Planning Commission - Regular Meeting

Good evening and welcome to our budget workshop number three. This is draft two of our fiscal year 2027 budget. Thanks to everyone joining us in council chambers tonight as well as those joining us on YouTube. Um just as we were able to do at the last budget meeting, we should have time for some questions for those in the audience directly related to the budget. So, with that, I will turn it over to Rod to kick us off.

Thank you, Mayor. Good evening, Mayor and Council. Um, first thing I want to do, I know you guys have gotten an announcement so that you virtually met Monterey Adams, our new uh planning director in the back of the room. We we do have one new department head with us this evening. So, um if you guys get an opportunity, if you haven't already, please say hi to Monterey before you leave. And um from here on out, any planning issues that you have that you want to complain to me about, just call her directly and tell her, you know, everything that's wrong with planning in North Carolina. Now, she's doing great. She has certainly um hit the ground running and knows that we have no shortage of things going on in Harrisburg. A lot of those we'll talk about this evening. This um is a very fun budget workshop for us. The the third one is where we go over revenues and you guys get a preliminary balanced budget from us. Um when I say preliminary, I mean everything that is gone through draft one and draft two and we've all talked about already and is manager recommended is in this supplemental packet and in the draft 2 folders that you have or the binders that you have now. And everything is paid for. It's balanced. that requires no tax increases. Um, we'll talk about some of our fee schedules and most of those are frozen. Some change depending on what the program is. Um, but if nothing else, we could operate provide all the services at the same quality that we've provided in the previous years with this budget that you have. It's preliminary because it's subject to change. We can um add, delete, do anything that the board wants. And we still do have a formal exercise after this workshop where you will each in individually be able to evaluate some of the capital programs and operational

programs and we'll come back and um tally those up in our final budget workshop. So the agenda for tonight is to really go over those revenue and fees um first and foremost. Then we'll have a section on comparisons and benchmarking. Go over a lot of our our budget graphics. I'm going to go once again on what does it mean to a a homeowner? What is the affordability on our tax rate? I know we talked about that in multiples. So, those of you that um are tired of hearing me say that again and take a break at that point. Go get go get a water, whatever. But I do think it's important to put things into perspective on the total cost of housing, the services that we provide and what does that cost somebody over a month or a year. uh financial models. The council members um that have been through this before uh are used to seeing our 10-year model and we do have a a five-year first five years of that 10-year model that we really hone in on. And we've always been, you know, gradually moving over the years to say we're going to focus on that fiveyear, but we're going to give you the tenure. You guys will get a look at that uh later on today as well. So you'll see a box over the five-year, but you do have the the full tenure and then describe kind of that council exercise that I'd already mentioned. Then ultimately just have some open discussion, some wrap up, talk about things that you know maybe have come to light since the last budget workshop we had. Is there any suggestions? Anything before we move on to the council exercise? So from a objective standpoint, our real objective here tonight is to to make sure that we have a good launching pad to get into those last handful of decisions that we have to make. We will then ultimately wrap everything up by the June meeting with a budget adoption. So as long as we can get to that June

8th meeting, I think we're we're in good shape and we're well on our way to that. I don't see anything prohibiting us from that. The today. You know, we talked about what it is. What is it not? It's not a final budget. I don't want anyone to look at this and think, "Oh, this is locked in. We can't make any changes. This is all subject to change." But everything that is recommended here has already been vetted through the board and you guys have shown uh overwhelming um support for the things that aren't sure. Those are the things that we still would need to be able to flush out in that council homework and feedback section. So, I will bring up Brian to go over revenue and fees next. Good evening, everybody. So, let's jump right into uh townwide revenues here. So, you've seen this chart throughout budget season, especially back to the retreat with the proportion of the town's revenues um from the general fund and from our enterprise funds. And so, these percentages here have not changed from what we saw uh as historical numbers. And so, the budget has stayed very much in line with um what we've seen in in prior years. So, obviously, the vast majority of our revenue comes from property taxes. And we've talked about at the beginning of the season these these kind of three big buckets of revenue and the three smaller ones as well. But how much influence do we have over these revenues uh ourselves? How much is uh a state or a national influence on those and what levers do we have to pull to control these revenues? And so we'll look at uh what control we have over those uh in the next couple slides. Um but as you can see here, we've got three areas where um the vast majority of the town's revenue is placed. So we've got about 60% in property taxes and sales and franchise taxes, another almost third in

our utility revenues, and then just about 10% for all remaining revenues for the town. So to look at the general fund revenue comparison from fiscal year 26 to 27, um we'll start at the top and just work our way down this this table here. Property taxes going from about 19.9 million to 20.8. So that's about a $900,000 increase. And that represents our um our growth, our natural growth. new homes, new businesses, and improvements that were made to properties uh for the calendar year 2025. Uh so this is our January 1st, 2026 valuation. Um so that's, you know, without a rate change or anything, that's just all natural growth that's in that number. And then as we look down through all remaining revenues, um you'll see here that everything is pretty flat. And so that ties back to what we were forecasting at the beginning of the season. Uh we know that sales taxes, for example, might be down across the state. Um if that's the case, then Cabaris County and Harrisburg in particular is probably flat or maybe even a 1 or 2% growth number. Um but that's one of those that we have very little control over other than our development process and that that takes years to play out and and actually realize those differences for us. Um so this is is kind of an economic number, the majority of it in our sales tax revenue. And you see that we've we've kept that very flat from year to year. And that represents that slight change in our in our um distribution throughout the county, but a 0% growth on sales tax collections in the county. Utility sales taxes are much the same. Uh we were the state forecasted a little bit of growth in uh pipe natural gas and in electricity sales. So we have a little bit of an increase here, but we're pulling back on telecom um because people don't have home phones anymore. And so that some of those other franchise taxes and and utility sales taxes are coming back. So we're we're

staying essentially flat there. Uh power bill is is flat from year to year. The rural fire tax that you see there is actually decreasing and that's because our rural uh tax base is shrinking as we annex properties into town. Uh we get that natural growth, but it comes from the rural fire in in a lot of cases. So we actually see that decreasing slightly. Um and then all other um volume and activity related fees that you see there, permits and fees, charges for services, those are planned to stay uh very flat uh from year to year and even show a little bit of a decrease in the permits and fees. So not much changing in any of the categories here for general fund revenues other than property taxes and that's just simply a growth number that you see there. A little bit more on the property taxes. Here is that natural growth chart that we saw at the beginning of the season. Uh this is actually uh that has a a positive um piece to it and that's moving from 26 to 27. We actually see a little bit more growth than expected. So about 3.7% growth coming into 2026 and that minimum number for this year is 3.9 that we got from the county. That will be adjusted again before this season's over. but it's going to be so minor that I I would not expect that to result in any sort of change to our budget. But we were very happy to see that that that recovered just a little bit. Um we know how many homes have been approved over the past several years, how many are on the books waiting to be built. Uh so this represents some of that coming online, but it also represents some commercial and some industrial activity as well. And as we've discussed throughout the season, we know that's where our focus needs to be. If we can grow a 3% residential um but we we can get 3, four, 5% commercial and industrial growth, then we can really um do a lot better than the models are planned for right now. We've also added over here other sources of revenue that are

possible for communities. A lot of communities around us have the motor vehicle tag fee at $30 a vehicle. You can do anything from 5 to 30. Uh we did not even contemplate that fee this year. Um we are very proud that we can um raise all of our local money through our tax rate and not have to hit the plate fee or some other some other fees um and and spread that out um so that every interaction you have with the town is is some sort of fee or tax. So very happy to not even contemplate that sort of tax this year. And then there are other counties around us that are doing the transit tax that you see there, the extra half percent for transit tax. And then we've even got Meckllinburgg County who added a full another point on top of their transit tax. And so the Meckllinmberg County tax rate is 8.25 now where Cabaris County is still seven. So there's a lot of other communities around us who are looking for other uh avenues for revenue. And we're really happy that we can uh rely on our property taxes and also not change that rate from year to year.

Sure. put this in context today. These are some of the areas that start to become. So, we've been communicating that out to our state legislators that like I mean we our community likes to transparent bill and they feel like it's accountable in that the communities that are doing that could potentially have that taken off the table if they set artificially low capital if that if fruition things like motor vehicle tag $30 per vehicle in a community where we probably have you know 40,000 vehicles or in. So that's a lot of money that most communities don't. The same with these these additional taxes. You'll see counties and areas have to get into them that aren't currently and we're one of those that disproportionately. We've stayed away from fees at all cost until we absolutely had to when doubling of the solid waste to be feeding the trash went through the roof during CO and so we progressingly started you know a fee there but that still is only a third of the cost twoird of it is covered by property taxes and there's there's six other so we are proud of it but I do think that's something to keep on on your mind as we move forward in the levy cap discussions with the state legislature that there are other options but we'd like to have that

there any questions.

