City Council - Regular Meeting

Uh hello and welcome to our Thursday evening council uh budget workshop. Uh we're joined here by uh Director Healey uh from Assessing and Administrator Canrath. Uh yes. Uh Director Healey, please kick us off.

Sure. Thank you very much, Mr. Mayor. Hopefully everybody can hear me. All right. Um as we know, uh we're nearing the end of our revaluation that's been ongoing for three years. Uh the results are becoming apparent. Uh obviously it's creating a lot of concern in for our property owners as well as the council uh and city hall workers. Um we were trying to find solutions to lessen the impact. Uh obviously as we discussed before um there was a shift for years. Uh the commercial base was at a higher percentage in residential and that has shifted during the revaluation. Um some people will see significant tax increase. Some people will actually see a little break, if you will. Uh I had Tyler run some numbers and there is approximately 48% that would have stayed the same or seen any minor reduction. That's minus uh any type of tax budget increase. Of course, that means 52% would go up, which is the majority of the properties obviously and uh it would be mostly residential. So I I understand that. So, uh, the administrator and deputy administrator asked me to look at a few different scenarios, a few different options, which we did, and I've heard the discussions about a possible phase in. So, I asked first of all, I asked Tyler, uh, is it possible? Can you do a phased in reevaluation? They said yes. Uh, software modifications would be between5 and $10,000. It's after that that we start running into some cost. And I got four different scenarios that they ran. Can you move the mic closer to you for sure folks at home?

You got it. So, four different scenarios. The first we'll call option A. A statistical update of values in the years two and three with no informal hearings. Values would be indexed by property class. So, we would adjust them by uh residential, commercial, industrial, uh apartments and what have you. The cost of that would be between excuse me would be 100,000 in year two 104 and year three. Option B a statistical update of values in years two and three with informal hearings. Again values be indexed by property class residential commercial utilities and artificial intelligence values would be included as a backup. The estimated cost in year two 227,000 in year three 236,000. Option C, a statistical update of values in use two and three with informal hearings. This one they would recommend uh stratifying the values by land use code. So we specifically go 101 is res uh single family residential, 102 family, so and so forth and so on. So we stratified by each and adjustments made to each class that way. Uh that would be uh between 288,000 in year two and 2995 in year three. Option D is a full statistical update of values in years two and three with the informal hearings. It's essentially what we're doing now, but just extended over the next couple years to make sure nothing has changed dramatically. Um they again they stated they could do it. Um I understand why the council would would think about going this direction. It would certainly not be my recommendation. I think it's it would be very confusing to the property owners. it'd be uh I don't know if you had a chance to uh actually I'll get to the document the mortgage company. So, one of the things that I put together a pro

and con document that I got from Tyler and one of the things I said was uh mortgage companies would also have a hard time figuring out what the escrow should be for the taxes moving forward and then it would put an undue burden on my staff. Uh we'd be carrying this out over three or four years instead of just doing full implementation now. So, uh, my recommendation would be just move forward with it. It's been 38 years. Uh, I know it's difficult. I know it would be very difficult on the taxpayers. Um, but at some point, we have to do it. Now, if we put it off, we're just delaying the inevitable. It's going to We We don't know what's going to happen with property values in in the next couple years, and we certainly don't know what's going to happen with budgets in the next couple years. If we move forward this year, we'd know and if it, you know, people would finally have that the questions answered whether they like it or not. They may not like it, but that would be in my uh estimation best way to move forward.

Uh yeah. Uh councelor Councel Herman, thank you. Um thanks for bringing this forward. Um what are those costs? Uh what what are those costs for? So they what they do is they they would review all the sales data again update the uh land and building schedules that they create the values with

and it would be based on market. Now it it's possible it is entirely possible that the values created now may not change in the next couple years but we don't know that this would be a safety net to make sure okay we went through this whole process let's make sure the values that we do finally end up with are reflective of market value. Okay. I guess I guess I'm I thought that phasing in the revaluation meant figuring out all the values and then phasing in the increases to the taxes. Right. So you're saying they would figure out all the values and then next year figure out all the values again

just to make sure that we're okay. So each year would be a phase in to get to the full value. Right. So, and each year they would do some type of uh study ratio, study analysis, and update of T tables if needed to make sure that the values are still reflective. So, it wouldn't be just we we'd just be making sure that the values that we're dealing with now are reflective of market value at the end because again, we just don't know what's going to happen. It could go down, right? We we don't know what's going to happen with real estate values. Yeah, I I understand that. I guess is there an option to just do do the revaluation now and then phase in the phase in the tax changes? So, um, one of the things I I talked with the administrator about to earlier was something that uh was done in this town of Brunswick uh that kind of set a precedent on this of they delayed their rebell. They just delayed implementing for three years. Now, I would certainly never recommend that because we'd be dealing with this over the next few years. Um, if we delayed, we could still go through the process of the valuation notices, which is supposed to go out this week, could go out to the property owners. They would know what the new value is. We've got scenarios that would get a pretty good idea of what the tax rate's going to be. So, we could supply that information to them and say, "Here, here's where we're at. this is what your taxes would be if we' implemented, but we're going to just delay and use our values from the current fiscal year uh and increase it based on if there was permits and what have you. It it that way there it's it would give the property owners more time to prepare for what was coming. the the the downside of that, what scares me is we don't know what the budget's going to have because right now there's a lot of pieces of this and uh one is the reval and its impact on the values and then

there's the budget and its increase on taxes. So, and they they you you counel Harman, you mentioned this the other night. I was watching. You're right. The reval did have an impact as well. Um I ran a scenario on my own home. uh my taxes would have gone up about $600 without a budget increase. So unfortunately with the budget increase it's like 1,200 but that yeah so okay I guess I I may not be communicating my question very well so I'll let others try to get the answer. Uh councelor Chidum.

Uh thank you Director Haley. What are the costs for option D? Option D is uh 4416,000. So 400 in year 2, 416 in year three. Okay. Thank you. Um and if I understand correctly what the phase in would be, it's it's a different approach than I had envisioned. Uh you would take all residences under option B for example, all residential and bring them up to full value in years two in year two. And then in year three you would take all commercial and industrial. And

so what we would do is as of the completion of this reval this year that's considered full value. Okay. We would implement a percentage of that increase over three years. Okay. So that gradually takes the shift which we're expecting and distributes that over three years. But that's a relatively small component. if my calculations are correct of the tax bill that people are going to be facing this year which is due driven primarily by the budget. Um if my valuation is going to go up 30%. Mhm.

This approach would say okay in year one it's going up 10%. In year two 20% in year three 30%. That's correct. That doesn't change the the the the tax levy. That doesn't change the amount of money the city needs to operate. So that means that we're going to have mill rates that are increase in each of those three years. That's correct. That makes things even more confusing than they are now. That's why I was saying that that that that's why I would not recommend phasing in because of the confusion created just exactly as you explained. Okay. All right. Thank you. Uh, councelor Nene.

Thank you, Mr. Mayor. Um, thank you very much, Assessor. Um, I've got a couple of questions about So, the option A that you proposed basically costs $24,000 to implement. The um when you talk about year two and year three, that's because year one would be no increase in taxes. Is that correct? Increase in value in and then and new taxes collected by the valuation. That's why I should have said year one is this year. Okay. So year one is this year, right? So we would phase in uh and percentage increase on each property class this year,

next year and then the year after. The other component is to make sure that our values that we are phasing in are still reflective of market value because there's two things could happen is one they could go up two they could go down and I think if we missed that then people are really going to be upset and there was no scenario in which we just released the new valuations didn't change the mill rate for a year and then started to go for that was my the last thing that I mentioned was a delay of implementation for a year. Mhm.

We keep our current values, our current FY 26 values. Uh increase them based on if you had a building permit or if you have new construction because that hasn't been put into the uh appraisal, excuse me, the assessing side, the taxable side yet. We can get caught up on that. That would not be that difficult for my staff to do. I think it would be more difficult for my staff to implement something over three years.

