it based on the economic climate and our priorities. We're we're uh we we have a five-year plan that essentially is in place to cultivate rating agency confidence in our fiscal financial position. All right. We are, I will say, somewhat of a a rare breed. Not every community, most communities in North Carolina don't do these type of budget plans, five-year plans. We started doing this because we had a strong desire to get to a triple bond rated community, AAA bond rated community and this was a measure that was recommended to us by our financial consultants to help build confidence with the rating agencies. When we go up there and we share with them standard and pores and Moody's, our five-year plan and show them that we have a spending plan that meets the needs of our community, meets the priorities of our strategic plan and works from the standpoint of numbers. It gives them a great deal of confidence when they're considering our ratings. All right. So, if we look at revenue over the next five years, that first column, 2027, that'll look familiar, $83.3 million. And you can see in this chart how we are projecting revenues to grow over the next five years. The five-year plan is a balanced plan. The revenue assumptions are the same as the fiscal year 27 assumptions. So, I won't spend a lot of time belaboring those.

Again, the planned use of fund balance in fiscal year 27, $1.5 million is for the Ponty Woods Park project and $5 billion is for the police facility expansion. We're proposing to pay for that expansion with fund balance cash um because we have the good fortune to be able to do that. The general fund revenue assumptions, the tax levy growth conservatively projects a staggered growth of 5 a.5% from fiscal year 27 to 28, 6% from fiscal year 28 to 29, 6 and a.5% from fiscal year 30 29 to 30, and 7% from 30 to 31. So what does that mean? And it means we have confidence that we're going to see some strength in economic conditions over the next five years and we're going to see growth in our um in our tax value and our tax revenues. Now, I'll caveat that by saying that that 7% does not uh exceed the uh historical growth average of our tax rate increase year-over-year. Some years we've seen as much as double digit percentage increases in tax growth. Some years they've been single digits, but never has it exceeded um or never has it been below 7%. And so you can see we are still very conservative at 5 and a half, six, six and a half, seven, but we are showing some modest growth year-over-year in our assumptions. Property tax again is the only major uh revenue source the town controls. Um and again uh you all know the the conditions we find ourselves in with some uncertainty around this topic. Um commercial and retail value growth has been pushed out to align with the timing of the gold leaf crossing uh project being open for business and the 7% growth projection in fiscal year 31 I

want to underscore is conservative considering the pent-up development demand we have had while our um building permits reflect growth but slower growth the uh amount of projects that have been coming in for pre-development meetings for uh review by the planning department for consideration by the U planning board and the town board is accelerating. And so we're seeing some confidence in the development community that we're going to be coming out of this u little bit of a lull at some point in time in the future. So, they're going ahead and getting plans before us, plans approved so that when uh the market conditions do reflect confidence, they're ready to pull the trigger and be ready to move on it with platting lots and building. So, that gives us some confidence that our property tax percentages are are good. Okay. Again, other taxes are factored into our revenue assumptions. vehicle tax fees, vehicle rental fees, we're growing those at 1% um which is conservative down from previous 5-year plan of 2%. So, we're showing some conservation there. Assumes a 3% increase in sales and use tax throughout the five-year plan. Sales tax is the second largest revenue source and we're showing it at 3% because it is extremely unpredictable and um we have just been seeing some sort of uh erratic fluctuations in sales tax. So, we don't want to get too far ahead of our skis where we might find ourselves in a position to have to pivot and and and make some adjustments we're not wanting to make. Uh unrestricted utility sales tax, ABC distribution, beer and wine. We're growing that at 1% a year throughout our five-year plan. Uh restricted um and other grants, we kind of know what those are year-over-year.

POW bill is conservatively budgeted at 1% per year increase year-over-year. And uh we are showing some fund balance appropriations so that we can fully cover our spending plan of $1.6 million a year for uh street resurfacing and sidewalk maintenance and repair. Permit and fee revenue uh expectations are budgeted conservatively at 3% growth year-over-year throughout the five-year plan. Uh these estimates will be revised in the five-year plan based on developing market trends. So, if we see strength in the market, we'll revise our five-year plan next year to reflect that. But right now, we're being on the more conservative side with our planning and budgeting. Solid race revenue includes a dollar fee increase in fiscal year 27, another dollar fee increase in 29, and another dollar fee increase in 2031. So, they're on staggered years. And the reason being is we anticipate that with uh added customers, those will be the years that we'll need to consider adding new crews to be able to adequately service our customers. Sales and services revenue is projected 5% annually. Why? Because we have a popular parks and recck department and we have a very popular art center. So, we feel confident in those growth projections. Investment earnings, again, we're budgeting those at 95% and the five-year plan continues estimating investment earnings at 95% of the prior year. This does reflect the one-time use of $ 1.5 million for the temporary measure at Ponywoods Park and a five onetime $5 million appropriation for the police facility expansion. On the expenditure side of the income statement, the expense side of the income statement, here are the five years of expenses. This is just operational expense. So, you'll see that bottom number, $67.9 million. Why is that less than the 83.3? because it doesn't factor in debt, new debt, existing debt transfers, those things

which add to the 83.3. So you can see just for operations how our budget is projected to grow over the next five years. This is a base escalation rate of 4% for most departments. Individual annual requests for personnel, equipment, and projects we will detail in some future slides. The governing body department increases due to election costs. So in fiscal year 26, fiscal year 28, and fiscal year 30, you see some increases. That's because we're factoring in the cost of municipal elections, which aren't inexpensive these days, by the way. Six figures. Then on top of these subtotals, we add to that existing debt, new debt, transfers, capital projects, and any appropriations to fund balance. I will show that this I do show that this is a balanced five-year plan. you see all the zeros at the end. I will draw your attention that the appropriate we do have an appropriation to fund balance um in years 2 through 4 uh in the grand scheme of things for an 89 90 93 $99 million budget. They're small numbers, but these are reflective of some surpluses that we plan to put back into fund balance if everything were to work out according to plan. It also provides a little bit of cushion if if there's a project where the expense comes in more. We have a little cushion there as well. Excuse me. Going back to new debt service in the five-year plan. We've got debt service associated with the public service center expansion. uh the South Park Community Center renovations, the Fleming Loop Turf and Pickleball Courts, the Hilltop Nemore Town Park improvements, the KBEC Road Town Park project, the fire station 5 construction, the fire station 5 engine doesn't serve us well to build a fire station if we don't have a truck to roll out of that station and a rescue one

replacement truck. These are thoughtful, intentional use of debt service through our five-year plan. It maintains our financial strength and solid financial footing which is a pillar of our strategic plan and it ensures the cost of generational projects and not solely paid for by current taxpayers and customers. Future generations that will be enjoying these projects are also helping to pay for them with debt service. The three main pillars of a five-year plan other than operational and debt includes personnel, equipment, and capital projects which do fold into operational. Looking at personnel over the next five years, these are our recommendations. Uh so in this is only general fund now. So this takes out the utility fund people because we'll talk about those when we get to the utility fund. But just in the general fund, 345 uh and a half full-time equivalent positions currently 14 projected for next year uh in fiscal year 27. In fiscal year 28, we're projecting 12 added positions, 13 in fiscal year 29, 11 in fiscal year 30, and 20 in fiscal year 31. Why so many in fiscal year 31? Because we got a fifth fire station coming online, and we'll need to make sure we have the the uh the human capital for that. All things considered, we would have roughly around 415 and a half equivalent full-time positions uh if this plan was to carried out exactly as drawn. To talk about some of these personnel recommendations uh in our uh parks and recreation and cultural resources department, which feeds into quality of life, we have that assistant parks and grounds superintendent I mentioned in fiscal year 27. We have an athletics program specialist in fiscal year 27. We have parks maintenance workers. in fiscal year 28, 29, and 31 and a recreation program specialist in fiscal year 29.

Um, art center is a theater coordinator in fiscal year 27 and a program support specialists in fiscal year 31 to support the programs and the activities at the art center. And if you want to ask any specific questions about what these positions will be doing uh as I present these, just stop me and ask. I'm kind of rolling through rolling through this uh for the sake of time. Uh continuing on, we've got positions recommended in the police and fire. 16 total over five years in police, 27 total over five years in the fire department. Police in fiscal year 27 includes uh two police officers and then a total of three officers in each of the fiscal years every every year after totaling 12 for fiscal years 28 through 31. a records custodian in fiscal year 27 and a court liaison in fiscal year 30. The court liaison serves as the primary point of contact between the department and the courts. Coordin they coordinate and facilitate the flow of information and documentation required for court proceedings and discovery. And they ensure that officers are notified of court dates, uploading discovery requests, delivering subpoenas, preparing case files for prosecution, and assisting with officer testimony, scheduling, and grand jury. The 27 positions in the fire department include three firefighters annually from fiscal year 27 to fiscal year 30 to ensure full staffing for fiscal year 27 and fiscal year 28. Medical response units at fire station one and then at fire station 2 during shift. Adding these positions ensure the stations can respond to fire calls even if there has been a medical response. Fiscal year 29 uh is um includes staffing for fire station 4 ladder and rescue company during each shift to meet the expected costs for service. Fiscal

year 30 is for full staffing of fire station one engine one during each shift to meet expected calls for service and 12 firefighters to staff fire station number five. This budget, this five-year plan also includes one assistant fire marshall and emergency management coordinator to better accommodate fire inspection workload levels and coordinate emergency services events across town departments when the emergency operations center is activated. one emergency medical coordinator to provide internal training on medical response and one deputy fire chief to complete the command structure and ensure efficient and effective management and a succession plan. I think Chief Jones is on a 10-year contract, but we want to be planning for his future as well. Right, Chief?

All right. I think I just heard him say, "You're right, Adam." Um, continuing on, we've got positions in public works, environmental protection, uh, sanitation equipment operator for fiscal year 27, 29, and 31, a sanitation collection worker two for fiscal year 27, 29, and 31, and a sanitation collection worker one for fiscal year 27, 29, and 31. essentially adding crews every other year to meet the growing demand of our of our customer base. Public works administration. We've got an assistant public works director for fiscal year 28. Tracy intends to work at least another 15 years, but succession planning is going to be important in the public works department as well. And improving transportation within our community and community development. Uh we are proposing street maintenance workers in fiscal year 28 and fiscal year 30. finance. We're growing this department as well over the five-year plan with a utility billing specialist recommended in fiscal year 27 and a budget analyst in fiscal year 28. For public buildings, a building maintenance specialist in fiscal year 29 and a custodian in fiscal year 30 when we add more buildings. We got more to clean and more to maintain. Uh in IT, an IT support technician is proposed in fiscal year 28 in this 5-year plan. and then in human resources, uh an HR analyst in fiscal year 27 and a safety coordinator in fiscal year 30. Right now, we have a safety and risk manager and we're going to need to uh spread those responsibilities out as our organization continues to grow.

