City Council - Regular Meeting

Praise the Lord. Everyone welcome to our budget retreat. Uh let's have a little word of prayer first. Mr. Wilder, you lead us in a little prayer first.

Heavenly Father, we thank you for this day. We thank you for this Holy Week. We thank you for our city council, our staff members, our citizens. We thank you for the work we're doing in our community. Let us continue to focus on you. So, let's continue to focus on the true meaning of your life and your sacrifice and your giving spirit and your the love that you've shared and the love that you've shown us. We just want to have those words in our heart just not only in our heart but also in our mind and our mouth and our spirits that we will resonate you that we will give the true example of what a child would look like in your presence that you are pleased in your sight. In your precious name we pray. Amen.

Stand for the pledge. Uh, United States flag is right there. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Amen. And now turn you over to Mr. Wind Bender who will go over the agenda.

Thank you, Mayor, Vice Mayor, members of city council. Uh well, you can see we got quite the compliment of city staff here ready and willing and prepared to uh walk us through this retreat. Uh going over just a few of the items today. Donna Whit, our CFO, who will be celebrating 27 years with us. She and I uh Yes, absolutely. She and I and Gregory were in uh New York earlier this weekend. We met with the different rating agencies to talk about our city. Uh we met with Fitch Moody's and S&P and uh the pro prospect looks very good and very very exciting very it was a whirlwind. Uh it was Donna's final final final trip to New York. Uh she'll be retiring at the end of this year. So just you know we're really blessed to have uh Donna Whit. uh and we got to talk about each of our schools of higher education and Donna reminded uh each of the different uh groupings that she had uh graduated from what was then Liberty Baptist College that's now Liberty University. So pretty fantastic. Um next uh water we Tim is here is going to walk you we've proposed an increase in at least two of the water funds. Um he'll walk you through that and then uh dashboards. Uh last retreat we showed you the CIP dashboard. We thought it's got bells and whistles. We haven't seen anything yet, folks. Uh we've also got a budget dashboard. And so built in there, there's also a break. Couple housekeeping items. Uh want to say a big thank you to Joel. Um trying to read writing here. Daniel, Tony, FAC, and the LPD for uh hosting us here today and making everything accessible. Thank you. Other housekeeping, bathrooms and water fountains are out the door and to the left in the lobby. Uh, if you need water, there's a cooler back here behind you. I guess right here. Right here. Uh, there are a lot of power options. Let

Meti know if you need anything, she can uh she can help there. Uh, for security purposes, we do not have public Wi-Fi. We are moving. We are I can't read this last one. Uh, well, we're making sure that the room is comfy by way of temperature. So, uh, with that, Mayor, uh, turn it back to you and, uh, if you don't mind, go ahead with Donna.

Miss Donald. Oh, thank you. Um, this morning, um, I asked you to bring your budget books. I thought it might be easier if we just walk through this document. So, um, we can answer questions along the way or you can give me questions and I will answer them later. Um, whichever you prefer and we can go as quickly or as slowly as you like. So, um I thought the best place to start was page 33. In the front of your document, you've got um your full org chart um information about the city. Um but thought we'd start with all funds. Um there's already been a question um about um the growth between 25 and or the 26 adopted budget and the 27 adopted budget. So there on page 33 um you will note the um adopted budget for 26 was $552.7 million and the manager's proposed is $620.7 million. That is a 12.3% increase. And um but we have a new fund this year called the medical insurance fund and I'll get into that a little bit later. Um the generally accepted accounting principles GAP allows you to account for your medical insurance in a couple of different ways. Um staff has looked at this for probably since I've been here in transferring how we do this in transitioning to a more transparent way that actually allows us to take a closer look at our medical insurance funds. Um you'll see here that it is 18.9 almost $19 million. And now we're going to account for this more like an internal

service fund, more like our fleet fund. So um this is where we're capturing all of our medical related insurance. So both our premiums and our claims will be paid out of this account. So it is different. It may it looks like it's inflating our all funds and a great addition to our budget, but actually these are the same funds. We're just accounting for them in a different way. So, it's not really an addition to the budget. So, if you pull that out, you're at an 8.9% increase. And the other large increases that you can see here um are in the water fund um for their capital, their sewer capital. Those are um other large increases. it's not really in their operating. Tim Mitchell's going to walk you through that, but there are some large increases in CIP. So when we say all funds, this is all in. So that's that's why that 12.3% increase looks really high, but there are reasons for that. You're looking at me. Got a question?

Okay. All right. Thank you. That's right. Yes, sir. Are we going to is is this kind of what we're going to talk about about the medical insurance fund or are we going to talk about it more? We'll talk more about it when we get it to the um other funds. Okay. Because that's what I have questions about is the medical insurance fund. So, if we're going to talk about more more about that specifically later, then I don't need to talk about it now. Okay. Thank you.

Sure. So, um going on through the book, um lost my place. Um the next page, um you're going to look at your committed and assigned fund balances. Um those are the ones that are in addition to our unassigned that we have so many conversations about and then um our changes to those committed and assigned fund balances. The next page 36, you're looking at our um general fund revenue summary by category. And you'll see that our non-dedicated revenues have grown $7.3 million and non-dedicated has grown is what we're projecting in the manager's proposed as $3.8 million for a total of 11.1 million. So, we'll look at those more closely as well. Um the next 10 pages we look at our top 10 revenues and you've got a history here so that you can see um how important these 10 revenues are and the growth or reductions actually their just their history over the last 10 years reflected there. The first one is our real property tax. Um we're expecting about a $1.5 million growth this year and you can see that's 1.8% 8% and it's all related to new construction. So there's nothing related to an assessment. This is all based on new construction that's coming online in this year. Our personal property tax um as you see there, we've grown about a million dollars yearoveryear. Um lately, most of that has been because of the price of vehicles. Um we have fewer vehicles in the city but we are um they are more expensive. Thankfully people are buying new vehicles and they

are available. Our sales and use tax there on the next page um this reflects a 4.4% 4% increase from 26. And um this is really just the moderate growth that we are seeing um currently in our revenues with the expectation that that slight growth is going to continue. Our utility tax electric runs about $3.5 million every year. Of course, it's based on our weather trends. And so it really stays, as you can see there over this history from 2018, it really does stay right at $3.5 million. Our communication sales and use tax, um, most of you have heard me say this is my least favorite tax because ever since the state took it over, it decreases every year because it's based on landline use and also telecommunication services. So, most people have gotten rid of their landlines and so this is reducing yearover-year. Um, we expect it to stay right about $2 million. Um, there have been bills in the general assembly for the last couple of years that have proposed to start taxing um streaming and your internet service and those have not passed. That would greatly help this revenue stream, but those have not passed. our business license tax. You have to remember that the tax that's um collected in a current year is based on previous years sales for that corporation and um these are these are expected to grow but it really matches the growth in our economy um because it is based on last year. So, um, we are looking at that just for a slight

increase of.9% to about $11 million. Motor vehicle license. Um, we're proposing the end of the three-year hiatus on the collection of the motor vehicle license. And this is run um, you can see since 2018, it's always about $1.5 million a year. And um if for we're proposing for 27 1,550,000 and our lodging tax again um we're seeing growth there. A lot of that is in our from um Airbnb. Um we've got a lot of people that have um put their apartments and town houses with Airbnb and uh that is increasing our revenue. Um it's up about 2.4%. So um but again this is just continuing that slight growth that we are seeing in our economy and we're we're really very appreciative of this. Um this is one of the things our agent uh rating agencies landed on is they ask about our consumption taxes and whether we were projecting growth into 2027 and uh and we are we're expecting that to continue. Um, a lot of that and we had this conversation with the rating agencies too is based on the fact that we have so many college students in our town. Um, Liberty is a very big growth engine for us and we are very appreciative of them because um, one thing about Baptist, they're going to eat and um, and their parents are going to come here and see them. So that's a great thing. So, um, that was something they asked about and we were able to say, "Hey, you know, they're looking to increase their onampus student population to 30,000. They're at 16 now." So, that's a that's a big boost for us. That that helps support and keep our other taxes for our residents low because everybody comes to

eat. It's a good thing. Speaking of eating, meals tax. Um, meals tax. We are um looking to keep this 1.9% increase which again just reflects that slight increase and continued increase steady increase that we're seeing in our local economy. And the last one there is our ambulance service. Um this one has grown. Um a lot of it is the cost but um the growth is projected to continue and it is it looks like a big bump there but since 2012 um we are seeing more an increase in our runs um and that just has continued to be kind of big bumps yearover-year. Um I know collections are kind of hard um especially after once insurance and Medicare and Medicaid is taken care of. Um but we do um do collect those delinquent um ambulance leans and that that's helping bump that up. But we are expected to see about $4.3 million in our ambulance. So then the next couple of pages looks at every re revenue that comes into the city and you can see it's very diverse which is um really good because um you don't want to be stuck on just a few taxes. So, this shows you um the the change between the managers proposed and the adopted 26. You'll see that for real current property, that's about $1.4 million. Um the tax relief program, the housing rehab program, all those things that that fold into this, but this gives you the complete detail of those. And if you have specific questions, I'll be happy to answer those. And then um page 50 and 51 you're looking at our dedicated revenues. Again, these are mostly um something

that is very specific that comes in that has to go back to the service that it provides. And so this is where you'll see a lot of our human services money as well. And then on page 53, you're looking at our expenditure detail. And this is a a great place to find just a snapshot of the general fund and the expenditures and you can look at each department there and how it's grown. Um some of them have actually reduced um since 26. But um and we'll go through those more in detail as we flip through this book as well. But this is a a great little section right there so that you can see um all the revenues and our expenditures um in detail to give you some more information. So with that we can start going through departments. Anything before I do that?

A vehicle. Goodness gracious. Motor vehicle license. That was page. Sorry, I'm trying to find it. No, that's okay. I got you. That's page 43. Um, just putting my notes. So, it's 1.5 million. uh that it would be bringing back. How much was a dollar on the nightly fee for the hotels again? Do we remember that from last year by chance?

