City Commission - workshop

Good evening, it is now six o'clock and I hereby call the

What is it? August 11th, meeting of the city commission to order. Jared, will you please call the roll?

Mayor Adamczyk.

I'm here.

Commissioner McCullough. Here. Commissioner Fox. Here. Commissioner Morrison. Here. Commissioner Von Linnell. Here. Mayor, we have five commissioners present. The quorum of three is met.

Great. Thank you very much. Will you please rise and join me in the Pledge of Allegiance? I pledge allegiance to the flag of the United States of America and to the Republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Thank you. As this is a work session, we do not necessarily have to take comments from public at this point or

your new policy is that you will take public comment on everything unless you vote not to.

OK. We will take public comment on any item not on the agenda. Would anyone like to approach? Seeing no one, we will close public comment. Commissioners, any remarks? Andrew? Jim? Nothing? Larry? I do have something, if you will give me just a minute to get a couple of papers out. All right. We did receive, as you're all aware, we had a very complex and extended set of activities over the last several months with cleaning up debris from the several large windstorms we had We received a letter from a local citizen who specifically requested that we extend our appreciation to Tyler, Jalyn, and Ryan from the Forestry Department, who worked very hard in the area of Colorado Street and 8th Avenue, or 8th Street. So thank you to them. Please extend our appreciation. I would like to note that we've had several new roles in our organization. Chelsea Johnson, who you are accustomed to seeing over here, has been promoted to city clerk. Lauren Page, who is also in the city manager's office, is now the legislative and executive services coordinator. And our new chief financial officer, which is a new position, will begin, Amy Lang will begin on September 1st. So we look forward to welcoming her. Finally, I will just note that we did not have a proclamation, but last week, Governor Kelly issued a proclamation recognizing August 7th as Kansas Purple Heart Day, honoring service members who were wounded or killed in combat. And this marks Kansas inaugural observance as an officially designated Purple Heart state and reaffirmed our commitment to approximately 2,500 living Purple Heart recipients across Kansas. So I would just like to recognize and endorse Governor Kelly's action on that front. Thank you very much and we will now begin our first item on the agenda.

Yeah, thank you mayor and city commissioners for the opportunity to do our third iteration of our proposed budget. As always, I like to start off with reminding the commission what our goals were in 2026 and that number one goal being to stabilize the budget and talk about sales tax renewals, also housing and development. So we'll be checking three of those goals and making progress on those this evening. budget strategy again for 2027 was to develop a budget that was structurally balanced to had mill levy stability maintain service level address debt issue that we knew was up and then also include salaries equipment and vehicle needs as we are progressing through our budget calendar we are on our third work session and Just a reminder that on August 20th, which is next Thursday, we will have another Third Thursday event where we have all of our departments out at Third Thursday's downtown who are just really being present and engaging with our community. We've had a lot of really good feedback of those and we know that our staff really enjoy going to them as well. Kind of launching into the revenue assumptions that we continue to work with for this budget development season. No change in wastewater rates, a 3% increase in water rate, 4% increase in our stormwater rate. We are renegotiating our franchise fee agreements with our utility companies for the first time in 20 years. And so we are proposing a 2% increase in franchise fees. We are also projecting a 1.75% growth in our sales tax revenues. After a little bit of adjustment with the county, we have determined that our mill is worth $780,986. After our last work session on July 14th, we took the feedback that was given from the commissioners and we've made several changes to that budget. Those changes were distributed to the commission on July 30th and I have not heard any individual comments from any individual commissioners regarding line items or any specific department budgets. so i wanted to run through very quickly what some of these changes that were made based on feedback on the july 14th meeting and conversations that we've had over the last couple weeks with you all one-on-one so we have decreased the total mill levy to 52.8 we have a library total mill was held flat We've adjusted the franchise fee revenue to be reflected in the general fund. And then we have general fund transfers to debt service capital improvement funds as well. We will talk about this in a little bit more detail in the next couple slides. We had a change in our capital improvement fund beginning balance you will recall at our last Commission meeting Or the one before our last Commission meeting we bought an aerial truck for our forestry division Because we had a piece of equipment that was spending more time in the shop than it was in the street So that had an impact on what we were planning on carrying over from 2026 to 2027 and We have moved a lease purchase payment into the economic development fund. So that lease purchase payment is a agreement that we've had with Kansas State University for a building. That building is currently the vet medicine building. And so we helped them build it and they are paying us back for that piece of property. Our special street and highway fund had a reduction in the cash balance. We received a PO on June 30th, 2026. And so that was not reflected in the numbers that you saw on July 14th yet. Special parks, and it was significant. It was about a million dollars, which is why I wanted to note that and point that out if you noticed that there was that reduction. Normally, if it would have been 30 or 50,000, we probably wouldn't have brought it to your attention, but it was significant. uh... special parks and rec water wastewater and stormwater fund reductions and cash balance and increased transfers to debt service and then of course those increases from those funds uh... to debt service transfers out are being reflected in the debt service fund beginning balance which is increased due to those additional transfers and from other funds danielle can i just clarify are those

Those are all related to debt service within those specific departments?

Yes. So we pay for all of our debt service out of that debt service fund. So even if it's a wastewater or a water debt, it is paid for out of that bonds and interest fund, debt service fund. So this mill levy analysis. Walking through, we talked about reducing. We had city managers recommended budget was to maintain a flat mill levy at 54.5. However, through conversations with the commission, we have spent some time with these numbers and we are proposing a 52.8 mill levy based on those conversations. We did not make any changes to Riley County from July 14th The changes that were made to the library fund and the library employee fund You will see was to hold their total mill levy flat so this is a Holding their mill levy flat allows them to generate an additional hundred and seventy four thousand dollars which is a four percent increase and However, this is a reduction from what the library did request. General fund is where you will see your next change. So for the general fund, we are showing a full decrease to reflect what we are planning on generating and projecting to generate with the increase in franchise fees. All of those additional savings, again, as those conversations that we had when we were talking about this in our first couple work sessions, are being used to increase the bonded interest fund from .664 mils to 2.985 mils, which is an additional $2.3 million in, sorry, an additional 1.8 for a total of $2.3 million in that bonded interest fund next year. so um are there any questions about this mill so okay i want to go back one of the other things that i wanted to point out um so we have a our mill levy went our assessed valuation went from 748 million to 780. This is an additional 32 million. So the conversation that we were able to have with the Riley County Appraisers Office and with our Pottawatomie County Appraisers Office, we have been able to deduce that approximately a third of that increase in our assessed valuation is because of new construction. So we have We know that I could do nothing to my property, and my property goes up, and my property value goes up. And so those are some of the concerns that we hear from our community when the value of your home goes up 7%, 10%, and you feel like you have not really made any improvements necessarily to your home. So we were trying to figure out though, because we know that we have new homes that were built last year. We know that we have new businesses that were built. We know that we have vacant lots that went from nothing to something. And so we wanted to be able to capture the property tax revenue that would be generated from those new properties that have come on. So we were able to do a calculation, and that is why we landed at that 52.8. It continues to be our recommendation that we should try to capture that $462,000 in property tax revenue that would be generated from those new construction projects that are in our community now. Are there any questions about this mill levy analysis? Yes, Commissioner Morrison. Capturing that.