Okay. So that brings us to our property tax rates. So you can see the history here from 2016 through the proposed 2027. Um, we, as we've said many times throughout the season, we don't intend on recommending anything any change from our 41 cent rate that you see there. And we're very intentional with increases over the past years. It's always tied to a specific growth of some program or um, you know, it's tied to a project or or some new cost for the town. So you can see Harrisburg Park Construction and that debt service coming online uh represents one of the increases as well as the Harrisburg Sheriff Division uh really expanding and growing there. That resulted in an increase and then any chance uh that we have such as right after the reval um we're able to drop that 2.5 cents from 43 and a half to 41. So our movements here are are always tied to some sort of significant change in the underlying expenses. And another important metric to look at that I referenced earlier is the property tax base and and what how it's made up. Um we've got residential, commercial, and industrial shown here. Uh we were able to add the January 1st 25 to this chart that we saw previous previously in the season and residential stayed at 80% for the last two years and the mix uh of commercial and industrial did move by a point each uh but obviously make up that other 20%. Um, and so this is just where, you know, one of our focus areas needs to be. Uh, we've said internally that we want to bring that residential number down to 65 or 70%. And, um, that doesn't mean cutting off residential growth completely, but having commercial and industrial outpace, uh, residential over the next 5 to 10 years is going to be really crucial for us. Um, as we've said before, those commercial and industrial properties have really high values and they don't require many services from

the town. So, it's a real u win-win for the town to bring those on. So, charges for services, those utility fees are the second largest uh group of revenues for the town. And so, um we were able to hold most of those steady from year to year. Uh but we are going to pick back up on the water sewer rate um increase of 5%. Um that is a resolution that we've had in place for nearly 10 years now. And we were able to skip a year early on in that 10 years and we were able to actually freeze last year as well. But given the input cost to the water and sewer fund, uh it's it's definitely responsible to pick back up on that rate increase. And so we've got that set of 5% in the the budget in front of you.

And just just to be clear what input costs are because we're all we're all involved, you know, here, but there are residents listening at home. So we

Brian, we explain we buy our stuff. The vast majority of the cost in the water and sewer fund are the purchase of water from Concord and Charlotte and the treatment of sewer at Wasach. So that represents the vast vast majority of cost in the water sewer department. But we also have our own personnel and so we know that the water purchases are um we have rate increases of four to 5% on that side and then on for WASAC with our sewer treatment we have a 5.1% rate increase there as well. Um and then as we know with supplies, materials and personnel, we're in the 3 to 5% inflation range there. So the entire fund as the water and sewer fund has these input pressures of about three to 5% on inflation. So um we're able to do things with efficiency um you know all all sorts of strategies to that we were able to uh freeze that for one year. But um but with those going up consistently year after year, it is responsible for us to get back on pace with that. The storm water fund uh doesn't require a fee increase. So we're we're staying at uh that same fee for this year as um we're able to for the solid waste fee as well. That $10 a month uh will remain unchanged. And then athletic fees, uh we're happy to be able to leave the resident fee untouched here. So, the fee schedule that everyone's used to from this year will remain the same, but we have increased about $10 per sport on the non-resident add-on fee. And I've got a table that I'll show you here shortly. So, you can see that impact. Uh, it's $10 on most of the common sports and then a little bit more on the popcorn or cheer and football. But, we'll take a look at that. Brian, do we do we get um coaches do they get like u a discount on the fee that they pay for their kid or like a a free kid or something?

Um we did a couple years ago coaches would get half off their child's registration. Um but we have not done that for two years now I want to say and Jim's confirming that and um and that has not impacted the the um coach recruiting at all. Okay. Yeah. I was just wondering if we could um give them a break or you know find some ways to entice more people to sign up as coaches. And if someone signs up as a coach and they don't have a kid like maybe it would be good to see if they could like sponsor a child like have like one kid um at a discounted rate. Okay. Yeah. Maybe something to consider. I

have a question. So the changes to the water and sewer rates that 5% that's going to be passed off to the community, right? Correct. So, um, is are is there like literature or something that's going to go out that's going to prepare them for this or what's the plan for that? We we have done both methods. We have sent out a letter before alerting people of the the upcoming rate increase and we've also um just let that apply to the the first bill of the new year. So, um I think you know we've we've done both strategies. Um and I'm not sure that we've developed whether you know which strategy we're going to do this time, but we've had success.

I think where we run into to an issue is if we haven't done the incrementals when we see this the the lower singledigit ones um you know putting things out versus not putting things out, we don't we don't really um see any difference. I think when we don't do it and then on the fourth year we have a 20% increase um people want to know what what's going on, right? And so typically we will put a letter maybe one month before the first bill once we've adopted the budget but we don't know we really can't send it out until we pass a budget. So

Oh right, right right. So in previous in every other year we will adopt a budget in May but the first one after election we do a long cycle and so it becomes a tighter more compressed time frame so we it would probably go out in the first bill. Okay this year as to where last year we didn't do an increase but it would have went out probably in the June bill. I'm just saying because all these things added cumulative adding up for people are going to matter right. So, if we can give them a heads up, that would be great. Absolutely. I mean, it makes sense why, right? But it's just helps to kind of know ahead of time, right? Yeah. And and I think this represents about a $320

increase in in the bill. Um, so that's basically what you're you're looking at.

Thank you. So to see those revenue impacts in these two funds, uh the water and sewer fund, the vast majority, as I said before, is all in those water and sewer charges, about 12.4 million there. So that number going from about 11.5 to 12.4 represents our growth and the 5% rate increase. And then the remaining revenue in this fund is is very minuscule compared to that. The transfers number just represents the capital that we're spending um in within this fund. So that's an internal revenue number there. And then on the storm water side, it's moving from about 825 to 847. And so that's just a growth number there with the rate staying the same. Same on the transfer there at that 150,000 represents our uh spot improvement project like the Piccadilly Culbert that we just completed. And so here's a look at those example water bills. We've got a residential in town customer who uses about 4,000 gallons a month. So their water and sewer bill would go from 6035 to 6320. U the way that their their bill fell out, that's about a 4.7% change. You can see residential out of town for that same uh 4,000 gallons moving from about 89 to 93 and the same on down for commercial and flat sewer. Uh so you can see the impacts there that people will experience. Any questions on that?

I just note that I overestimated 320. It's 2 285. You were thinking of the 6320. That's exactly.

All right. So, a couple other fee schedule changes and you'll get a copy of the fee schedule in the next packet before the next meeting that anything that changed or was added from the prior year will be shown in red. So, it'll stand out to you. But here is a summary of what changes we have in the fee schedule right now. uh the credit card convenience fee going from about 250 to three. This is a cost recovery measure. It cost us about 295 this year, but we held off on that increase last year. Um that so that's probably you know the $3 is going to be our break even again next year. Uh so I hate to do that but um you know that's just a pass along cost there. Uh the fire department sells 911 reflective address signs for $10. The blue signs with the white lettering that you can put on your mailbox. Um, so it needs to be in the fee schedule if we're going to sell them. So we're adding that this year. Um, there's also a couple changes to the fire inspections fee schedule. This has not changed in a number of years, but the fire marshall has recommended going up incrementally on several of his fees there. You can see some $25,50 and $100 changes. And then I've got a table here for the parks athletic registrations. This is the non-residenton table. So nothing is changing on the resident side. And you can see some five and $10 changes and then the 25 and 50 for Pop Warner cheerleading and Pop Warner football.