Um I don't that's something I have to look at. If we don't have that now, I'd be curious what it would look like if we had that 1.5 million be paid for folks from out of town in hotels rather than residents. Okay,

thank you. Um, and then the second question I had was related to the ambulance service fees. So, it uh I believe I understand what you're saying. Are you saying the 12% increase is really related to Yes. extra calls, but it's the extra costs are eating into that. So, it's not like there's extra cash coming from Yeah. No, it's it's not it's not extra because really you know you know what I'm trying to say. Yes. Yes. It's um it's really based on we got a lot more calls, but that's also more cost for the fire department to make those runs. That that's that's so it's really there's not really excess there. Thank you. That's all I have for now. Mayor,

backing up to page 30. So, I think during the presentation it was said that there's no new positions or FTEES in this budget, but the total full-time equivalents increased by 5.04. So, what's what's where's that reconcile?

Okay. There's um there were positions that council added after the 26 budget was adopted. Okay. There were five positions for human services that um were fully funded by the state and those five positions were added. There was also um positions for the Commonwealth Attorney and the Sheriff's Office. Um I'm looking at my budget staff. Did I miss one? And those those other two have been offset by reductions across these funds. So the net is five, but those were actually added um they came to council after the 26 budget was adopted adopted.

The I think it was like a grant that something state funds paid for. Yeah, they had state they were fully funded by the state. I remember that. So there are no new positions. Okay, got it. So that's new positions that we basically previously approved.

Yes, these were adopted in fiscal year 26. So there nothing new for 27. Okay, starting with city council and clerk. Um I know um you all were given all the memos um from the budget submissions and that information. So um I don't know if you've had time to read those or not, but um we'll we'll kind of work through both of those. So, in our city council and clerk's office, um the only increase is the 2 and a half% um cost of living adjustment that was adopted by council in 2026. Um in the clerk's memo, thank you, Alicia. Um she did mention that it would be very helpful to have another full-time person. She's got a part-time person. Um it would be helpful, but that is not funded by this budget. in the manager's office. Um there's um the cost of living adjustment adopted by council and then also um a slight increase in their um contractual services and those were offset by other reductions, small reductions to to make sure that they worked within their allocation. in the city assessor's office. Um, on page 61, you can see Sure.

on on what you just said. So, what you're saying is that in these department budgets, we're accounting for that 2 and a half% cost of living adjustment. Correct. In each individual. Yes. Okay. Because what we do, the way we budget that is we put the um the whole number in non-departmental um in case council changes it. Got Um then once council adopts the budget at whatever rate then we can spread it and um it makes it easier for budget staff actually because if we budget it in every department

and then council changes that percentage we have to go back and change every department. So this way we just budget um like in this budget we're um the manager has proposed a 2 and a half% increase. So that's a non-EP departmental and then if it's adopted by council we'll spread it to the departments. Um if not it'll be taken out before adoption.

Sure. Because because looking at um looking at last year's budget the got this right here. General information operate. Yep. Here it is. When when you look at last year's budget, it says so this year's budget says 38,310 increases in salaries and employee benefits reflecting adjustments resulting from the 2 and 12% cost of living adjustment. And then last year's says 174,988 increase in salaries and employee benefits reflecting the 3% which is I think what was proposed cost living adjustment adopted by city council. So that's 2 and a half% at 38,310 and then 3% at 1749 988. That's that's a pretty substantial difference. So I'm trying to figure out why last year it reflected 175,000 for 3% and then this year it only reflects 38,310 for 2 and a half%. I'd have to go back and look at last year's, but also um city council also based on evaluations for your direct reports, those percentages that that has to be added in there as well after the budget's adopted.

We we haven't we haven't done evaluation since 2024, so that shouldn't be a factor. I was well city council the body has not met to do any performance evaluation since 2024 on any appointees so that shouldn't be a factor. Um my understanding is there were something was done based on contracts with your direct reports. Well we we can't change contracts without a vote. The body can't decide

without a vote. So, and I'm I'm not aware every every close session we've had to do evaluations on the agenda to do evaluations has been cancelled. We never actually went into close sessions. The minutes reflect that. So, I'm very curious about how 175,000 equal 3% last year in the budget and 38,000 310 equal 2 and a half% in this year's budget. I'll get back to you.

Thank you. Memory serves. We had a close session about that and uh the minutes of that meeting should also reflect that some members of council left halfway through. So maybe if they stay through the whole closed session, they would know where things stand. Thank you. As am I. Yeah. And I do remember there was a closed session that I was involved in, but it definitely does not account for that difference. And you left. No, I did not leave early from that one.

There were two close sessions, but there has not been any vote to change any contract terms. And I want to make sure the minutes reflect this, Madam Clerk. There has not been any vote to change change any contract terms for any of the appointees. There's been no vote to set any compensation packages for any of the appointees. And I've been asking for I think we're getting close to a year now that we actually do what the charter says we're supposed to do and set the city manager's compensation by resolution ordinance.

Okay. Okay, if there's nothing else, let's move on to the city assessor. And maybe I should have described this a little bit better. Um, in these budget descriptions, it shows um highlights of what was submitted by the department and then then if there was a change to that um it would be below there. But the everything submitted um like by the city assessor's office was proposed. So um this is your changes and these highlights it reflects changes between the 26 adopted budget and what was submitted by the departments and then there would be a section if there was any changes from what was submitted to proposed. So, in the city assessor's office, um there was the increase for the cost of living. Um an increase in contractual services for um their software maintenance fee, and that's going to be a common thing here. And then, um they actually had a decrease in their internal service charges, which is fleet. Um those are for the the vehicles that are assigned to the assessor's office. And then um this 28,653 this is an increase that we had to add back to their budget. Um they do reassessment notices every other year and 27 they are required by state code to send those reassessment notices. So he only budgets the postage he needs every other year. So this is the um postage that's needed for those reassessment notices in 2027. and and in his memo he did make mention that um his software his assessment software is coming to life end and there would be it's about 23 years old I remember when they bought it and um we need to start um thinking ahead about replacing that software for this city

assessor in the city attorney's budget there is the 2 and a.5% increase as well as office restructuring um and and then um an increase in for the cost and the volume of outside legal services required. And they did decrease their other charges um to make sure that um they met the maximum city cost allocation in the self insurance fund. There is an increase of $118,000 for our cost of insurance policies. Um these generally go up every year. We don't have much of an op option, but just to find the money to cover those and um and I will say that um they do a really good job of costing those out and finding savings where they can. Yes, sir.

I do have one question. Thank you, ma'am. Um it's probably actually for for Matt. The you guys you guys do a substantial amount of work for human services. Is that correct?

Is there a way, and I guess this question is for probably all of you guys to consider, we get a substantial amount of state funds for human services positions. If we're doing the equivalent to one attorney's worth of work in human services, is there a way to actually put an attorney in human services? Like move a position and capture some of that state funding to cover that FTE versus the city attorney's office? This is just a question that I have that I feel like could ease pressure on the general fund because I do believe that there is there's a I I know from talking to the attorneys in your office and talking to you that you guys do a lot for human services. Is that something that is even possible? And would the state is that an allowed position for the state to cover in human services where they would um

have you Okay, perfect. I don't know. I don't know who right person is to answer that question.

I can hear you.

Okay. All right. Um, so yes, there there is a way and that is something I've been working with the manager's office on um and working with uh human services as well. So we do we we have at least three attorneys dedicated to human services work which really kind of it leaves maybe two and a half attorneys including myself to do all the other work for the city. So, um, and if if you're curious what what my hope was in in coming up with anou with human services to do something like this was to be able to try to offset the cost as you had said from what we put in the general fund, but to use that money to get an additional attorney when the time was appropriate to be able to to hand I guess distribute more of the work that we see in the office um, among six attorneys versus five attorneys. But the general rule is from what I understand when you dedicate attorneys under an agreement and get money back from from the state, they have to do I think at least 85 or 90% of the work or more. And they could either be housed over there or housed in my office, but it it's it varies by the workload. That's the key is making sure the workload meets the adequate percentage. And I got to tell you, I mean, there's at least two of them are doing 90% or more now.

Absolutely. Yeah. So yeah, I appreciate that and and that's something I think that would be I'd be interested in exploring. I don't know if it's something that we have time to do in this compressed budget calendar, but if there was a way to ease general fund pressure by recouping the cost of some of those attorneys with with uh state funds because I think I don't know what it I haven't looked at the formula in this here. I think last year was about 17% local, 83% state funded for human services. It'd be worth exploring, I think, to to to to see if we can actually get that done for 27. Thank you.

Okay. Um, moving on to Commissioner Revenu's office. Um, accounts for the 2 and a half% cost of living adjustment and also the 3% increase by the state comp board. And then they did have a slight in decrease in their contractual services um based on historical cost and to meet their maximum allocation. And financial services um we have our 2 and a half% cost of living increase. um we had to increase our contractual services for our professional service contracts and um so we did increase um our other charges to make sure that we stayed within our maximum allocation and um I did um reduce our um total FTEES by um a half a position. I have a retiree that works part-time. Um, and we're eliminating that part-time position to help fund the um the rest of the budget. And it also um they're going to have to figure out me at some point. So, they will

it'll all work. Um because I have rock stars, not geologists. So um okay, human resources and then those next few pages it does break down every division of finance as you'll see with all departments human resources. Um on there on page 76 you'll see the two and a half percent increase and also they decreased their contractual services and their other charges to make sure that they met their maximum cost allocation by um just making things work. they were um they did um eliminate their $15,000 um they had for on-site training in order to afford the increase in their contracts and things like that. Then it has got a really long budget memo, but um basically they um they work some magic. They got a lot going on, but um they were able to stay within their maximum cost allocation. Um they did do the 2 and a half% increase. They also have a progression plan that they have paid for. um they have an increase in their contractual service for their software applications as well as software subscription cost but they did decrease their other charges um $52,000 by rightsizing Office 365 and they did an audit of those subscriptions to making sure that they were only paying for the ones they needed to. So um that did um realize some savings for them and allowed them to stay within their maximum cost allocation

and then the next pages show all their divisions and we get to the registar. Mr. Sprouse isn't here with us. He's working today but want to acknowledge that we've hired Brian Sprouse and that's a big uh to do for us and we're really happy that he's accepted. He's on board. Thank you. Yep. He's a keeper, sir. Have for that position? Not I wasn't part of the process, so I'd have to get that. Thank you.