In capturing that $400,000 for taxes. Is that going to be applicable next year when we have the TIF coming back in and other abatement issues that come up in the future? Is that still going to be pressing this on budget?

Yeah, so I think that's a conversation that we will have to have is how we want to handle. So we know because that downtown TIF was put on the tax rolls about a year early. And so that was about an additional 18 to $20 million in assessed valuation. So this is a conversation that the governing body is going to have to have on how we want to handle that. That finally coming back onto the tax rolls, it will be reflected in our additional

uh... sales tax or sorry property taxes danielle i have a question about the franchise fees larry probably knows more about this but i brought my gas bill and basically uh... obviously it's a percentage of the cost of gas but there are two places on the bill that say franchise fee and two places that say city tax and county tax

Yeah, I think that I'm gonna have to reach out to Kansas Gas Service and try to get some more explanation On their tax bill.

Yeah, and of course another tax builder the electric bill is also a franchise fee and I mean there was one on that and the Internet and that kind of thing So I would just like to point out that these fees that we're talking about increasing really do hit the lower income people much more than they hit me or you. In my highest, I found I paid $4.27. which doesn't, you know, isn't the end of the world, but if it's gonna go up significantly, that could be $5 a month, and that's $60 a year, just for the gas. So, I personally would like us to just bite the bullet and go up one mil, and I don't think the world will end. We also, most of us got this thing today about our tax increase and that kind of, I looked at several different properties. Mine went up 8.4% this year, 8.04%, but others only went up nine, 1.47, and point two two i think we often hear from people that are concerned about their property tax but we also hear about people who need more services and we need more roads paved and i would just say i think what we're doing the property tax to me seems to be the most equitable tax and upping things like the franchise tax really do hit the people who don't have as much money to pay for franchise taxes. And so I'd just like to throw that out there. We constantly hear that our wonderful three new members were elected promising low property taxes. but I'd just like to point out that Susan and I were elected in sort of reaction with just as many votes to people who felt the services had fallen off in the last four years. So just saying, that's how I feel about trying to make the taxing situation as fair as we can.

for clarification commissioner mccullough when you say you would rather raise the mill one argue speaking to raise from what we are currently at, which would be 54.5 would raise one to 55.5, or are you suggesting we would raise one from 52.8 for a total of 53.8?

I would, the latter.

53.8? And then the other piece of clarification regarding those franchise fees, Increasing our franchise fees by 2% is anticipated to generate approximately one and a half, $1.6 million. And so raising the mill one would only generate an additional $780,000. So would you continue to raise, so you would still raise the franchise fees?

Yeah, I'm just saying we need to be cognizant of the fact that certain fees, certain sales tax are really hitting the people who have the least amount of money. And the franchise fees, I can go with that. I understand that 2% is not the end of the world. But people who are... counting every dollar and don't have enough money at the end of the month, this will hit them harder than the property tax.

Thank you for that clarification.

I'd point out the same people that we are concerned about get hammered with property taxes because the rent goes up or the quality of the homes go down because landlords don't take care of it. gaining, we're just trading water. I think we have to have a balanced approach. And where we are is about as balanced as we can get, I think.

So I'll just make a couple comments. You mentioned you hadn't heard from us. I've kind of been saving my comments since you sent out the latest numbers. I do support the 2% increase in the franchise fees. I think that will help more so than raising the mill levy. On your budget, I was pleased that you reduced it to the 52.8, but being that close, I think we can get it to 52.5, and I would do it in this way. In your numbers you gave us from July 8th to July 30th, you reduced the cash reserve from 14 million down to 13.4, which was good. uh... but in those early numbers you had put money into the the capital improvement fund of about six hundred and thirty thousand well that went away but you added under transfer to special revenue eight hundred and eighty six thousand i would suggest that we reduce the general fund by two hundred thirty six thousand and we take that money out of that line item special revenue going last year, it was 395. This year with this change, it would be 650, which would take care of your salt domes and whatever. I think that would be sufficient versus the 886. It would get us to 52.5. I think that would make a huge statement to the public that we're trying to get the mill levy down. We're doing all these other increases with franchise fees, with sales tax, with water rates. Let's give them the 52.5 on the mill levy, and I think we could all live with that.

The only thing that I would share in response to that, Commissioner Fox, is that we do have $900,000 of capital improvement projects planned. So that includes $500,000 for two salt domes. It also includes $200,000 for communication equipment out at the airport. And it also includes $200,000 for vehicle and equipment replacement. So based on your comments, we would have to eliminate those vehicle and equipment replacement. which is, so the reason it went from the 600 to 800 was because of the way that we were originally reflecting the franchise revenues, and then also remember that we purchased that aerial truck from this, so we aren't carrying as much forward. So I just want to make sure that that is a decision that the governing body understands the impact and consequences of lowering from 52.8 to 52.5 is about $230,000.

336 and I think we can surely either deal without the purchase of the truck for a year or we can find that money sure in one of the other buckets of money that we have so I mean we're dealing you're you're replacing one salt dome that was blown away with two so I And by the way, I don't know that we've approved that, but maybe we did.

You have not. That will be coming later, but that is our proposal. You don't approve it until you actually take a vote on it. So you can still deny those salt domes up until the day we have an agreement in front of you.

We have to fund it first, so.

Correct, that's what we're doing now.

I would like to point out that under this scenario, The general fund has been reduced by close to $2 million already, and I'd like to commend the city manager and department heads for the work that they have done to try to streamline budgets, find efficiencies, Um, I think it's really important that members of our community recognize the hard work that has gone into this budget. You know, we're, we're sitting here talking about a few hundred thousand dollars and I'm not making light of what a few hundred thousand dollars can buy or where it fits in overall budget, but I think it is significant that we. recognize and appreciate the hard work that has been done to get us to this point. I would also take issue with the idea of continuing to use an unsafe, a truck that has unsafe hydraulics. I don't think that is a really wise decision unless we want to see our insurance rates go up or risk someone having a serious injury.

I totally agree with your comments on the hard work from Danielle and her group on this budget. I don't know about this truck you're talking about. I don't even know what we're talking about. I'm just...

It was a lift truck that the Forestry Department was using during the storm. We already did that one.

I think what Mayor Adamczak, and she can certainly correct me, but how I took her comments was just that it's important to make sure that we have safe equipment for our employees to operate in when they're doing their day-to-day jobs.