The fire I'm sorry the fire inspection changes are those in line with what most of our community

Yes. Yes, they are. Uh we're we're still um we're not abnormally low or anything, but we are a low fee community compared to many others. On the right side of this page are some new storm water fees. Um, as as the storm water function for the town has built out and we've taken on more pond inspections and reporting on those and getting a lot more involved in the storm water uh world, then we're finding out that we need to build out the the fee schedule and some of the enforcement mechanisms on the storm water inspection and reporting uh function. So, you'll see that we've added a couple here. Fail failure to submit an annual inspection report as well as working without a permit, violating a stop work order. So, those are all new fees that are being added this year. And then there's a a large table that Devon has put together for the illicit discharges. Classes one, two, and three. There's levels of violations in there. Um, way too much to put on here, but let's just say all of your violations start with a notice of violation, and then the fee grows as you are a repeat offender or you move up through classes one, two, and three. Um, I can tell you don't want to elicitly discharge based on that on that fee schedule. And that's obviously what it's intended to to do is to keep our water clean in Harrisburg. All right, any questions on the revenue overview. All right, I will pass it to Ellie for benchmarking, right? No, Lee,

let her have all the thing on. There we go. Hi, good evening. I can put it in the middle of the room and I can still reach it. So, it's pretty good. Uh, hey. So, um, I'm going to jump into some of the initial benchmarking items here and then I'll turn it over to Ellie so she can get into the the higher level things that are beyond what I understand. So, um, I'll just jump in here on this. And these next few slides are ones that y'all seen. Those of you that have been on council for a while, you've seen them year after year. uh just updates and no radical changes, but I do feel like uh you know, we've been coming back year after year with similar information uh which I I think is is good because it shows that we're on a good uh clear path and it's a path that's been working. So, uh here you'll see u our tax rate comparison to our other Cabaris County neighbors as well as Charlotte here. Uh these are all current fiscal year 26 for everybody on the right. As Brian mentioned earlier, all everything that you're seeing today, uh there's no tax increase proposed here. So, uh we went ahead and moved our fiscal 27 forward here. Uh again, as Brian said, no motor vehicle change, solid waste fees staying the same. So, you know, you're looking at that $350,000 uh home valuation would for Harrisburg taxes would be uh $155. And you see how that compares to all the rest of them. Uh as we get into later in the year, we'll usually update this as we know what other communities are. It's early enough right now, so there's there's some chatter, but there's not any definitive

uh tax rate amounts being thrown out just yet. These next two slides are number of town employee numbers, and we show this again every year. And uh one that we always got to be careful about because you we want to take pride in that we provide a superior product uh for with that using less resources than most everybody else in our peer groups. Um but we also don't want to say that we're overworking our employees so much. We do push them hard as we tell y'all every year. U you can see the results of that. Our employees do a great job. And uh again, you can see here with the this one is a number of town employees per 10,00 residents. So right now, six uh employees per 10,00 residents. That's compared to the average of 13. That puts us at the lowest compared to the entire group here. U this next one is the inverse of that. This is showing the number of residents served per full-time employee of the town. So, each one of our full-time employees are servicing 172 residents uh compared to the average of 86. So, again, this idea that we're uh doing, in our opinion, we have a superior product that we're putting out of council. Uh we appreciate everything that y'all do to support us to uh provide that superior product and we're doing it with less people because we've worked as you can see each one of these slides uh has this continuous improvement uh thing and that we talked about that earlier in the year but that's really been especially for this year our big focus has been on this idea that just we're always striving for perfection. We know we're not going to ever reach it, but we're doing our very best to do that and that's elevating our

work product and we're trying to figure out better ways to do what everybody else and what we've been doing and but just doing it more efficient. So, I think that that illustrates that a lot. Same thing here with the general fund expenditures per capita. So here you can see uh Harrisburg uh per capita $1360 compared to the average of 1712. So again we're providing that superior product with less general fund expense dollars. And so all that kind of goes into what goes in how are we able to do this? And so these are some of the the items that we wanted to pull together and and throw out to you. uh the pay structure and recruitment that again has been a lot of support from council uh but it's allowed us to really become the leader the employment leader here in North Carolina u especially in Cabaris County and we have very competitive pay we have benefits that are second to none and that helps to recruit top talent because we need that top talent to be able to do everything that I had just mentioned with our our work product our aggressive grant program that again we're getting these 8020 split match grants that are enable us to get some very large product projects done uh at 20% of the cost and so that has really helped us keep our our cost down low um robust capital reserve fund and low debt service um as y'all know I mean it's been years um outside of the bond uh piece of it that we've actually come to council with uh debt issuance. Uh that used to be a pretty regular occurrence. Uh back in the day we were um you know multiple times a year we

were coming uh with that. So uh our capital reserve fund has really enabled us to not uh you have to utilize our current uh tax rate dollars for capital. we're able to use those dollars that we've efficiently put aside in our savings account to handle that capital going forward. So, um, and that just really has been able to set us on a good pace to be able to to not have as much especially as from year to year some of the economic uh challenges that hit, we're able to keep moving along with those because we have this capital reserve fund. newer infrastructure. We are I saw you at the corner. I'm waiting. Uh the newer infrastructure. We are a young town. And so not only is our infrastructure age wise newer, but uh thankfully there's a lot of new processes on ways to maintain that infrastructure that might not have been in place in some of these other communities. 50, 60, 70 years ago. So, we're able to keep our existing infrastructure, our new infrastructure longer uh because we're able to maintain it better. Uh and then finally, the data analytics and competitive operations uh what we're doing today as well as what Ellie will talk about some more. All of that is going to this constant process improvement. Uh and really the goal of trying to put out uh the best product that we can at the cheapest price.

Kind of look I look tall, man.

I want I want to talk over you. So I um I intentionally asked Lee to kind of cover these and and a lot of Councilman Fall asked this, you know, most of the other ones like what are these other communities doing that that we don't want to do, right? what pitfalls do we want to stay away from? And and as we've kind of thought about that and looked at it, I I think it's it's actually the inverse. I I don't know that, you know, Morgan or Lexington are doing anything wrong or different that we want to avoid. I think we're we're pushing the envelope and being very intentional on some things. There are just some baked in things, right? We're we're a younger town. We have newer infrastructure. We haven't been through you know what Canapapolis has has been through with the closing of mills or you know we we don't have um what you know Morgan has has gone through um economically. So most of our stuff we is newer. We've been able to maintain it. We've got good momentum on it. That's just a baked in thing. We're not doing anything special there and nobody's doing anything different. Um, I think some of the other ones though that we that we talk about are very intentional and and some of it relatively new. Our our pay structure and recruitment efforts are really like a brand new thing. I mean, that's something that this board u bought into and reinvented four years ago and saying how do we do more with less? How how do we we have a hard time, you know, keeping people. We have time hard time recruiting people. How do we compete? You know, you guys go figure this out. And so, so we have a a really um one-of-a-kind and I would say first in class um pay analysis and compensation plan that Taiisha and her group in HR are data troving every single year rather than the other communities who are doing this once every three to five

years. And then Lee is taking this and and you know putting putting his work into it. And then it's going through multiple folks so that we're we're making these incremental changes every year and we're never really losing sight of of what our goal is was which is to have really productive employees with the best software and the best technology and the best equipment so that we're not wasting our time on on meaningless things. So that has really paid off in droves. we we've been able to increase and become more competitive on the compensation side of things at the same time having less folks. And so I think if you look at some of these other towns, you might see they they just they have a huge overhead of employees from legacy years and they can never really invest in some of the technology and some of the equipment and you know some of the natural attrition replacements because they're just it's just too big of an animal to to address. uh the grant programs that was something that we were challenged with that I think um has we've done better than expected there and if you look at us at a per capita basis we really don't have a peer on our on our grant program we're a very small town um you know we're we're bringing in you know $40 million over that four-year period for a town of 25,000 people that's that's not very common in a state like North Carolina where you don't have um federal aid roads in in your own town. So that and then the last one on here I think is something that's been really new. That's that's really about a year and a half process. But um you know we've built this into the culture of just really running the organization like a like a private startup would in the Charlotte metro. Like we're we don't handcuff our

employees. We say, "Look, if there's a better way to do this, smash the old way and and let's let's do it. If that software that you're using for two, three years, it doesn't work anymore, try another one. And if that doesn't work, try another one." And and so by kind of freeing people up like that and saying, "How are we going to innovate next year?" Yeah, you're you're in the poll position, but how do we how do we make sure we stay in the poll position and having a formalized process where we, you know, submit that through, you know, different levels and ultimately to you guys and then circle back on all that with accountability. I think that pushes us and, you know, when you look at all these graphs, we're either number one or number two. And generally, if we're number two, it's a it's a mathematical issue. they they they might have a a separate fund that's not general fund in a case or like Leland has a fire service fee instead of a tax and so it becomes a mathematical thing and we also are comparing ourselves on state demographer numbers when you look at these so we're considering I think our population when we compare ourselves to other towns here we're using like 20,000 instead of the 25,000 so our our numbers get even bigger when we look at, you know, we may have we may be underestimating our population on these graphs at 20%. So, I think all that to be said is just we're intentional and we want to keep the momentum. I think it's really hard to start momentum. So, you know, once you lose it, you you have momentum one way or the other. Ours is going in the in the good direction and that we just keep pushing in that direction.

So, either you or Brian I think it was three years ago.