Understood. My concern, my my my major concern is that at this point still no one knows um even if we had a hypothetical uh new mill rate what their increase or de decrease would be, right? And we know that the vast majority or the majority of residential housing is going to see an increase, sometimes substantial.

Yes. And so because of the fact that we're well past the point when you can file a homestead exemption and well past the point when you can apply for the senior tax credit fair fairness act. That's why I'm concerned about something hitting us immediately. Um simply because and some of the older housing stock with severely undervalued homes. Um I I can tell you that my neighborhood has plenty of homes that are valued at somewhere between 68,000 and $88,000. the new valuations are going to be somewhere around 250 to 350 if they're there's a few that I know that are two units that are occupied by one person. And so there's an opportunity I think with a delay in in in putting in uh this piece with good outreach to make sure that we're protecting folks that that have that can take advantage of programs that are available. Right. Um I I'm sure you you're aware of how many people in in the in the city have filed homestead exemptions and how many have not. Is that something that you're you have access?

We do have that right now. I want to say it's about 5,270. And so how many how many homes doing uh I want to say we have 8,388 single family residential. So there's another 3,000 potentially that could apply for the homestead. You know, hit with the timing of it because you you have to apply by April 1st. You have to own the home before April 1st. So there's completely understood on that that level. Do we have any idea of how many people have applied for the senior tax fed credit fairness act? Do we have we can find out but you have to talk to the state on that. They they it's part of the uh uh stendum to the state income tax return.

Gotcha. I I completely agree that that you know if you could just speak just really brief briefly to h how long this process has taken and how much it's cost us so far to come to this point. Um, so we had uh budgeted $580,000 for the project and it started three years ago and we've got to the point now where the valuation notices are supposed to be actually mailed next Friday. Uh, Tyler is waiting to hear from me tonight of to send the letter to the printers for tomorrow. So, uh, but

if you're Tyler, if you're watching, hold on. And so we uh uh but that's where we're at in this phase. So we've gone through the the full uh revaluation. Uh the physical inspection part unfortunately didn't work out. So we went to a data mailer. Uh that was all that information was entered into the system. Um they've done all of their uh sales analysis. They've done their commercial income and expense uh review and all the the tables the valuation tables are complete. Okay. I do think it's important that people get their new valuations as soon as they can. I I think the question that I really have is whether or not we delay one year before we implement the full tax um or if we do a step plan. And I'm wondering if like it makes sense to to put that forward as a referendum item in all honesty uh with a breakdown of of what the cost will be if we do and do not once people have their numbers and can actually make a decision. Um, I just think it's tough for us to make a, you know, like a snap decision one way or the other when we haven't, it's going to take a couple of months for people to digest like and especially I'm I'm I'm considering the folks on fixed incomes, right? like if you are not expecting uh an increase uh in Europe or or even folks that are you know they're living to their means or in some cases above their means because things are very expensive right now and if your um escrow goes up uh you know $300 a month that changes your family planning for all of the expenditures that you're putting forward. Same thing with the with the fixed incomes. And so I'm just trying to figure out a way that we can do this that is allows our our folks to prepare because our community is one that uh the working poor still own property here. Um it's very rare I think for a lot of communities and and the last thing I

want to do is push them into situations where they're um or it's not tenable for them to stay in their homes. So, so there's something I think that's kind of important for me to mention uh as far as state statute goes and the reason they do this is so there's no undue influence on values is the ultimate decision is the municipal assessor of how you value properties. Now, what you the electeds can say is we're not giving you the money. You're not getting 200 grand. You're not getting 400 grand. Which then sends it back to me to say okay you can only do X or Y. either we delay or we implement. Um, like I said, I it it's uh it's something the way it word the statute's worded is that I am an agent of the state of Maine even though I'm hired by municipal office, right? I work for the city, but I'm an agent of state. So that's that separation of so there's no undue influence on the uh assessing department or the assessor to arrive at values that benefit certain people. Not that that happens, but that's why the separation is made that way

ultimately. So what you're saying, does that direct directly relate to the concept of like a referendum, for instance? So what what the council could say is, okay, you you've given us these options. Uh we're not going to fund it. We're not going to give you 200 grand. We're not going to give you 800 grand. And then I have to say, okay, well, that gives me two options. Either we implement or we delay. Mhm.

And um in speaking uh like I said, my my preference would still be to implement. However, the discussions we've had and like I said, I just had this thing that came into my realization into my head today that we can do this. Delay it one year. People still get their values. They'll know what they're going to be assessed for. They're going to have a couple of months to argue whether that's good or not. We're going to have an estimated tax rate that they could multiply their value by. So have a good idea moving forward what their taxes will be. Like I said that what my the part that I fear is we don't know what the budgets will be next year. And so you know if we do don't implement we end up with people seeing a significant increase this year and then a significant increase because the budgets went up again. But if if we do the one-year delay, um people are not it's September of 27 will be the first tax bill with the new values. So that does give quite a bit of runway uh for people to know their new values and to prepare uh for what's coming. You know, it's over a year. So, um I think some of the, you know, the the challenge, you know, we're facing right now is um we're looking at some potentially large numbers for many people in this community to absorb in a very short amount of time. And so we do have an option and um director you're not opposed to this option. I'm doing a one-year uh delay uh in the roll out of new values and it does give at least a year plus for people to prepare. Um they they know their new assessments and they'll be able to have some time to at least prepare um for what is coming. So uh but the point about what the budget is next year is a valid one. Um we could be looking at some potentially big numbers again. Um but so I think the one-year uh delay, a phase of new uh values does accomplish uh some of the

goals that I think um we're trying to get at um and addressing some of the uh the scary numbers right on our doorstep. Um if I could just add and we not be this is not precedent setting this has already been done by another municipality. Correct. Yeah. Just a

and just to follow up on that if we have if we have a window of let's say uh a year for the expectation of these uh new taxes to fall into place that actually does give people planning opportunities and it also creates an opportunity possibly if we were able to to encourage this in some way. But, you know, the ADU programs exist, right? We've got a lot of seniors that are living in uh four bedroomedroom homes with two baths, right? Uh one person and like um you can offset uh the costs of of they can't tap into the equity of their homes right now without being homeless, you know, like they there's no other place to move. They have to move into maybe a rental or into another community, right? Um, and so, you know, I'd like to see any type of model that we can look at in order to to move people into housing still in our community that they can afford um and and and make sure that they're not crippled by by by a surprise. And so that that those are my concerns. So,

uh yeah, thank you. Um we're going to need to give people some time. So, uh, you know, Christmas is right around the corner and September 27th is coming even faster than that. So, I I we're either need going to need to do a phased in approach or we're going to have to give people uh uh a year, you know, runway or delay here. Um, I mean, that's just that's just where we're at. We need to give uh people time to to plan. Uh, all right. Uh, back to you, um, Councelor Chidum.

Thank you, Mr. Mayor. So if we delay this for a year, we use the current values that everybody has on their property adjusted by building permits and so on. Um we have a mill rate right now at 3278. With the budgets that we're talking about, we're talking about a 10, 11, 12% increase on budget alone. So if we delay a year, our mill rates are going to go up to 36.

Yeah. Um, that's going to be a shock. The problem I see with delaying for a year is that especially if these letters go out, and I'm encouraging that they do. That's the whole purpose of delay is to give people a heads up. We're going to have a segment of the city that has been overt taxed based on the old assessments that now with a little bit of common sense is going to realize I'm still being overt taxed but the city has the information to equalize my tax so that it's becomes equitable. Does that open the city to any liability to any any claims that and particularly you Assessor Healey um you you're an agent of the state.

How do how do we reconcile saying we know that you are overvalued here in the great scheme of things, but we're going to put it off for a year and we're going to let you pay extra for a year.