I was thank you I think it's important what Susan said I mean it costs money to do things right and it costs a whole lot more money to not do things right and if you have trucks or vehicles that have to be in the shop a lot and you know they're not on the streets where they should be then we're losing more money than we're saving by cutting the mill levy

i'm pretty happy with the overall budget how it looks um as far as larry's point goes i mean i would be okay with taking the 236 000 out and if we really really needed it for something then just pull it from cash later but i don't i mean i don't know for specifically what trucks we're thinking about replacing or what the um what the goal with that would be for sure so

The only thing I would share is that with this budget and with this reduction, we did reduce, as noted, we did reduce our cash balance, ending projected balance for 2027. So right now our revenues in excess of expenditures for the general fund is about $823,000 already. So if we were to reduce by 236, we would be at about $600,000. And just as a note, our windstorm that we had in June has cost us approximately $500,000. Sure, while we might be able to get reimbursed from FEMA, sometimes it can take anywhere from three to four years for us to recuperate those funds during those emergencies. I will share that as we've talked, this cash balance We have been trying to make incremental steps towards getting to a sufficient cash balance. Not very long ago, that cash balance was down to about $1.5 million. Through discipline and through being able to use monies that came from the federal government with American Rescue Plan Act funds, we have been able to get that cash balance up. It is my goal over the next three to five years to try to get that cash balance to about 30% of our operating. So trying to shoot for 15 million in the next four to five years is where I would like to see that cash balance eventually. So again, just trying to make those incremental changes and incrementally increase that with it being at $800,000 into that cash balance that's already operating at a margin of about 2% of our operating annually.

So two questions. When you gave us the original budget numbers, the general fund started with a cash balance of 11.6. That was part of the revenue. But then later you told us that's gone up to 12.6. So that tells me we made an extra million dollars either this year or at some point.

So 11.6 was what we were projecting to end 2026 at. We ended 2026 at 12.6.

So an extra million dollars. Now we're adding another 800,000. I would point out that at the end of 24... Cash balance was $10,700,000. Two years later, it's $12,600,000 and we're budgeting for $13,400,000. Now, in my math, $13,000,000 is about 35% of $40,000,000. So that's over a third. You just said you're aiming for a third. We're there.

So as we talk with our rating agencies, yes, shooting for a third, wanting to maintain, but as we have these conversations about continually trying to cut into cash balance, it's a conversation that frequently comes up. So I'm just trying to reiterate and impress upon you all the importance of having a stable, reliable cash balance. I would additionally share the conversation that we hear from our rating agencies when we go out for bonds. is that those communities that are rated AA or AAA, they actually have cash balances in the range of 60% to 80% of their operating. So again, just trying to make sure that we are stable and understanding that, again, where we operate with sales tax as being one of our biggest drivers, those things can change very quickly. But your point is taken, Commissioner Vox.

I would like to bring in some macro level considerations since you mentioned sales tax as well. There was an interesting article in today's New York Times about the impact of the weather we've been seeing on revenue in cities and towns across the country because things like power outages cause small businesses, restaurants to lose inventory in their freezers. Daycares have to close because they can't let kids outside when the air is of such bad quality. Projections, Danielle, as you probably know well, for the hard wheat crop in Kansas are at close to 50% of what we've seen in the last several years. That may have an impact on who's coming for football games over the next year and a half. Our sales tax collections have been robust over the last several months, but I don't think it's wise to rely on continued growth in that particular revenue stream. I think we will see some slowdowns.

I don't think the public wants us to rely on continued rises in the mill levy either, so just to point out.

Well, we're talking about a reduction in the mill levy of several mills right now. We're not talking about increasing our mill levies.

well where we started in january when us newbies showed up and you gave us the forecast of where you thought we would be or might be in the city i think we've had a substantial understanding discussion and change of attitude what budgeting is where we can go and what we have to deal with they haven't changed we got streets we got debt we got all of those issues and quite truthfully I don't know if the city can accept Larry's idea, 525. The 528 does not offend me. I think it is responsible, and I do think it, in fact, stabilizes our thinking in the future on how we spend money. And that's got to be the issue. We've got to be able to figure out how to control our spending. And everybody wants more. Everybody says they need more for everything, whether it's a new truck or whether it's for our social agencies, whether it's the library, whether it's the streets. And we just have to learn how to budget expenditures. And I think we've made a headway on the mentality of debt addressing. So I'm pleased that we've made this much progress. We've still got a couple ugly ones to deal with in the future. I understand that. but this is one that I think is in fact well decided and well worked out and I don't disagree with the mayor's comment and Larry's that staff has done a very good job it hasn't probably been fun I expect I don't know how many times you guys would have looked at the budget and each time we complained about it because I know I've made a few comments about not being happy with how we spend money, but we've addressed it, and I think that is the future where we go and that we gotta do. So I would never disagree with 52-5, but I can live with 52-8 and believe it's responsible.

Appreciate those comments. Um, so the action, um, that we need, uh, for this coming up in the 2027 budget. So, um, staff will publish a notice for hearing on September 15th. Um, currently, uh, what we were projecting that notice we would publish for, um, you know, kind of based on conversation and this evening. We will publish at $41,237,426. One of the things I want to make sure, since we do have new commissioners and we are talking a lot about that mill rate, we actually publish the dollar amount. And then we don't get the final certifications from the county until October. So if there is some fluctuation with the county, with those appeals that are going through, I know we have a hearing for one of our properties at the Board of Tax Appeals later this week. And so as some of those adjustments continued to shake out with the county Even though we are talking about a proposed mill of fifty two point five or fifty two point eight We will actually give the number and then whatever the final assessed valuation shakes out. We could see a fluctuation in the past we've seen anywhere from a tenth of a decrease to three tenths four tenths of an increase so that mill levy number is might not be exactly 52.5 and or 52.8. So it's my recommendation to, you know, the other thing that I would make, the other comment that I would make regarding Commissioner Fox's comments about that 52.5, I do think that it is important for us to realize the revenue from our new construction that we do have coming on board. And so that is that 462,000. So if we were to go to 52.5, we would not be realizing the increase in assessed valuation of all of that new construction. It would only be about half of it. So I know you're looking at me. What are you talking about, Danielle? Don't ever play poker, Commissioner Fox. No, so I can't play poker. I don't poker face either. As we had that increase in our assessed valuation, again, of about $32 million. I'm rounding. That $32 million, we had those numbers from the county, and they shared with us that about $10 million of that is related to new construction. So we want to make sure that we are capturing that amount of property tax would be associated with those properties that we were collecting zero on or less than zero because it was an addition or significant improvement what we're trying to not charge people for what we're trying to give relief to people for are those folks who have been living in the same house who have not made any significant improvements no additions haven't Done anything necessarily to improve their property, but still saw an increase in their appraised valuation anywhere from ten thirteen percent That's what we're trying to to give that relief to so we are still trying to capture that Property tax revenue that is associated with those brand new properties or those big additions that have been made to properties and that would be about four hundred and sixty two thousand

I'm not sure I understand all that because that number is built into this 780 million, so that's part of that. And we are taxing that additional, so we're not losing anything.