It was competitive though, that's for sure. Okay. Um, in the registars's office, um, I had to work really closely with Dan Pence, um, trying to kind of help him figure out the best way to work within the city guidelines. So, what where we ended up was um we figured out that he knows he has one for sure election in 2027 and then there could be other elections. Um, and where we ended up is, um, he budgeted for what he absolutely knows he needs. Um, with the understanding that, um, if there are additional elections that come up, he would come back to the finance committee and ask for funds from the reserve from con the contingency to fund those elections. Um, it's really hard to find money in the budget for whatifs. Um so um this kind of worked out better for us knowing that we're just budgeting for the for sure. So if other elections come up then um we'll we'll come back and fund those through the reserve for contingency and then that way working with the new registar we'll kind of look the next person can kind of look down the road and um kind of figure out the number of elections and help him or her let's her work through those things. But it is a little tricky for them based on number of elections. But um he did um he had the two and a half cost increase plus the 3% by the comp board. Um but we did increase his contractual services, his other charges, and we were able to

reduce his rentals and leases um for his copier. But um this one he he wasn't able to stay within his really his cost allocation because we were trying to make sure we budgeted for that one known election. But um we got there. And then the electoral board um there's a $12,900 decrease, but that's based on um decreasing temporary personnel services for and just accounting for the one election. And then there was an increase in rentals and leases um reflecting the cost of polling place rentals. So we're just making sure we account for the elections that are known in the state treasurer budget there on page 90. Um they did have a decrease in their salaries. um they provided the increase for um the deputy treasurer there, but um because our new treasurer is not certified by the comp board yet, um his pay is considerably less than our previous treasurer. So um we're we saw some savings there. Once he receives that certification, we'll be bumped up, but it'll probably take him year and a half, two years to get all the classes in to get certified. So, moving on to judicial everybody. Okay? All right. So, our circuit court clerk, Todd Swisser, um does an amazing job and he really does a good job working with us. um he um had his 3% increase by the state comp board, but he also included an additional deput deputy clerk position that was in July of 2025. That's the one I forgot to mention. So, this was added in our first

quarter adjustments um in for fiscal year 26. So, that's another one of those that netted out to five increase. And then he had a $15,500 increase in contractual services reflecting adjustments for his historical spending, but he was able to stay within his allocation. And our circuit court judges, um, they had an increase for the two and a half% and that was all. and the Commonwealth's Attorney's Office. Um they did have to account for the position that was given to them by the state in fiscal year 26 and um they had um what we had to do for them. They were not able to stay within their allocation. they they submitted a budget within their allocation, but they had let us know that um they used to get a free subscription from Axion for the uh bodywn cameras and they had to start paying for that. So, we added that money to their budget and it's going to be something that's ongoing now. So they had to start paying for that subscription and really that's by state code. So there isn't really an option there. So that is a $82,559,000 increase for in contractual services for that Axon Justice bodywn camera management subscription. And then they had um another increase um for their other charges reflecting historical spending. And then their fines and fees budget didn't really change or and then we're

on to general district court on page 100. And um they did not make any changes and they have an $82,273 budget. in our J and DR district court. Um they reduced their 30 thou 30 they have a budget of $30,900 which is $200 less than the 26 budget. And then for the magistrate um they also decreased their budget by about $1,000. Um they eliminated their janitorial services um and they asked for um some funds to replace furniture and the janitorial services was only for their waiting room and they found a better way to do that. And then in our sheriff's office, um they got a lot going on too, but they also received a position from the state um in 2026 that's accounted for in the 27 budget. Um they did their 3% increase by the comp board. Um they had um an increase in their contractual services for vehicle maintenance and repair services to equip um and decal 2 replacement vehicles that they receive from fleet. And they also um are replacing 12 tailor tailor tasers and replace the um existing live scan system in the J&D court per the Virginia State Police. And then they had a $6,000 increase for their fleet services and an increase for their telephone service um once they moved into the police old

space. But they were we were able to eliminate their um rent that they were paying to the Blue Ridge Regional Jail. So that saved them $30,000. So, they were able to stay within their allocation at the um court services unit on page 106. Um they maintain their $1,500 budget. Okay. Public safety. So, in the police department, um they did the two and a half um cost of living for nonsworn and the one step in accordance with the established sworn public safety pay plan for all the sworn officers. And they also um everyone had that health insurance increase. They in had to increase their contractual services by $140,000 for software maintenance and cost um across all their multiple systems. some laptop replacements that um were done um with CARES funds um in back in 2020 2021 those are end of life and also um the vehicle outfitting and maintenance for their vehicle replacements and then they had $121,000 increase in their internal service charges with a decrease in their capital charges. And um but they also increased their capital outlay reflecting the purchasing of um computer service servers and they um they were able to move money around and whatnot so that they met the maximum cost allocation. But you can read in

their memo um there's always needs. So um but we we um funded what they what they asked for. in the fire department on page 117. They also did the 2 and a half% cost of living increase and the um one step in the swarm public safety pay plan. And then um they were able to actually save some money. Um this is a about a $96,000 overall decrease because um they had a lot of attrition. So as they replaced um officers that retired with um younger officers moving up um they were able to save quite a bit of money doing that. So um they did see an actual overall decrease and then they had an increase in their contractual service for software services and um also additional cost for their promotional process. They had a $234,273 increase in their internal service charges and which is their fleet charges and also um $84,000 increase for the purchase of loose equipment for the new ladder truck and medic unit for station number nine. and but we also um had to help them out a little bit and um put in their full lease p payment for station 9 um anticipating that we would need that in fiscal year 27. There's only a partial year budgeted in fiscal year 26

question on that 95,000. So is that 95,000 still within the department or was it just an overall reduction and being used in other areas? Oh, no. It's it's within their department. So, they've kept the dollars. They kept the dollars to how they needed to, right, to meet their allocation.

Annette and Jesse do a really good job. They have a big job doing the budgets for public safety, public works. Gel is another one that is the goat. Um so in public works budget page 123 um they did have their increase of the 2 and a half% but they also included um the transfer of a part-time custodial position from the police department. Um I think they figured out in working together that um it really worked better for that custodian to be under public works as opposed to under police. So they did move that position. that's also reflected in the police department. And then um they also have this this you're going to hear me say this over and over $180,000 for their increased cost of software purchases and maintenance. And they also the additional cost of temporary personnel services and other contracts because um they use a lot of temps for refu. And so that cost is increasing. they only they had a slight increase of $2,000 for their fleet cost and then um an another increase for the um heavy equipment and vehicle parts offset by savings in the leche treatment charges. So they that was only a small increase there because of that. And then um they had to um add a copier which was a $2,600 increase in their leases, but overall they stayed within their maximum allocation. And you can see all the divisions of public works and that moves us to health and human services.

Yes, ma'am. Thank you. So I do have that I want to just make a note of really just for um the manager to we've talked about this before for going into next year because it's going to take some research for us and you won't be here but you can think about us next year when we're talking about this. I will

um is for public works for street maintenance. One of the things that we've um heard a lot from our citizens about including myself is the line striping. And so uh we looked into it I think last year, the year before about um the concerns about the visibility of our line stripes especially at night especially during the rain for those of us who are over 35 and may have visibility challenges at night especially during the rain. A lot of citizens complain about that, especially when we have, you know, a rainy night. We'll see a lot of things on social media the next day about the concerns. We've talked about the um the type of paint and the product that we use. And when we looked into it in the past, I know it was explained by public works that based on the material we use and the equipment that we have, we would have to do a complete overhaul in order to do anything different than we currently do. So it would be new equipment which is a major investment to in order to use a different type of material that would be um a better product than what we can use that would maybe be more effective in reflect in reflection you know and and more visible for a longer period of time. So, I think that's something I definitely want us to talk about for, you know, future budgets and really doing research now to get ahead of it in what that cost would look like to build out for a future budget because I know it's not something we're doing in this one, but I think it's something definitely worth the investment because it's a safety issue and a lot of people just cannot see and we hear about it all the time. So, uh, just wanted to maybe start thinking forward. I know y'all start working on the budget like in October, November. People think it's starting now. You guys start use, you start working on it almost as soon as we adopt this one.

July one. Yeah. So, um, maybe we could just start thinking on that one. Thank you. Thanks, Anna.

Looking through the spreadsheet that you sent us on public works and I'm trying to see where this 180,000 in contractual services is coming from. I know it's broken down into sub departments. Um, that's the combined purchase. I mean, excuse me, what what kind of software are we looking at that's that much of an increase? Do we have any idea? Michelle, can you answer that? What kind of software in public works? It it's probably their project management software, the the work system, the work order system.

Oh, yeah. We did have a new um new agreement for the equipment at the convenience center. Okay. I'm just trying to find because we've taken that back over from region 2000. Got it. Seems like a little bit of substantial amount. I was just curious what it is that we're we're doing. Thank you. Well, and if you look at refues on page 131, you'll see an increase of $104,000 in that contractual service. So, that's going to be the bulk of it for those temps. All right. Let me look at

So, that should be got that helps me dialed in. Thank you. Okay, going on to um human services, the social services including public assist assistance on page 135. Um, this one looks kind of like the others. They got their two and a half% increase. Um, but they also have those five new full-time positions adopted by council with the offsetting revenue. So, that is where you're seeing that that that was done and first quarter adjustments for fiscal year 26. Um, they had a slight increase in their other charges and then an increase in their rentals and leases. And then looking at juvenile services on page 140 again the two and a half percent increase for um cost of living they had a decrease in their contractual services reflecting the number of Lynchburg juveniles being placed at the regional um detention centers. So that reduced the city's cost and then they had a slight decrease in their internal service charges for the vehicles assigned to human services or for juvenile services. And then um they had about a $4,100 increase for um the utility rate increases. Going on to parks and wreck. Um starting with the oh I'm sorry parks and reckon libraries libraries first on

page 143 and um they had their increase for their 2 and a half% um also um increase in contractual services for their software services and advertising. They had an increase in the um fleet assigned to them because remember they're starting their bookmobile and then also um a decrease in other charges that they managed to work through so that they could meet their cost allocation.