That is personnel. Any questions on personnel in our five-year plan? Yes, sir. Uh thank you for the break. Thank you for the water break. A little confused on fire station five. Are we planning a engine company and ladder company at that location? An engine company? Yes. Not a ladder. Okay. Okay.

That's a good question. Any other personnel questions for the five-year plan? Okay. Going to move forward then with equipment detail by year in our general fund five-year plan. The town has about 284 vehicles that are not heavy equipment vehicles or trucks. This is just, you know, trucks and and and cars um that are more uh uh commercial but also uh smaller in size. Um and so we do have a menu of replacement and new vehicles programmed into this 5-year plan for various departments. And this chart right here sort of spells that out uh of how much we plan to invest on replacement vehicles or new vehicles in each of these departments and what the total cost we anticipate over the five years is on an perom basis. Usually we're hovering in that uh $3 million range annually for new and replacement vehicles. Um, we're going to concentrate on new equipment, but it's important to note that the 5-year plan includes an average of 2 million annually for replacement vehicles. And this includes a schedule of about seven police patrol cars per year. If you'll recall, um, in the last, uh, few years, um, we have, uh, we added a fleet maintenance manager to our organization to help manage all the, uh, vehicles and equipment that we have. And our fleet manager in part is helping us to develop a schedule for an appropriate replacement schedule for our vehicles so that we're not getting to where we have these huge expenses in any given year, but we're spreading that cost out over an industry norm period of time. And so again, we're adding police vehicles, fire vehicles, drones. We would not add police positions without

the equipment needed uh to perform their jobs. vehicles and equipments associated with the 14 new sworn positions that are in the five-year plan. In addition, investment in drones is requested in fiscal year 27 to assist with event security, Christmas parade, Independence Day celebration, and other events just as I've mentioned and high-risk response situations and missing persons locations as well. Drones can be very helpful for. Similarly, three of the new fire positions will need an administration vehicle. Other positions will use existing fire apparatus. All existing four engines were replaced in fiscal year 25. You might recall we did the push in into the fire department on our fire engines. Uh other um the town will order two replacement fire engines in fiscal year 31 due to the long delivery lead time. We are ordering one new engine in fiscal year 30 for fire station number five. It takes about 18 months for a truck to be delivered. Best case scenario, sometimes longer. Um, new equipment that we're focusing on in the public works includes a leaf truck top left in fiscal year 27, a backhoe bottom center, and a storm sewer jet left um bottom left in fiscal year 28. In fiscal year 29, a truck for the assistant public works director, storm drain inspection camera, bottom right, and a mower. Also in uh public works, a rolloff truck um in 20 year fiscal year 30 and which is in the top center. An example of that and then fiscal year 31 a bucket truck uh top left and a mobile vehicle repair truck bottom left. An example of how departments are providing good value. The rolloff truck can be used for multiple purposes as needed instead of buying singlepurpose vehicles. For example, they can help to move

dumpsters. They can haul street sweepings and scrap metal. And there are attachments that you can put to this rolloff truck like small concrete mixers so that the town can mix our own concrete for small concrete jobs and a vacuum unit to augment debris collections. And the mobile vehicle repair truck can solve simple vehicle repairs without towing or the need to return to the public service center for staff who currently are out accomplishing repair projects. Sanitation will include garbage packer truck in fiscal year 27, 29, and 31 to go along with the addition of those new crews and a bulk pickup dump truck with a tarp so that we don't uh break windshields in fiscal year 29. We're also keeping the town safe. Mayor, in the digital age, you talked about cyber security. It's just as important as patrol cars and fire engines to be quite honest. information technology budget over the five-year plan plans to upgrade equipment to ensure that the town operates seamless and safely and is always open for business and ready to serve our residents, customers, and business owners, keeping our transactions and data safe and secure from bad actors. That is the equipment. And I spent more time talking about new equipment, but again, we have replacement equipment in there as well. Any questions about that over the five-year horizon in the general fund?

Uh I think uh right now I'm just going to check in with each commission. Is everyone okay? Everybody okay? All right. Good. All right. Thank you, mayor. Keep on going. Capital projects. All right.

Detail by year in the five-year plan. We have a lot of exciting capital project investments in our five-year plan. Um this chart here uh identifies uh the amounts that we will be investing in capital uh over the five years uh and which departments will be doing that. And you can see the um amounts at the bottom. Some of which are funded by rec payment l fees, some of which are funded by general fund uh cash and some of which are uh debt funded. And so, uh, we'll get to specifics in a moment, but the first year, fiscal year 27, about $31 million. And then you can see we have a a schedule and plan for the outer years. The projects that are being recommended were selected by prioritizing projects and discussing those projects at Town Board Retreat that preserve quality of life. This goes back to strategic planning. The they support providing core services at the service level that our customers have come, frankly, to expect. They maintain town assets to preserve and extend the useful life of town investments. And they fulfill promises that we made in prior year budgets and prior year five-year plans. So, let's talk about some of these. The annual and recurring projects and the public works and streets uh departments. We have about $135,000 dedicated annually towards storm system maintenance. And frankly, that probably is going to have to change over time in the future. We're going to probably have to dedicate more resources to that, but 135 is a good start while especially while we're continuing the storm water um assessment. Um PAL bill, we allocate annually $1.2 million for street resurfacing and $450,000 for sidewalk repairs. And in the engineering department, in both fiscal years 28 and fiscal year 30, we allocate $300,000 for pedestrian improvement projects. Uh

these are projects outside of sidewalk maintenance or uh these are projects that we might want to put in either ADA accessible ramps or we might want to do some additional sidewalk work that we identify uh in those years and $175,000 for pavement condition studies. So the fiscal year 26 pavement condition study which is uh happening now in fiscal year 26 that is going to be used to determine where street resurfacing efforts are needed most. Um and we will do another one of those in fiscal year 2030 just to make sure that we're focusing our attention in the right places. All right. Improving transportation. The town um has made this a top priority for many years is improving transportation within our community. We've spent um the last decade adding and improving transportation infrastructure in and around Fugquway Arena. Uh $63 million of town funding has gone into transportation during that period of time. We will assess the impact that the large program of committed town and DOT projects has on traffic patterns prior to initiating new major transportation projects. And that's one of the the outcomes from our town board uh uh retreat was let's knock off some of these projects that are on the menu right now before we add uh significant other ones to the menu. Let's get some of these that we've already got in the works accomplished. And this map shows it right here. We've got uh four colors here. Uh the blue represents the seven projects that have been completed. The Highway 55 James Slaughter operational improvements. Uh the Highway 401 Mill Creek uh Gold Leaf Gateway, the Wallace Adcock Boulevard uh Gold Leaf um road, the South Jud Parkway and South Main operational improvements, the Jones Street sidewalk project, and the Southeast Jud sidewalk project. all uh

completed projects. We'll have two others completed in fiscal year 26. Um Matt guarantees me that the Witt Road Johnson Pond roundabout will be completed by the end of the fiscal year. So, we're going to see. And the downtown verina pedestrian improvements uh completed. Um keeping moving forward with the theme of projects in orange uh expected to be completed by next fiscal year. The Austin Ridge Greenway, making great progress on that project. and the Northeast Jud Parkway Broad Street operational improvements. If you've been out to that intersection, you've seen those crews working uh adjusting um the traffic lights there, adjusting the utilities and putting in the new lanes. And then in fiscal year 28, we anticipate having these six projects in purple uh substantially complete. That's the Bass Lake, Sunset Lake, Hilltop Nemore operational improvements at that intersection. The Hilltop need more Johnson Pond operational improvements at that intersection. The Lincoln Heights pedestrian improvements on Bridge Street. The old Honeyut Highway 55 operational improvements. The old Honeyut Road and KBc Road operational improvements. And the Sunset Lake phase 2 widening improvements. All critical projects. And that's not to mention the ones that DOT will be completing uh within that completing or starting within that 5-year period. The five points um modifications at Hilltop, Hilltop, Needmore Road, Air Park Road, 401 uh intersection project that will also be realigning Hilltop Road into Lake Wheeler. And then of course the big one, U5751, which should start construction pretty much at the end of this 5-year planning horizon, 2031. We've got more than 10 different parks or park facilities that have capital projects associated with them over the

five-year plan. A total of $35.5 million. We'll be using some recreation payment and loom money of $ 1.94 million, a transfer from the general fund of $5.4 million and debt of 28.2. Uh projects that will be funded with recreation payment fees in Lu payment in L fees include the ballfield three light replacement and enhancement at Action Park. Um the restroom courtyard replacement and enhancement project at Action Park will be uh completed in fiscal year 29 under this plan and replacements of lights at the tennis courts at Action Park in fiscal year 2031. The Austin Ridge playground replacement and enhancement is uh planned for in fiscal year 30 and the James A. Campbell playground uh replacement and enhancement is in 2030. And then in South the South Park ballfield one and two light replacement and enhancement in fiscal year 29. Additionally, parks, recreation, and cultural resources projects. There will be some funded uh from the general fund. The $ 1.5 million I previously mentioned for the temporary measure at Piney Woods Park in fiscal year 27. The Honeyut Road Park tennis court lights will be uh converted to LEDs in 2031. And the South Park ballfield number three light replacement and enhancement in fiscal year 2031. And then we have a number of capital projects that'll be funded with a mix of cash and debt only achievable with the recommended twocent property tax increase. That is the South Park community center renovations and expansion uh project in fiscal year 27. The Fleming Loop turf fields and pickle ball courts in fiscal year 27. The KBEC road

town park construction in fiscal year 28. and um the hilltop need more town park improvements and armed services memorial um project as well. A town manager. Mr. Just a question. Are there any uh plans to upgrade the Jeff Wells Environmental Park? I know some of that asphalt is sort of u cracking a little bit. I don't I don't know. I just wanted

there's you know we do routine maintenance. So, if there's there's uh asphalt that is in need of repair or um uh or could be unsafe, we would make those those repairs and and uh enhancements there. But no, no large capital project improvement is planned in the 5year. There are uh some pending repairs that will uh be made on the heels of the public utility uh sewer project that went through the park. So that that impacted some areas that we're working with the contractor to uh address areas that need some shoring up.