That is a very valid point. Um I did speak with uh Taylor Burns who's the assessor for Brunswick. Uh they did have some appeals. They uh managed it. The problem is we in order to prevail on a set on a an abatement, you have to prove that you're being treated unfairly at a ratio of 10% or more. Right? So, if our ratio is 38% or 40%, whatever it is for this, if we didn't do the rebell, someone's going to have to prove that they're being assessed at 50 or 60%. And that's going to be difficult to do it. It It's It's one of those things. It's just extremely hard to prove that you're being assessed at a greater percentage than the average, which is 38%. Because most properties, as we know, are going up roughly 180%. So, it' be difficult for someone to prove that they're being assessed at 60% right now because that's just would be highly uncommon.

Okay. I I didn't realize there was a a threshold. There is. Yeah. There. So, it's not 10% within the relevant the statute reads an assessment that is within 10% of the relevant assessment ratio is deemed to be within acceptable limits. Okay. All right. Um, thank you for that. I I have a couple more questions that aren't specifically germanine to the roll out, the delay, the phasing, but they do relate to assessing and mill rates. Is it appropriate to address those? Now, um I guess in this context, why don't you ask your questions and then we'll we'll go from there.

I will when I remember them. Um okay. Uh does so right now we have before us uh we have the option to delay uh at least one year and then or uh spend money to to phase it in. What uh what are we feeling like we'll just go down the row here so that way we can give our assessor some direction. Uh yes councelor forward one.

Um thank you Mr. Mayor. One I would suggest uh we definitely delay for a year. two, since this is a budget work session and this is a presentation and we're missing two members, um we probably don't want to make a decision. It also gives us an opportunity to get some feedback um from the folks that are going to be impacted by it. Um so um I'm open to the phased approach. I'm also um open if I mean the challenge is nobody actually knows what the impact's going to be, right? So like once they have a number and they can understand what the impact will actually be, I think that we'll have a better understanding of whether or not people will be able to swallow that in a one year, two year, or threeyear proposal. Um, but I definitely think when we're talking about 3,000 single family homes in the community that that haven't even applied for the homestead exemption,

correct? Like we have to do our due diligence to make sure that we're communicating to everyone in the public to make sure that they take advantage of every single tax credit possibility that they have. We do mail. Every new property owner gets a homestead exemption application. So, we do try.

Yeah. No, I understand. But I'm just thinking about like community based approaches where we actually knock on people's doors and bug them. Um, I'm not saying the city does that because I know it doesn't always work out and I know it didn't work out for Tyler Technologies, but like we we have to we have to reach out to the folks and be like, "Listen, you know, we you are going to see an increase in your taxes for the for the folks that will." Um and uh and and there are programs in place that that you should be taking advantage of in order to to reduce that impact to you. Uh councilman, thank you. I guess I'm still I'm still wondering about the costs of phasing it in. You said we budgeted 580,000 for this process. Mhm.

Um, and I I don't understand why if we've done all the calculations and valuations, why it costs $2 to $400,000 to to implement those in a staggered way. So, it would be additional work on Tyler's part to analyze the sales to update the tables if need be. Um, we could ask them not to do that. The downside is if the market does drop or go up dramatically, then that could be missed, right? So, if we're just saying we're just going to phase in these values and we're not going to do anything else, uh if the market changes, we could have some issues. Yeah. I I guess I don't I don't understand why that would be, you know, we haven't done this for 38 years. Why would it matter if the market changes in the next three years? Why don't we just phase in the values that we have now?

Um, you're right. We could do that. The the I don't we all remember what happened in 2008. I'm not saying that's going to happen. No one has a crystal ball, but property values dropped 50%. Mhm. In within a year and a half. So, if that happened and we were just phasing in the regular values, that'd be a problem. I It could also happen next year if we do it all at once, too. So I I just I don't see the connection, I guess.

So the the connection is on once the system is set up the way it's meant to be, we've never been able to do adjustments in our database because the last reval was scrapped in 2006. So what we have is appraised, excuse me, assessed values and then taxable values. We maintain two sets of values. The the taxable are override. So we've never been able to use the system to adjust the taxable. we have to go into 12,000 parcels and adjust those. So once the rebal is complete, if the market were to go down, we could do annual adjustments. So the phasing in and the implementation of the software would be specifically to do a phase in. If we completed the rebound, it said we're done with it, then I could do it based on sales.

So you'd basically be doing a reval every year. every year. Um IAA uh standards, International Association of Assessing Officer Standards is once every four years. Uh a lot of states do annual, a lot of states do three years. Maine is once in a 10-year period, which is just it doesn't make sense anymore. When they created that statute back in the 70s, maybe it worked then, but it certainly doesn't work now. It's way too long. New Hampshire, for example, is 5 years. Yeah. And and the reason why we're not doing that currently is just because it's been so long since the last time

so long and also our system our even though we have a a computer assisted mass appraisal program we can't use it the way it's meant to be used um without manually it it just doesn't make sense that we have to manually touch 12,000 parcels. So okay if I may counselor it sounds like there's a technological component to this as well. Yes. Yeah. Uh, anything further, counselor? No. Uh, councelor Roy, did you have something whether your thoughts? Thank you, Mr. Mayor.

Um, my thoughts are kind of like councelor Herman's in a way. I mean I think you know we haven't done this in 30 plus years you know and if we come up with a number and we implement that number and we see a year down the road that the numbers tank or eight months down the road then we could adjust for that if we had to. But I I mean I I I just I I kind of share the same concerns as council. But um with that being said I mean I'm I'm in for a delay at least um for a year. I mean, I we we can't right now. I don't think with the way the the numbers are and the budgets and all that stuff, I don't think we can implement this at all. I mean, we're going to put people out of their homes and it's the last thing I want to do. So,

Council Noble, um I agree that we should wait. Um I don't I don't know about um phasing it in or doing it after a year. Um, I want to talk to my constituents first and see what they think and have some other conversations with people who understand it probably a little bit better than I do. Um, so yeah, that's

councelor Chidum. Thank you. Um, councelor Roy just mentioned putting people out of their homes and and I'm sure he meant that as a figure of speech because to my knowledge the city has never evicted anyone for non-payment of taxes. The process is that a lean is filed and your house is burdened and but you're not told you have to leave. You're not made homeless. So, uh, unless I'm mistaken, I'd like to put that whole concept to rest that we're forcing people to leave their homes. If you make a conscious decision to sell your home because the taxes are too high, that's a little bit different. But the city is not going to go around knocking on doors and telling people you have to leave because you haven't paid your taxes. Am I correct in that?

Yes.

Thank you. Um, as to delaying, you've addressed my question about the liability or the the uh concerns the city might have by continuing what is an inequitable tax structure now. We all know that we have the tools to fix that. And if we continue it, you've addressed my concerns about the exposure the city would have. Another concern I have is that economic development and the fact that we have got a mill rate that is as high as any in the state I would surmise um will only go higher. We're now going to be charging uh 36 3.6% of the value of your property. um that's going to delay any economic development tools that we would see by reducing the mill rate to 15 16 17 whatever it falls out to be with a new budget. So that's an argument against delaying for a year. Um the only advantage to delaying as I see it from a monetary standpoint is that the shift of burden is not affected. So that residents don't see that in my view relatively small incremental addition to the large 10 12 13% that we're talking about in the current budget. I is that a fair statement?

That is a fair statement and I I think we're kind of on the same page. I I am much more in favor of full implementation and having to deal with the fallout, but understanding what we're up against as far as, you know, people wanting to be able to have time to prepare for this. And that's why in in my mind, you know, the the two I believe the options are delay or implement. I I I tend to agree with you uh director Haley um and my preference would be to implement um implement now uh particularly if we're looking at any increased costs in the delay because of those factors that I've mentioned uh and because I truly believe that the shift in in equalizing the tax across all property and taxpayers in the city is if we could get this number out, but we can't. I've I've tried previously to the the differential in or resulting from the revaluation is relatively small in comparison with the differential resulting from the increase in budget. Um so that's why I I think that I appreciate the concerns about giving people time to prepare and so on. Um but they're still going to be faced with a horrendous bill this year resulting exclusively from the budget. Uh if we if we implement the reval this year, we avoid having another year of 30 plus mill rate. We avoid any minimal exposure to the city. uh and the cost of that is relatively small in comparison with the unavoidable costs that we're going to experience because of the budget inflation.