I've gotten a lot of interest from my wife's friends, all of them beyond excited for the book mobile. So, I know there's interest. Just wanted to do a quick shout out to for that. Yeah, I think that's going to be cool. They've metricul metriculated within the last two weeks. And uh Ken, does he get on the road? Where is Kent? There he is.

Mayor June. So, coming to a neighborhood near you. And then looking at parks and wreck, which includes recck services and the community market on page 148, um their two and a half% increase. Um they actually had a decrease in their contractual services. Um they had a reduction in their needed software maintenance services due to the deput the department's network analyst position being consolidated into it and some of that equipment that went with them. Um and then there was a decrease in internal service charges for their fleet uh vehicles and then also a decrease in other charges uh for the reduced need of program supplies and services due to the elimination of the naturalist feebased programming and a reduction in funding for the pool chemicals because the pool's going to be closed. So they were able to see those reductions there. on to community development. So in community development, you're on page 155. Um they have the 2 and a half% increase. Um they had a decrease in contractual services. That's one way that they met the maximum cost allocation. They had a decrease in their fleet for the vehicles they have. and then an increase in other charges based in their historical spending. So again, they move things around to meet their maximum allocation. And um you can flip through the next pages looking at funding in their um individual divisions there. in economic development. Page 163, um you'll see the increase for their two

and a half% as well as um the health insurance there and then um a decrease in contractual services. Um is one way they met their cost allocation and then they had a decrease internal service charges. they have um a vehicle assigned to them from fleet and then um they reduced their other charges and their um rentals and leases. So um they had some changes in their personnel as well that they found um they they had vacancies they weren't able to fill at the minimum. So that's another reason you see a larger increase there for the 2 and a half% but they found that money in other areas of their budget to make that work. and then communications and public engagement um on page 168. Um they also had their increase um adopted by council, but again they um they had changes in some of their positions and they decreased their contractual services to help offset that. But then they had the um an increase in other charges for their digital asset management system. But again they met their cost allocate their maximum cost allocation by moving those things around. And that ends departments. So we're at our external service providers on page 169. Okay. In our mandated category, Blue Ridge Regional Jail, we saw a huge

increase in 26. So thankfully, um, we only have an increase of $81,428 for the proposed document. Um, the regional radio board, that's based on really our portion of the debt service for that equipment. So that increased slightly. Um there was no increases are proposed for our contractual organizations of the Humane Society, the Old City Cemetery, and the Virginia Cooperative Extension Service. And then in discretionary, um you can see that we do receive requests from um several other nonprofits. Um, but the ones that are proposed to be funded are the ones that we have funded in the past, which is our Central Virginia Alliance for Community Living, which council added back. And also um there's a $4,000 increase for the impact living services for first responders where they added the Commonwealth Attorney's Office and then um transfers and to other funds um is based on our grants. It's based on our fleet purchases, um, our replacement purchases, um, you got your schools capital project fund. Um, and I'll talk a little bit more about this, but um, schools in addition to the commitment that council made for 10 million in 26, 30 million and 27, and 20 million in 28, they also have some smaller maintenance type projects that can't be bond funded. And

so, um, they had about $1.6 $6 million for as as a request for 2027. And so we didn't have enough cash to actually pay for those. Council um a couple of years ago set aside $1.6 $6 million for to put aside in a reserve for as a non-closure schools non-closure fund that we just set aside some money in case schools needed it for closure of schools and and if there was going to be a study or something. So council just set aside that money. Um so with no discussion of closure of schools and them proposing to use to um really renovate those schools with the $60 million that council set aside. We use that one point we're proposing to use that $1.6 million. It's one-time money and that would cover their smaller projects and we can go through that list once we get to capital. But I just want to point that out there that that's what that school's capital project fund is. The others um are our usual transfers that we make between the general fund and other funds. And then um non-dep departmental um looks pretty much like it always does. you'll see that um there's 2 and a.5% set aside for the nonsworn funds and then also I lost my number the retirey benefits um there's money in there for un unemployment you'll see that this is where we put the VRS retirement savings our VRS savings that I told you all about because we'll use that to spread to departments once Once all the numbers settle out, it's just easier to stick it here than in every department. If something changes,

we have to change every department before the adopted book. So, um this is I don't have software, right? So, this is um this just really helps us in how we put this book together and manage those spreadsheets. We're on page 171. Showing on here. I'm looking for it. VRS retirement projected change is in the middle of the page. Start at non-EP departmental and bop down about eight lines. Okay. Um then this the salary market adjustments the 2.3 million there under employee compensation and

Sure. So is that include the progression pay as well? So that's the sworn progre progression pay and also the nonsworn cost of living increase and that's in the salary market adjustments for 2.3 million.

Sure. And that's another that's something else that I had a question about. Let me pull it up here from comparing to last year. So on the definition side of this on on 172 the next page it says Hold on. Hold it up here. All right. It says employee compensation funding for salary market adjustment for non-sport employee. For FY27, the funding for the joint public safety pay plan is included. And then when you look at the budget we adopted last year, it says in FY25, same thing. Funding for the salary market adjustments for nonsworn employees. In FY2025, the funding for the joint public safety pay plan was moved to the fire and police department budgets. Yeah, we we budgeted those in fire and police for 26 instead of putting the money in the non-EP departmental.

Sure. Um but this year um we are kind of crunched. But when you go back to the public safety section, it's saying in the public safety section that's for 26 that added in that that included their pay progression for 26. So when you're looking at it here where it says highlights of the department submitted FY27 budget include 260,000 roughly increase in salaries and employee benefits reflecting 2 and a half% cost of living adjustment adopted by council for nonsworn staff and salary adjustments for one step in accordance with the established sworn public safety pay plan. So that's that doesn't reflect

the step for 27. Is that what you're saying? That that's just um submitted. Um so it included what was budgeted for 26. Okay. But we just we did budget a little bit different. Um in 26 we actually put the pay progression funds in the fire and the police budgets instead of non-EP departmental. And this year it was working with those departments and figuring out what that was and make sure we got it right. We just put it here first and then um once council adopts the budget, we'll move these funds to fire and police and then um based on council decision um we'll move the rest of the funds for nonsworn.

Are there any other market adjustments in there other than the 2 and a half% that is proposed in here and the pay progression plan? Is there any other We give ourselves a little bit of wiggle wiggle room for um whatifs. Um there's a number of people like me that can walk out of here and replacing us may look really different than what we make. So we just we do give ourselves a little bit of wiggle room there.

I'm looking at Megan and Michelle. It's probably a $100,000 maybe that um just because of turnover and change that um we might depends on what council does we might have to lower it, increase it, whatever. So there is a little bit of play there. The question is is there any structure like pay structure changes in here? No.

Okay. So, so it's two and a half percent. And and the reason is is because I think last year there were structure changes that were in the budget that weren't really articulated to us. And I'm still hoping to get an answer to that. But if there were pay structure changes for employees during the fiscal year, I feel like we shouldn't also be doing a 2 and a half% increase for any employees that receive pay structure changes that were at least 2 and a half% or greater. So, if they received a structure change, you know, it kind of making sure we're not doing double salary increases, if that makes sense. I think you you understand what I mean. So, I understand what you're saying.

Uh I I I'd still like to know if that occurred last year, but um I guess we'll find out.

Okay, moving on to page 173. Um this is a lot of information about debt service. Some of this comes um straight out of our annual comprehensive financial report. Um it just provides you kind of a if you really want to know it's in here nutshell of um all the information based on our total debt. Um, the actual budget for debt service starts on page 186, but we're looking at about um if you can tell on these pages, but it's about $1.4 million more than what we had to pay in 26. um based on um and we're really hoping for great interest rates when we sell these bonds um in the next few weeks and um we're really um our refunding opportunity may be completely gone as interest rates have increased. So that may not work at all. We're still hoping it does to save some money there. So um we're, you know, we won't know those final numbers. So, there might be an adjustment to this before we actually do the adopted, but we're hoping for the best. Oh, back um back in non-EP departmental, I forgot where I was. I wanted to point out these two numbers. Um so, um y'all been around me a long time, been here a long time. Um, when I see something that I know is coming up and we're not real sure about it, I try to stick some money aside. So, um, we had about $1.8 million set aside

that's just kind of built up through the years. Um, and we called it a GLTC reserve. um a coming out of COVID I mean at one year they got so much CARES funding that they didn't ask for any money at all for operations from the city and then it seemed like yeartoyear there was a big swing in their federal and their state funds so um we work with GTC there's anou in place because um basically we are their stockholders at the end of the year if they have a surplus it's just like schools that comes back to the city but if there's a deficit in thatou the city is responsible to pay that deficit. So um as they have returned money to us I did set that aside in a reserve it's city money it's not GTC's money it's city's money as a just in case they ran in a deficit or something happened with their federal and state money so that had accumulated to about $1.8 million. Well, payday someday. So, um, in working with GLTC and understanding their needs, um, we did set aside a transportation contingency that came out of that reserve. So, they're towards the bottom, you'll see that $800,000 that came specifically out of that reserve. And then also um up here um under multimodal transportation planning that's where that 500,000 is um to do um should council choose um looking forward to their meeting. But um if council should choose, there's an opportunity there. We I took a half a million dollars out of that reserve to do an extensive

um study of nuts to bolts with GLTC to maybe help them not just look at bus routes but also their grants, their funding streams and like all the intricacies of GLTC. So, um just to help them maybe run more efficiently or see a better way to do things um just as a possibility. But that's where you'll find those funds. We did not add it and we'll look at JLTC here in just a second. Um, we didn't add it to their budget because it would I think it should take council action to move that to JTC. Yes,

sure. And a general question doesn't need to be answered now, but um I think something to consider is this proposed multimodal study. How does this intersect or overlap with what the planning district commission is doing with the CVTPO? Because I do believe we've also got a multimotal study going on there. So, I just want to make sure that we're not duplicating studying the same thing that we're also studying in the Central Transportation Policy Organization. Well, and that'd be something that would have to be fleshed out, like should council adopt this money to JTC to do that because we would want to do an RFP through the city's procurement office with very specifics as to what that study included. So certainly if there's something that's already being done, we wouldn't want to duplicate that.