So here we are three years. What benefits have we seen from that? What is that helping us overall? Where are some savings from that? Thank you for asking. Sorry. Um, I didn't realize it was a Yeah, there's some plan,

you know, you can you can plop your money into the the easy trust account that everyone in the state has and you can make your 2% or 0.01 in bad times. Um, or you can be really active and aggressive with the commercial paper in the long-term securities. And so we have half of our money at at approximately 4% for up to three years from this point today. We have a ton of protection over a declining interest rate environment, but we still have half of our money that we can shift any from day to day and really take advantage of short-term rates as well. Um, but we have gotten about $3 million a year in interest income over the past couple. We're on pace for more than three million this year. And those numbers used to be a couple hundred thousand. So if we were to leave it in the trust and not pay attention to it all year, we might be looking at one penny on the tax rate, but we're looking at six or seven pennies on the tax rate.

So that is saving the residents six. It's either saving the resident or we're accomplishing a lot that we would otherwise have to pay for at some point through taxes. So no matter how you look at it, it's certainly a benefit for the resident. Thank you.

And and I'll push it even even one further than that. And I don't want to get, you know, Brian too, uh, big of a head sitting over there, but you you you I think if you look across the state, it's this type of, you know, initiative and and we were one of, again, one of the first to to be able to do that. Part of that's because you guys allow us to, right? There's and we have the ability to take some of that risk because we we've done good on our fiscal policy. So, when you have some money sitting on the side and you're not always borrowing, well, now that you can take that risk if it doesn't if something goes wrong, you're not laying people out. You might not have made as much um investment money, but that's not that's not a huge risk. So, um other cities have have started to do this to the point where the the state had to offer a money market option as part of the investment. So they used to just have their their little savings account. State has a whole separate option for us now because of of this type of you know pushing from cities like ours. So I

you said something and I want to go back for just one second because I want people to understand you said we did it because we allowed you. I don't want people to think we're in a Rocky Mountain situation. You know that that decision was not an easy decision. I mean, I think we we brought it back two meetings back to back before. I mean, and Brian, thank you for the, you know, you did a very good due diligence on it and answered a lot of the questions, but I remember walking away going, is this the right thing to do? And, you know, there was a lot of risk there, but we've been very fortunate from that. So, I just wanted to clear that up that hey, it wasn't like we gave you the keys to the kingdom. There there was some good uh research done. When I say allow, I mean, we had to ask multiple times. Brian had to sing for a supper and explain it, but but I think that, you know, we're able we're able to take those risks.

And again, when I say risk, this is this is risk- free when we talk about financial stuff. Like if yes, if Apple were to shut its doors tomorrow, um we would be the first person they pay in their liquidation. um that's the risk we would take, but you know, we would get paid in liquidation, but we would still get paid. So, it's not like these are, you know, in crypto or or something like that. They they can be invested in very

um short-term um protected bonds at at corporations, major blue chip corporations, and and they pay off into three. I think maybe our longest were like nine month or something like that.

Yeah. Three. But, you know, because we've built, you know, an organization of excellence, we can be kind of the first at those. And when you're the first at something and it pays off, you you gain you just gain the most. So, I think if you to answer that question in a very mathematical term, I'd say over four years, that number is probably like $12 million. If you look at a three-year window, that's probably like a 10 million dollar. So, you know, that's four times the amount we spent on the turf fields. You know, our our payoff on investment would be the total of the turf fields, um the farm mill historical um mill project and the Main Street revitalization we're talking here with some money still on the side. So, that's that's all money that is not tax dollars. That's all investment earnings from savings that we've had on on operations and projects over the years. So, it is it is significant and it's it's just one of a dozen things that we do that gets us, you know, a 50% lead on on other communities when it talk when we come to spending, when we come to staffing, um and then ultimately u tax rate when it gets to the next one. very last slide that I'll run through real quick. Uh this is a comparison of that same group that we've been looking at, our peer group of tax rates. So this is showing our existing tax rate at 41 pennies and compared to almost 52 uh state what for this average group here that we have. So definitely outside of Leland, we're the lowest out of comparison. all that

pennies don't exist anymore. You're going to say cents. Just saying. Um, one thing I wanted to mention to because this seems to come up every budget cycle. Um, the previous property tax rate comparison where it had Meckllinmberg on there. We always hear why are we paying more than Meckllinburgg. So that doesn't include any of the fees, the airport tax, the skyscraper tax, the funding that they get from all that that we don't have access to. So, it's not really apples to apples, but I think that often gets thrown up at at our smaller municipalities. Why are we more than we're not we're really not more than

That's a great point, Mayor. And, you know, we've seen that transition over five, five, six years of starting to kind of see them bring their property tax down. And some of my conversation has been density pays lower property taxes. It just does. If you have a skyscraper and a lot of um vertical construction, then you're going to get a lot more per acre um so you can have a lower rate and you're going to get much higher. In addition to that, they are mostly um they're mostly getting their revenue from things other than property tax, which is completely different than the norm for the state. the more rural more rural you are, the more reliant you are on property tax, the more urban, the less. And as you said, airport um is a whole another animal. Um their combined storm water program between Meckllinmberg County and the city um is a is a big animal in and of itself. They have a a giant water and sewer program that's off books. we're so small here that you know it's not like water and sewer has its own HR in those cities that would you know their human resource and their finance and all that that would be separate and paid for with their water and sewer fees. So um here we we cost share that but a large portion of it is still general fund but point taken. Anything to add to that team? Did I miss anything? Okay. So, Lee went over um kind of the you know, how do we compare? So, you Brian's job was to say, "Okay, here's here's our revenues. Here's what we're doing." Lee wanted to say, "What is what does that mean? How do we compare to everyone?" And then Ellie did all these population numbers. So, we wanted to put some context into this with the people

that actually created them.

So, Rob set me up uh to talk about population. I think our census population has us at around 18,000 and then the state demographer does a little bit better and puts us around 20. Um, but it really lags behind the residents and the buildings building permits that we know that we have. So, our number is actually closer to to 26,000. And how we get to that number is a table that we had last year. We brought it back again, updated the numbers. So, we look at our tax parcel information from county GIS. and we look at the residences both in town as well as in our rural fire tax district. And so when you count out those number of residences and multiply that out by our very unique census multiplier number which is 3.4 which is larger than the average town because we have a large number of families in Harrisburg. Um we come up with around 7,774 residences in town which translate to 26,000 people. 2500 residences in our rural fire tax area, which is our planning area. Um, which translates to 86 8,700 residents, I'm sorry, 8,700 population. And then our total residents count, which would include um not just our taxpaying residents, but anyone who's using our our parks, anyone who's using our greenways, our walking trails, our athletics. Um that number is really more like 35,000 people. So, that's who you're serving um daytoday, who we're serving day-to-day here in Harrisburg. And then for some more context, looking at our our change in our in town population year-over-year, um we were really hovering around 22,000 in 2021 based on that tax parcel information. And we're looking at closer to 28 29,000 people in our in town

residence population by 2027. And that's a projection of the average year-over-year of around a thousand people just in our in town population. Any questions on the data piece? Okay, that's it. That's all I have. All right. So, I've got a couple budget graphics to share with you here. Um, we'll have a lot more up on the website and in the manager's recommended budget presentation and in that report as well. Um, but we've got a couple ways to present where your tax dollar goes. So, this is a kind of a crowd favorite here. Um, showing the the tax or showing the dollar bill broken down into the different departments. Um, but the one that makes me feel most comfortable is this one in comparison to that because you actually get some real numbers here and you can compare. Um, so this is a good representation and uh for someone to understand uh where the general fund dollars are spent, but we developed this one a couple years ago and I like this one a lot more because it really identifies that public safety component of our overall tax dollar spending at about half of every tax dollar is on public safety with a 2:1 uh split between fire and deputies there. And then you can see we've got parks and wreck representing a little under a fifth of our remaining uh expenditures and then several other departments that are less than 10% individually. So um you know almost three quarters is spent on public safety and recreation and then all of the supporting functions below that make up about a quarter as well. So that's three different ways to show how that tax dollar is spent. And then we've got a couple more that we've seen before. But Rob will go over these. This is my new favorite. I one I think it's the most colorful. So that's uh that's

part of it. Um but we've gone you you guys have seen this a few times, but I do I do want to walk walk through it again. And you know for anybody in the audience that that hasn't or for those that you know would love to hear these these numbers again. Um, we've had several conversations about kind of affordability and housing affordability and what does it cost and you know, a lot of times I think we're we're so accessible that that people come to us and and say, "Hey, I've got this problem." And um, it's hard to decipher it. I know just as a homeowner myself, a lot of times you're just you're just too busy. You're not breaking down that monthly amount if you have all of this escroed. So, you know, we put this together. This is a new person moving in to Harrisburg. You know, you you moved from wherever and you've bought a house in Harrisburg and you you're buying at the average home value of 550,000 and you have a decent amount of cash, so you've put 20% down. Um, this person also has pretty good credit. They're they're at 5.6%. I think mortgages have slipped back up over six. So, um, this is this is a, you know, a typical mortgage payment in Harrisburg. If all of that is true, it's 2,917. This isn't folks that have been here for forever or have a low locked rate or anything. If all these assumptions are here, 6% of that comes to the town. And so we certainly recognize that that $2,917 that's not a number I think in America that we want any, you know, nobody wants to be paying $3,000 a month for a house. So I think nationally we're right like there there's a housing crisis in this nation and we're not immune from it here in Harrisburg. And and for those that