So we're not so we don't have a planned town project to go and do major trail enhancements, but there is some punch list followup from the construction project that went through the park. Okay. Okay. Just wanted to bring that to your attention. Yes, sir. Thank you. Thank you.

Thank you. Um, additionally, we have uh capital projects that address uh facilities and uh some of this is cost shared by Wake County, especially as it pertains to fire and the fire uh services area in fiscal year 27. Station one will have carpet and flooring replacement. Station two will have an air intake inducer provided to improve air quality in the Bay Area as well as interior and bay painting at station two. In fiscal year 28, this plan includes interior painting at station one, bay floor maintenance at station one, a close a closing shelter for uh fitness area at station one. We had a fit we have a fitness area at um station 4 and it is uh um the ones that don't work out of station four are jealous of station 4. So we're trying to promote good health and wellness for our firefighters and uh station one will see a shelter for a fitness area. Um our police department now has a fitness area that is widely used and popular by our police officers and so we want to make sure we're taking good care of wellness for our employees. Station one will also include HVAC replacements, two of them. Station two is exterior painting, roof maintenance at station two, carpet and flooring replacement at station two, storage barn replacement at station two, and we intend to have the land purchase for fire station 5 by fiscal year 28, if not sooner. Fisc year 29 will include the parking lot resealing at station one and two, exterior painting at station one, roof maintenance at station one, HVAC replacement for the bunk room at station two, bay floor maintenance at station two, and apparatus bay encapsulation at station two. For fiscal year 30 for the fire departments, we're looking at um station one rescue truck

one replacement to be funded with debt. station number five uh design and a engine on order for station number five due to the long lead time and uh for fiscal year 31 station one and four painting project station one HVAC replacement uh one of those station four parking lot recealing station five construction uh that'll be funded with cash and debt allowed by the two cent recommended property tax rate increasement engines two of them and uh self self-contained breathing apparatuses and mobile and portable radio replacement all in the five-year plan. As it pertains to police, we will do the design of the police facility expansion. Next year in fiscal year 27, fiscal year 28 includes the construction of the police facility expansion and it will be uh well needed and well timely because we're quickly quickly growing out of space or we have grown out of space there. Uh fiscal year 31 will include portable radio replacement which is a wake countywide initiative. And then there's good stewardship of other town facilities. For example, fiscal year 27 includes the public service center expansion construction as well as the Hilltop Needmore Town Park maintenance building roof replacement. Fiscal year 29 includes window replacement at the Hilltop Needmore clubhouse and uh that was the only thing that wasn't done with the the renovation there. So, it still has sort of the old wooden windows that need to be addressed. the public uh parks and recck um cultural resources admin building replacing the HVAC in that building um in fiscal year 29. In fiscal year 30, the Hilltop Needmore clubhouse exterior painting, the Hilltop Needmore Town Park Maintenance Building, HVAC replacement, and the exterior painting of the parks

and recreation cultural resources admin building in fiscal year 30. The art center will see some exterior painting being done in fiscal year 30. It'll be time for a new paint um paint job there. And then in fiscal year 31, replacing two HVAC units here at Town Hall, as well as the replacement of an HVAC unit at the museum building. Arguably, I think we thought of everything for the next five years, but maybe we missed something. But hopefully hopefully not. Hopefully, we've been pretty thorough. And so, the impact to fund balance in the five-year plan, again, $1.5 million in fiscal year 27 and $5 million in fiscal year 28 for the police facility expansion project. And then the five-year plan does not include touching the fi the fund balance anymore over the course of that five years. Um, there's no further use planned in fund balance. The estimated beginning fund balance in fiscal year 27 is 35.5 million and the ending fund balance estimated in fiscal year 2031 with some modest surpluses is $ 29.25 million. The town's financial policies identify a minimum fund balance threshold of 25% as a percent of total fiscal year expenditures which we exceed every fiscal year in this five-year plan. This ratio does not drop below 30% during the five-year plan. And this is consistent with other towns our size. The impact to PAL bill fund balance. I mentioned that we draw down a little bit annually to make sure that we're hitting that $1.65 million that we need to fulfill our resurfacing and sidewalk projects. This uh table here shows what the beginning fund balance will be at the end of fiscal year 26 around 3.2 2

million and by uh the end of the fiscal year 30 around $2.6 million. Again, the 2026 pavement condition assessment will be used to update our long-term spending strategy for POW bill funds. And then we also have our recreation payment and L fee fund balance. Historically, recreation fee and LU revenue support a large number of new recreational amenities, but this is not the case moving forward. Uh, unfortunately, over the past two years, there has been a historic cost escalation in land and recreation improvement construction costs. And while development activity has trended uh still sees growth, it has trended downwards. And all of that factors into a recreation payment and L fees. We have evaluated our current recreational fee and LO formula. I mentioned this at our town board retreat. We have found that it is out of the norm from our peers and it does not reflect the current costs for acquiring land or developing recreational facilities. There is no steady revenue trend to continue to cover the Fleming Loop Park debt service or the uh future recreational improvement projects. It's just not the environment that we're in under this model. And so we will hire a consultant. We talked about this at the board retreat. Fiscal year 27 budget includes funding to hire a consultant to review um the performance of a financial analysis to calculate and recommend park dedication requirements and fee and loo fees. Um Holly Springs recently did one of these studies themselves within the last year resulting in future residential development contributing to recreational improvements in future years. We've got to get a better model because right now uh we're bleeding these funds and we're not generating enough revenue to pay for the recreational needs that our community is demanding.

The estimated fund balance in our debt reserve fund balance is 2.383 million. Over the five-year plan, we're going to draw down $5,000 a year to go towards transportation debt service. Um, we do have uh $295,000 of vehicle fees that we will transfer annually for that debt service. Um, this fund can be used as needed to support transportation debt service or to support a transportation project as uh designed by the board. And again, our five-year plan calls for the draw down of 5,000 annually. So, just some fund balance summary notes. the recreation payment and LU fee appropriations focusing on supporting capital projects identified in the projects by year description. The recreation uh fee and loo revenue levels preclude its use for Fleming Loop Park and the South Park Community Center debt service. POW bill appropriations vary each year for Powville street resurfacing and sidewalk repair projects. The highest appropriation that we will make will be the fiscal year 27 budget with 151,000. The general fund use of fund balance in the five-year plan occurs in fiscal year 27 and fiscal year 28, but not after that. And the debt service fund reflects minimal use of fund balance annually to help support transportation debt service. So you might ask, well, what are we paying for on debt service? Well, this chart right here explains what existing debt general debt gen debt service in the general fund is. And so you can see we've got refunding bonds for street projects um and downtown improvements uh for the 2019 refunding bonds. We've got 2012 bonds that were transportation improvements. We've got the public service center bonds. We've got 2018 GEO bonds which were transportation improvements. 2018 lobs limited obligation bonds. Those were for government facilities. Uh the town hall

and I believe the police station as well, but maybe just town hall. 2021 incremental financing uh for fire ladder truck for a fire ladder truck installment financing uh fire station number four debt uh recreation bonds 2023b this was the hilltop Nemoretown Park community center transportation bonds 2023b 23 geo bonds for transportation improvements transportation bonds the uh the first um of those 10 23 $20 million bond. The first of those 10 million a fire engine. The four replacements we have debt on those. And then we have the second tranch of the 20 million transportation bonds. All of this adding up to annual debt service anywhere between uh 8.7 and $6.8 million of existing debt over the five years.

Mr. Town Manager. Yes, sir. Um I have to stop you here. Uh, Commissioner Vorman, you still don't have to leave. And I think this is a good time for us to take a break. We've been going about hour, hour and a half. So, if we can take 10-minute break and then we can come back. Is that agreeable? I'm going to call a break for right now. You good? I'm good. You are good. Yes, sir. We'll just call call back. Uh, and town manager Mitchell is on you. Thank you for allowing us to take that brief break. Yes, sir. Okay. We

All right. All right, we're almost done with the five-year plan for the general fund and then we'll go right into the utility fund. We talked about existing debt and then the new debt that is factored into this 5-year plan now appears on this chart. The uh public service center phase two um debt is now beginning to come online uh in fiscal year 27 as well as the Hilltop Nemoretown Park improvements in fiscal year 27 and Fleming Loop turf and pickle ball courts only to be accomplished with the recommended twocent property tax rate increase in uh fiscal year 27 and the South Park community center renovations expansion uh as well uh affiliated with the recommended 2cent property tax increase. Additionally, um uh there are uh new debt that comes online for the KBEC Road Town Park uh project also linked to the recommended uh two cents. The fire station number five project also linked to the two cents. Um and then the fire station 5 engine and rescue one replacement. So, this is all of the new debt that we anticipate coming online over the next five years. We were almost there because now we're done with the general fund.

No wonder you looked at me like and before we transition to the utility fund, I'm happy to answer any questions that the board might have. That look like really?

We were very close. We were almost there. Oh man, are there any questions related to the general fund? We talked we talked a lot. We talked about personnel, we talked about equipment, we talked about capital projects, we've talked about debt, new and existing, and we've talked about general operations and revenue assumptions uh that all go into this plan. I think it's a good plan. Um, it does not involve a recommended property tax increase for any of the remaining five years in the four years in the five-year plan, only in fiscal year 27, fiscal year 28 through 31, no recommended property tax rate increase. And it ensures that those four prioritized major quality of life and public safety projects that we've talked about at length that our town border retreat and since then uh get get accomplished and completed.

And do I understand that what originally was forecast was a 2.5 cent increase over the next four or five years. Correct. two and a half cents over five years or two cents if we do it in fiscal year 27. Thank you. Yes, sir. And and and I think I understand that by doing it this way, by being able to have a little bit more cash to pay on some of the items, there will be savings of that service on on the long term. You understood that correctly as well. About $13.5 million. Okay, good. You all got it. You all captured it.

Great. If we need a little uh excitement, I there's about a 4 foot black snake right here in this uh desk right here. I'll just open the drawer and throw them out. But the utility funge should provide enough excitement for for itself. You'll see me start dancing. Snake out here.