Uh councelor Chidam, so what uh you're in favor of just uh implementing immediately? Is that what I'm hearing? Yes. Yeah. Yes. Thank you. Um back to uh councelor Long Champamps. I've asked the council how they feel about an implementation andor um a phased in approach. Yes. Um as I shared before, I definitely think we should delay this. Um as of right now, have all of uh have residents received what their new revals are?

No. They're supposed to be mailed next Friday. The new valuation notices are being mailed next Friday, the 24th. So although we we have known that this was coming, right, but no one actually knows what their number is to their property, right? That's correct.

So how can we just say, okay, in May, this is what your new revaluation is, and this is how much you have to pay, and then right away we start collecting that. I just don't think that's fair. Typically, when you buy a house, you know how much it it values at, right, before you purchase it. So, I think that we should delay this at least a year. I'd like to see two years, to be honest, but at least a year. Uh because residents haven't even gotten what their houses are valued at now. And I don't think that's fair. I I think it was a process. I'm not blaming anyone, but um I do think we definitely should delay this um a year. I'd like to see two if we can't um phase it out.

I just like to offer and this is not to certainly not to disagree with our chief assessor um but I have been through this process city in uh other communities. Um, you know, the one I was there for the whole period for was a community with a much higher median household income uh than Lewon. Uh, and it was a big deal there. It was controversial. There was a lot of public feedback. There was some outrage. Um, it was a difficult process. Uh, it had not been 38 years there either. So, I guess just some of my concern is, you know, Lewon, as you know, is a city where we do have a fair amount of working poor. As councelor Beiji mentioned, we do have a fair amount of poverty. We do have a lot of residents, older residents on fixed incomes. Uh I think Lewon is is a little bit different than some of the other communities um certainly in the southern part of the state uh when implementing this. I think there are some concerns about handing people very large tax bills in one year and I think we do have to be mindful of that. So uh just again some I've done this before in other communities. Um I think Lewon is a bit different in the demographics that we have. Uh and I think if we're not mindful of that, um this could be a very difficult year for a lot of people. So I'm not I'm certainly not trying to disagree with some of the other comments here. Um this has been a long process. We have been preparing for this. Um but I just think the demographics of the city are such that um we do need to be um I think mindful of the implementation and the impacts in one year on people.

Uh I I agree wholeheartedly. So, um I guess where I'm at, uh I I think there's support for uh for a delay um around the council and then if the council uh you know, obviously the phased in approach um you know, uh the city incurs additional cost and so I I guess I would put to the council that either a year with phased in or like um councelor Long Tramps just mentioned uh two uh two-year delay without a phase in um Uh, all right. We're just going to run around really quickly. If we can just get councelor's thoughts quickly on this, that would be great. Um, councelor Naene.

Uh, thank you, Mr. Mayor. As I said before, I do think I we need to sit with those numbers for a little bit. Uh, and see what the community has to say, see what some of these increases might look like when we do the math at both ways. But I would be in favor of what I would be in favor with a of a one-year or a two-year delay. I I I I'm not opposed to either. And I'm also comfortable with the concept of phasing it in on the on the a um scheme, which only costs $24,000. Uh $463,000 all the way up to $863,000 seems like a very excessive amount of money to put out um in order to manage this. I would also say too, and I just want to make this clear, renters costs will go up. rents are going to go up. Um, and they're not going to get a bill. Um, it's just going to be like in September when landlords are adjusting their costs in order to provide, you know, so that's another major concern. That's a huge pressure that, um, renters do pay taxes in the form of rent. And so, um, that cost, it basically threatens every type of housing that we have, almost every type of housing that we have. So, um, those are my points. So, I'm happy with whatever we decide. I'm I'm fine with the w with with with the with with the two-year delay, but I really think that we need a little window before we make a real decision to hear from the the people who get their numbers and say, "Okay, what does this actually mean to me?"

Uh, did you have anything further to say, uh, councelor Longs? Again, I just share that I would um like to see a delay. Two years would be, I think, much better. Um, and the concern I would have with waiting until people receive it in the mail. Um, if we wait for that uh to decide this and then when are we supposed to implement this if we were to when when was it supposed to go into effect?

So the the timeline now is valuation notices go out to the tax property owner, excuse me. They have six weeks to meet with Tyler to discuss their values. We do our tax commitment typically the end of July. Tax bills go out in August with a due date of September. So that's the timeline. So the values if in full implementation would be used to send out the bills in August.

Got it. So again, I would like to uh just share that I think we should delay this for a year if not two years. And I think I think we've heard from the public loud and clear that this is uh really scaring a lot of people and people are worried and although the city does not necessarily evict people from their homes. Um we have people that if they just can't afford it, they're going to have to move elsewhere, right? So although it's not technically an eviction, it will feel that way to a lot of people. So, um I don't think we really need to wait personally, but that's just my opinion. Councelor Herman,

thank you. Um I did want to emphasize something councelor Nene mentioned about renters. So, you know, if a homeowner gets behind on their taxes, they're not going to get kicked out of their home. But, uh, if the say the taxes on your duplex go up by $3,600, that's that's another $150 a month per tenant, um, in rent immediately. Um, so that will be a hardship for a lot of people. Um, I also wondered about the letter that goes out if we can clearly communicate to people and um, I think councelor Nene mentioned this. I don't want to take credit, but if we can clearly communicate that the new value is not to be multiplied by the current mill rate um, because that will confuse people.

If I could add that was added to the letter uh, and it it's being sent to the printer tomorrow, but that was specifically put in bold right above the new assessments. Okay. Yeah. Thank you. And then I also wonder if we could if we could I guess coming back to the beginning if we could phase it in without doing the continued revaluations in between and incurring more costs there. Could we just take the you know take the values that we have now and then implement them over three years maybe without doing all the extra stuff that will cost more.

There would be some costs incurred but we don't necessarily have to do statistical updates of value. However, the confusion is I think there's going to be a lot of confusion if we did that approach. Not only as I mentioned with the taxpayers, uh, mortgage companies and then the additional staff, but this would spread it out over another three years on my staff. So,

okay. And it can't be just, you know, it can't just be a table that, you know, you're you're at 100,000 now and next year it's 150 and the next year it's 200 and then finally it's 250 the the third year or something. Like I said, they they can for5 to $10,000 they can adjust our software to do that. So it's more of not so much the cost as the confusion and the additional work that my team has to do. Okay. Yeah. Thanks. Uh, Council Roy.

Now, I gotta watch what I got to say. I mean, I um some people got what I meant. The other people didn't get what I meant. I'm just going to say like I know we don't go kick people out, but when you can't afford your taxes, you're either one forced to sell or two, you leave your home. So, that's what I meant when I said kick people out of their houses. Just letting you know. And that's been thrown around. Councilors, we're not going to go back and forth. Please continue. Councel Roy, I again I've already said what I had to say. I'm at least a year if not two. I'm fine. Thank you. Uh councelor Noble, I agree with everyone else. I think there needs to be a delay of one or two years and I don't know what that's going to look like.

Okay. Uh councelor uh Herman, sorry if we can go back to you. What you're okay with the delay or where where were you at? Yep, I'm okay with that delay. Okay. Uh, councelor Chidum, did you uh still feel the same way?