haven't been in their house for long periods of time, that affordability is made up of of these buckets that we see here. First and foremost, principal and interest. And in this case, you know, the the new home, half of that is interest. 1,387 is is an interest charge. Principal is $98 and ours is 187. Cabaris County is 263. And again, property insurance at at $172. We're providing the same services. We're providing the services that we provide at roughly the same cost that it takes nationwide to ensure the roof and structure that most of us never use, right? And if we do use it, there's some big deductible. When somebody calls 911, we don't charge them a $3,000 deductible before we come to their house. We just show up and whisk them off to the hospital and save their lives. Same with the roads. John doesn't charge somebody a $50 fee each time we do a a pothole. We just go out there and and fix the pothole and police. You need us, we're there and everything in between. We don't charge somebody before they walk on the greenway. We're not going to go out and tell people to get off the turf fields or quit walking the track at at Harrisburg Park. All of these things we provide at roughly the cost that it cost me for YouTube TV every month. We're providing 29 deputies, 54 firefighters, 34 public works employees, seven people in our engineering department, human resources, five people in our in our planning department, finance, everybody that you see here. And we do it at $187 a month for every single person in town. and we don't charge you anything when you call and you need something. We just show up and and so I think it's an

important message to get out is that, you know, Geico charges you the same amount just to make sure that if something happens to your house, it's covered after you pay your deductible and after they tell you they're not going to cover it because of exclusions and liabilities and you didn't have flood, you don't have water. It's not, you know, um and you got to fight with them. You don't have to fight with us. We we just do it. So really, it's a it's a very good value, but if you go through an affordability, we can get lost in that because we're so available. And so people come and they say, "Well, you know, lower lower that for me. At least you can do something. I can't call Geico. I can't call Wells Fargo. I can't call and and complain about the market price of a house, but I can call you. So do something." So if we if we were to do something and and you look say something dramatic and and interesting a lot of our our larger departments kind of cost the same. So you could say instead of parks and wreck here you could say get rid of police and it's about the same amount of money. But if we were to completely wipe out all of our park and wreck programs, get rid of football and baseball and softball, close our parks and sell them off to private industry, and get rid of our greenways and just don't do any parks or recreation, we could reduce our taxes down to 33 cents from 41, which sounds incredible. It's like, oh, that's 25% off, you know, my my house cost. But what does that do in reality? It takes that $2,917 monthly bill to $2,881 and you don't have all the things that you really love about the town. You still have to pay, you know, the the insurance that you want to pay and you still don't like that interest payment that is what it is. Now you have roughly the same monthly mortgage cost, but nowhere to walk the dog, nowhere to take

the kids, nowhere to go have, you know, recreation events, or god forbid, let's let's say it's public safety that you wiped out. Okay. Well, now you've saved $36 a month, but nobody's showing up when they steal the bike out of the front yard, which is probably one of the the, you know, least of the crimes that that you'd be worried about, right? somebody breaks into your house, okay, I saved $36. Is it worth it? And so I think from a value proposition, even if we wiped government completely out, we we picked that house up and we just gave no services, no police, no fire, no no parks and wreck, we don't take care of the road, we don't do anything, you're still less than $200. You're still paying $2,700 a month instead of $2,900 a month. So, when it comes to affordability, I I think we all agree that there is a problem. We're just not the solution to that problem because we don't contribute to it in any meaningful way at $170 a month. If that if we did that same thing, we wiped out all of our park and wreck operations and we said, "Okay, we you know, we're done doing that and we're saving you that that 36." But homeowner insurance went up 15%. Now, mine went up 80% last year, but let's say it went up 15% which is very likely. It pretty much wipes that out. And and so now you're paying 197 on insurance, 2906 overall, a negligible amount to to that to total mortgage, but you again, you have no parks, you have nowhere to go, you know, enjoy nature. You have nowhere to go participate in athletics. And and so insurance is is much more volatile than what we're doing. We we lock our rate for four years and then we'll reanalyze it on community needs

every four years. So you're getting the same thing for us for blocks of time with less volatility. If we were to go and and say, well, let's say interest rates drop down, economy gets a little worse and interest rates go back to where they were at four years ago and go down to 2.75. Well, now that interest rate or the interest um total goes down to $770. Now that monthly payment goes from 2917 all the way down to 2,300. So you can see like we all everybody in this room remembers not too long ago when you could get a 3% mortgage. So that's really, you know, what's driving this? The the cost of houses it, you know, the cost of a house just cost more. the price of a house went up and then interest went up at the same time and insurance doubled and then everybody said, "Dang it, you guys, your taxes are too high." And it's like, well, I I don't think people would be in here looking for a housing cost correlation with taxes if insurance wouldn't have doubled, if interest wouldn't have doubled, and if the cost of houses wouldn't have doubled. And really when you look at these levers and and and move them around, interest kills everything. Principal certainly is the second biggest. Insurance is even a bigger impact than we are in taxes. And I would argue of everything that's offered on this screen with the exception of purchasing of the physical property, we're a better value by far. And we're local. We're here for people to come talk to. We provide, you know, these public meetings for everybody to see us operate in a in in transparency. We put all of our documents on our website and we employ your neighbors. So, uh, I I think we're the best value going, but we don't tell the story very well. And I think, you know, this hopefully will help us tell the story

and we will continue to share this throughout the community that although we agree there's a there is a housing cost issue, we disagree that we're significant contributor to that. We we just simply aren't. Any questions on those graphs? I know we've talked about them before. Um but I'm going to beat that dead horse until we pass our budget because I think it's important for our neighbors to know that that, you know, we're doing a good job. We provide a lot for very little. And if we really look at it, um hardly anybody disagrees with this. I've I've dealt with this in communities, you know, for my entire career where people come in, they're very upset. They they want to know something and if you just show them, if you're just honest, you say, "Look, I if you've got a better way to do this, I'm I'm always and sometimes they do and and then we make a change." Um, but more often it is we're doing our best. Here's here's what we're doing. Here's what we're spending on this. Here's what we're spending on that. And they go, "Okay, that makes better sense. I appreciate you taking the time. I appreciate you, you know, explaining that concisely and clearly. And so the more graphics that we can have for that in today's graphic world, I think the better. So we're we're going to continue to push that out.

You're up, bra.

All right. So let's take a look at the financial models uh that tie into draft two. So this is a a summary look at the general fund model. Um the highlighted years of 2029 and 2033, as a reminder, are are upcoming revaluation years. Um we leave those flat in the model, but we know that those years are subject to change. And so we want you to know as they're approaching the u the proposed budget year. Um, like Rob said earlier, we always show you the 10-year model and we we want that model to be successful, but we really hone in on that first five years and make sure that it is successful because we have plenty of time to move future projects around and make adjustments for the back half of the model. Um, but something that that we like to see at least e even across the 10-year model that may have some lower years is you want to see recovery in a model that dips out really bad in year four, five or six. um that would indicate that you have a one-time investment um a couple really high years of capital investment, something like that that's pulling down your reserve balance, but as long as you're recovering at some point or leveling out in the model, uh you you at least know that your operations are in good shape. So, here looking at the general fund model, um it's a very successful model. It's probably the best one that we've had in a number of years. Um and there's a couple areas that we want to focus in on. Um, so across this 10-year model, I've got the capital, operating capital highlighted here. Just kind of in general, on average, we're spending about $2 million a year. So the general fund is uh paying for about $20 million of operating capital across this model. And then the real key to the financial model is the ending capital reserve fund balance. And so what you can't see on this summarized version here is the money flowing into the reserve balance every year. it paying for all of our