There was one really that was in that little table right there at one point, but we were saved by our IT department. Believe it or not, I want to thank uh Mike Wagner. I'm adding him to the list here for the utility fund budget. Mike, our public utilities director, was instrumental in um him and Heather uh in the uh public utilities department instrumental in helping us craft this operating budget for fiscal year 27 and plan for five years for the uh for the town board's consideration. The utility operating fund is based and built on a rate model, and we're going to talk about that rate model in in a few moments. It's also built and based on um the priorities and projects that we have been talking about for the better part of a decade for our community and keeping those projects moving forward. Um the revenues for the uh utility operating fund for fiscal year 27 involve these line items. uh water sales. Um revenues from a planned rate increase for water tap fees, water meter sales, interest earnings, penalties, uh miscellaneous rents and leases, and then revenues generated from sewer service, uh the rate increase, planned rate increase pertaining to sewer service, sewer tap fees, and sewer pre-treatment fees. A total of $40,616,000. This is just enterprise operating revenues and we'll talk about the rate increases as we move forward. Penalties include charges for late payment, shut off, restoring service and insufficient funds. Tap fees are for um tapping into our our system. Um a lot of times we see those come from um uh changes uh from wellwater to town water with annexations and seeking our service. meter sales uh

are primarily associated with new commercial development. Um and John Deere is the only uh corporate industrial customer that pays a pre pre-treatment fee based on their industrial customer discharges. All right. The assumptions for revenues this fiscal year operating budget fiscal year 27 includes a 15% change in water and sewer base and volumetric rates consistent with our uh Stantech rate model uh that we went over at our town board retreat as well as um we've had a rate model in place with Stantech for a number of years that takes into consideration capital investments and the debt service affiliated with those as well as operating costs. The combined monthly bill for an in town resident using 5,000 gallons per month, which is average, will increase $2110 per month. Many households use less than 5,000 gallons. And so the total per thousand gallons used per month is $9.34, which is a base rate of $6440 increase. And then a volumetric rate for every thousand gallons is $2.94. The 15% increase is consistent with what the rate model indicated last year and what we uh presented to the public last year and what was presented to the town board this year at our retreat. Our rates are determined by a consultant using a rate model that determines rates necessary to support capital debt service and operational needs. Base rates are the flat monthly fee for access to water and sewer service. and volutric rates pay for how much water a customer uses on a per thousand gallon basis. Currently, our model, as a reminder, suggests that there is a rate increase needed in fiscal year 28 uh 28

at 15%, 29 at 5%, 30 at 3%, and then it backs off to 2% and one and a half% every there every year thereafter for the balance of 10 years. and we'll show the rate model in a in a moment is updated annually. Uh if the town outperforms its assumptions on the number of customers being added and the growth in system development fee revenues because of new projects, then rate increases may be able to be adjusted accordingly. But using current assumptions, that is what the rate model reflects. Uh there are some utility fee change recommendations in this fiscal year 27 budget. Uh specifically around new water and sewer bill account fee. We're adding a $25 fee uh for when you sign up. This is an industry norm. Right now there's no charge and um there's also no incentive for electronic billing and there's a high cost that comes with paper billing. And so we've been over time encouraging customers to get onto our um our online billing system and receive their bills online. And what we have found as an industry norm is that utilities uh water utilities in particular, towns in particular that provide water charge a $25 fee for a new account setup. And then they apply that $25 to the first month's bill if uh the customer signs up for electronic billing. If not, that $25 is used towards funding the cost of helping to uh provide paper billing to that customer. Okay? So, the goal is you get that $25 back. It's applied to your first month's bill. If you sign up for electronic billing as an incentive, all right, this fee will be credited if the new customer chooses the electronic billing option. The town will save on cost and sta and staff time affiliated

with um generating those paper bills. Um, so there's also a fee of $5,000 proposed for pump station review and inspection. Pump station review and inspection is currently not recovering this cost and this fee is consistent with our peers. All right. So this is the dashboard by uh for our rate model as provided by Stantech, our rate model consultant. Um this slide shows the model needed uh rate increases are 15% if you look at fiscal year 27 15% for water and sewer 15% in 28 5% in 29 3% in 30 2% in 31 and then it backs down to 1 and a.5% annually. Um, one of the things that we discovered when we started doing these rate models several years ago is that there is an industry norm of doing annually between one and 2% uh rate increase so that you're keeping up with the cost of providing service. um we had not been doing that uh prior. And so this rate plan while it uh involves some uh uh greater increases in rates in the in the earlier years to to service our debt and make sure that our capital projects are funded. It also factors in industry norms in the outer years. You'll notice that rates are not only intended to cover operational and capital needs, but also to ensure that the town meets expected benchmarks such as cash on hand and debt service coverage. This is required by our bond covenants when we uh issue bonds and it's important to keeping our bond rate rating which is our ability to borrow debt in the future as needed at the lowest cost possible. The two key metrics that are used by the bond rating agencies to uh confirm that our rates

are set appropriately are cash on hand and um debt service coverage. So this gives you a snapshot of our current rates and our proposed 3/4 inch meters are the uh typical um residential household meter size. So you can see that would be what a typical resident would expect to see as a base rate and a volumetric rate, variable rate um for their water bill. So right now 1784 is the waterbased rate that'll go to 2052 and the sewer base rate for a residential customer 2477 will go to 28.49. Uh the variable rate for an in town water customer is $92 per thousand gallons. The water variable rate in town will go to $10.37 and sewer will go from 1060 to 1219 with this 15% increase. Um again the combined monthly bill for an intown resident using 5,000 gallons will increase by about $2110 for the month. Um as we previously discussed many households don't use 5,000 gallons per month. Some use less, some use more. And so there will be the the increase for water and sewer on a combined volumetric rate is $2.94 per thousand gallons. Our utility operating fund expenses. So that that we talked about revenues. Now we'll go to the expense side of the income statement. We have operations. We have new positions. This is just for fiscal year 27. Capital equipment, transfer to capital projects, transfer to debt service, and total expenditures. uh $47.3 million revenues are under expenditures. Well, why would you have a budget where revenues are under expenditures? We knew that was going to be the case. That has always been a part of our rate model when we started

increasing water water and sewer rates a number of years ago. We did those increases so that we could capture uh cash that we knew we were later going to have to put towards debt service. So, we're taking $6.7 million out of reserves out of the $37.4 4 million that we've built up to pay on debt service. That is what is allowing us to keep those rates at no more than what we had previously advertised and said that they would be for our rate payers. Some budget assumptions. The 27 budget was developed with the primary emphasis of preserving Fugquway Verina's quality of life while delivering core services efficiently and effectively and delivering on commitments made in the prior five-year plans that address long-term water and wastewater capacity needs to maintain reserves to support these top priorities. Capital improvement projects are limited to needed projects, particularly those that support water and wastewater capacity growth, improved system performance, and reduced inflow and infiltration. Those are our three main pillars. Capacity for current and future. making sure that our system performs like it should perform from a system integrity, from a water pressure, from a fireflow standpoint, and making sure that we're not treating storm water uh like it's sewer, getting that storm water out of our out of our sewer system. Those are our three main uh focuses, all while being fiscally disciplined in in doing so. So, I'm going to transition to the five-year plan. We'll talk about personnel. We'll talk about equipment. We'll talk about capital projects for fiscal year 27. But for the sake of efficiency, it's better just to blend this in on the utility fund with the five-year plan presentation. So, I'll move to that at this time. So, here we

are with revenues, and you can see again the $40.6 million that I previously went over for revenues. And then you can see the revenue forecast for the next five years all the way up to 57.8. 8 million in fiscal year 31. And you can see the revenues that we generate with the plan rate increases. Another 15% in fiscal year 28, but then it drops down to a 5% increase in fiscal year 29. Revenues begin to uh from rate increases begin to decrease even further in fiscal year 30 at 3% and then 2% in 31 because the whole goal is to bring these rate increases down to the industry norm. That's the whole goal. All right. So, what are the assumptions that we're using to build these revenue and expense models? Well, first of all, we're using the assumption of 700 new equivalent residential units. This is building permits and apartment units and commercial for water and sewer sales and system development fees in fiscal year 27 and 700 in fiscal year 28 through 31. Now, what have we historically done? Well, we've historically built based around 1,00 to,200 new units in our budget, but again, I showed you in the in the models and the data that we've been looking at for trending forecast in the general fund, those numbers just aren't there. And so, we've budgeted very cons what we think is on the more conservative side uh closer to um a a norm that we've been recently seeing for uh growth estimates. Now, if we outperform that, we can come back year after year and re revisit our five-year plan. maybe even revisit our rate model. But right now, I don't have a great deal of confidence to tell you that we need to budget based on,00 or or,000 or 1,200 new customers because that's just not the numbers that we're seeing right now. On the expense side, again, uh here

you'll see $47 million in total expenditures for fiscal year uh 27. And you can see that uh changed in fiscal year 28, fiscal year 29 and throughout it fluctuates. And a large part of that fluctuation has to do with capital projects, transfer to capital projects. Um and so that first four years in the five-year plan, we're spending down that $37 million that we intentionally captured with earlier rate increases so that we could have rate smoothing coming into the later years. That was the whole goal was to eventually get us down to the industry norm. So you can see we are revenues under expenditures for those first four years, but we're drawing that fund balance down to pay for that so that we have an ending fund balance and a balanced five-year plan. The use of fund balance uh is a commitment to use the revenue raised throughout the recent utility rate increases to support the capital projects and the associated debt service when those rates were raised. Fiscal year 28 capital transfer is mostly uh $17 million related to the Sunset Regional Pump Station project and we'll get into that in a little bit more detail when we talk about capital projects. And the transfer to capital reserve in fiscally 31 will support future capital projects. So you can see there's about a $1.1 million transfer to capital reserve. That's actually a surplus in that year and we'll start to bank that for future capital projects that we know we'll have this u uh we do not believe that the town board needs to have be concerned about the uh estimated fund balance at the end of fiscal year 31 that $15.6 million. It's 27% of the fiscical year 31 total expenses uh that the utility fund will incur. And um that's different from the requirement of the 25% that the general

fund has. Um but nonetheless, it's consistent. And the fiscical year 31's fund balance maintains the ratios needed for the bond cover covenants. It maintains the cash on hand ratios and it maintains the debt service coverage ratios. So now let's take a look at the u personnel, the equipment, and the project investments over the next five years. Assuming we take uh we we've finished the budget assumptions, excuse me. So the utility rate model uses similar projection methodology for departmental costs as is needed in the general fund. Base department escalation factors a 4% growth in the operational department which is consistent with the general fund. Some operational costs are unique to the utility operations and so we have to factor those separate. We talked about those um Commissioner Adcock at one of the previous meetings about the cost of chemicals. Uh we had a contract that the town board awarded on chemical costs. And so there are some things that just aren't you can't base on a flat 4% growth. Uh some you have to factor separately like fuel, like utilities for plants and pump stations, like chemicals. We've got those growing at 10%. The purchase for water resale, uh we purchase from Raleigh, Johnson County, and Haretick County presently. We are subject to increases in their costs. So we budget 6% increases in those expenses and sewage treatment. We treat our own sewage at Terrible Creek wastewater treatment plant in Brighton Forest, but we also send sewer uh into the Capefir River Basin with our partnership with the uh Northern Haret Regional uh wastewater treatment plant and we're subject to cost escalation there as well. So, we factor in uh 6% there. And there are specific new equipment and personnel and project costs that are included uh just as they are in the general fund. And so, now we'll get to that. This chart right here shows personnel, equipment, capital project costs for each year over the five-year horizon.