Jason, can you maybe try to help me explain this in a different way that would make sense for Commissioner Vox?

Yeah, it gets a little bit back into the revenue neutral rate observation. Last year, a mill was worth $748,000 today, or 746, 48, and now it's worth 780. So there's valuation growth just in the mill itself. Then you have property, whether it's residential, commercial, office, its value is a matter of January 1, 2025 versus January 1, 2026. If you think of a residential subdivision where we put a street water sewer in, and as of January, 2025, there were no houses. And then you go back January 1, 2026, and half of them are under construction. The county's gonna look at that differently than it did when it just had a street, sewer, and water. They'll actually value everything in that subdivision. That's the growth Danielle's talking about. The valuation went up. by 30 some million, 10 of it is coming from new construction, which means you have more responsibilities within the community to serve a subdivision, serve a new building that's commercially went in and vacant ground. McDonald's is a good example at Kimball and TCB. vacant ground in some of that area there were properties there but you can also watch properties decline and then commercial value will jump significantly as of january 1. the valuation does grow the revenue neutral rate that's why it's down to 52.2 you had 30 some million and assessed value assessed valuation growth, that's why the 54.506 can't remain flat. It has to go down in order to offset that 30-some million in assessed valuation growth. If you get all the way down to the revenue neutral rate, you have effectively given back all your growth. And what Danielle is suggesting, capture some of that growth and correlate it with the new construction.

in my opinion, that $10 million in new growth is where we got our mill reduction. That's where we captured enough to run it down. We haven't done that good a job of cutting expenses, but we're realizing there is growth, and what little there is, we have captured. and to do that we've reduced it approximately one and three quarter mil and that's where we got the reduction it wasn't magic it was being able to realize that and the same thing when the other projects come back on that's why i'm asking about the tiff next year that 18 million doesn't equate all of that to the city but it's new money and we've got to be able to to look at that in budgeting so We did our job, I think. We didn't do any magic. We're just realizing that there is growth and they oughta be paying some of the bills that we paid for 20 years for them. And that's where we're at. And that's why we're able to reduce the mill levy. It's not magic.

Jason, I have a question. Will the two, so based on a conversation that Danielle and I had, I went back and looked at building permits for the last several months, and there are not a whole lot of large projects. There was one project for close to two million, there was another one for 300,000. The construction for both Cedarhurst and the AmeriCare facility, are those non-profits, will they be paying property tax on those two buildings?

Yeah, I'm not going to be able to sit here and tell you for sure. There are a number of properties in the community, i.e. Meadowlark, that don't pay. And it's all about the way they're structured. It's all about how they file and how they approach the state of Kansas when it comes to whether they're exempt or not. there there are plenty in the community that are structured in a way where they don't have to pay property taxes but that doesn't mean all of them the low-income housing tax credit projects a lot of them do pay the property taxes so it's really a matter of how are you structured from a llc perspective and how you're going to operate your books as to whether or not the county is going to be able to assess you or not and pay taxes i do think a complex side of property taxes that i'll just one little caveat a lot of us like to look at it from our home perspective We look at it collectively at the city because we have to take all $8 billion worth of property and 4 billion of it's taxable to get to that 780 million and assess valuation. So if you look at your own home in any increase, year to year it's difficult to watch these proceedings and correlate it to your own bill because we are looking at it collectively and even though three billion of our four is residential the commercial carries such a weight because it's two and a half times the residential and it factors into growth so much more than it does a residential subdivision. Revenue that's generated within those commercial properties is viewed as part of a valuation versus really a square footage of your home or a recent sale in the neighborhood. So when we talk mill levies, we talk growth, we talk about capturing that new construction, it is difficult for a homeowner to do that math and see how we are just capturing growth in this community when they're paying more in taxes. But we are looking at it collectively and pulling out a piece of the pie and suggesting to you to capture it. Property owners, homeowners will look at it and say I'm paying more taxes, that's what you're capturing. So it's just a difficult subject matter to really talk about. We talk about it collectively. Media likes to talk about it from a residential property owner perspective.

Thank you, Jason.

I think we would be remiss also in not discussing the fact that we are seeing inflation at 4.2%, and diesel fuel is up significantly. So staying flat, when we see that kind of inflation, it really means we're regressing, not going forward, because we're going to have less money to do things. And you talked about the salt things. This, to me, is really good thinking because we're going to have two of them so people don't have to drive the salt truck from Miller Ranch to Northview to get more salt and back and forth. So we're really saving some dollars. And to me, those are the efficiencies we should be trying for.

Yeah.

Appreciate that, Commissioner Rockola. One of the, having conversations with Director Johnson and just sharing that having these two satellite salt domes actually allows us to keep the plows on the ground faster, or longer as well, which helps us get rid of that snow faster and to be able to provide a higher level of service more efficiently with a reduction in fuel.

But they're going to probably be paying twice as much for the diesel that's running them.

Yes. Always.

I did look up an explanation of your your franchise fee if you'd like it.

Yeah, thank you Jason. Yeah, so there we keep you around.

You bet there's two charges on your Kansas gas service bill. The first one is for the gas you used in that months time. There's another charge, probably around five or $6 for a winter of 2021 recovery. That $5 also carries a franchise fee, local and city, city and county sales tax fee associated with it. It's probably about a quarter on your bill. So that additional charge, Kansas Gas Service is still providing us all as customers, has franchise fees and sales tax applied to it.

That makes sense why it's in that separate column.

There is also 55 cents of city tax.

Yeah, that's our sales tax rate. That's our sales tax. Yep.

Not our franchise tax.

Our sales tax, county sales tax, our franchise fee applied to both of those.

Thank you. Yeah, you're welcome. I'm glad we were able to clear that up.

So the way I look at it is if we're, If we're getting close, if we're around 300 or 462,000, if there's property owners that have like no valuation increases, if they survive the appraisals without getting increased somehow, then they're actually going to get a tax cut. And the people, you know, they had a higher appraisal might still be getting a tax increase. So just that's kind of where we're at. We're probably about 50-50 on above or below, but right around there.

Yes, but it will be less than if we would have kept our mill levy flat at that 54.5.

Yeah, just the specific tax bills in the community. If we do the 52.8 mills.

Yeah, I think something, everyone got their revenue neutral notices in the mail today, if you had a chance to check your mail before you came to the meeting. And so what your, if we move forward with 52.8, what folks see as their city's property tax on that revenue neutral notification that they got will actually be less if we move forward with 52.8 than the notice that they got in the mail today.