capital project fund capital and then um sending money back out to the different funds. So you're only seeing the ending balance here. Um and for example, if you see the transfers to capital reserve fund of 6.2 million in 2028 towards the bottom of of this um table here, that 6.2 million is adding to the 20.2 million from the prior year in the capital reserve fund, but you see the balance going down to 13. So that means that that capital reserve fund is not only using that six million that came in, but we're spending another six on other projects. So there's $12 million of capital project fund projects being uh accomplished here that you can't see. All you can see is this the six million decrease from year to year. But across this model, we have 20 million in operating capital and we have a little bit more than 60 million in the capital project funds. And those are our multi-year projects that that uh very typically span a couple years for design and a couple years for construction. Um but we have 60 million laid in this model. We have 20 million in operating. So we're accomplishing a ton of capital uh and and um we have a very successful model despite that. Um so really good results on the general fund side. On the water and sewer side um really strong model as well. You can see that we have some significant investment that takes us down a little um takes us down to about a million dollars or less in years five, six, and seven. But like I said, this um recovers pretty well by year 8, 9, and 10. And so that tells us that we just have a really heavy capital investment period in those years. And as we approach those years, we'll spread those projects out or do whatever we need to to make this model not so tight. Um but seeing that years one through five um are very successful here and are accomplishing everything that we have on the CIP um that that's a really good

positive for us on this model. And then the storm water model is a lot less complicated than the other two. Um and so you can see that it it stays pretty healthy. The nature of this fund is to save up money and accomplish these spot improvement projects around town. Uh spend down the reserve balance on those and then spend a couple years saving back up. And so you can see that um coming into play here as well. So any questions on those models? And I'll go back to the general fund just so you can see that one. I'll add a little flavor to what to what Brian said, especially for um our twoist uh our two newest um not our twoist our two newest uh council members who this is your your first model that you're seeing. Um, and it's all of our models are positive for all 10 years. This is the first time since I've been manager that that we've we've gotten here. It's not accidental. I mean, this has been our goal is that over a four-year period to try to to get there. Um, but most of you have heard me say, look, we we really focus on that fiveyear. the first um year I was manager I think that was threeyear that that you know before we saw it kind of go into red and we've been u being very intentional on what do you know how do we service that how do our operating expenses go making sure that that our operations grows at a slower rate than our natural growth for the community. um investing in policies that that promote quality over quantity and and all of those things have have gotten us to here where you know I want to point out this you won't see this anywhere I I don't think you'll see another community if there's another community in the state that has all of their um capital paid for that um is doing as much as we are per capita that has the number of employees that we have

per capita that has the tax rate that we have compared to everybody else and a balanced and and positive um ending balance on a full 10-year model. I I don't know them. I I think we're we're in a league of our own. Again, I don't think it's a bad idea to to dip at like year five, six because you have a lot of time to adjust there. And so there are times where you're saying, "Hey, look, I I'm comfortable with that. I'm comfortable with with going into the red in those middle years and then having it recover at year 10. We don't want to be ever red at year one or two. Um those years we have to be positive unless we you know are going to borrow some money. But you know what we see here I think is is quite the achievement. Most local municipalities are struggling financially and those that aren't struggling financially have tax rates. You know, I think Canapolis 56 cents was the highest that that you've seen on here. I made the joke that, you know, if we if we had that kind of tax rate and and those kinds of fees, we'd have flying cars in in Harrisburg. Like we'd have an extra $20 million a year to spend. And I don't I couldn't we could fund everything that we've ever thought of here. We wouldn't be making any choices on anything. We don't want to get to those tax rates. We're very comfortable being um an industry leader on tax rates, unemployment numbers, on um per capita spending, all of those things. Um it also is really impressive to be able to get to a full 10-year model that's in the black. So um that's a team effort that certainly finance department works really hard at that. Lee on the uh operation side wrangling everybody and then Ellie and I checking every data point that we possibly can for efficiencies um and and making incremental changes and our departments

being troopers on implementing those boots on the ground results in something like this and also just board direction.

My turn. Yep.

I was trying not to speak as much tonight. Okay, we are rounding home here. So, let's talk about, you know, next steps on where do we go with all this information. We'll go through a process that some of you are familiar with, some some aren't, some need a refresher where we have a electronic exercise that that you guys will go through individually and we'll take the results of those and it it'll have lots of these decision points on them. And it's it's mostly a yes or no in lots of different categories. And there's also some what I call the the Ian Patrick section because Ian would never let me put him in a box. He always wanted his own box to fill out and click yes on. Um, but you you'll be able to adjust your own tax rate, right? If you think 41's too high, you can scale it down. If you think it's too low, you can scale it up. You can adjust those fees and just see what does this model that we looked at do. And and you know, you can break the model and make it go negative if you want, and it'll just show deficits that that we'll have to work out at some point. Um, and you'll be you'll you'll al see all the manager recommended um items on there. So, say was it manager recommended? Yes. So, it's it's already in and paid for on the model. Um, but you'll be able to go through that optimize what you think you wanted, you know, and we ask you to go through and say, I don't think it's a wish list. I think it's tell me what you would do. What if you were uh the only vote that mattered, that's your exercise to do. You send that into us. We then um gather all that information, accumulate it, put it together, and we would consider six or seven council members a significant appro approval. I just add that to the budget. Um we don't need to discuss that. If six or seven, you think we

should do that, then we'll modify what you see here and and put that in there. Um, if we get into that moderate approval, moderate denial, I think there's a consensus needed. That's where the next meeting there. There are there there are times where four council members say, "I think we should do this." And three don't. I don't love to do that. I think a lot of what we have going here as far as our model success, our financial success, our operational success, our reputation is all because we have everybody swimming in the same direction. And so I wouldn't feel comfortable going out on on a limb or you know some new project that three people on our board think this ain't a great idea because if something goes wrong you can very easily have one of those people go ah you're right that wasn't a good idea and now we're just you know we shouldn't be pursuing things that that I think are not obviously good and so we come back in we talk about that hey four that wanted to do it the three that didn't I get more context. Is this something we want to pursue? Is it something we want to look at for one more year? Maybe there's an official study. If it's a really big project or something, maybe we just need to clarify some things. But I'd like to either get more people on board or more people offboard. And then strong denial the exact exact opposite, right? If only one or two people want to do it, we're not going to bring it in here and and debate it. We're going to put it into next year's retreat process and we can debate it at that area and say what do we need? We can get more information. We'll work with from a staff standpoint. We'll work with those one or two uh elected officials and say, you know, let let me let me help you here. What is it that you need to to sell this to the others or is there is this just something that will never get there? Um so the significant approval, we'll add it in. denials, we we'll take them out and we'll come back with kind

of a handful of things usually that you know we end up with four or five items that we need further clarification on. We'll settle that at that final workshop and then we will write the manager recommended budget at that point and move it move it forward from there ultimately to a public hearing and um adoption. examples of things that'll be in here. You see here on an operations um level, you'll see the swiftwater rescue team deployment uniforms that they're in there. These are all recommended in the budget. Um implementing our alternative water source um programs so that we have Concord and another source so we're not so reliant if there is a drought. Um, when you go to, you know, personnel requests, we really only have, uh, minimal there with the reclassification and the part-time attendance. When you get any capital, that's usually where this becomes more significant for you all. And you go through that uh, exercise. It's like, okay, now there's the things that are recommended, the, you know, extrication equipment, the bucket truck replacement, but there's also some stuff on there that may just be an adjustment. ADA sidewalk, we've discussed that program through here that you, you know, currently we spend 100. Maybe some people want that at 150. Maybe you want it at 200. You could also just put it in at 10 million if you want in the in the blank spaces, but we'll give you some options that we've heard. We've heard some things about the greenway program, right? We spend 250 annually on that on on just annual greenway upgrades and projects in addition to the specific projects that we identify. So, we may have Back Creek Greenway, let's say. That's a funded project, but there might be some smaller

additions throughout the year that we can be nimble on and maybe that should be 350, maybe it should be 300. We've given you some options there. And then there are some of these things that um are just larger projects. The design for Highway 49 and Roberto Road, the mitigation, the kind of um jug handle that would go behind Publix so that you could avoid that. We've we've talked about, hey, that's a that's a bigger project. We'd like to design that, but now's your time at the end to say, "Yeah, I'm I I definitely if it was just me as an elected official, that's something I'm for. That's something I'm I'm not for." And then we can continue moving through that. The rest of this are kind of those wordcloud wish list, those things that we've talked about, but we haven't really identified funding for or that we could move up um a few years and get things going like think the fire station one, right? Do we want to fund that all this year? And obviously we couldn't fund that all in one year, but it's good to know context of, hey, is that something that you want to move up? We could start design sooner. We could move that around in our model. Um, as well as the parks master plan implementation, you know, $25 million over five years. We we could break some projects out if we start to see a large push towards that type of expenditure. The Robinson Church Road extension, you know, talking about doing the overpass and reconnecting Harris Depot to to Robinson Church, a $20 million. And then some of the the more doable things that you'll see on here, I think, are, you know, site ready EDC, $2 million to get sites ready around town so that you can pursue economic development a little bit quicker. And the library, we have $3 million

uh project in there that is unfunded. That would be like seed money, right? acquire property to to relocate the library even though the county would pay for the library if we wanted it in a certain location or we wanted to speed that project up with a partner. That's that's the type of thing you'll see there. And as you go through this, um, text me, call me, email me, um, bug Brian, Bug Lee, you know, we're we're happy to go through this, um, step by step with anybody and and make sure that you understand it completely. Any questions on the council exercise process?