Um you will see that in 2031, we're not projecting any personnel increases because we're doing a lot of that in the previous four years. We've been playing catch-up in our utility uh enterprise fund uh to a get us more in line with industry norm and b get us in line with where we need to be to keep our our state and federal permits. So we'll look at each category in depth um and and talk more about it. So personnel, this is just personnel in the utility fund, water and sewer. Um we currently have 47 and a half full-time equivalent positions. We're proposing to add seven new positions next year in fiscal year 27, four in 28, one in 29, I'm sorry, two in 29, and two and 30, and no new positions in 2031. At the end of this 5-year plan, it would take us to 62 and a half positions. The addition of personnel has been carefully scrutinized and it is limited to the minimum staffing that is needed to meet our permit requirements to provide core services now and for the future to support increased customer demand to continue providing outstanding customer service which we take pride in to be good stewards of the public's funds and to maintain our current utility system that has a value of over $750 million. So, if you wanted a little factoid to take with you, we're on we're threearters of a billion dollars in value for our utility system. Five of the seven positions in fiscal year 27 are required to meet the 247 staffing requirements at Terrible Creek Wastewater Treatment Plant. That is a regulatory requirement once that plant is expanded to 6 MGD. when you go over 5 MGD, uh, law requires that you have a 247 operation. The positional requests are consistent with all fiveyear uh,

prior five-year plans. We've been talking about this since fiscal year 23 that once we expanded our our Terrible Creek plant, we were going to have to go to a 247 operation. uh the result of sta this is also this plan of the next five years is also the result of a staffing study that we conducted in fiscal year 23 that told us what the industry norms were and told us where we needed to be to operate an efficient department. There are three major capital projects coming online in the near future and we have to have staff to operate and maintain those and we are being very intentional of the staff that's being added so that we methodol uh methodically, excuse me, catch up to the appropriate staffing levels. Every one of these budgets puts one word and I can't pronounce and that was the one. All right. So, why do we need these positions and what are the risks? What do what function do these positions serve and what are the risk if we don't do these positions? I think it's important for the board to understand that. So for our collections department, that's waste water collect collecting the the water and and treating it. Uh for operating and maintaining our sewer system, we have a responsibility to clean 10% of our sewer lines annually. That's under our permit with the state. We have a responsibility to do pump station operation and maintenance. We have a responsibility to do sewer line repair, installation, operation, and maintenance. We have a responsibility to maintain easements. And we have a responsibility to camera and inspect our sewer lines. And if we don't have the right people in the right place to do this work, we risk violating our permit requirements with civil penalties. We reduce we risk permit um we our permit requires weekly visitation. We we will have increased risk of sewer overflows which could result in civil penalties and public health concerns. Increased risk of pipe failure. uh sanitary sewer overflows which could result in

increased uh risk of more costly and extensive repairs and an increased risk that customers will be at without service longer. And if you think that you've never met a a mad customer, wait until they can't flush the toilet, then they really become upset. So, we can't have that risk. And that's why we need to have the right people in the right place. The town currently has 200, another little factoid for you, 250 miles of sewer lines. I think Mark added that up. That's if you put all those lines back to back to back, you could run one sewer pipe from here to Washington DC. It' be a bad sewer pipe, but you could do it. The estimate will uh we estimate that in the next five years, we'll add 30 more miles of sewer lines to our system. Only just meeting the permit requirement. We're only just meeting today the permit requirement of cleaning 10% a year over five the five-year plan only covering 50% of the assets. half of the assets will go uncleaned and and that's why we have to have a plan for maintaining those. We have 37 pump stations. Um we're going to add nine new we estimate over the next 5 years based on subdivisions and projects that we know are coming online. That's not to mention the ones we don't know that are coming online, but the ones that we believe will happen over the next five years are going to add nine more pump stations to our our inventory. Our permit requires at least weekly visitation to each pump station with SCADA. And the pump cost uh is is high. So we want to try to avoid pump failures and long wait times for replacement pumps. The expected useful life of a sewer line is 50 to 75 years depending on the type of pipe material and the adequate maintenance of that pipe. And so preventative sewer line replacement is less expensive compared to unexpected repairs and line failures. um you know, we want to make sure that we're we're not having to put out fires, that we're getting ahead of it. So, uh we we're looking at those

positions. Then, a crew leader in our collections in fiscal year 27, growth and new development is a driver. The addition of 30 miles of of gravity and six miles of force main. And so this person will oversee the repair and installation of gravity sewer and force mains, serves as a backup operator, and assist the supervisor with permit compliance, a utility integrity technician in fiscal year 27 to operate and maintain water valves and CCT um gravity sewer main. So this is sort of a joint position. This is a dashboard of our sewer collection system. We have 6,633 manholes, 37 pump stations, 32 force main valves. Um, we anticipate uh greater than 30 miles of gravity sewer uh that will be added to our system and greater than five miles of force main nine pump stations over the next five years. Here's a list of some of the new subdivisions that we are know are either under construction now or will be coming online in the next five years. It's a pretty long list. Um, we've got mixeduse projects which equals new infrastructure. Von Park, Academy Village, Harvest District, etc. And commercial projects, which is new infrastructure. Gold Leaf Crossing, the Stoen Industrial, the Royal Creek Form Base, Banks Road Flex, Fquway Commerce, etc. Lot of different projects coming online that's going to add to our system. And so the AWA, the American Waterworks Association, best practice is for us to have five people for every 100 miles of sewer line. The town has over 250 miles of sewer line. Technically, we should have 12 and a half positions for that uh inventory. Currently, we have seven positions. So, you can see we've been operating lean and we got to catch up and we got to make sure that we're meeting the requirements under our permit.

That's less than 60% of the staff that we need currently. And we got growth on the way. So, we've got to do something and that's what this plan aims to accomplish. the terrible creek wastewater treatment plant expansion, the operation and maintenance. I talked about it 6 MGD, we have to have um anything over 5 million gallons per day requires staffing at 24/7 or we violate our permit to operate the wastewater treatment plant. So, we're proposing two operators in fiscal year 27 and one operator in fiscal year 29. This maintains a $97 million asset. We did an expansion in 2018 and we're currently under under construction for our uh expansion to 6MGD. These are certified staff that are required to operate the facility and ensure this provision of a core service. And this plan expansion will be complete in January of 27. And so we'll look to do a a ribbon cutting on this on this um big venture. We did that in 2018, I guess it was. and um it was a benchmark for our community. We have Terrible Creek and Brighton Forest wastewater treatment plant permit regulatory compliance. So, we will need to uh begin doing in-house lab services. So, we'll have a lab supervisor in fiscal year 27 to analyze permit samples for the Terrible Creek and Brighton Forest plant and water samples, a lab technician in fiscal year 27, and a water quality technician in fiscal year 29. Um, with this increase in sampling volume, in-house staffing will be more responsive, efficient, and effective. Without these positions, we would still have to staff have staff to do courier samples to a contractor and it will cost the town more money in the long run. The economy of cost makes the most sense. Uh

and it also ensures the highest of quality for our customers. In-house testing will be more frequent so we can also save the cost on sending samples to the commercial lab and it also helps extend the life of our system assets. So that's the sewer side. Now on the water side, let's talk about those responsibilities and risk. We have a responsibility to ensure water quality, quantity, and pressure. We have a responsibility for waterline maintenance and repairs. We have a responsibility to service line maintenance and repairs. We have a responsibility for installation of new services. And we have a responsibility to clean and exercise valves. And if we don't do that, we risk violating our permit requirements, which could result in notice of violations and civil penalties. Increased risk of pipe failure, increased risk of more costly and extensive repairs, increased risk that customers will be without service longer, and increased risk to public health and safety. That one being perhaps the most important. People may not be aware that not only is the town required to ensure the quality of the water that comes out of the household tap, the water and wastewater treatment plant discharges back into the noose and Capefir basin systems must also meet regulatory requirements. So the five-year plan accounts for a senior distribution operator in fiscal year 27, a crew leader distribution u employee in fiscal year 28, a distribution operator one in fiscal year 28 and a distribution operator two in fiscal year 28. This is so that these positions can repair and install water lines, maintain water quality, pressure uh easement mowing, e pressure easement mowing, install meters, regulatory compliance, address customer concerns. We have an interlocal agreement with Holly Springs to operate and maintain

the Sanford conveyance line that will be built uh over the next few years. We have the growth and new development that we know is on the way. That's the driver. We anticipate it's going to add 37 miles of waterline new pressure zones and booster stations and tanks over the next five years. We're also planning for a utility location technician in fiscal year 28, a utilities engineering technician in fiscal year 30, and a utilities engineer in fiscal year 30. Uh again, growth is driving these decisions. Development plan review, inspections, and project management. Growth and maintenance are driving these decisions. We're averaging 1,300 water and sewer line and town fiber locations per month. You know, when someone when a fiber company is digging in town or we've got a contractor that's digging or new subdivisions, we got to go locate lines. 1,300 locates between water, sewer, and town fiber per month. That's a lot of workload in a one-mon period of time. Corrective and preventative maintenance is a big driver both of the wastewater treatment plant equipment and pump stations. Total water and sewer assets in five years we think are going to be plus or minus sewer gravity lines of 280 miles. Force mains plus or minus 34 miles. 45 total pump stations. Uh plus or minus 417 miles of water line. Three water booster pump stations. Three elevated water tanks. We're getting ready to build one um off of Volp Road and and Wilbine Road. One ground storage tank and two wastewater treatment plants. Brighton Forest and Terrible Creek until Brighton Forest is decommissioned. This is our dashboard for our water distribution system. Again, we've got the Sanford conveyance line that will be under construction hopefully in the near term. 17 miles of 36 inch and 24 in pipe and booster pump station, a new 1 million gallon elevated tank at Old Pal and Wilbond. And then