Well, one thing is we sling arrows at people in government City isn't the sole target. We have companion targets of county and school district. And those that complain to the city also ought to be voicing their concern to the county and school districts because they spend more than we do.

I know this is a work session. We will not be taking a vote on this. Commissioner Morrison, you expressed that you can live with 52.8 moving forward. Andrew, I have the impression that you concur.

Yeah, I'm 52.5 or 52.8.

Karen, can we move? Larry, I know you'd like to go a little bit lower. I think we can provide you with guidance to publish at the 52.8 level. And we will move, I guess we don't publish until we take a vote on this.

So we will actually publish at 52.8. So we can get that hearing on the books. And then on September 15th, is when you will conduct that revenue neutral rate hearing and then you will also conduct another hearing about the budget uh... and then we will adopt on september fifteenth as well uh... just a reminder uh... we can publish at fifty two eight which we will publish at fifty two eight uh... but we can continue uh... you can always go lower but you cannot go higher

Is that direction clear for you?

That is clear direction, yes. Thank you, Mayor Adamczak. Thank you. I recommend seeing if there's anyone who wants to talk about budget before we jump into sales tax.

Thank you. Is there anyone in the public present today who would like to make some comments?

Good evening, Mayor and Commissioners. My name's Linda Cook, and I live at 3703 Birch Court in Manhattan, Kansas. And I am the President of the Manhattan Public Library's Board of Trustees. And, of course, what I want to talk about is the library's budget, which your recommendation is to hold the mill flat. But that is below the library's request. And what came to our attention just in the last day or two is that there's conflicting interpretations of a city ordinance compared to a state statute. So in summary, and then I'll explain it, what we would like to do is request that you keep the library's request at the same level, the budget request that came in at the same level. The difference is $54,543. But that will give us time in the next few days Um, to work with Danielle and, uh, sort out this issue with the state statute and what it says, and the opinion of the attorney general back in 1982 is that it's to be determined by the board of directors of the library, not the governing board of the municipality on how much the levy, the, the is given to the library and their budget request. The city ordinance, um, is a little, could be taken and interpreted in different ways. And in that one, the majority of the commission. has indicated like that you do not want to go with the board of the library's recommendation but you know stay within a flat revenue from the last year which again is lower than what the library requested so we're not talking about a large dollar amount even though $54,000 is not something to overlook but what we would like to do rather than setting a precedence this one in making a decision now on the library budget give us a few more days to work with this interpretation working with Danielle and working with our board of directors to come back with you know here's what we were here's what we think we can do with this with this budget versus doing something now that might be in conflict with what a state statute allows the board to do so I don't know if you have any questions Let me know. But that's our request is that you just put it back in there for now. That $54,543 let us work this out with Danielle so we understand the interpretations of this state statute and the city ordinance and then just kind of clear it so we don't have that issue going forward on who makes that determination.

So I need some clarification from somebody. Last year's line item for the library, 3,215,321. What Danielle has proposed is 3,366,821. That's $151,500 increase, not 53 or 54,000. So I don't know what numbers we're looking at.

Yes, so their original, I'm gonna add these numbers together really quick. How much was the library's total request this year?

The number I'm looking at, the increase was 244,000.

So, yeah. Yes. Good evening, Mayor and Commissioners. So, the library requested 3.6 million, almost 3.69 million in just Avalorum taxes alone. When we're looking at the library's budget, We also need to factor in Motor vehicle taxes as well. So the totals that are being reflected is includes motor vehicle taxes also so their total budget that they're asking for compared to what we have presented, including the motor vehicle, that's where the $50,000 differential comes in at. But it's really about a $300,000 difference if you reduce their just avalorum tax alone. And that's by maintaining the mill levy. from last year can you run that through that one more time yes so the library acts for three point six nine million dollars just an avalorum tax that was in their letter is that the fund and the employees nope just yes so they asked for that however there was a request by the commission to maintain their mill levy from last year in order to do that we had to reduce their Avalor ask but we also have to factor in their mill levy ask and we do that every year We always factor in their motor vehicle ask as well So the difference is actually about three hundred thousand dollars total in their their actual budget So when they're presenting their budget to us, they're not factoring in the motor vehicle portion of it they're only asking for the property tax because that is the mill levy and

so all right I think several of us are confused yes yeah it is confusing yeah it is I'm sorry so so when they presented their ask several months ago it was only reflecting ad valorem yes and so with the motor vehicle tax they would have an increase in About $240,000.

That is not reflected in the budget that they submitted? No, because that calculation is based on what we get from the county. So they would never have that information to provide.

OK. So over the years, we have been providing them with additional funding that's not reflected

their original ask the motor vehicle so we've always they have an ask of 3.6 we make sure that their budget their total expense budget is met but the revenue piece of it can be motor vehicle as well as cash carryover and then the app Elora so they asked for 3.6 and which then we can calculate the Avaloran piece to it, but based on the conversations we have with you all, if you don't want to increase the mill levy, then we use the motor vehicle to fill the gap for them to meet their budget needs.

Do we ever... So the motor vehicle is filling the gap And that's one reason why we've never approached decreasing the mill levy that they have asked for in the past because there has been an additional source of funds for that.

I'm sorry. We do. No, we have reduced their ask in terms of the mill levy, but in terms of the total for their budget for this year compared to what they asked, it's more than what they were asking.

So I wanted to pull this up so the library's original ask was 3.6 million for their operating and then for their employee benefit fund was 825. This was their original ask and so where we are at today is is that 3.36 and that 775 by holding that mill levy flat.

So that's where that reduction of 54 or 52

Well, the total budget is where the $54,000 comes in because of the addition to the motor vehicle tax. So Danielle's previous slide that she showed, the 3.685, that was their ask in property taxes. This is the modified mill levy with the reduction to maintain the mill levy from last year. So it is about a $200,000, $300,000 decrease in property taxes. to maintain the mill levy. Their overall total budget is still close to the 3.685 because we're factoring in the motor vehicle to be able to make up that difference.

So this 4.298 plus 1.005 equals 4.311.992. I just want to make sure that when we talk about holding that mill levy flat, that's what we're talking about. We haven't done any kind of reduction between total adding those two together. um like you see here where we've gone from nine at the city um from 12 or where rcpd's gone from 29 point from 30.9 to 29.5 that has stayed remained constant um that holding that mill levy flat but their original ask was that 3.6 in 825 000. neophyte dumb question yeah

First time I've ever heard that we're assigning vehicle taxes to anybody to meet their budget.

We always do for all the mill levy funds. We get that from the county. Yes, sir. And that's part of the state budget process.

The fact that we've always done it is not an answer, in my opinion. My question is, under what basis do we assign vehicle taxes to meet their budget request?

It's based on the county's formula and the calculation the county provides, sir. Raleigh County.

So the county assigns vehicle tax revenues to the various taxing agencies. Yes, sir. Is that correct? Yes, sir.