Sure.

All right. So, thank you. Sorry, I had to go back. Um so we're in component units and first one up is schools operation. So on this front page um I think it's important to note that um this has your agency submitted. So up here in your revenues, it has what they and this is based on the governor's budget and the what they proposed to us. So we got this straight from them and what the school board adopted. Um so this has their state funding at um 79.5 million, their federal funding at 880,000. um their other funds 922,000 and then their agency submitted to us was 46.6 million and the manager did propose the 44.2 million which is um an increase over adopted 26 of 2.1 million. So just want to point that out. The rest of these numbers come straight from schools. Um, and I think you had a question before, um, Marty on, um, kind of how we came to that number. And, um, it really we were looking at what the local cost was because at the in the governor's budget, it was a 2% increase for their SOQ positions. So, this would allow the local match for the um 2% increase. And then there's about a half a percent in there. Um it's kind of what it equates to. In their um submission, they outlined a lot of um salary type

pay type increases that they would like to do. And I think as you have mentioned before, we can't tell schools how to spend money. Correct. So, um, but that would give them about a half a percent more on that 2% that they could choose to spend however they saw fit. I think, um, one change I think that they will bring to us in our in your joint meeting is um, they also had BRS savings the way we did that wouldn't have been in their initial budget. So, um, but they'll also have probably have a reduction in revenue because the state pays their VRS for some position, their SOQ positions. So, theirs is going to be different than what the city recognized. But, um, so, and I have not seen those numbers. I don't know what those are, but I think that's probably something they will bring to us. But, um, you know, my thought I don't count. I don't get a vote, but um my thought is, you know, that would be some another revenue stream they possibly could use to um fund some of those other pay increases that they had mentioned in their request. And

and I and I've expressed as much in some one-on-one conversations I've had. The question that I have though is it was there's two different proposed budgets right now when it comes to salary increases for the school division for the teachers. There's a general assembly budget and there's a Senate budget. There's a 1% difference between those two. So I'm not I can't recall if the 2% was general assembly and the 3% was Senate. I don't remember. But my question is what we are is what we're doing based on the the 2% budget or the 3% budget. Do we not have do we know what it would take to make sure we're covering the 3% budget? Do we have any idea?

Um superintendent's memo has not come out with those numbers. So um like I said, we had the governor's budget and what they requested and that's just kind of how we did um math. We don't know. We don't know which budget we've we've got. Right. Right. No, we the funds that are in here were based on the governor's budget. So So you're looking at two and a half% two and a half%. So it and and honestly, it's just math.

And I do think you're you're correct there. There while there is going to be some offset because of the way the SQ funding works with with their salaries, there's still the potential to have some projected uh savings. Yeah. From the It did tell me that they did have savings in their VRS rate, but I I don't even think she knew at the time how that was going to flush out. Thank you.

So, there is a wealth of schools information here. Um some of this um comes straight out of our um annual financial report as well. And then um on page 198, you'll see um GLTC's budget. And I just want to point out here that the city operating, you will see um the agency submitted $3.6 million in a request and we did fund it flat at 1,879308. Um and this is what they submitted to us. I'm not sure um in looking at their federal and state funds if this if they if they have something different now. So I think that's something that you'll find out at your joint meeting how their state and federal money flushed out. But um but I did want you to see that I did not put that additional funds in the GTC budget. It's city funds and it's sitting in the general fund and non-departmental as I showed you. Okay. Now, the medical insurance fund. This is like um this isn't accounting 101. This is like accounting 401. Okay. Um and the way I think it's easiest to think about it is um is think of how we budget fleet. So in the general fund, you have the cost in every department that has fleet vehicles assigned to them and we we account for the cost in the general fund for those fleet vehicles and maintaining them, the gas, all those budgets. So the medical insurance fund works just like a

fleet internal services fund. So, in the general fund, you're still going to have the department cost um for the city share of um all the premiums, but the way we we used a payroll agency fund to account for our claims. So the money went in for from all the premiums and what employees pay in for family and the employee cost and all that got paid into like a payable and then when the bills came for all the claims it just kind of washed through there. But that's not a very it's not a very clean way to do it as far as transparency and really having the information to do a lot of analysis on our claims and things like that. So, um we finally got here and I know um it's just hard to wrap your head around um and they had to explain it to me a couple of times. I had to go back to my tea accounts so that I could understand it's been a minute. Um so um this this is not an addition to the overall budget. It is just a different accounting trying to be more transparent and having a place. So now this medical insurance fund is just going to work just like fleet. Like how all the money from the department flows into fleet to pay for to buy the bulk gas to pay for all the parts and all that. It goes back into that fund. This is capturing all the premiums paid by the city by staff. Um, all those things are coming into

here and then we'll pay the claims out of this fund which allows us to have a better accounting and more more it's just a better accounting of these funds. The way we were doing it before is fine by GAAP, but they also allow you to do this. Honestly, if we could have done this 20 years ago, we would, but um it it takes time to figure this out. So staff finally said, "We're doing this this year." And I'm like, "Okay." So um it's not additional funds. It's the same premiums and the same claims, but it's washing through this medical insurance fund. The same way it works for fleet. Make sense? Go ahead.

So, I think you hit the nail on the head when you said payroll agency fund because I had questions about that last year because it wasn't in our budget. Right. I I you know because as soon as I saw we were putting I think it was a million dollars into the payroll agency fund. I looked in the budget and I searched for payroll agency fund and I couldn't find it. Right. Right. So, yeah. that's not in the budget because it's sure

it's kind of a liability account where we capture just like this. We captured those same premiums and paid the claims out of there. Um the funds were appropriated, but um it's it's just how it was paying the claims, putting all those funds aside that are for medical claims and then paying the claims out of that fund. this lets you see it. This is a more transparent way um to actually put it in the budget book so that you can see the cost because I mean it's $19 million. I mean it's not small

and that and and that's kind of what's led to a lot of my questions about this in particular. So, I think you've articulated well why we're moving in this direction with this because when you look at page 21, it makes it look as if yes, this is 19 million in new spending. Yes. And it's not. But we've been paying health insurance claims for employees probably for 100 years. As long as there's been a city. As long as there's been a city. So, so it's not new spending.

No. Um but the question that I do have is I do think that it would be helpful to see what when you look at these categories here on the expenditure side, health insurance claims, dental insurance claims, vision, so on, right? It would be helpful for me to I guess be more comfortable with this to see if we can get some kind of highle summary of what was actually spent last year. So because right now it's projecting, you know, you're taking essentially the 19 million from the department budgets. Is that how this works with the internal?

Yeah. So really this is what's paid in um matching claims. Sure. So this is a budget. It's a best guess in a prayer. Got it. Um, so you know, sometimes I have to come to council and say, "Hey, we our claims were more than our premiums." So what was paid in wasn't enough to cover all the claims. What you accounted for the claims

and that's why we have a a reserve set aside because that's what I do. Um, so that we have somewhere to go to do that because how and how that worked is that you're going to have a third quarter adjustment to move that reserve into this fund so that you can literally see at the end of the year if we were over or under and by how much. Sure. So right now that's just an adjustment that we do as part of our year-end entries.

Got it. And if there's if we have too much then we kind of just put it back into the departments and let it wash out at the end of the year. This way that reserve is actually part of this fund. So what if there's more money if there's more premiums that were paid in than claims paid out then this will actually have a a fund balance that that can be used to help settle this fund. So it just puts all the health insurance in one place. So again, my question is what did we spend? And I know you know you don't have this now today. I know you don't, but but for last year, right, when we closed out last year

rather than trying to figure out where we are in the middle of the year, what did we spend on all of these? So each one of these contractual services in the expenditure line, health insurance claims, dental, vision, health insurance administration fees, dental insurance administration fees, health insurance stop loss premiums, etc. I think it would help be helpful to see just to have some kind of idea because we have the information because we've been spending the money. Yeah. Well, I can tell you what was spent for 25. That that would be very helpful, I think. And that's the other way this is going to be more transparent. is because when you do the 28 budget, you're going to have a history. You'll have your 26 actuals in here. Exactly.

Because we're going to set this up and make it work so that we're ready to go July 1. So, we'll start setting up this fund so that you will have that history. So, prior to this, where did we see the claims being paid out in the like the FY26 adopted budget? What section of the budget was that? It's not in the budget. It was in you'd have to look in your act for in your accounting. Okay. In the annual comprehensive financial report. Got it. Thank you. But I can I can provide those for you.

Okay. Fleet fund. Um fleets another kind of confusing one. Internal service funds are kind of confusing because you're putting the cost in all the departments and then that rolls up for their budget. So they have to come up with what they think, you know, gas prices going to be um and allocate that out to all the departments, the enterprise funds. Um they take care of all that. So in this budget um they had the the 2% as well. Um they have a new parts contract that um with this being the first year, they're really that's something that's a little bit of an unknown. They've got an increase in here of $142,200 for this new parts contract. We are really hoping this is high, but right now we just we don't really know how this is going to vet out. Um there were other charges um increases for um outside vendor repairs due to technicians shortage and high accident costs. So they're accounting for those. They did have a decrease in capital outlay because we are not replace we don't in the replacement list and they have a whole you know year's worth of plan. we don't have to increase uh we don't have to replace as many heavy and light dewy access and then there was a decrease um in that future vehicle needs reserve um because um when COVID hit and they couldn't buy vehicles fleet was a mess because we were providing funds for them to replace the vehicles as they were needed but then we were having to we couldn't find the vehicles we were having to date. So, we had to move that

money out at the end of the year and kind of set up a reserve so when those vehicles became available, they'd have the funds to purchase them. So, that's kind of how that future vehicle needs reserve works. And then um they did see um a savings from the VRS decrease and there was an increase in their debt service and that's because um every year we've been doing our replacements for um our large fire apparatus um you know pumpers and medic units and ladder trucks and um we bond fund those um they have a shorter payback period period because of depreciation for those vehicles. But um we are having to increase our debt service based on the number of fire apparatus and many of those um we're having to do a cost analysis to see because if we pre-order them which it takes about three years to get some of these vehicles and if we prepay them a lot of times they'll give us a discount on the front end but if we're not going to get them for three years and we're only utilizing a line of credit to pay for those. Sometimes um the interest we would have to pay on the line of credit to prepay that would actually be more than um what the savings allowed. So, we're we're really looking closely at how we fund especially these big fire apparatus, but there is an increase because um for the ones that we have already purchased and have been delivered. Okay, breathe. Airport fund. We're getting there, y'all. Um

breath here. Also send a note to city council. Um we have hired Ken Le. He's coming to us from Alexandria. He's going to be our fleet director. His first day is April 8th. So, we're happy to also acknowledge that new department head. So, thank you,