Uh, yes, I do. I think that delay is going to create more cost and more confusion. Um, and I think that the impact of the reval alone based on what I've seen uh is small enough um that people are going to get hit with a big chunk whether we delay or not this year because of the budget. And we're looking at, as I said, 10, 11, 12, 13% increases. Um, so I'm in favor of immediate implementation. That that makes me a minority of one, I guess. But, uh, that's that's the way I feel and I feel strongly about it. I'd love a chance to to convince other counselors of of the rectitude in my view of that approach. But, uh, I respect the fact that this is a a majority rule situation. And I've got seven other thinking people up here who who have formed their own opinions. I would like to ask and I think I asked this early on. I didn't get an answer uh in an email. One of the early letters drafts said that we're this will bring us to 100% valuation. The state requires toothlessly as it appears that valuations fall between 70 and 110% of market value.

That's correct. And I thought there was discussion early on in this process a year, maybe two years ago, that we were going to be shooting for a 90% uh rate so that we could accommodate fluctuations on either side. Um is is it in fact that we are shooting for 100% valuation this year? My goal was never to be at 100%. We're not at 100%. Um we we want to have room. We don't want to be over 110. So my target has always been 91 to 95%. At 91% we can certify 100% and get full exemption values.

Okay. So that's the the homestead exemption is $25,000 even if the market is 91%. That's correct. Okay. Um thank you. And one final question. In an earlier conversation, uh Director Hilly, you and I had a conversation about sales chasing.

Yes. Um, it surprised me that when a home is sold that that doesn't become the market value and therefore the assessed value of the home. And you said there's a state law that prohibits that practice. That's correct. That's called sales chasing. So, if I assess a house for what it sells for, they do have a Proposition 13 in California. Well, that's how they assess property. Uh, in the state of Maine, it is not legal to do that. Uh, we still have to look at what other similar situated properties are being assessed for. And if that means the house that sold for 300 should be assessed at 285 to 290, then that's where it's assessed. Conversely, if it sells for 300, but the neighborhood says it should be 310, it should be 310.

Okay. Thank you. That seems like an awful lot of extra work for assessing departments across the state. But if that's if that's what Augusta has deemed appropriate, then I guess I'm I'm not one to argue with that yet. Thank you. Uh okay. Uh just so we can provide clear direction to our assessor. Uh what what what did uh sorry administrator Kra?

Yeah let me just the director did mention this before. So we're having this conversation but I mean as he note under state law this is this is bill's decision. And so obviously we're having this conversation, but so it ought to be something that that you're comfortable uh implementing and I think from our conversations you're comfortable with uh either a implementing as is now or a one-year delay. Is that accurate as your accurate? Thank you. represented here on your Okay.

Are you well uh so are you comfortable with a two-year delay? I no I I think I I my recommendation would still be to fully implement the revaluation. Uh but I listen I understand exactly where you coming from. Uh at some point it we have to we have to do it. We we can't keep putting it off. Uh right now the state law doesn't have a lot of teeth in it for not doing a rebuild. They're going to adjust our tree growth reimbursements down. We don't I think we'd probably get5 or $6,000 in tree growth reimbursement. So, uh that's not the issue. My issue is that they didn't do it in 2006. If we don't do it in 2026 and we don't do it in 2020, when are we actually going to do it? We need to do it. We need to get it over with that. The city needs this uh for equity purposes. Um I I was able to justify my mind again Brunswick's done. It's not precedent setting. Uh give people time to understand where they're coming from, what their values and what the impact would be and that would give them 15 months to to get their heads around it. So that's why I'm I I would I would accept that we could delay it a year.

How does uh how do the rest of us feel about that? Council Long Traps,

I'd like to see two, but I think since you are the one that uh makes that final decision, um then I appreciate uh that you would consider one year. Um, I'd still like to see two, but um, if that's all we have, um, then I think that's still some time, 15 months for people to adjust, um, and start digesting that. And, um, so we really don't have much of a choice, but at least we have one year. So, thank you.

I don't know. If you could sleep on two years, that'd be great, you know, without sounding like Yeah. the um and I understand that a phase in approach presents issues and it, you know, cost the city additional money. Um, you know, since Brunswick did three, I think, uh, two could be, yeah, at least considered. Uh, council Harman.

Um, yeah, I did want to bring up also You mentioned we don't know what the budgets are going to do in the next few years. Um, but I still don't, you know, if if the budget goes up by 10%, presumably my taxes would go up by about 10%. But if my home is currently valued at $85,000, but it's it would sell for over $30. Granted, that might not be the assessed value, my taxes are going to go up by a lot more than 10%. So, um I guess I I don't see where the the budget and the revaluation really play together. They're both things that will increase taxes on residential properties, but um I I feel like they're separate. They're just separate tracks, aren't they?

So, again, what what we're doing in a revaluation is we're move the mic closer to you, director.

What we're doing in a revaluation is redistributing the tax burden so everyone's at the same level. So yes, the implication will be that someone is going to see a tax increase. And as we mentioned, 180% is the average increase. So if you were 180 or less, and I said earlier, there's about 48% of our properties that were 180 or less, no increase in the budget, they would have seen taxes stay the same or go down. The other 52% who are above 180, the it would be it would vary. So 190 small increase. Mine went up 275%. So big increase. Uh so yeah they they do tie together but uh again redistribution revenue neutral. That's what a revaluation is. Uh it's just and no one ever wants to hear this. We want to make sure everyone's paying their fair share of the tax burden. That's all.

Okay. Councelor Nene. Yeah. one, and I know I'm repeating myself, but the quicker people get their evaluations, the quicker we can have, I think, further conversation. If you're looking for me to say okay to one thing or or another thing, what I wanted to see isn't necessarily what you're saying you're going to do anyway. So, um I think get those numbers out to folks uh as quick as we can and you may actually be reconsidering um after you hear from the constituency as well. Um because I'm sure they're going to reach out to me. They're going to reach out to a lot of folks. So,

so again, the plan is still to move forward. Valuation notices go out. Everyone has the opportunity to set up a time to speak with Tyler about their value. Um some may think it's okay. some might think it's too high. So, they'll have that opportunity at that point. And then we'll also have an opportunity to make sure that any available program that's available out there. Um they're they're applying for and getting for this for the upcoming tax year. So, that again, Senior Tax Credit Fairness Act and and the um which also applies to renters um and uh the homestead exemption.

You are correct that that is one program that renters can take advantage of. It's property tax and rent fairness credit. So, they can benefit from that. Um, even not being a property owner, but there's also the veterans exemption, which we encourage every veteran to apply for. And, um, if unfortunately you also are blind, there is a blind exe exemption. They're they're not a lot, but every penny helps. So, yeah, we just need to make sure that we're we're protecting our residents as much as we possibly can for the for the once they see increases. Administrator Canrath, you can uh work with uh the communications team to get the word out on these programs. Uh councelor Chidum, did you have your hand up?

Yes, I did. Um I wanted to also put a plug in for uh looking at the extent that the city, the municipality can forgive interest or penalties on late payments. I don't know if that's allowed under state law. Um but given the unusual circumstances that may be a consideration if that's a tool in our toolbox we may want to look at that for a year or two years. I believe it is say that would be finance director that's not so other communities I know have uh have waved interest or made some changes to okay so that

so you as council during the budget process set the interest rate. So, if you wanted to set the interest rate at 1%, you could set the interest rate at 1%. You can't in you can't increase it higher than what the state um sets, but you can decrease it to what you prefer.

Okay. Thank you. I realize that these costs, the two components being the revaluation, which will affect different people differently, and the budget, which will affect everybody identically. Um and I I've made the point that my belief is that the budget is the main driver here. The reval is a relatively small number. Um if we can give our the people who are going to be exposed to these large increases in their tax bill every benefit, i.e. making sure they're aware of the programs that are available to them uh both locally and through the state. If we as a council can uh reduce the burden to the extent that we have in our power, that will help. I still as a minority of one uh urge that we implement this immediately.