another 1 and a half million gallon elevated tank in the Sunset Lake Road uh vicinity of town. public water line extensions, capital improvement plan uh projects. Uh we think the private sector will add more than 40 miles of water lines, valves, and hydrants that will be turned over to the to the town for ownership and maintenance. Again, these new subdivisions are going to be adding to our infrastructure, plus the mixeduse projects, plus the commercial projects. It's happening. Uh AWA best practice is five people for every 100 miles of water line. We have 329 miles of water line currently. We should have about 16 and a half positions uh to serve that 329 miles. And we have eight. And so uh the two crew leaders and the six distribution operators over the next five years will help help to bring us closer to where we need to be. These are just some pictures, some examples of recent repairs and utility that our utility crews accomplished. We had a water line break on Lake Wheel Road, which was the upper left hand picture of your screen. Highway 55 and Dickens Road, which is middle left. Um, we had a 4 foot thick asphalt utilities that had to be get through to even fix the pipe. Um, 4 foot thick. Do you see even get to to get to the pipe? In his street water line replacement is on the bottom left. Uh all these pictures on the right are of a sewer line break on Andrew Road south of Jud Parkway and we had hurricane damage from uh both Hurricane Debbie and Helen.

Just drill a hole, put a charge in there. Um here are some more examples of infrastructure. We have aerial sewer lines off of Andrew Road. The left is the before and the middle is um literally a tree that is smoking. How does a tree smoke? Um, the tree is intersecting a sewer line and when we did smoke testing, the tree began to to smoke. You found a leak, huh? Yeah. Uh, and then the right is a sewer line that crosses the creek. A tree fell on the sewer line, breaking it, right? It's not connected. Where do you think that sewer went till it got fixed?

Yes. So these are just some examples of what we deal with, what our department deals with um on a daily basis. Equipment recommendations. There are equipment recommendations over the next five years, both new and replacement. Uh in fiscal year 27 where we have included a enclosed trailer to secure tools and equipment at work sites. That's an example at the top left picture there. An open trailer to move equipment to and from work sites. That would be example in the middle picture, top middle, easement mowers on the top right. Uh staff trucks, both new and replacement, bottom right would be an example. An asphalt saw, that's not pictured, and a spare sewage pump for the Terrible Creek wastewater treatment plant, also not pictured. The new sewer combo truck uh was ordered for fiscal year 27, was available early, and so we purchased it in fiscal year 26 because we had the capacity to do that. Fiscal year 28 includes a tandem dump truck bottom left an excavator bottom middle staff trucks both new and replacement bottom right also a spare sampling equipment for the Terrible Creek wastewater treatment plant no picture and some location device equipment for our new position that we're including in this budget also not pictured moving forward with some additional equipment recommendations in fiscal year 29 is sewer easement machine that's on the top left. This helps clear uh difficult to reach sewer lines and rugged that are also in rugged terrain. A 4in sewer bypass pump top middle. Uh a crane truck. Example of that is top right. Staff trucks new in replacement. Bottom middle. And we have a press pump for the Terrible Creek wastewater treatment plant which is not pictured. Fiscal year 30 includes a dump truck lower left with tarp, no broken glass.

an ATV for uh our our an ATV for our CTV CCTV. So, an ATV to carry our camera for sewer line inspections in difficult to reach areas in rugged terrain. Some staff trucks new and replacement in fiscal year 30 and a ground penetrating radar for locators. No picture there. Some equipment recommendations for fiscal year 2031 include a spare pump at our Eastern Regional Pump Station. That's near John Deere and South Lakes area. That's top left would be an example of a spare pump. A sewer van and CCTV equipment in the middle to be able to more effectively and efficiently inspect larger sections of sewer lines. A utility bill folding and envelope stuffing machine. We're going to have to replace the one we got unless everybody goes on uh online billing and gets their uh their bills uh emailed to them. Um so we're going to have to replace that. and then replacement staff truck bottom right. And so again, just to give you sort of a concept of our system, um we get water from both uh Raleigh, Johnson County, Hornet County, and in the future, city of Sanford. Uh we have our own wastewater treatment plant at Terrible Creek and Brighton Forest. And then we also discharge sewer to Hornet County through the North Hornet Regional Wastewater Treatment Plant. We have some capital project recommendations in the five-year plan. Of course, the big ones that we talk about that hit our debt service the most are the Sanford Water Treatment Facility. Uh that's pictured in the top left under construction for expansion. The Terrible Creek wastewater treatment plant that's in the middle photo and that is an updated photo of of the site that is undergoing construction and expansion now. And the Harnet wastewater treatment plant bottom right. We first budgeted these major generational investment capital projects in fiscal

year 24. We'll have an update on their progress later in this presentation. The projects in this five-year plan support the full implementation of those projects, the future expansion by filling in needed infrastructure and annual investments to maintain our current utility system. So capital projects in 2027, the major projects of 2027 are um are uh in water connection project to fill in service areas, a water capacity study. Um that's the million dollars. Uh that's for the water capacity study that is to hopefully wrap up our interbation transfer process. The Johnson Pond Road Loop, Hilltop Nemore to Spicewood is a is a connection project to fill in service areas. We've got an investment, a two-year project. This is year one of two years for advanced meter infrastructure. This replaces meters that have reached the end of their life expectancy, improves electronic water usage reporting, decreasing the need for manual meter reads, eases staff workload, and enhances customer service quality and timelines. We have the 1 million gallon water tank uh that will be under construction in fiscal year 27 partially funded with debt uh savings from a prior issuance on the sewer side. Then we also have and you'll see this I won't mention this every time but every year's budget for five years we'll have water line replacements water line oversizing valve replacement program and miscellaneous water projects. So these are all annual expenses that you should expect to see every five years, every year for five years. Under the sewer side for fiscal year 27, we will decommission the Brighton Forest wastewater treatment plant uh with the whole goal of taking that treatment plant offline and only having one treatment plant to operate

and maintain. Uh making improvements to uh the junction area of our system. Um, we will do the design in fiscal year 27 and construction in fiscal year 29. This is Andrew and Holland Road area. We will also do some upsizing of downstream infrastructure to accommodate vertical growth in downtown Fuway Verina. We're also including in fiscal year 27 uh the design for the Sunset Regional Pump Station project with construction planned in fiscal year 28. This takes three existing pump stations offline and combines them into one central location for more effective and efficient operations. The existing pump stations all compete to pump into the same undersized force main. In addition to the new projects discussed each fiscal year, the town practices good stewardship of existing infrastructure through annual maintenance and repair projects. Annual utility maintenance projects that you'll see each fiscal year are water line replacements to ensure uninterrupted water service, water and sewer uh line oversizing, payments to developers who upsize infrastructure that they install to meet our future development needs so the town doesn't need to replace relatively young infrastructure. So, we'll partner in that. Valve replacements to ensure water lines can be isolated in case of breaks or maintenance needs. sewer inspection, sewer line inspection and cleaning, which is vital to maintaining an efficient sewer system, and sewer line inflow and infiltration inspections to prevent storm water from entering into the sewer system, thereby creating unnecessary costs. Fiscal year 28 projects, the major projects in 28 are a one and a half million gallon water tank design and rightway needed for that project. Um in addition to that the Andrew road loop

which is a connection to fill service areas. This waterline loop is needed to support water quality quantity and pressure between Andrew and Perfroy roads and the second year of a two-year phased advanced metering infrastructure project. On the sewer side we will include the design for the Andrew road interceptor where the construction will be planned in fiscal year 30. This will alleviate downstream impacts from the Parker station subdivision and the construction will be included in fiscal year 28 for the Sunset Regional Pump Station. The construction of the project that will be designed in fiscal year 27. In fiscal year 29, we will be focusing primarily in the water side on maintenance and repair of existing waterline infrastructure. on the sewer side where we will actually do the construction of the sewer improvements in in the junction area of Andrew and Holland. The construction of the project that I previously mentioned and sewer also includes the little black creek interceptor. This is in conjunction with the Black Creek regional pump station in Force Main. This will support regional sewer service and the southeast ETJ and hopefully be a catalyst for future development. In fiscal year 30, the major water capital projects include the construction of the one and a half million gallon water tank that will be located in the Sunset Lake Road vicinity and three connections to fill inservice areas of growth. Kbec from Ma Stewart to Walter Matt. Buck Roland from Walter Matt to Kbecbeck Road. The Johnson Pond Loop 1010 Road to Optimus Farm and maintenance projects on the sewer side. The Andrew Road interceptor will be constructed. Previously mentioned that one as well as the Black Creek Regional Pump Station and Force Main will be constructed. This is in conjunction with the Little Black Creek Interceptor that

I just discussed. And in fiscal year 31, there are five water projects. The Whitt Road loop, the old stage road from Mount Pleasant to John Adams, the Eddie Howard road from Walter Matt to Panther Lake, the Clayton Road at Highway 55 to Mos Stewart, Panther Lake from NC42 to John Adams, as well as maintenance projects. And on the sewer side, we're only focusing on maintenance and repair of the existing sewer infrastructure. And so this is the capital improvement plan for the next five years. Here are these projects shown on a map for your reference. I'll give you just a minute to take a look at that to um digest it for a moment. So you see we're in addition to some of the big system integrity and uh water and sewer capacity projects, we're also doing some projects in the southeast region of our ETJ and urban services area. Any questions there before I transition to debt service fund? We've talked about rates. We've talked about budget revenue assumptions. We've talked about expenses. We've talked about personnel. We've talked about equipment. We've talked about capital projects. Really, the only thing that remains to discuss in the enterprise fund is debt service, existing debt service, um future debt service, and the capital reserve fund. We're almost there. Any questions for me? Should I keep on going, Mayor?