Donna. So, thank you. So, um, fleet I mean I'm sorry, airport fund. And we're looking at page, um, 210 is where you'll see their, um, changes in their submitted budget. And they do have the 2 and a half%. And also they have a $283,700 increase in contractual services for converting all their custodial positions to contractual and then also extending the ARF hours 247 365 days. Um they're going to be full-time. Um so um they've had they've had some real issues in their custodial services. So they're really trying to figure those out. Most of this is from the 247 operations for the ARF. And then they had a little bit of a decrease in their fleet cost. Um and they had a slight increase in their indirect cost. And um for those that may not know what that is, um we hire a company called Maximus to do this for us because we just don't have time. And what they look at is spreading the cost of administration across all funds. So that like for for my salary and my time um when I work on bond issues and debt that is for the entire city, water resources pays for a portion of that and we do that through a study called in indirect cost. So, it's not a direct cost to the department, but it's an indirect cost. And we look at um the manager's time, the deputy city manager, assistant city manager, we look at all those overarching

um cost and that we spread those to all the funds. So, when you see this indirect cost per Maximus study, we hire a company named Maximus. We've used them for years. um they provide us a good service at a very low cost and um but that's that's what that indirect cost means in case you were curious. And then um they do have a decrease and then they're um non-departmental and that reflects moving their small projects equipment to the airport capital fund. So they're no longer funding for those in their operating fund. And then Tim Mitchell is here to do water, sewer, and storm water. So, we'll swip swap over to other funds. And this is this is kind of your hodgepodge of everything else. So, um we have a city, federal, state aid fund, and that's our grants. So, um you'll see here on page 249, this is a summary of all of our grants. Um, and it's nice to see that federal funding is $2 million. Our state funding is $2 million. Um, we do have local cost to those. A lot of our grants have a local share of a million dollars. Um, we use inkind. Um, we now have these opioid abatement funds that um, we tap into. Um, y'all, that's worse than CARES and ARPA put together. So, um, you know, there's no such thing as free funds. The paperwork and accounting associated with those are a lot. Um, I I always joke and say they have more strings than Pinocchio. So, um but but you'll see all of those in here and the other side of those and then the um pages after that

you we'll can um you can actually see the actual grants, the individual grants associated with our Commonwealth Attorney's Office, economic development and tourism, fire department grants and the human services grants. Um, and what we what we try to do is we try to budget for every known grant. So if if it's something they've gotten for years, they're going to continue to get, we want to go ahead and budget for those. And that way they don't have to come to council individually because you would drown in just appropriating grant funds. So, we try to do as many as we can that we know about through the budget process so that they don't have to come individually back to city council. Okay. So, page 257 is our information technology grant. Oh, I'm sorry. That's part of the other Oh, and then page 258 is community corrections and pre-trial services. Um, this is a grant that we have gotten for years and manage. And the good thing about this one is they are able to use some of our opioid funds to provide services. Um, it it's actually really working well. It and it's helping with um these um probation and those type of services. Um, so um this is something you may not have even known about, but we do budget for that. They get their funds from the state and um they also serve some of our surrounding localities, but they do a really good job. The TANIF grant is there on page 259. There's no change there.

The Virginia Juvenile Community Crime Control Grant, um there's no change there. the Central Virginia Criminal Justice Academy. Um, their budget is there. They do have a slight increase um in their cost of about $86,000, but we have an agreement with the um criminal justice academy, the workforce um opportunity grant that we receive every year, there's no change there. the adult recovery court program. There's a slight increase there of additional funds um from the o opioids. So, this is this recovery court is another place that utilizes those opioid funds we're receiving and I'm doing a good job with that. And then our CDBG. So, y'all hear from our beloved Melville Walker um about all the steps and the hoops you jump through for our CDBG funds. And um so the budget is here. It the budget is $750,979 is what's um projected right now. Um it is a slight increase of $42,000 over 26. And then on page 266 is our children's services act. Um this is something that um increases about every year. We've we budgeted 9.5 million in 26. They kept it steady for 27. Um generally this is there's going to be a third quarter adjustment or a fourth quarter adjustment. Um where we just have kids that are so broken they need more services. So that's a hard one. And then our forfeited assets by state

code, we cannot budget um those funds because we get them um when things are confiscated or whatever for police or Commonwealth's attorney. Um so but you can see the actual 25 um expenses there. And then our home program again works very similar to our CDBG funds. Um, our allocation for 27 is $320,518, which actually is a 57.5,000 reduction from 26. And then we got our LEAF fund um that is constant at $75,000. And then um page 273 you'll see um the changes there for the detention fund. Um and this they also work within their allocation. They have their 2 and a half% increase um reductions from contractual service because they move their software license to other charges in other charges. you got those um plus the expense of their Office 365 licenses, their indirect cost for Maximus went up $63,000. But they do um they're showing their reduction for VRS in their department and also a decrease um in their transfer to fleet for a fleet vehicle replacement that occurred in 2026. And then risk management is um the other side of all those insurance policies and um all the things there. Um but you'll see

that there was an increase in their insurance and claims and that also reflects premium cost and then a slight decrease in their non-depal for their VRS savings as well. And that's on page 276. 277 is the special welfare fund and there is no change there. And then in the technology fund, um there's an increase of $225,000 over 26, but this is based on services that we can pay for out of the technology fund instead of it's operational budget. So um we this is funded with an agreement that council did a long time ago, 20 years ago maybe that um funds that come in from our telecommunications and um those type of funds we try to move in here. And this is another place where we just set aside funds to hold them because we know as we have to replace software systems um like the assessor's office um is they know they're at end of life. We paid for the upgrade to the financial system that was done almost 10 years ago now probably. Um but but that's how we utilize this IT fund. Okay. Then towards the the end here, we've got glossery and our financial management policies. And should we take a break before we go to CIP? So, if you turn to C at past your yellow tab on CIP page three, um here's your um total capital improvement program. This is all five

years and all funds is $560 million. And then we're going to um take this in bites. Um but it's not going to take long. Happy to answer any questions. On page um five you'll see all the resources. And this is really critical because um 560 million's a big number, but um it is important to note the federal grants, the state grants, the transportation grants that we receive so that it's not all it's not all on the city, which really is very impactful. But let's go ahead and turn over to um page seven, which starts our city capital. um our city capital um you'll see the five-year appropriations there. 2027 um is a 50.5 million worth of appropriation. Um if you note down here in our buildings um now that the police building is complete, there's no large building project for the city in those funds. Um at least not funded by the general fund. Um, in transportation, you will note, um, we do have our continuing projects there for our bridges, roads, those type of things. Most of those we do receive, um, VOTE help with. So, it's important that we keep those moving. Um, public transit is um, just the match for GLTC, for um, buses. um economic development. They do have some projects here in the pipeline, but thankfully they also these are for your pad ready sites, but um we've been awarded several large grants to help with funding those parks and wreck. Um 2026 we had a really heavy

year of funding parks and wrecks projects. So, um we don't have as much funding in 2027. um they're going to use that kind of as a catch-up year to get a lot of those projects done, the Miller Park pool and um some other projects that they've got going on. But they they will have about $2.7 million. This is mostly just their maintenance um for their fields, fences, lighting, those type of projects. And then um miscellaneous, the the bulk of that is for radio replacements. And then we have our reserves. So, um, going into buildings, um, the one project I want to note on page nine, as we've talked about this, I was in the manager's um, overview of the budget, is our fire station renovations. Um, this is something that was added since 26. Um, and these are extensive renovations for 2027. That is mostly fire station number one. And then you'll see that um we have our regular major building repairs. Um the 1.4 million in library renovations. This is cash funded and this is their FFN. So this allows them to finish their project out and um get the necessary furniture, laptops, all those type of things, all the extra pieces that we don't bond fund that go into the library. And I got Kent shaking his head at me. So, we're good. So, and then as you flip through these pages and buildings, you will see the details of each of these projects. Um, your major building repairs there. Um, you'll see the 2027 projects. Um, one of the largest is the, um, HVAC and city hall.

Then in your transportation projects, um, just a couple to highlight. um the Lynchburg Expressway Candler's Mountain Road interchange that is 100% VOTE project that um it's a city project but it is 100% funded by VOTE. And then you'll notice that we do have um additional funds to appropriate for Route 501221 one-way pairs as we're finally getting ready to move that project along. Um the rest of these are um pretty they they've been in the plan and we're just working them through the plan. And then on the following pages, you you've got the details of all of those projects. Economic development section on page 61, you'll see the overview there. Um downtown development, this is for maintenance um only in our downtown projects. Um you can see that it's just maintenance of all our enhancements, the bluff walk and keeping all that um up to date. Um future streetscape improvements. This is as we continue the waterline replacements um putting those um the city side to put those blocks back together better than we found them. And then you'll have the Ivy Creek Innovation Park there. And um this does um put more money in for the property toolkit. City council included that um for community development projects in 2026 and we are continuing to fund that um for our Derelch properties and those type of things that all those pieces that were so important in that toolkit because this really moved those demolition funds out of community development and put them here in the

CIP. So, some of this is not totally new funds, but um just budgeting differently the funds that we always had for demolition, moving those into the CIP. And then um we always have the STE street and utility extensions. Um this is helping new development in our neighborhoods to put in the sidewalks and help them with some of those pieces in parks and wreck. Um oh, sorry. What happened to the airport commerce party?