Uh okay, Council Roy, did you have your hand up? Um thank you, Mr. Mayor. Sorry about that. Um one of the questions I had, I've asked this a couple years now, I believe. Um, can we as a municipality come up with our own exemption for maybe seniors or anything like that? We can come up with a program, we did discuss this last year, that piggybacks off of the property tax and rent advantage credit. We cannot create an exemption on our own. That's only the state legislator, the power of taxation, but you can implement a property tax assistance program in a municipality. Uh, I was involved in the one that get implemented in the town of Kland.

Good. Okay. I just really want to wrap our our brains around that. I think, uh, I want to see what we can do about that. Um, I'll talk to city the administrator later. Thank you, Councelor Nene. Um, I have two comments. one uh for the director um direct direct director Roy um do we have the ability if we're setting the interest rate to set it to particular types of parcels or would it be overall and so like for instance if it was like owner occupied could we do that it would be overall

it would be overall for all parcels okay so that could be a concern um and the second thing I was just going to bring forward and I think a couple of folks have mentioned it in certain places but if we place. Um, if I, for instance, if I put a deed covenant on my property that said, uh, the income level of of or a rental property, for instance, the income level of this uh, renter is this or this house can only sell for this much, right? Does that actually affect the valuation of the home? Any restriction you put on a property that decreases someone's what we call the bundle of rights in that property would reduce the value.

Right. Okay. So, I it's it's maybe a little bit abnormal now, but I know that that it's been done before. And so, that's another avenue that possibly could be explored for people who we have some folks who, you know, they're living on $15,000 a year and that's and they're still owning their home. So, councilors, if I may, I I think we could let administration determine uh everything that's available and and help get the the word out. Um, uh, councelor Long Tramps, did you have something, uh, as we're wrapping this up?

Yes. Um, and I'm sure you've already shared this, but what is the real consequence to pushing it to two years?

The real consequence is that we continue to have inequities as we discussed. Um right now our ratio is likely to be our certified ratio is likely to be under 40% which means the homestead that we got that was 11750 this year could be 10750 in FY27. Um, if the values continue to drop, then we have to keep making those types of adjustments. And as we mentioned, we already understand that there may be some inequities in our assessment. And my job as assessor is to make sure everyone's treated fairly and all assessments are equitable. So delaying the year um in my mind I'm saying okay we're giving people the opportunity to see their value prepare themselves understand where it's coming from but then if I put it off any I I legally I should be implementing it for evaluation but I understand and the short window between valuation notices and tax bills I completely understand that people need time. I I get that. But if we put it off any longer, then it would be me knowingly adding another year to an inequitable assessment.

Does that make sense? Mhm. So, we'll have approximately 15 months Yeah. after people receive their new uh reval. Correct. That is correct. Uh but uh our assessing director I think was going to sleep on it. So we're going to we're going to get at least a year and then maybe two. Um I think that's where we're at at this very moment. Uh any final thoughts from from uh either uh you uh director Healey or Administrator Kane Roth on this? Not on this topic. No, I'm all set too. Thank you.

All right. Thank you all so much and thank you for your service to our city. Uh, Director Healey. Uh, Director Roy, are you joining us up here, move into the second part of, uh, our workshop? It wasn't even done. Uh, I guess as she's, uh, as director Royy's making her way up, uh, director um, or sorry, administrator Canrath, I will let you uh, kick things off.

Sure. So, at our last meeting at the uh council's direction, we came up with some additional scenarios for amendments for reductions to the proposed budget beyond the 4.1 million savings that was already identified. So, uh those were laid out. Um again, as we discussed at that meeting, a big piece of tier 2 and tier three, um our current employee layoffs. Um, again, we were directed to come back with bottom line uh dollar figures um as to obviously not discuss particular names or positions here in a public setting. At this point, we are just getting to some numbers uh and seeing where everyone uh wanted to land. Um I will comment on the actual uh lists of current employees developed that constitute these numbers. Um this list uh can be made available. requires proper and legal employee notification uh before that. Obviously, we also in general certainly don't want anyone to learn that they're losing their job uh in the newspaper or by watching this meeting on TV. Um so, we did have an initial conversation with legal uh about how to uh do this. There are some collective bargaining agreements. Uh there's some language in there we have to be mindful of as well as employment law. I did also ask if the list can be provided to you in executive session. Was advised it cannot at this point. So, uh that's where we are as far as uh getting this actual list to you. So, what it will involve is us working with legal uh making sure we're doing everything um in accordance with collective bargaining agreements. uh then the list could be public, but certainly we're going to also want to go one by one and advise all potential impacted employees that their position is up for uh discussion of elimination this year. I think that's the only right and proper thing to do and uh according to our CBA's uh and state law. So uh but I do just want to say I did ask if we could provide to an executive session uh

and our city attorney advised that we cannot at at this point. So, uh, we'll work through, uh, all of those, u proper protocols to do that with the goal of that in mind. Um, but again, as for the moment, we were charged with coming up with some bottom line dollar figures, which we did at our last meeting, um, in the three tiers. So, I think what we'd like to dig in more with tonight and probably next Tuesday, uh, is really just get a firm idea of where we are as far as interest in offering further amendments for, uh, cuts. Um we heard I think some opinions at the last meeting. I think we have a some sense of where everyone is but um the clock is also ticking and we do need to uh if we are going to be going for example with tier three cuts we also need to be mindful of there are a number of um guidelines as well as timelines in CBAs for anyone covered under a contract um that we're going to have to get moving on and get this process uh going uh sooner rather than later. So, if it involves tier one, there's no employee layoffs, that's different. Um, but from what I think we're hearing, I think there may be uh a majority here that is in favor of tier three from what we've heard, tier three or beyond. Um, I think one counselor mentioned six, but you know, um, we're at least I think at tier three, but so we want to get, I think, more of an idea of that tonight. Um and then obviously that will set off a much larger process for us in working with legal uh HR um and to come up with a process in order to notify potentially impacted employees um and work through that. Um I'll also say we had initial discussion with legal again um in the mechanics of how this would work. Um there are a couple different ways you could um inform someone that their position is funded through the end of the fiscal year and then obviously it would end or you could offer a severance package and put them

out uh immediately um and they would get a severance package um and there'll be some other obviously legal uh instruments there and details. So uh that's for us to work through with attorneys but again I think we just need some clear ideas of where we're going to land. um if it is in tier 2 or tier three, we need to get moving in some other uh pieces of this with legal. Uh and also to notify employees and like I said, then we can because I know there's interest produce a list to everyone of who's impacted, but we obviously have to go through the proper legal channels and of course notify people just as human beings uh that their positions are up for elimination.

Uh thank you, Administrator Canrath. So yeah, where we're sitting right now, it appears that a majority of counselors are interested in at least tier three cuts. Um the question is, uh yeah, what are is tier three? I guess what how much how much are we looking if we're looking to cut beyond tier three? I would love to provide a number to uh administration this evening uh to work towards because uh as administrator Ken Ruff just mentioned the clock is ticking on all of this and this will require lots of conversations and time and so on and so forth and uh yeah so I guess we're going to just uh do what we've been doing. We're going to start with ward one uh in terms of uh where we're at. Are we are we fine with tier three? Are we looking to do more? Uh uh yes, as succinctly as possible, please.

Thank you, Mr. Mayor. Um my position hasn't changed. I want to see a 3 to a 3 1/2% increase in the operating expenses, which will still leave us with about a 10% increase overall in the budget due to the county tax increase, uh the debt service increase, uh the reduction in uh uh revenue sharing, and uh and the increase in the school budget. And so for operating expenses, I want to see three to three and a half%. I would be I I know that other folks are not leaning as heavily on the cuts. So I would I would be able to stomach the three and a half, but I would really want the three. So

uh councelor Long Champamps, did you have thoughts? Not right this moment. All right, council ar. Thank you. Um I had a couple questions on some things that came up on Tuesday. Uh so in the in the tier one scenario it mentions cutting the LATC vehicle um line and and someone had mentioned that there were other monies that they could use. Can you expand on that?