Uh, yes. I just um the Sanford Water Project Yes. issue. Is that on here anywhere? Is that It is not. I've previously referenced it, but it is uh the line coming from there is not on not shown on this map. These are just town um inside the town. Okay. Jurisdiction projects. All right. All right. Yes, sir. Okay. Good. But it is it is in the financials and it is on our plan. Okay. Yes, sir. Just not on this map. All right. Thanks. Yes, sir. Any other questions? Okay. Carry on.

All right. Debt service fund. Our debt service fund involves uh revenues and the expenses associated with debt service. Our revenues come from a ch a transfer from capital reserves and then a transfer from our utility operating fund. Uh the debt service funds revenues equal expenses and are not expected to build a fund balance. They're a balanced fund. Debt service shown here does not include the utility funds portion of the general fund public service center debt service. That is paid directly from the utility operating fund and not the capital reserve fund. The debt service for fiscal year 27 is $16.3 million. 8.7 of that million is paid by the capital reserve fund and 7.5 is paid by the utility operating fund. debt service fund balance as of June 30th, 2026 uh is zero because we operate on a zero balance for that fund. The fiscal year 27 estimate for this fund is that it will not use or gain fund balance throughout the five-year plan. The utility fund debt service, what makes up existing debt? We have our combined utility bonds that we issued in 2016 for utility related projects as well as in 2021. We have the public service center uh the utility fund share of the public service center debt from the original build. We have the 2023 water geo bonds. The southern oaks gravity sewer line bonds that re that project recently wrapped up this year. The north haret county wastewater treatment plant expansion project. The southern uh we have okay so southern oaks gravity sewer line was wassued in two different instruments. the Sanford expansion, the 1 million. So, mayor, there's the expansion of the Sanford plant on the chart, the 1 million gallon water tank,

the Harnett County water district purchase,

the waterline projects uh for 2024bs that we issued, the Sanford expansion SRF loan. So, we've got some through bonds and we got some some through state loan, and the Terrible Creek wastewater treatment plant expansion. Some of these are big numbers. Turbo Creek, 70 million. Sanford expansion, 59 million of it is SRF loan, 47 million of it is through bonds. Um the Harnet County wastewater treatment plant, 50 million. We're talking big numbers. When we expanded the Terrible Creek wastewater treatment plant from 1 million gallon to 3 million gallons, it was the largest cost single project that the town had ever endeavored at the time at $30 million. and we it was that was a big pill for the town to swallow at that time. Now we're talking hundreds and millions of dollars of projects. That's how we've grown as a community. And then we've got new debt coming online. The Sanford conveyance line 69 uh.83 million and that is not bid yet. That is what we estimate the project to be. So we'll see how that comes in. the public service center expansion that is the uh utility funds portion of that the the fourth water tank 1.5 million gallon tank and the black creek regional pump station in force main so all of this is new debt that we anticipate coming online in the next five years in the utility fund and so our total utility debt is anywhere between 17 million and 26 almost 27 million a and that is supported with both customer rates and system development fees. So then we also have the utility capital reserve fund.

Um this is where system development fees live. System development fees are for water and for sewer. We did a system development fee rate study this year as well as a consumer customer rate study. And that system development fee rate study based on all of our capital projects and all the debt service that we uh are planning to undertake or have on our system already indicated that we could make some small incremental increases and be within our statutory requirements for water system development fees and sewer system development fees. So, we're showing a small increase that will generate about an additional $31,500 a year in water system development fees and an increase on the sewer side that will generate about $152,600 in revenue on the system development fees on the sewer side. But that is ensuring that uh both the development community and our customers are uh paying into um the the cost of of our utility system. System development fee revenues reflect the proposed increase that I just mentioned. It is typical to use fund balance in capital reserve funds. Fund balance has been intentionally built up knowing that it will be needed for specific future capital projects or the debt service associated with them. And I mentioned that earlier. Think of this as your savings account. It's there in case of emergencies, but you might also sock money away knowing that you want you will have one day in the future larger expenses that you will need to to pay for.

The 3,700 U73,000 reimbursement in fiscal year 27. You'll see that in the first column. Reimbursement from issued bonds is capital reserve funds spent on the Sanford conveyance project with the intent to reimburse when revenue bonds are issued which is expected to occur this year. So we reimburse that fund $3.7 million. We cash flowed. The ending estimated fund balance in the capital reserve fund you can see fluctuates from year to year anywhere between 2.7 and $4.5 million. Again, Stantech was the firm that also reviewed our system development fees. Water system development fees are recommended to go from 4,929 to $4,974. Again, a very small increase, but one that is permitted under state statute nonetheless, and increase sewer system development fees from $4,845 to $5,63. We have a scheduled public hearing on May 19th that is required by state t state statute for system development fees. We also have it for our budget as well, but we have to do a separate one for system development fees. And we have posted the system development fee analysis that Stantech has performed for us on our website and it's open for 45 days for public comment. And assuming that the town board concurs with these recommendations, you'll be asked to adopt the fiscal year 27 system development fee schedule uh in addition to this to the town budget on June 1st. Water uh system development fees are increasing to support capital projects to update town water townwide water meters that have reached the end of their useful life. And in conjunction with this meter replacement, the wireless reporting system will also be upgraded to ensure that we continue to

have accurate bills and reduce our billing staff workload. The sewer system development fees are increasing. They're going to help support projects that will ensure uh things like downtown development um and uh residential sewer capacity. system development fees ensure that residential customers do not bear the full burden of growth in Fugquway Verena. So, we've been talking about these projects for several years, but I want to just again emphasize the Sanford Water Treatment Plant expansion. Its estimated completion is in fiscal year 29. Um, three of the four major projects again are under construction. The Sanford one is under construction. Our share is $136 million and we're expanding that plant from 12 MGD to 30 MGD. The project is proceeding very nicely and within project budget and is on pace to again be completed in December of 2028. The Harnet Regional Wastewater Treatment Plant expansion, our share is $44 million, expanding the plant to 16.5 million gallons per day. uh we we will um uh see an additional uh 2.6 MGD so that our total capacity will be six. It also is proceeding along schedule and within budget and it is on pace to be completed the first quarter of the calendar year of 2028. and our Terrible Creek wastewater treatment plant expansion, $70 million, expanding capacity from three to six million gallons per day, also proceeding on schedule and within budget, and it is on pace to be completed before January of 2027. The Sanford water conveyance project, it is uh very close to being ready to be bid uh pending D, North Carolina Department of Environmental Quality permit approval. The project is a bit

behind schedule uh due to permitting, but it still can meet construct the construction timeline we believe. Um however, any additional delays uh could result in the conveyance line being finished after the plant. We're doing everything we can to avoid that. And with that, Mr. Mayor, that includes the fiscal year 27 and five-year plan for the utility fund. and I'm happy to answer any questions that the town board may have before I sort of wrap it up with a uh a recommendation for what I'm looking for from the board this evening. All right. Any questions from any board members? Sure. Um,

Mr. Warren,

so I was wondering if there maybe is a simple, easy to chew on answer to because we're going to get the question, you know, why are our rates going up 15%, you know, two years in a row. And I mean, you presented a lot of numbers very quickly and we appreciate that, of course. Um but you know when I'm when I'm trying to answer that question to just you know people the rateayers basically uh is there is there something easy to point to something easy to chew on as to as to what was it is it I I noticed you the capital projects were like a big big portion of that is is it just because of these all all the new building we're doing all the new infrastructure we're building.

It really comes it really comes down to to uh a few things. Number one, yes, you know, a large part of um the rate increases that we're experiencing are due to the investments that we have committed to making for our future.

Um that really is the primary driver. You could not you could eliminate um staffing positions out of the budget. You could eliminate equipment out of the budget. you could eliminate even some of the smaller capital projects and you would not be able to avoid a 15% increase because of the large capital projects that we've committed to. So, I think the very easiest and simple thing to point to is is that we have a 10-year um and really uh our utility department uh uh looks at a longer horizon as well, but we have a documented 10-year capital improvement plan uh that we have been uh publicly discussing and and planning for for the better part of a decade and implementing along the way. and we have committed to projects that will um allow our town to continue to receive reliable, safe um drinking water and uh be able to continue to uh with public health and safety in mind, treat uh waste water that is in an environmental friendly manner um now and into the future. And um there are certainly I think you know we hear from time to time about um the challenges of growth but there are benefits to growth as well. Um adding more customers allows us to spread that cost out over more individuals which helps to to keep cost uh as manageable as possible for current users as well. and it allows our town to uh cons continue to see the fruits and the benefits of of growth that is going to happen in this region whether we like it or not. So I think that is the number one um number one thing that you could

point to easily to explain why we're seeing these rate increases. We have planned for these rate increases and we have also very uh intentionally planned for rate smoothing and rate stabilization. Our goal is to not do these 15 and and you know we did a 20% increase one year as well. Not do these big increases, bring them down through smoothing and then only uh be be considering industry norm increases year-over-year one and a half one and a half percent. That's the goal and and and have a plan that maintains that for the next 30 years. Um and so that has been the focus there. The other piece of it is the cost of construction and the cost of maintenance of a system continue to just be exorbitant. When there's more work in the market place, the the the demand is higher and the cost is higher and um and there's certainly not a lack of projects in this region that drive the price up. So the cost of maintaining and operating a system have gone up. Fuel prices have gone up. Chemical prices have gone up. Those all factor in to um you know what rate what the rates have to be to to maintain a system. So there's there's operation and maintenance that just costs more. There is investing in our future and that that is the big the big driver. Uh that's that debt service that we're looking at. Um, you know, and I think that the other piece of it is being good stewards of a of a system that is valued at $750 million. We have to maintain it. We have to have the people to maintain it. We have to have um, you know, the the the resources, the equipment, the things to do that. All these things factor into it and the cost. And if we don't have these rate increases now so that we can

provide more stability in the future, then um, we just don't meet that need. Sure. Simply simply put, we can't afford it. No, I think I Thank you. I think that answers just, you know, when I'm complex, it's a complex topic, but I think that sort of gets to the main three pillars. Absolutely. Yeah. And that's what I was kind of looking for, just because I know people are going to ask us about this. You know, 15% is is going to be tough for some people. So it is um it is and that's why we do a rate model as well and why we talk about rates for the next five years so that the public can be can understand our system

if if if we're conveying it to them or if they're paying attention to uh to these presentations and to what we discuss. We don't want this to be a surprise for anyone. And that's that's sort of been our mantra the entire time we've been talking about these these big investments that we're making is we don't want it to be a surprise for our customers. We want our customers to plan and be prepared for it and know that we do have a plan to to smooth this these rates out into the future and have a stable uh plan moving forward.