Thank you. Yes, sir.

So thank you, Rena. You're welcome. It is complicated and I do miss cook and I had a conversation earlier this evening I Do need I do think if we yes Commissioner Morrison, I will let you speak I Guess my question is after all of this explanation.

I We're short sheeting them on ad valorem tax from what they wanted, but because of the vehicle tax, they're getting really what they wanted. Is that a fair statement?

Pretty close. It's about 54,000 short. Now I think it would depend on, yes, pretty close.

So since you're the Pied Piper of this outfit, If we are concerned about $54,000 under what action we're asking you to take, does that change what we have to do about the 52A to cover $54,000 to be able to lower it?

So I ran a quick calculation, which is always dangerous without Rena overseeing it. But I do believe that 54,000 equates to about 0.069 mils. So if we publish at 52.8, I believe we can find that 54,000. Thank you. You're welcome.

So again, we are not taking any action tonight, but are we in agreement that we will permit the ongoing discussion about the relevance of the different statutes and ordinances to take place in parallel with moving forward with the mill levy rate that we just discussed? Are we agreed that we can continue having those discussions with the library and the board of trustees and interpreting the legal statutes?

Do you want me to?

Well, I'm just looking for a couple of nods. We're not taking an actual vote. I just don't want to speak on behalf of any of these leaders. I am OK with proceeding in that direction. It sounds as if Jim is. Karen is nodding. OK.

Yeah, so we will proceed with publishing at $41,237,426 in Avaloran property taxes. And we will continue our conversations with the library board and with our legal department in continuing to give the concerns that have been raised a thorough legal and policy analysis. Thank you.

Commissioners, I would just interject that in one of my recent conversations with Danielle, we were talking about frequently she asks for direction from the governing board, the governing body, and if we have three or four different opinions or five different opinions, it's not giving her much direction. That is partly why I'm asking for some of this feedback tonight to make sure that we are able to move some of these items forward with a consensus among us, if not a formal vote. So please forgive me. I'll probably be doing this for several weeks until we get into a rhythm. But I've been frustrated recently with feeling that we have not made progress on some items in part because we have such disparate points of view. And so in an effort to become more efficient ourselves, I would like to call on us to try to have a more robust discussion as we are sitting here in our work sessions and provide some more unified guidance by way of explanation.

I feel like we give guidance that just isn't always unified.

Well, that's the case. If it's four different perspectives, that's not helping things.

Mayor, I would just ask one more time. We kind of interjected with that library comment just to make sure nobody else has any additional comments.

Thank you. Are there any other comments on the budget discussion that we have had up until this point? Linda, did you finish your remarks? Please just sign in if you haven't already Thank you, and thank you for your service representing the library Commissioners, thank you for your engagement tonight You guys are paying for that 15-minute Commission meeting we had last week

We knew it was coming.

Yeah, yeah, eventually, right. Okay, next topic, the sales tax question. So this is one of those times when I am going to recognize that I believe that I had proposed something that was overly complicated and overly difficult to try to communicate, not only to you all, but also to our community. And so when we had originally talked about the sales tax renewal of, you know, we have our 20, our point two dedicated street sales tax that is expiring at the end of this year. And we've had a lot of robust discussions about what our different opportunities are to renew that sales tax. And I had put forward a overly complicated, although a great idea, And so, but after having some additional conversations with you all, with community stakeholders, again, I don't think there was a strong sense of kind of, we knew we needed to take care of streets, but as far as that additional sales tax over what we need for streets, we talked a lot about maybe cemetery, maybe zoo, trying to work on some of our deferred maintenance. just wasn't a lot of consensus as commissioner fox said there was a lot of guidance just not unified guidance even if there was a project that we could all get behind and i will pick on the fire training facility as an example even though i think there is consensus from the commission that we need to do something with our fire training facility there are still five different ideas about what that solution is actually for our community so i am coming back to you all with a new recommendation for our sales tax based on feedback from the community which was basically simplify this and tell us exactly what that money is going to be used for So the new recommendation would be a half cent for street maintenance. We would not repeal that quality of life a year early. And we would only be using this half cent to do street maintenance. We're not talking about new streets. We're not talking about adding lanes. We're not talking about improvements. We are only talking about street maintenance. We do have a five-year plan that has been based on a model. You have seen it. We are going to present it again in more detail, really refining it, showing you some additional maps, really getting into the nitty gritty of what that five-year plan will actually look like. And then other considerations that we have. This would bring our total sales tax rate if passed to 9.45% in Manhattan, Riley County, and it would bring it to 9.75 in Manhattan, Pottawatomie County. We know that we have that quality of life sales tax, a quarter cent that is going to be sunsetting in 2027. I think this is our opportunity to spend some more time refining what our community priorities are and what we want those projects to look like in regards to the fire training facility, the cemetery improvements that we have talked about, as well as zoo needs that we have, and as well as some of that maintenance or upgrades or improvements in our park system. We also have an opportunity of the sunsetting of our 2023 economic development recovery sales tax in 2032. So that is actually a half cent. This new recommendation, just to simplify it and use images that we have used in the past when we've talked about these things, that full $8 million that would be generated by a half cent per dollar will go towards street maintenance. The ballot language that we have in front of you today is incredibly simple compared to some previous sales tax initiatives that we have done. But I think simple is important. I think simple is transparent. think simple is clear so the question would be shall the city of manhattan kansas be authorized to levy a one-half percent special purpose city-wide retailer sales tax for street infrastructure maintenance if approved such tax shall take effect on april 1st 2027 the day following the expiration of the existing special purpose city-wide retailer sales tax implemented on april 1st 2017 or as soon thereafter as permitted by law and shall expire in blank years. I think this is one of the biggest decision points that we need to make this evening is how long we want the sales tax to be in place. Brian is going to run through our five-year plan. We can certainly, we have a lot of confidence in a five-year plan and what needs to take place in a five-year plan. When we start looking at years six, seven, eight, nine, and 10, It gets a little more ambiguous. Certainly know what needs to be done, but we want to be cautious when you see the detail that we go into talking about which streets that we're exactly going to touch. So I do think that that is a conversation that we need to have this evening. And so as we are preparing for Brian's presentation and as you are seeing Brian's presentation following Mayor Adamczak's guidance, I am also being more clear in what direction I need this evening. So this evening we need to determine the purpose of the sales tax. Your staff recommendation is street maintenance. Determining the sales tax amount, your staff recommendation is a half a cent. And determining that expiration date and your staff recommendation is between five to 10 years. And we can certainly talk about the pros and cons and what going five versus 10 years looks like. So without further ado, I will turn it over to Brian for his presentation.