Um, we had a conversation about that and um, you want to you want to answer that Greg or Winter? It's really um, at a point that it wasn't able to move forward, but one of y'all Oh, Kent. Yes. Airport commerce part, we've done the initial site assessment, but we're really looking at the best way to kind of leverage the alternative funding that Miss Wit's talking about. So we put a pause on it. We still have what council has allocated in remainder and then our hope is to be able to leverage other funding to to move that project forward. So we're going to come back to you with a with a re re redesign project around that. Got it. Thank you.

Parks and recreation again like I mentioned um this is their maintenance projects. There's no large projects in parks and wreck. This has just given them some um maintenance money to help them keep up all of our parks and the grounds um and the especially the athletic fields as we're getting more and more tournaments here. Um but they'll be finishing up some projects in parks and wreck and it'll give them a pause to kind of catch up. And again the details of all those projects are behind there. Um in miscellaneous um there is um alerting system existing fire stations starting in 2028. That's a conversation that I'm having with um our interim fire chief at this point and whether they might have some savings in their budget to possibly do a station in 26. Um we haven't we haven't finished that conversation. So, but that is um something that they are looking at in 26 if they have some funds they can repurpose in their budget. And then also the computer aided dispatch replacement is back in in 28 and that'll be something that I'm sure there will be many many conversations around before that moves forward. Um so for 27 you've got the petroleum storage of $50,000 and the radio replacements of 750 in our reserves. Um, we've got Station 9 and City Stadium. So, based on those new contracts that um

well, we're still not finalized the lease with um Liberty University for Station 9, but we're really close. And so, we've um in the draft lease, there was some maintenance money that was to be set aside every year. Um, even though that lease didn't finish, we wanted to make sure we at least put that in there. It's it's payo funds. Um, so we've established that there and it could change, but probably won't at this point, but wanted to make sure that we did account for that. And then in the Lynchburg City Stadium Capital Maintenance Reserve, that is part of our lease with the Hill City Howlers. And then um as always, we have our snow street and bridge re reserve in there in case um we have another wicked ice storm that we don't want to deal with, we might need to go pull those funds. Then in schools capital, um this is where you've got your big chunk. So, um this is purposefully there's not as many projects in our others here um to make sure that we can afford the commitment council made for the schools. So, you'll see the 30 million um for 27 and 28. Um and then I mentioned that 1.6 million for pay as you go. So, um that's using 1.6 6 million out of the reserve that was set aside for the non-school closure by council and this is using it to fund their maintenance projects. And if you flip over, um, sorry.

Well, I thought there was a page in here that reflects how they're spending their 30 million, but no. Okay, so we don't have that yet. So, what's behind these pages is the 1.6 million. I'm sure we'll be getting that hopefully soon from them and what their plan is for the the $30 million for 27, but my understanding it's um renovations for the school buildings. Then, airport capital. Um you'll note that um it's federal and state funding for their projects and only $100,000 in payo funding. And um they they provide that through their operational funds. Um and those are typically um they have a large one for the airfield drainage repair and then stateup supported small projects and equipments of a half a million dollars. So nothing thrilling there. And then Tim is going to walk you through water, sewer, and storm water. So, unless you got more questions, you're done with me. All right. Good morning, Mayor, Vice Mayor, members of council. It's my pleasure to

walk you through the water resources budgets and capital improvement program and as well as talk a little bit about our proposed rates for FY2027. Just uh real quickly before I begin, I'd like always like to recognize their exceptional staff at Water Resources. Uh their knowledge and abilities and dedication really always impress me and and uh just their commitment to the city is important. um from our crews that make repairs in the middle of the night when the weather's 10 degrees on the water lines or crews clearing out uh roots and rags and grease from sewer lines to stop sewer overflows. Um and then their water and wastewater treatment staff and our operators and lab staff are always impressed me with what they do and keeping their facilities going 247. So just everyone behind the scenes with water resources, they provide exceptional services to the citizens of Lynchburg. So just a little bit about our uh proposed rates for FY2027. We are proposing a rate increase with the water fund from $345 per 100 cubic feet to $362 per 100 cubic feet. And I'll go into a little bit of detail about in a few minutes about why we why we need that rate increase. Sewer fund, we are in compliance with our consent order at the current rate. So, we do not need to increase rates because of our CSO consent order this year. Um, and we have adequate revenue to make sure that we meet all of council's fiscal policies as well with the sewer fund. So, we do not need to have a rate increase with sewer this year. storm water. We're asking for a 25 cent rate increase per uh single family units. Um

and th this equates to about a$16 per month increase uh to a typical household using the average amount of water that the households in Lynchburg use. So about a$16 per month is what we're looking at. So, one thing that we always like to do is compare where we are with air, water, and sewer bills with the rest of the state. And this is uh previously the Draper Aiden uh used to do a an annual rate report that's now being done by a new company called TRC, which took over Draper Aiden. Looking at that report, our average rate based upon 5,000 gallons of use per month is $8857. That's what air rate is. What air uh average household bill is. Virginia average is well above that at a dollar $123 per month. And then we also do a comparison between the city of Lynchburg and other uh utilities around this around close by as well as the other CSO cities. And while we're not the lowest, we're definitely towards the bottom of the list with air rate impacts to our customers. Storm water, a similar situation. We're well below this Virginia average of $846 uh per single family unit. Uh we're at 515 currently. Um so again, well below the the state average with our stormwater fees. And I'm going to go into a little bit more detail in a few minutes about the min minimum or the monthly uh service charge that we charge. We currently charge $7.79 for a typical household, it it increases

based upon meter size, but compared to the the localities around us, uh it's well below their their minimum their monthly charge. Just a little bit about our budget goals. We we establish our budgets and our rates to make sure that we're providing adequate revenue to fund our operation and meet all the regulatory compliance requirements that we have. We're one of the most heavily regulated departments in the city. Um and then we have extensive infrastructure that we have to fund. And then we also when we're setting our rates and establishing our budget, we working to comply with council's fiscal policies as well as the CSO consent order. And then finally, we want to make sure that we're doing what we can to minimize the rate impacts and and uh increases to our customers. So, just a little bit about our infrastructure. We've got an extensive amount of infrastructure in the city. Um it's complex and costly to maintain. We have over 1100 miles of utility utility utility lines. Um thousands of fire hydrants meters and um water valves, 12 water tanks, nine pump stations, two two water filtration plants, their sewer treatment plant, and then many storm water assets as well that we have to maintain. So just going in to when we're developing our budget, one of the things we do is we look at all the revenue sources and this is an example of the water fund budget revenue. Um so we have multiple areas where we

receive revenue from multiple categories and what we really look at is our our water consumption for one example it varies significantly from year to year and the graph on the the right hand side shows how the water revenue or water consumption has varied over the years. So it's very hard to predict how much water consumptions we're going to have in any given year. Uh the overall uh trend is that the water revenue or water consumption is declining. Um we had a spike during the COVID years but if we if we look at the water consumption it's declining and then average household water consumption has declined 8% since 2015. So when we're developing our budget and trying to estimate how much uh what the water consumption is going to be, we look at all the class categories. We look at industrial or look at commercial and look at the trends in each of those and then we look at the overall trends and try to to select the best based upon our best estimates what the water consumption is going to be. If we select too high then then um the rates and then it comes in lower than that then the rates don't adequately fund the water operations. But if we select too low then we may have excess revenue uh if we set a rate higher than we needed to be if if the actual water consumption ends up higher than we predicted. So that's just a little bit of the challenges in trying to establish a water rate that's um uniform from from year to year. I mentioned the uh fixed charge the uh

monthly service charge and one of the things that we do again is look at the different revenue sources that we have and look at what instead of increasing the water rate what happens if we increase other fees instead to achieve the same result. So, as an example, uh this year we're proposing the increase in the in the water rate. It's a 17 cent rate increase. Um if you multiply that by the amount of water that's being sold each year, then we get an additional $525,000. To get the same additional revenue from increasing the monthly service charge, we would have to increase it by $1.79 cents per month. And that's assuming that all that additional revenue goes into the water fund because typically that service charge is split between water and sewer. Um, so and it's really a simply a factor of uh you have a higher multiplier with the water rate than you do with the monthly service charge. The another thing that we've looked at, we haven't increased this fee in over a decade. And one of the reasons we've done that is um when you have localities that have a very high service charge, then customers are paying for that service charge before they even use the first gallon of water. This way, keeping this fee low, uh, it gives the customer the ability to monitor their water consumption, especially now that we have, uh, we're going to be finishing up our, uh, cellular meter installations this year. So, customers will have real-time information on their water use. They get alerted for water leaks, um, and that type of thing. So,

now they have the ability to monitor the water use. And we have a lot of customers that do that and try to try to reduce their water consumption. U so this by increasing the water rate it spreads the the cost out over over a bigger group of of individuals or customer accounts versus having it just increasing the the uh fixed fee significantly. Just going through our water system priorities. We have about 455 miles of water lines. Uh there are over 90 miles of water lines that need to be replaced now. Uh they're beyond behind schedule being replaced. In our master plan for our water system, what we do is we we're looking at the water lines that over that are over 100 years old or unders sized um or AC pipe. AC pipe is as best as concrete pipes. It's an inferior pipe and we want to get it out of our system as quickly as we can. Uh so we have a goal of the 1% per year or about four and a half miles. Some challenges in meeting that goal include contractor availability. We've had projects where we have uh in some cases we've had no contractors bid on the project. Um but we have a limited pool of contractors. Uh some projects are more costly and complex than others. So they cost more. So that that reduces the amount of water line we can replace annually. And then just staff capacity in general, just getting those w those projects out on the street and ready to bid. But our goal is to minimize outages and boil water notices and protect uh prevent property damage while providing adequate fire protection and protecting water quality. You may have seen Uh recently I