Can you go back to the um, operating I think it was Councilman Smith that put it in there years ago. I'm not sure if this athletic special recognition you had sort of a discretionary fund. Yeah. Can we make sure that that's included in there as an option? It is. Everything on here will be on your on your sheet and it's this is in there. That specific one is in there as manager recommended and it's already funded and everything that you see here. Okay. It just made life a lot easier when it came around. We don't know what it would be but

Yep. And I I don't anticipate typically what what we've seen are we spend a lot of time talking about these operation things before we get there but I don't want to be presumptive and say yeah you didn't say anything in the meeting so it's funded so we give you the opportunity now typically these are all seven and when we get them back it might be a 61 on one or two of them but typically the the council just we've all talked about these station two furniture, the um you know these benches. Um yeah, all all of these things have just really been flushed out or small number things.

If something comes up eight months from now, we didn't anticipate. It's so much easier to have that.

Yep. We keep that in the in the council budget as a as directed by you all. Other questions? Great. So um I am going to get through the rest of my presentation probably in the next you know five minutes or so and then we can have u much more open discussion because we will be wrapping up a little bit early but you know I want to I always like to just explain our process again for the room and and for the community that it is always our goal and I think we we achieve this goal by having a thorough transparent and engaging budget process. We don't lock anybody out of this. We make ourselves completely available to the town council, to the community. Um we're we're happy to, you know, dig through things and and discuss these and stay here um as long as we need to and schedule special meetings. I think that that's critical to the process and has been very effective. By the time we're done with this, we'll have spent, you know, 22 total hours in here just engaging in our annual budget. That's a lot of time to to spend together. It's also a lot of time to listen to even if you put it on double speed. That's an 11 hours um for those at home that want to listen to this. And uh although I know the other speakers up here uh have much more inflection in their voice. I don't. So I can I can put a few folks to sleep at home. 22 hours is a lot and we do that for a reason. Um we're proposing to hold the tax rate at 41 cents. I am nervous about that. Not because we're not because of our financial status currently. Um we we are very we planned on being at 41 cents for the next four years. We committed that to our residents and we we told them during last revile we won't we'll see it the next refile. We plan for four years. We don't plan for one year at a time. um

the the levy cap discussion really I think rewards high tax towns and so being a low tax fiscally responsive town who says you know what we're happy being a lower tax town and know that our community will support us if there is something that comes up if we want to expand police if we need to add another fire station if we want to do a big transportation ation project. We feel comfortable explaining that to our community and going to them when we need it. And um you know, if you look just in the county at the two extremes, we're we're 15 cents less than than the highest state. So, you know, we're leaving $8 million on the table just in property tax every year just in comparative communities here. I think that's the right decision. I'm I'm happy to do it, but I do get get nervous that between now and the next time we set a tax rate, the the playing field could change dramatically. We'll be ready to adapt to that, but I don't want to leave that with with the community with with the council as something that isn't an issue. It is an issue. We're working through it and we'll adapt to

I'm trying to understand what that could possibly be. We saw the stairst step when you added police, when you added fire. What else would we add other than a water slide or something? Well, I I I think it I think you're right in the in the short term. Right.

Right. Um there there is um a time where we'll need to expand our deputy division further andor have a police department in Harrisburg. I don't think that's tomorrow. Um we we committed four years ago to go up to this full buildout and we've about reached there and we probably have a plateau for several years to kind of gauge and see how long you know what what type of public safety we need to adjust to. Uh we fully built out our our fire many years ago. We've kind of grown into those those shoes. But there there are plateaus that you know are at year five at year seven that there are services. I'll tell you one on here that fortunately it's on the fee side of things, but storm water uh permitting, the erosion and sediment control part of that is run through the state. There's a back and forth about are they just going to pawn that off onto the towns. That's a multi-million dollar program. I mean, our internal projections right now is that would take two or three full-time people to to run something like that, or you'd have to contract it out with a with an engineering firm. And again, that that that could be a a seven figure number. And if the state says, "Hey, you all have to do this." We would do it. I say this in a in a very we we would do it in in the spirit and intent of the Clean Water Act. And so it would be done at a very high level and and Harrisburg residents wouldn't accept anything less. We would run it like we run police and fire and streets and parks. And so there are things like that that okay, if that comes across, how do how do you how do you assume

that? Um we we We wouldn't we wouldn't have as many levers to pull if we have a cap. Also, again, if if we if we need to go more than 29 deputies, we will at some point and you're at a cap. What are what are our options? Maybe go, you know, hearing maybe go out for a referendum, maybe not. I I'm not sure. Um, again, the uncertainty bothers me. If whatever the playing field is, we'll adapt. We'll figure it out there. These rules are much different than other states rules that we have right now. And we beat our competitors handily under these rules. If they change the rules, we'll adapt. It'll take some time. We'll figure it out. Um, but having that uncertainty on on property taxes when that's pays the lion share of your critical services, it's first time I've gone into a budget like that. So, if that wasn't in the horizon, I would look at all you and say we're very happy with our tax rate. We're very happy to to not adjust it for we've been planning um and we're really happy with what we've done financially with that low tax rate. So, um I don't know what those stair steps are, but I know they come and I don't know when they'll come. the um 5% increase on on water and sewer. Again, those are those are just built-in passroughs. Our sewer fee is going to go up. What we what we pay WASAC to treat our sewer is going to go up a minimum of 5.1%. This year, it will be more next year and more in the year after. We're probably looking at 7% increases from them. I Yeah, I think we can build in efficiencies to where 5% is kind of our number. Um, last year we were able to go

to zero and and sewer pass through from WASAC. Last year I think was 7.2%. So we just ate that 7.2 for our customers last year. On on the water side, we're expecting again four to five from Concord. They're building a $30 million treatment facility to take care of the forever chemicals that were um in the news most recently. That's not free. They've got to pass that through to us. our customers are going to see that. But overall, we saw in the previous um budget workshop that our rates are amongst the lowest um in our peer groups. So um we're doing really well there. We want to maintain doing well there. The service levels and and the projects, they all meet our mission, vision, values, and goals. And I think we we're doing all of those at high quality. We're not asking for any lowering of services. We actually think we're going to do much better at that. And then our sign significant investments over the next one year, 1.2 million on the Highway 49 and Roberta mitigation, doing the design, getting that shovel ready, and then hopefully looking for some partners to to fund the rest of that. Spending over a million on greenway, sidewalk, and pedestrian connectivity projects in addition to the ones that we already have going that are on our CIP. and then nearly a half million dollars on replacing the self-contained breathing apparatus across the fire department. Those would be the three kind of biggest capital expenditures that we have over a one-year period. I'll pause there because the last thing we'll do is kind of go over where do we go from here for the next budgets, but that concludes kind of our presentation portion and I'll take any comments, questions, feedback if you have it. I'm going tell you as a good sign that we did a good job presenting uh with

with not a lot of questions. So, if there aren't um I'll remind you all of the details that we talked about tonight are in here. So, um same with the rates and fees if they're not in here that the long detailed ones that you talked about um that Devon put together for illicit discharge. we can get anything that you need. If you something doesn't make sense, please, you know, reach out. We will quickly move into that um council um exercise part. When when does that go out, Brian? When do we plan to have that going out? End of day. What's that? End of day Monday.

End of day Monday. Um so again, very while you guys are at the at the council meeting, I don't want you filling that out. I want you want you paying attention. But um Monday we plan to to get that out. We generally give you a week or so to kind of sit and play with that and you can do multiple versions of it and um again it's very interactive and I think it's user friendly. But if you don't think so, blame Brian, call me. I'll help you get through it. But he he built it. So we'll blame him if it doesn't work. If it works, great. Just know I've I built the whole thing. Um, workshop number four, April 30th, that is another Thursday evening, 6:00 to 8. We'll we'll come back with all of the results of that, talk about any of the things that we do need to clear up, make sure that I have good consensus. I do need to kind of really leave that meeting with an understanding of the budget that that we're going to write because we're going to turn right around on May 11th and present that. and that'll be the first night that you hear it. That will be um the opportunity for public comment for the community. Um they'll they'll be able to come in and and if they haven't if if they haven't been involved to this point, they can come in at that meeting here at comment as well. And then we'll have a 30-day waiting period and then put that on the June 8th council meeting for adoption. I will say we don't have a second meeting in June. So, if there are any changes, which is is pretty rare, but we, you know, sometimes we'll have nominal changes after a public hearing, um, I'll need those from you all really quickly between May 11th and in the end of that May 11th week so that we know that we have a budget we can pass in June. Otherwise,

um we'll be going into July 1st without a budget and um we're not the federal government. So, we don't get to just keep keep going. Um everybody everybody goes home July 2nd and we have a big party the 3rd and 4th. So, I can't miss that. We we we got to get our folks here. So, um June 8th, we will pass a budget. May 11th, we'll we'll present that final budget. And anytime in between, um let me know if you you have any questions at all. Thank you, council. Are there any other comments before we move to public?