Thank you, Manager. Brian Johnson, Director of Public Works. Here to talk about some street sales tax. A lot of these slides you saw back in May when we talked about the 2027 or 2026 PCI data that we had got back. So I'll go through these relatively quickly, but there are a few new things that we can certainly want to show you and kind of where we've come since then and how we've envisioned this next five years going. So just a real quick overview of our functional classification map. You can see the red and the orange are KDOT projects or KDOT properties, and then the rest of them are city of Manhattan. Real quick from the community survey back in March, 90% rated street maintenance as the highest or second highest need in the city. 83% was the highest, and then another 7% as the second. This is our 10-year completion map. I did show this back in March again, but I wanted to show it one more time. 51 million total in value as far as street maintenance completed. 30 million in sales tax, which pretty much zeroes out the sales tax dollars that we've generated over the last 10 years. Another $10 million from special street and highway, which is your gas tax. And then we got $10 million in general fund, about $1 million a year. I do want to talk about that for one second just to clear up any confusion. That isn't necessarily dollars that are spent on street repair. Those are dollars that we use for our staff. So that $10 million or $1 million a year is people, equipment, material, sand, salt, diesel fuel, all of those things that it takes for a street department to go out and work on the streets. That isn't necessarily the $10 million that we've spent on a contractor to go out and do that work. So I wanted to clear that up for sure and just make sure everybody understands that. And then since 2023, sales tax makes up about 75% of all funding. So this is a significant source of our funding for our streets. If that funding source goes away, it would be a disastrous hit to our street maintenance program. Again, I showed this back in March. 65 cities and counties in Kansas do have a sales tax for streets. You can see the list there on the left. A lot of those cities are about the same size as Manhattan. We are the lowest at .2. In fact, everybody else is two to three times what we are, so they're generating a pretty substantial amount more money than we are. Even Clay Center at a .5. That's about two and a half times what we are. So again, our PCI value is defined 0 to 85 is good, satisfactory, fair. We're trying to get to that 70, 65 to 70 range. We're at about a 60 right now throughout our entire network. In the modeling you're going to see in a minute, we've modeled it out. There's several scenarios, but the one scenario that we're really focusing on gets that PCI up to 70, but it also reduces our backlog. And that is as critical or more critical than the PCI. Because remember, your backlog is your very poor series and failed streets, which are incredibly expensive to fix. If we can get our backlog down, then we can get into more maintenance items on our streets that are less expensive. So here's some examples of some ratings you see to the left there, that under 40. That's considered our backlog or failed streets. 50 to 60 is fair. Again, we want to be between that fair and that good category. Good 70 to 85 and then very good. Per the PCI data, one in every six of our streets is at 40 or less. So one in six streets is in that condition in the upper left. Again, here's some asphalt ratings, too. We've got our under 40 there in the upper left, 50 to 60 fair, and then good at 70 to 85. Again, we're trying to be in that 65 to 70 range, and then we're trying to reduce that under 40. Again, about 18% of our total network is under 40. So here's the total PCI for the entire network. From 2016 to 2026, our backlog actually grew from 14% to 18%, while our PCI fell from 70% to 60%. So obviously, we didn't generate enough revenue to keep those ratings the way that they were in 2016. Here's our classification by streets. Locals make up about 62% of all of our street network. Miners, about 26%. So miners think Wreath. think Hudson, think Sarbor, Sunset, those types of streets that are neighborhood connectors but they aren't majors, and then majors are about 12%, Anderson, Kimball, Seth Child, Hayes Drive, McCall, those are your majors. Majors make up about 12%. Now, the good news in the PCI data, the majors and the minors are in pretty good shape. They're in pretty excellent shape. Minors are at a 66. Majors are at a 75. That's really good news because miners and majors are incredibly expensive to repair. So the locals, even though they're a bigger share and they're pulling our PCI down, they are a little bit cheaper to repair than the majors and the miners. These are our zone maps. We broke the city down into five different zones. We're going to go through them all to help identify the areas and the locals where we're going to go attack and spend our money the best and try to get the best bang for our buck in those neighborhoods. Each zone is about a 60 overall PCI. I think one was a 57, but they're all pretty close to the same. And as we've generated or developed our five-year plan, we're planning on spending about the same amount of money in each neighborhood. So that should bring all of them up into that 65 to 70 category. This is Zone 1, which is the southwest part of the city. This is Seth Child. This is Anderson. This is Scenic Drive. And then down to Fort Riley Boulevard down here, this is Miller Parkway. So that area is a 61 and a PCI in fairly decent shape. It does have some larger areas that need to be repaired. Dartmouth, which we talked about a couple months ago, that's a big one. And then also a lot of the Ivy Streets, a lot of the college streets on the south side of Amherst. Zone two is the northwest side of the city. Once again, this is Seth Child here. And then Anderson. And then Kimball, and then of course the city property or a city boundary. And then this is Grandmere Parkway. So again, lots of red in the locals, locals and locals. Overall PCI again is a 61, so it's like the zone one. But as we look at that part of the city, again, locals are in pretty bad condition, need a lot of work, a lot of repair. Hudson is here, we're currently upgrading Hudson now, we're repairing Hudson now. Zone three is by the stadium. We call it the stadium area. Let me show you again here. This is Seth Child, Kimball, Anderson here, Denison running north and south, so it's that area bounded by the stadium. Again, we've got lots of red in the locals. Arterials, collectors, not too bad of shape. Denison, Dickens. We're doing some work right now on Browning, so that should improve a little bit also. This is a 63. This is actually our highest rated zone of all the zones that we have. A lot of it's because of the collectors and arterials that run through here. They're in pretty good condition. Zone 4, the northeast part of the city, 57, which is the lowest PCI. We do have quite a bit of work happening in this section of the city right now, doing some work on Butterfield there, up by Walter Drive, and then Walter Drive was recently completed. Overall, it's 57, which is one of the lower ones, but again, quite a bit of work happening there now. So Zone 5 is the downtown area, Anderson. Bluemont, Anderson here, up to Jardine, Seth Child, and then of course Fort Ruther Boulevard, the southern boundary, and then out onto KDOT and McCall. 56 is its number. Lots of red again in the locals. We have done some work on the arterials, especially Anderson. Anderson just got a mill and overlay last year, so that should bring that up just a little bit. Again, about the same dollar amount repaired needed in each zone. So that's the five zones. Total network PCI is a 60. As we look across the city from east to west, north to south, our entire network is a 60. Again, collectors' arterials are in better shape than locals, and you can certainly see that by the map and what's attached. So here is our model that we ran out uh... for five years from 2027 to 2031. And as we look at that model and how it does its steady state, this green line here is the steady state that actually increases our PCI while also reducing our backlog. Remember, our backlog is about an 18, 19 now. PCI is about a 60. So this does both. It also reduces backlog, increases PCI, and it runs about $8 million a year.

I'm sorry, you know I have a love-hate relationship with that part. One of the things that you and I talked about when we ran through it was Just sharing that if we maintain where we're at at that status quo, our backlog continues to grow.