think it's the city of Covington had a waterline break and um a lot large portion of the city was without water and they've been under a boil water notice for quite some for a number of days. So we really want to prevent that. Another priority that we're really focusing on over the next five years is the Abert water filtration plant. It was built in 1972. Uh while we've done some plantwide upgrades, we we while we've done some improvements to the plant, we have not done a comprehensive study of the the water treatment plant and what all the needs are. We just completed that this year. Um we've identified about $25 million in needs over the next five years. Um, and some of the critical systems that need to be upgraded include the raw water pump station, chemical room, and feed equipment, air filter valve replacements. The picture in the upper right corner is a picture of a large valve in the water plant. It was designed specifically for the Aber plant and installed over 50 years ago. We can't get that valve anymore. If it fails, we really are we can be in trouble with the water water plant. Um, so we want to replace it before it fails. We can't even have it fabricated. So to replace that valve, we've got to repipe the entire pipe gallery and upgrade all the the control systems in that pipe gallery. Lead and copper. Uh, this is the lead service line inventory and replacement. Uh this is ongoing. It's a massive effort. Uh it impacts a lot of our divisions and water resources. Takes a lot of uh personnel to be able to manage this. Um our goal is to significantly

reduce the number of unknown service lines by October of 27. Uh we currently have over 16,000 that we're trying to identify what the materials are because October 27 any that we don't have identified have to go into a replacement plan. So it's better to find them now than to include them in a replacement plan and um have to deal with that later. Just a summary of the water fund budget. Uh we really have no new positions or major initiatives except for the the capital uh project at the Abert water filtration plant. Um the budget will operating budget will increase from about 19.6 million to 20.3 million. Some of the cost increases are listed here. Salaries and benefits that's the net increase to with the 2 and a half% and uh all the other factors that go into salaries and benefits. Um, debt service will increase by $261,000, indirect cost by about $195,000. Donna mentioned what the indirect cost allocations were uh earlier. Their contractual services will increase. We do have a decrease in chemical costs because we had favorable chemical bids and so we have less cost associated with the chemicals. Quick summary of the water capital budget. uh list here the ongoing projects that are currently going on that will will go into next year to some degree. The lead service line inventory, Daniel's Hill, downtown renewal, uh the Filmore Street waterline replacement project. New projects in 27 um would be the a filtration plant improvements, the appropriation in 27 would be 11.4 million for that. there'd be an additional additional

appropriation that we'd seek in a few year a couple years. Um but this again planning on spending about5 to $6 million per year on that project. Uh Maple Hills water line improvements. This would be in conjunction with a sewer extension program project in Maple Hills. The next phase of downtown renewal is phase five and that would be on Court Street. Uh and then 13th Street utility improvements uh and Oaklane waterline. These are the major projects that we have for the waterline replacements in 27. Our sewer system priorities are to really we want to fulfill the obligations of the CSO consent order and finish our CSO program. And we will be starting the three remaining CSO projects in FY27. Um that's beside the tunnel. We'll finish that and also in calendar year 27. Um, but we really think we can complete the CSO program, a 50-year effort by 2030. So, that'll be a huge accomplishment to be able to do that. And if we get all the projects started early enough in 27, we probably could get get done in by 2029.

Is that the That's the tunnel as it is right now. Correct. Yes, that's it. So, I just want to point that out and that there is no proposed uh rate increase in this. There's no proposed rate of sewer rate increase. And I just want to acknowledge uh council's efforts over the years to ensure that we have the resources working with the state to to do this impactful project. Um and if you're still not deterred by the picture, I think you're going to start doing tours at some point. We we have set sk set set aside May 29th to do a tour. uh you'll be getting more information. So, we'll coordinate with those that are interested here at council to uh I myself will stand outside and wait for you to come back.

But it it will it takes some effort for the it's costly for the contractors to shut down operations for tours. Uh but that's why it's timed on a Friday. uh and and they'll they'll do a blast that morning and then um once that blast is done then we'll start tours later that morning. Um but you'll get more information about that coming soon. Um we also uh looking to extend sewer access to unsured areas. We're going to we'll be completing Richland Hills this year and as well as starting Maple Hills uh would be the next phase of that that program. And then we'll also be continuing their septic to sewer program the council approved a couple years ago. Um, and that's that will be available for Richland Hills and Maple Hills for two years after that construction is complete to sign up and connect to sewer without having to pay the availability fee. And then just complying with future regulations is always challenging. Uh, POS uh is going to be a big deal coming up. There's new legislation in the general assembly that's going to require us to do a lot more testing for POS particularly with our bioolids and so it may impact land application and there may be some financial impacts to that going forward. Some other sewer system priorities uh similar to the water fund we want to renew about 1% of the sewer system per year. That puts it on a 100redyear replacement cycle. Um we clean and maintain and inspect and line 20 to 25,000 feet of sewer line each year and that's in in lie of digging it up and replacing it. So it's a more

cost-effective less disruptive way to renew the sewer system. But we have a lot of problem areas as well. This is a picture of a sewer crossing uh a stream where we have a lot of debris. We have over 150 of these throughout the city. So, we have to constantly inspect these and get out there and remove all that debris so that the sewer line doesn't get washed away. And then also with the sewer lines, we have thousands of feet of sewer lines within 5t of streams. And we we recently had a um sewer line, a complete sewer line failure off of Weeping Willa Drive uh that was along this stream as well down over a bank, hard to get to and hard to see where we had over 100 feet of sewer line just collapse and fall into the stream. And we've got temporary bypass pumping set up now where we're trying to figure out how to make that repair. So at multiple times a day we have have crews go out and and operate the pumps to make sure we don't have any additional sewage overflow. So dealing with Yes.

Oh yes. Yes. So uh so the stream sewer lines along the streams are are complex because we typically have to rebuild the stream bank and stabilize the stream bank anytime we have to repair a sewer line there. Summary of the sewer fund budget. our operating budget actually will decrease in 27. Um that's primarily related to we had a one-time expense of the James River interceptor sewer line cleaning that was pretty costly this year. So we'll have a almost $800,000 savings in contractual services. Uh no new positions or major initiatives in the sewer fund. Uh salaries and benefits will increase about 136,000 um and then transfers to water fund about 124,000 and then we also have about a $300,000 savings in chemicals for the same reason we had that savings in the water fund summary of our capital budgets uh for the sewer. Uh we'll continue the the Blackwater CSO tunnel and the Richland Hills extension projects that again Richland Hills will be finishing up later this year. C Blackwater CSO tunnel sometime next year. Uh new projects will be the Dreaming Creek interceptor. It's about $10 million, but Campbell County is paying about half of that cost. So the impact is about $5 million for Lynchburg. um CSO7, CSO 14 and 33 34. Those are the remaining three CSO projects that we have to complete to finish our CSO program. And we have been uh awarded Virginia Clean Water Revolving Loan Fund money to do those

projects. So, the financing will be in place uh to do that. and we're working hard on the design so we can get those projects going this year. And then the Maple Hills sewer extension that I mentioned and storm water. Um so we there's a number of item number of issues that really don't have funding for that are out there that we need to be thinking about in the future. Currently we have over 300 outfalls that need to be repaired or replaced. The big item is Fort Avenue stormwater improvements. The picture on the right hand side is we've done a lot of studying and modeling of the Fort Avenue area and this is a flooding impacts on Fort Avenue. So we're looking at ways that we can minimize the flooding impacts as well as renew infrastructure that has completely failed in that area. Uh, and we anticipate that cost to be somewhere between 10 and $20 million. It'll be a significant project. Um, and then public best management practices. We we have funding in our budget to manage some of those, maintain some of those, but we don't have enough funding to really adequately go in and maintain those like they need they really should be maintained. And we mentioned this last year, but Because the storm water fund is a new relatively new fund, we don't have any old debt that drops off from year to year. So every project that we do, we have to pay we accumulate that debt service that we have to pay each year. Um so that's going to be a challenge with rates trying to keep rates low but also having way a way to fund that debt service going forward.

stormwater budget. Uh slight increase in the stormwater budget from 4.7 to $5 million. No new positions or initiatives. Um indirect costs uh is $133,000. Uh debt service increases by 44,000, salaries and benefits by 42, and contractual services by 33. And and all these funds, I'm just hitting the highlights of the of the budgets. Stormwater Capital uh ongoing projects that we have. College Park is the construction of that's finally underway. Uh Heath Avenue storm water improvements uh downtown area. Any projects that we do downtown, we also have a storm water component as well. New projects in 27 is a covert on Alagany and Lakeside that is really just about completely failed that we need to address. uh Hill Street and then just general storm water pipe and manhole improvements and rehab as we find those pro those issues. So in summary, what we're proposing is a rate increase on the water fund and the storm water fund that totals about $16 per month for a typical household. Uh the budget to adequately fund our critical infrastructure projects and operational needs. sewer fund rate increase is not needed and we're in compliance with their consent order by keeping it at the current level and Lynchburg residents even with those increases will still pay well below the state average for water and sewer services and storm water services. So be glad to answer any questions that you have.

Thank you for your presentation. I appreciate it. Real quick for the new guy. What's an outfall? An outfall is uh you see these uh big head walls where storm water pipes discharge and um a lot of times we have a lot of erosion. The head walls fall over um and to so each where we have those outfalls we have to go in restore that head wall a lot of times replace some of the piping and then put in outlet protection and and armor the the channel downstream of that so it prevents the erosion. I thought I heard you talking about it in reference to sewers though.

Oh, no. That was in the storm. That was only storm. Okay. Yes. Yeah. One one final question. You uh referenced in the water pipes that uh we had several miles that needed replacement immediately. I think it was 90 90.

Do you have a similar number for sewer pipes? So short answer is yes probably. We haven't done the extensive as an extensive analysis of the sewer line needs as the water system. Um but we do have a lot of old sewer infrastructure and we and a lot of it's the old terracotta pipe that um is subject to root intrusion and and failure. Um, so in all likelihood, a lot of the sewer lines aren't going to are going to need to be replaced prior to the 100 years. Uh, the sewer lining projects that we do, we can do a lot more of those more efficiently. So, we're actually meeting our 1% renewal with a sewer system annually at this point. Um, so I think we've got a lot of needs. There's definitely a lot of sewer lines out there that need to be replaced now, but I don't have an exact uh footage of the sewer lines that were in need of replacement.

Thanks.

Thank you, Mitch. Thank you, Mr. Mayor. I think what we decided was talk about lunch, so we're a little ahead of schedule. So, if you want to uh to go 30 minutes, you could do 12:15 and back or do 45 minutes and come back at 12:30. 45 minutes. So, 12:30, we'll be back here. 45 minutes and lunch break. Thank you, mayor. Yes, sir.