So currently every year um 50,000 was put in from fund balance. So, I believe they have about 500,000 still in their reserve to cover any purchases of buses or any of the items they need to purchase. So, they still have those funds available to them. That's not going away. Thank you. And is Auburn also reducing their budget by that amount?

I am not currently aware of what Auburn is doing for them. We are still keeping their portion of our our subsidy that we give them. We are not cutting that. This is just the additional portion that we usually give for the vehicles. Yeah. Because this is essentially a deposit into a savings account every year so that when the vehicles when the buses reach the end of their life, then that money's there. and and usually Lewon and Auburn put in the same amount each year um to to get there in seven years or 10 years or whenever the buses wear out. Um so I I wondered what the other monies were that were going to make up for that.

We hold the funds until they need them. They have to um purchase the items and then give us the bills. Uh we don't give them the funds ahead of time. So currently there's 562,60650 in that fund for them to use. And is that on is that just Lewon's contribution or is that both? That's Lewon's.

Okay. U I guess I would I would just raise that as something that I wouldn't cut just because that's, you know, that's how we fund our buses. Um and that's sort of an ongoing thing that both cities do each year. Uh I also had a question on the um the fuel price we got. So we got our price for gasoline and diesel. Correct.

Um and that's that that's a contracted price. Um, I wondered if there are what are the terms of that contract as far as extreme prices and um, you know, are there additional charges that the vendor can charge us or can they back out of the contract if there are certain price increases? No, we locked in at the fixed. We did not choose the the port. There is one that you can choose where it's an amount plus um the market. We chose the fixed amount. So, we're at it was what? 249 for gas and 298 for diesel. I think that's correct.

Okay. So, even though right now gas is over $4 and diesel is over $6 and still going up. Even if it if it's $8 a gallon, we're still going to pay $2.49. Correct. We're locked in at that fixed for it's for 12 months. Um we for for 12 months. Correct. Okay. So, it will be six months out of our fiscal year 27 and six months out of our fiscal year 28. Okay. Um, I think that's all I had for right now. Thanks. Uh, council Herman, we are getting a sense from the council as to where we're at with cuts. Uh, where where are you what is acceptable to you?

Um, I I still need more information on the on the proposed cuts before I'm able to make that decision. Councelor Roy, like I said the other night, um I think for me, you're looking at tier one, which is a savings of a million, 12,515, they're around there. And if you're looking at tier three, you're only saving 300,000. I mean, if we're going to cut positions, I want to save millions. I want to go for the gusto. You know what I mean? But I I still I I'm not in favor of cutting positions. If there are other things we could do to um cut costs, I'd be all in favor of that. I just um I'm having a hard time putting putting bodies out of out of jobs. Um, but like I said, I mean, if the council wants to go a different route, I mean, I right now I'm just going to hold on my position.

Uh, councelor Noble, did you have thoughts? I don't I don't uh councelor Chidum.

Um, I've looked at the tiers one, two, and three. I even looked at tier six, too. And, uh, the the returns diminish as you will go down. I'm looking at a differential now of uh minimal $33 a month is the effect that the difference between one and three would have on me personally. Um now all of a sudden I'm looking at this in a different light and I hear councelor Longamp in particular and councelor Roy uh unhappiness at cutting positions. Uh, on the other hand, we're looking at double-digit increases no matter where we go. And I think it's incumbent on us and I feel strongly that that we need to do what we can to reduce the tax burden. And for that reason, um, I'm I'm going to back off tier six, but I do think that that, uh, a hard look at the services that the city is offering would take us to tier three. Uh even though the benefits, as Councelor Roy pointed out, appear to be minimal, the difference between saving a million and saving 1.7 million, $700,000 is still $700,000. So, I'm I'm uh leaning now more toward tier three than even deeper cuts.

Uh so, we have one second, councelor Long, we'll recap here. So, uh, yeah, we have four counselors who are, uh, considering, uh, uh, cuts and, um, or st cuts that include staff positions. Um, so right now I'm hearing, uh, you know, without one of the counselors being here, uh, I'm hearing support for for tier three. Uh, yeah, I'm not sure, councelor Nene, that I'm hearing uh, support for, uh, you know, the increase that would be required to get to three or three and a half. Um, yeah, I'd like to get to a point where we at least provide some guidance to staff before we before we leave tonight. Uh, yeah, we'll wrap around again. Councelor Nene, the only point I'd like to make on that is that staff costs are the highest are the largest part of the budget. That is always going to be the case. Staff costs are the largest part of the budget. So if we're talking about reducing the budget and making the budget more manageable, we do have to talk about staff costs unless we can enter into a magical land where we never give colas. Um and um people people's pay decreases over time which is just not realistic. Um and so I just want to paint that for everybody like at the end of the day if the cost of government is too much. Yes, I want all the directors to go and look at their budgets, and I'm sure they have to figure out all the cuts they can make that don't involve staff. They to make sure that we're providing the essential services, not we're reducing the non-essential services and we're running the the budget as clean as we possibly can. But if we are ever going to start keeping our costs in check at all, we have we do have to consider staff cuts until we increase our tax base. So

again, I am strongly in favor of 3 to 3 and a half% increase uh on the uh on the operating budget, but I know that that's not going to pass. So I'll be the the voice of one. Uh Council Long Champs. Thank you, Mayor. Um so our fund balance, we can't use any of it because we really don't have any. Correct. We have what Can you tell me how much we have in our fund balance? 10.1%. Which is what for a dollar amount?

Under a million.

Carl, stop into your mic, please. It's like where's that wind coming from? I appreciate a little further away if you would. As always, I appreciate counselor's feedback. Thank you so much.

So, at the end of fiscal year 25, and that's what we we go by, we had undesated um 18 million71674 So we take our revenues from our statement four um which was 186,28816 and that's how we did the percentage. So um we have that 1871675 which is 10.05 10.1.

Yeah I cannot recommend using fund balance. So, we're going to be running out of that. Now, what if we sold We can't use like we have some properties that we know of um that we that are currently on the market that after they're all sold is is over a million dollars. We can't do anything with So, those properties, some of them are tax acquired. So, anything up and beyond the legal fees and the employee fees goes back to the homeowner.

What about 834 Main Street? Is that isn't that city owned? Is that the fire station? So, we plan to use that to lower the cost of the LCIP for the new fire station. So that's already in that calculation that's in your LCIP book to lower that cost that we have to bond.

Yeah. I'm just, you know, not really in favor of um cutting positions for many reasons, but I I do understand that um we need to do everything we can to lower the tax lower our taxes for our constituents. Um, that is one of our goals. Uh, and from what I'm hearing from you guys, there's nothing else that we can do humanly possible. Uh, besides cutting. Yes. So, if I may, counselor. Well, no, because I'm not done. Please continue. Thank you.

Um, that there just seems as though there's nothing that we can do. You know, we're really at the point, you know, as councelor Nan said, the majority of our budget is personnel. And so we're at the point where we are talking about personnel for significant further cuts. Yeah. And the majority here is saying, you know, that uh they want to cut positions. So there's really not much not an argument that I really have uh to defend anything other than that. Thank you. Uh, councilman,

I I really don't have anything further to add until I learn what is in and out of the budget. I can't really make a decision without that information. Uh, when we discussed on the phone, um, you initially told me you're supportive of tier three cuts. Is that, um, still accurate or, uh, yeah? Um, that is accurate in a overall sense, but I would need to know what those what is in the budget and what's not in the budget before I make a decision on that. Thank you. And administrator Kane Wrath uh outlined uh the process for that. Are we are we talking about positions in particular?