Yeah. I'll also just add that the town has been able to defer the need to make some of these sizable long-term investments and water capacity because of some intermediate term uh water supply arrangements that we have with some of our suppliers. Those are going to expire. they are

we have known that that is going to expire and if the town does not make the capital investment we won't be able to serve our current users. So the system development fee piece is that is ensuring that new growth pays what we are allowed to charge by formula under state law. the ch the chair that is attributable to growth, but there are costs that are uh directly tied to meeting the needs of our current water customers. And as we get more customers, they're going to help share that debt service cost. And so, uh it's a lot to bite off when you take on uh new debt service until you've got more customers to spread that cost onto. Good question.

Yeah. Thanks. Any other questions? Go right ahead.

So, I feel like we have um I feel very confident that we have a good, sound, workable plan for both the general fund and the uh utility enterprise fund. And so unless the board provides um any uh substantial feedback that would alter this plan, I intend to present to you on May 4th a balanced general fund budget, balanced utility fund budget for fiscal year 27 and balanced five-year plans for both uh generally along the lines of what I presented tonight. Um, that means I am recommending a two cent property tax rate increase for fiscal year 27 for the reasons we discussed. And I would say to the board that if um if you um are not or feel like you're not in support of that or could not support that, I need some feedback on which of those four quality of life and public safety projects you are wanting to cut because those that tax rate increase is tied directly to those four projects. Fleming Loop uh park turf and pickle ball courts. And by giving that project up, we are also giving up $4.25 million in Wake County hospitality tax. And I feel very confident in telling you that if we give that $4.25 million back, we probably should not ever go for a long time and ask for money through that process again. Um there's the KBEC road town park. We went through a mark primarily drove an effort to get Wake County and the Wake County public school system to commit to that almost 20 acres of land for a dollar a year for 40 years with renewable terms under the go under the

uh understanding and and agreement that we would develop that park. So that park helps us to achieve uh both youth and adult sports u needs in terms of facility space and without those improvements u go there goes the 20 acres. Um there is the South Park Community Center renovation. Um that is largely in part to improve and drive the improvement of customer experience and user experience. It also while we don't necessarily aim to try to replicate what we have at Hilltop Nemore Town Park because I think it would be very difficult to do that with an older building renovating renovating it. In large part, we are trying to provide some equitable services between uh those two facilities. And then there is the one that I would absolutely tell you that I think would be very problematic to walk away from, which is the design and construction of a fifth fire station. Um, simply put, I think we would be um, putting at risk our ISO rating and we would certainly um, degrade the level of service we would provide from a public safety standpoint. So, those two cents are tied directly to that. And if that is not something you feel like you can support with all the justification I provided, I need some feedback between now and May 4th so I can um potentially alter my plan or at least between May 4th and June 1st when you when you adopt it. But right now that's the plan I'm planning to present and I'm happy to to retain any feedback for you. I think it's a good plan. I think it's a justifiable plan. And I think there's some good benefits uh by by advancing that property tax increase which I previously mentioned. And that would be my recommendation to you and plan would be my recommendation to you unless I

hear some overwhelming reasons from you as to to back off of that. The utility fund is what the utility fund is. We've we've we've made the commitments on that. We've got the debt service. We've got the cost of operating our our system. Um, that is built on a plan and that's that's that's what that is. What can I help you with? Are you I'm done. You done? Yes, sir. Well, great job. Thank you. Yeah. Thank you. Very detailed. Thank you.

Appreciate it a lot. uh any discussion among the board or either if we not ready to discuss it yet uh the town manager has clearly identified you know the issues that we have to contend with and I don't know if anyone is ready to discuss priorities or not or if we're going to just uh wait and just think about this and then then look at how we want to approach a couple of issues the the tax tax rate increase And if so, or if not, there are some priorities that are listed that we may need to discuss or either think about. And if we're ready to talk about it now, this is a good time to inform the town manager. And if not, during the course of the next couple of weeks, we we need to think about what we want to do in regards to the proposed tax increase and the fees that have been proposed to us this evening. So, what is your pleasure?

Uh, just one more quick question. Okay.

So, of the the four priorities you listed, let's just assuming the board I'm just making up some just hypothetical is not comfortable with the twocent increase. It looks like, you know, from what it sounds like the South Park Community Center renovation would be the least the well given like, you know, we have the grant on Fleming Loop and the dollar for 40year uh on KBc Road, you know, it looks like South Park Community Center renovation may be the least bad thing to kind of take away from if we're not comfortable with a 2%

two cent increase. Let me help you here. Tie tie one penny to the fire station and then we get the other three projects done with the other penny. And if you want to reduce the south if you want if the board wanted to take South Park Community Center off the table but leave Fleming Loop and KBEC Road on the table, I'd have to run the analysis. Maybe you're dropping it by a quarter of a cent. So what you're saying Oh, go ahead. I'm sorry. I'm fine with approving what the manager has presented to us tonight. I also agree. Um I feel like you know uh you and finance department have kind of factored in everything that possibly could come down

that we have to deal with from general assembly on down and any of these things have been factored in. So I agree as well. I just want to thank each and every one of y'all for all y'all did. I know we wish all these department heads could have got all their wish list. We totally understand and we wish we could have did every single thing, but you know, this is where we at and we have to make sure we take care of the top priorities and the needs and and one day we'll be able to give all the extra wish list and everything and fulfill all your wish lists. I know that some are very extensive. Uh but definitely thank y'all each and every one of y'all for your hard work. definitely finance and uh department for all your hard work as well cuz I know this takes a lot for this what this been 3 hours or something but I know it took y'all countless hours to bring all this together and balance it. So thank each and every one of y'all but I agree with Commissioner Hcock. I'm I'm good with two 2% two cents.

Great. And just to follow up, what I what has um gotten me to that point really is I'm looking at it as um you've presented something to us that that has reduced the the increase from 2 and 12 cent to two cent. Yes, sir. And uh I'm I'm happy that you were able to do that and I'm willing to go to the two cent in this year to make that happen.

Okay. Thank you. Mr. Mayor, I have to concur with the other with Commissioner Ed Cox's assessment of that. I mentioned it early going from two and a half cent to two cents plus the savings on having to we able to reduce the debt service, able to reduce the debt amount. That that to me is key for the long run over the next 20 years. Correct. Of payback. That's right. Uh so I thought that was pretty wise. And then again, you could break it down piece by piece, but you know, we cannot not look at the fire station five. I would not I would not recommend that.

And then, you know, the others break down to little pieces of a scent. I think I think it's just good to go ahead and save the money up front, get it done, and then if you decide you want to do those projects later, they're only going to cost you more. And and one last thing, the fact that you're presenting a five-year plan right now that has no further tax increases in the rest of the next five years is also attractive to me as well. So I I'm I'd be ready to go forward with that proposal that the town managers made as well. Great. I'm glad you talked a bit a bit about it beforehand. Yes, ma'am. It it helps to be able to get your mind kind of wrapped around it

before we have to make that decision. And I think it I I think u I'd rather just bite bullet and do it right up front like this rather than doing it twice raising right two you know I think I think stretching it out and doing two doing it two times in the five years would be much as it would be much more trouble some to the to the public I understand great any other comments comments. Oh, yes. Just going to say it sounds like we agree. So, I'm Thank you. Thank you. Appreciate y'all's feedback. That helps.

Yes, sir. And I appreciate Commissioner Haynes is thinking of all of our department heads. I won't repeat all of that, but I know how hard the staff is working. They'll work for sure. This is a tough time of year for them, for you, and for the finance department. So, we appreciate it. Yeah. Thank you for that. Appreciate it. Any other comments? Are you clear on the direction, town manager? Yes, sir. I've got You did a good job. You made it concise and you went through it. I tried. Appreciate y'all sticking with me on it. It's a lot of information.

Yeah, a lot of information, but good information. And the alignment with our strategic plan, I think, is the key. Long as we stay focused on that, you know, whatever we do and however we convey it to the citizenry, it lets them know that we're on point in our planning and we're doing it strategically and is supportive of our intent to provide the best services now. and for the future. Yes, sir. And I think this this document and proposal presents that. Thank you,

Mr. Mayor. I I guess one thing I guess on the communication side is that'll help all of us as well. Um the stuff that just been highlighted, how that can be uh conveyed to the public about the savings and everything when it comes to them asking questions and seeing this budget be, you know, released of this u of of the uh the savings that we'll have long term and everything. I think that helps, you know, convey it to the public a lot that we're we're doing we're making the right decision now for the long term. So, I think there's

two things I would say to that, Commissioner Haynes. I appreciate you bringing that up. Number one, um we have been annually preparing a budget video and this year will be no different. And that budget video will provide context uh to uh what we discussed this evening and and that will be ready to roll out with the budget presentation at our May 4th meeting. Additionally to that, I think we will um we I don't not that I think we will develop some additional uh verbiage context that we can include both on our town website and social media as we roll out this budget proposal that explains just what you what you described. And so, uh, communications, department, management, finance will all be working together to to develop that that verbiage and context so that it's it's clear to the public the value of doing the two cent tax increase today versus versus waiting. And the information on the projects that are coming up will be

we have a planned uh uh quality of life uh primarily parks and recreation uh cultural cultural resources um message that will talk about all of the park projects that we have planned. And that's going to roll out um within the next day or so to to begin putting that on the on the radar screens of the public about the investments that we plan to make uh moving forward with our not just not just South Park. Not just one park, it's going to be all of our road, but we're talking Hilltop Need more. Yes, sir. Which will be I'm sure get some attention. Yes, sir.

And y'all are going to do a good job of putting that out for us. We're going to be very proud of the armed services memorial that we plan to put at Hilltop Needmore and the other improvements that we plan to make as well and we'll be putting that information out. Great. Great. Yes, sir. There are no other questions. Do I hear a motion? I mean, do we need a motion? Yeah. Do I hear a motion to adjourn this meeting? So moved. Second. It's been moved and second that we adjourn this budget workshop meeting. All those in favor, let it be known by saying I. I. Any oppose? Thank you. Thank you all. Great job. Great job to all of you. Appreciate it. Thank you.