All right, we've got two in the public. So, if anybody would like to speak, got Wally and Jim with us, just come up to the microphone and state your name and address for the record. Who's this guy? Yes. Wally Wallace, 3093, Spring Forest Road, Harrisburg, North Carolina. I have six questions. Okay. Oh boy. I'm sorry.

I said oh boy. Well, not necessarily. Uh the water and sewer 5%. How is that being paid for? Is that being passed on somehow to maybe I didn't understand what have you. So some of my questions I haven't had a chance to look at all the data that you have. Okay. Is is that being passed on in an increase in the bill or is that being assumed in part of the funds that you already have?

Well, both. we'll we'll we'll end up with a little bit more of an increase from let's say sewer. So, WASAC is our sewer partner. They're going to go up 5.1 or or about there. Um that'll be the minimum. It may be a percent. It might be up to 6.1, but I think it'll be 5.1. We don't have that exact number until they pass their budget. Um we're going to go up 4.7% on residential customers. And where will the uh residents see that in their bill? they'll see their bill go up 4.7 okay cents. So if you um if we if we flip I saw the I saw the data. Okay. All right. I understand that. Just uh trying to figure out where

we'll see that in their water bill in July. Okay. Uh question. Um the 35 million for 26 is that the budget for this coming uh this past year and I saw some figures up there. said 36,467,000 in 27 it said 36237 is that our total budget for 27 for the general fund I'm sorry just for the general fund is that that doesn't include water sewer and storm water okay so what's the total the total I think was 52 million with those funds included

we can get you an exact number while we'll we'll sum them up for you they aren't summarized

okay just trying to get an idea. Okay, next question, Rob, is basically for you. Last year when we did the property tax, basically there was $6 million over the four years. Okay, which if you break that out, it's a million and a half each year. How is that being reflected in this year's budget? Is it when that's the reason I ask about the other number, the 35 and the 36 general fund? And I understand it might not be I don't see a million five there. How how is that being dealt with? I need to understand how that million and a half per year is being used.

I'm not I'm not sure I understand the question. Last year last year when we did the property tax Yeah.

$6 million was going to be in over the four-year period. Okay. And I complained about it because said I only felt like we needed 3 million and the thing was it was going to go the 3 million of that was supposed to go for parks apparently or part of it to purchase parks in the future. Okay. So that leaves three million I mean a million and uh three millions each year excuse me for the four years basically 7 750,000. Okay. So my question is, how is that being used as part of this budget, part of the general fund increase, or how is that $750,000 being used?

Does that make sense to you? As much as it's going to, we might need a followup. Um, okay. But I think there's, you know, we have a detailed description. We went over it at at the last meeting on the expenditure side and it it does outline what those different costs are by department. But you understand my question, right? Yeah. Okay. All right. I'll move on. Okay. Um the 4% interest you said we uh Ryan, I believe you said we earn about 3 million a year. Yes, that's correct. Okay. Where does that money go? It

does it is it simply reinvested or are we spending it? Um it it could be both. It's it's reinvested um until the point that it's needed. I'm sorry.

It's reinvested until the point that those those funds are needed for some reason. But interest is earned respective to the fund that has a claim on that cash. So if water sewer has $10 million of savings, it's going to earn $10 million of interest. um proportionally to all the interest that we own. If the general fund's got 30 million, it's going to get, you know, threequarters of that interest distribution each month. So, the interest follows where the the fund that owns that money. The other big issue,

it's always it's always reinvested, but then it appears in the capital reserve fund balance, and now that's subject for appropriation for any future project. All right. Thank you. Um, in the general fund, you had the chart where it talked about transfers. Uh, and then I noticed that it said um I noticed decrease each year as you went across those transfers. What What uh is the cause of that?

I've been hoping that somebody would ask Brian a transfer question. I've been hoping that somebody would ask Brian a transfers question for four years. So, I was like, I'm not asking this yet.

I I I I joke because I pick on them every year on it because transfers are they they have long, you know, descriptions and and but I'll let Brian answer that. So we we uh transfer the money based on our fund balance policy to the savings account at the end of each year. And then as we spend that on capital, whether it's in operations or in our multi-year capital funds, the money goes from the savings account to those places to fund those projects. So you'll see big transfers to the savings account and then you'll see that savings account transferring money back or to other places to fund projects. And those numbers are in our total budget. So when you get the manager's recommended budget this year, it might say that our budget's 128 million.

50 million of that might be all of the transfers going back and forth. Understand? So it's not a very valuable number to look at over time. It it doesn't really you're showing a balance. The first number was 20 million and then I go over to I believe it's 35 and 35 it's going to be 7 million. So what you're telling me is that you're spending more out of that capital fund than what you're putting in. That's correct. Is that correct? So in other words, from 20 million to 7 million, that means that they spent 13 million of it in addition. It's reduced your capital ability to spend by 13 million. Correct. Correct.

That is correct. But that that's the entire purpose of that savings account is to build up money to then fund capital projects. It's actually legally required. It must fund capital projects. Okay. Yeah, that's that's a big decrease. Okay. All right. Uh, next question. On your wrap-up, Rob, uh, you've got 1.2 million to 49 in Robera, uh, 1.05 greenways. on the greenways. Is that additional? Is that out of the capital fund since uh and the others I believe have been covered basically through grants? It's in addition to the ones that have an additional so it comes out of the capital fund. Okay.

All right. And well, some of this is operations fund. I'm sorry. All of this is capital expenditure, but some of it is capital in the operations fund. So when you look at our funds, you we may have a capital project fund which is a multi-year project. We may have, you know, our CIP that that you see in here, but then you also see some of these things that like we talked about the greenway exp we have that in is 250,000 in that it shows up in our operational line items. That's that's included.

I understand, but Let me get a more simple answer. Okay. Uh so you're saying basically 1.2 and the 1.05 comes out of that capital account we were just talking about with Brian. Is that correct? Was that technically that's I would love to give you a more simple answer. I think that's more complicated. Okay. All right.

I don't know if the do these two specifically come out because we transfer in and we transfer out. So unless you're going to put a a sticker on each dollar and see where it lands up when he transfers it, it's hard to say that these are going to be funded by capital reserve transfer in or whether it's going to be funded by the tax that comes in. And but there there is a capital transfer in that covers kind of everything in addition to what we have in the taxes coming in. And we've saved that last year and the year before and the year before that because we know, hey, in year five, like if we were to look at this model right now and we go out and we say, hey, in 2034, we plan to build a fire station. We can't wait to 2034 to start saving money for it.

So that's what we would never have a $20 million number here if we didn't have something to spend it on later. And that's where I think while you were missing it is there are allocated items over those 10 years when you said it went from 20 down to seven. It's not doing that magically. It's because as he said the fire department is going to be rebuilt over at the new location. So we've been putting money away for that. So you're going to see that pull out. I understand that. I understand. So I didn't want you to get the worrisome trend that it's that somehow that 13 trend, you know, minus 13 trend is something other than than what's planned. No, I I was just Yeah.

The fact that no fiscal cliff make sure that you know that I was looking at it correctly that it goes down by 13 million regardless of what you spend it on, whether it's a fire station or a new car for you or whatever. We we we we plan to spend $13 million. I understand. Okay. over that period of time. Okay. More than we're going to collect in taxes to to do capital projects. Okay. Thank you very much. Thank you. Anybody else? One thing on that for clarity when you're talking about spending that $13 million. We have a choice, right? You spend it or you take it or you do it as debt,

right? we're doing it and paying it as opposed to drowning our residents with a ton of debt and getting in a situation like some of these other towns have gotten into. So, you know, you can say, Wally, that we're spending it, but at the same time, we have a choice. Sure, we can go crazy in debt or you can do it smartly like we were all raised. Save your money, then buy it. And that's where we're at. I understand you don't go into debt. You already got I understand. Any other questions or comments? All right, with that we will conclude our budget meeting tonight. Thank you all for being here this evening. Thank you.