Um, yes. Yes. I mean, I people need con my constituents have certain concerns and I also have certain concerns and I need to know is is this a firefighter? Is this a public works worker? Is it you know who what are what are we proposing cutting? I mean, if you take a look at the the school budget process like last night, this is all done in the open and it's all done transparently and we can make decisions based on policy um areas and areas where the department, you know, needs more help. We keep more positions there, areas where it's um, you know, where it's not really working. Then we might cut positions there. So, I need to know what it is that I'm voting on before I can make a decision.

Yeah, I think the difference is there. Those positions were built into the initial budget proposal and the employees were notified um that they would be uh discussed. I think our our issue now is uh I'd like to get that list, but I cannot give it to you in executive session per legal counsel. Um and then we have to just go through the proper process of notifying employees um to do that. So I think the difference with the school department is because the superintendent built that into the initial budget proposal and at that time I think notified those employees that they could be subject to uh layoffs. So um like I said if if there's interest in going forward with one of the options that involves layoffs, we're going to get going as soon as possible to um make that list available. But we do have to go through uh legal and with our collective bargaining agreements and make sure we're doing it um to the letter of the law.

Um thank you. Anything further? Councelor Herman? No. Uh councelor Roy, final thoughts from you?

If um if I was sure like we're not the city's not going to drop services with cutting staff because right now I don't know. I mean, I'm hearing that, you know, we're lean in a lot of areas. And I mean, I I'm just looking at, you know, I really don't want to cut people's jobs, but I understand, you know, the taxpayers need a break, too. And I just don't want to cut services. Like, if we if we lose positions, does that mean we're losing services? And right now, we don't have a whole lot of services. Like, our roads really need repairs. I mean, we we just our infrastructure is is not good right now. So my concern is is if we start cutting positions then we are going to lose services in a lot of ways. That is my concern and I don't know if we can continue doing I I I I don't know that's that's my concern.

Thank you. Uh councelor Noble, did you have any thoughts at this point? Um I guess I feel a little bit like Susan where we have to cut people's jobs then that's what we're going to have to do. Everything that I'm hearing from my constituents is that they just want lower taxes. They don't want to lose or be displaced from their homes. Um, so trust that you know what you're doing with that. So, tier three, I guess, is where I'm at. Uh, councelor uh Chidum, did you have uh uh any other thoughts?

Um, yes. the the fund balance uh is a question that I'd like to revisit. We're at 10.05% right now. Last year, I believe we took the council took the fund balance down to 9.3 or was it 9 something? Um, if my math is correct, one percentage drop from 10 to 9 would give the city general fund $1.8 million. We removed all of the capital out of the the budget. So, what you're requesting is to use fund balance for operating services, which isn't a good idea.

I know it's not a good idea. It's not a good idea to raise tax. I'm sorry I interrupted you. No, that's fine. Thank you for correcting yourself, counselor Chidum.

Please continue to stress that because it is everything that's left in there. There's no capital items whatsoever. So, and there's no one one time for service that we're doing. Um, so you'll be using it for operating. And if you get into that, we're going to be worse off next year, just like when we used more of the revenue sharing la this fiscal year. Now, we're seeing the effect of that this year when they they cut it. I fully appreciate the conservative approach and and you have to take that conservative approach. Um I'm looking at a perfect storm of unusual situations and conditions. I would never ever advocate that we use fund balance for operating expenses, but for the unusual circumstances we're facing this year. Um, I think one of the things that we have to do because recognizing that the taxpayers are going to look at a 10% increase in their taxes across the board at a minimum, one of the things we have to do is say this is a very painful year. Um, here are the things that we're doing so that we don't have a 10% increase next year and the year after that. I I forget what our increase was last year, but it was not a comfortable one. Uh, I know the council was not happy at all, but recognizing that there are so many things outside of our control, wages being the principal one, nobody up here wants to cut jobs, but it's a question, as I said the other night, of the the the residents of Lewon, the taxpayers in particular, are going to have to face some pain because of the world that we live in, because of the fact that that

uh the county jail requires a million dollars more work because of the fact that we've got uh I consider generous colas and steps which I'm told are necessary in order for us to keep pace with uh wages in surrounding communities. So all of these are external factors over which we have no control. But they're conspiring to give us an untenable situation in which we're going to have to make the hard decision of is the pain that's going to be inflicted on the taxpayer going to be a reduction in services or is it going to be an increase in taxes? And as I said the other night, that's the balance we have to take. And and my view is that the middle ground here is take 2% of our workforce, eight people, and say, "I'm sorry, you've done great work for the city, but we simply cannot afford to do this anymore. We have to turn the thermostat down from 60 to 58° because that's the world we live in. So, I'm not advocating that we get rid of people, but I don't see any other solution than to pile a financial burden, and we've all said we don't want to do that, on the taxpayers. So, I tier three. Oh,

you're you're asking me to shut up and put up tier three. I I uh appreciate appreciate that. Tier three. Um yeah, I think that's where we're at right this second.

Okay. So, I just want to confirm. I mean, it seems clear there's there's a majority consensus that we're looking at at least at least tier three cuts. Um, I just want to confirm because, as I said, once we get this process started, it's not something you can put the genie sort of back in the bottle. We're going to be informing employees uh on their livelihoods. And this is once this is underway, it's it's underway. So, um I just obviously we're not doing a passage final passage of this budget till May 5th. Um, but I just want to confirm that we have a majority consensus for at least tier three cuts. Maybe there are further amendments offered down the road for for additional. But just for us to prepare, we're looking at at least tier three. We should prepare for that. We should begin informing employees so we can produce a document, a list obviously. Um, and that's where we are. I just want to because obviously you know information becomes available people change their thinking but it's just important for us to know because again once we start this process with informing employees there's no going back on that

uh yes I mean you bring up an excellent point um we're not passing this tonight right

uh and counselors are you know uh are free to change their minds and and have in the past and uh but yeah I think uh we're we're gonna take questions here in a second but Uh yeah, I think tier three is where we're at. I know some counselors wanted more, but I don't believe that there was uh enough to to pass that. Uh and so I I don't want, you know, there's no support for tier six, a majority support for tier six. So I I don't want as I don't want to ask staff to to prepare, you know, some kind of worst case scenario that is not supported by a majority of the council. and councilors can certainly offer further amendments with further reductions or changes to the budget.

Once we're in an agenda, once we're in a meeting with a agenda item on the floor. Yes. Uh councelor Nene.

Thank you, Mr. Mayor. Um I I just wanted to quickly point out that one, I don't want to cut jobs. I need a sustainable budget, and that means that we either need more revenues um or we need to cut costs of government. As far as who we're cutting and how we're cutting, um, employees have rights. You're 100% correct. And the relationships between the city administrator, who is the day-to-day operational commander of the city, and and the directors, those are the decisions that the paid professionals make and do. That's not our decision. We're telling you what we can afford. You make those decisions. And so I I know it's not a comfortable place to be. I'm sorry that we're here. Um, but I just wanted to point that out. And just one quick piece, we actually contract out all of our road maintenance. There's no employees that do it except for one, and he's great. Um, but anyway, uh, Administrator Kra, Director Roy, uh, uh, I I think we're we're set. Do you have any questions for us?

No, I think, uh, I think we have an understanding. Um, we will begin work on this uh immediately and uh we'll have another meeting on Tuesday evening. Um, I'll keep you updated as far as um how quickly we're moving through this process. Uh, we'll be def definitely be um talking with legal early next week and making sure we're doing this process as far as handling the employees, the notifications properly um and a road map for um where we go. and we'll provide um any available information when it's available as soon as we can. Of course. Yeah. And I'd like to um also remind the council I I think uh city hall is closed and

patriots day is observation of patriots day. Yes. So uh All right. Well, thank you both very much and um yes and I wanted to acknowledge that uh this you know despite our differences I yes I really do believe that none of us want to cut positions up here. Um these are uh hard decisions uh to make and um and yeah that's why we're elected. Sometimes you need to make a hard decision. I get it. Uh with that everyone have a wonderful evening. Thank you counselors. Thank you staff and uh yeah uh we will see everyone very soon.