Correct.

Yes, can you talk through that for the Commission?

Sure, yeah, so we also modeled, we modeled everything from three to eight million. Three million is this red graph here. That's our steady states, that leaves our PCI at 60. Our backlog increases almost by 10. We go from an 18 to a 26. Then, of course, we came over and we modeled about a $5 million, and that was to drive the PCI a little bit higher, but it also increases our backlog. So we tried to do both as we modeled through these different scenarios. raising the PCI, letting the backlog get worse, reducing the PCI, making the backlog better, because they're trying to balance both. You're trying to get both things done at once, which is obviously not an easy accomplishment. But just raising the PCI and letting the backlog fall just pushes that can down the road. You're going to spend more money in 10 years than you are now because your backlog has increased. That street that requires a full rebuild has increased in numbers. You've gone from 18% to 26%. So that's the different models that we ran through with the PCI consultant. Again, a graph I showed back in March. This is what we spent over the last 10 years. Special street highway is in blue. General fund is in black. Again, that general fund number goes up and down. As we've had more and less employees in the street department and dollars we've spent, some winners are worse than others. 2019 was a big year because we spent a lot of money flood fighting that year. So the general fund numbers go up and down. But in general, they're about $10 million a year. As you can see, Special Street and Highway, especially after we get past 2020, a lot fewer revenue sources or a lot a lot less gas tax money to go attack our street inventory. So that number has, or that fund has really come down as far as being able to help with our street backlogs. You can see pretty much since 2018, 2019 especially, the special street maintenance fund, sales tax fund has really driven what has been repairing our streets by a factor of three to one or so. If we don't, or when that sales tax ends at December 31st of this year, if we don't pass a new sales tax, this is our projection for what we'll spend next year in 28 and 29 for road repair. It'll probably be less than $500,000. Last one, this is what we've projected out with a 0.5 after 2026. So in 27, we generate about $6 million because that tax wouldn't take effect until about April. And then in 28 and 29, we'd have a full year of that sales tax. And you can see the funding and the way that we could use that funding to attack our roadways. Last but not least, this is our five year local pavement replacement plan. So as we look out over the next five years at a $30 million for a street maintenance plan for locals, we think we can probably accomplish everything shown on this map. It's about six million per zone, about a million per zone per year as we work our way around the city. then this would be our five year major and minor street maintenance plan. Roughly two million per zone or 10 million over the course of the five years. These are the streets that we would go and do our maintenance on. All of your local, or your collectors and arterials. So with that, These are the different things that we would work on and accomplish with that sales tax, sidewalks, streets, curbs, geometrics, intersections, materials, all of that stuff that goes into a street maintenance fund. With that, I will stand for questions or see if you have any.

Brian, general question. Yes. $51 million total. Mm-hmm. Did some of that, and if so, roughly what percentage went to the North Campus corridor improvements, Kimball Avenue, North Manhattan, College Avenue, improving that area?

Yeah, the only street maintenance money that went to North Campus.

Not street maintenance, but the sales tax money.

Correct. Yeah, the only one that went to that, there's $300,000 that we went to the commission and asked for to improve the two southbound lanes on College from the hospital to Dickens. That was the only street maintenance money in any of those projects. About 360,000 I think was the number. The original plan and the original bid was we were just going to do the two northbound lanes on College. But during construction, those two southbound lanes were just in such horrible shape. We came back before the commission. The contractor agreed to match their bid prices, and the commission approved those two southbound lanes. That's the only dollar from Special Street maintenance.

Back where you had the magic chart about five years, how bad we kept going downhill, depending on how much money we spent. Even on the green one, we were only back to 13 on our desperate. Is that correct?

Correct. And 10 is about average. You can't eliminate backlog, because everything is degrading over time. 10 to 12 is about what other cities shoot for. So this would get us really close to that number that we could then, in the second five years, you could do a lot more maintenance, which is a lot cheaper than full rebuilds.

Well, after five, you're up to 19, weren't you?

I'm looking at the green line.

No, the green line is the 10-year, isn't it?

No, it's 5.

That's 5?

Yeah. So this is the dollar amount spent per year, $1 million, $2 million, $3 million, up to $9 million. This is your corresponding PCI.

Well, none of the numbers you gave us had 8-plus million. It was 6 million you just had.

This one, the green one, is right here, 8.4 million.

Yeah, but the number you said of what we would be spending each year revenue was only like $6 million.

No, it's $8.

$6 million on our locals and then $2 million on our minors and majors.

Yeah, it comes up to an $8 total.

Well, in five years, we still have a lot of road to do, don't we?

Well, five years is not going to eliminate the street maintenance. That I can guarantee you.

Correct. And I guess my only issue is we got to do something, no question about it. I'm not opposed to the half cent, although people are going to squeal, but we got to do it. I'm thinking, why are we selling ourselves short and not planning for 10 years? Even though we don't know what inflation will do, we don't know what further deterioration of things we don't expect to happen, you know, streets collapse.

aren't we better off having a 10-year financing plan to me absolutely yes if you're asking me the answer is yes now my boss might have a different opinion and you certainly want to ask her that question but no um i i do think that's one of the decision points that we have um to discuss this evening um we can talk about doing um five or six when we talk about We have a pretty confident in what we can do, what we need to do, and what the condition of things are gonna be like in five years. Streets are a very funny thing, and I think that Brian would agree with me when I say this. To say that a certain street is gonna need to be replaced in 10 years is very difficult. just based on weather, what's going on underneath it, with the sub base, construction in the area, those things like, we could think that we don't need to replace it for 10 years, but we actually need to replace it in year six or seven. So it gets more ambiguous in those out years. And so when we talk about having, telling folks exactly what we're gonna spend, that's half set sales tax on, I can certainly make conversation and have discussion of whether we maybe do five years and then go for a renewal or do 10 years and then go for a renewal. The one thing we know is that we're always going to have street maintenance. This is a service, this is a product that the city of Manhattan is going to have to provide in perpetuity. So we can talk about both.

And the other thing is we know as time goes on Our gas tax is going to be less and less in ten years if we get three hundred thousand dollars out of gas tax.

We're gonna be lucky Well, we're gonna have propeller plane cars. Yeah, I guess getting electric cars Maybe I think the five-year plan is critical in the sales tax argument. Yes, but I don't think it is the end issue I think for example if we show them what we think we will do and plan to do in five years And we know it ain't gonna get any better. We got expenses for the other five years. I don't think they're going to expect this kind of plan, what happens in year six, seven, eight, nine, and 10. The commission in place at that time, our professional staff, engineering, they're gonna say, these are the streets that we have to look at. I don't think anybody would want to have a wild guess, and there'd be nothing more than a guess of what we do in year six, seven, eight, nine, and 10. I think we ought to have the funding, and I don't think we ought to have to go back to a vote every five years where we know we have it.

So are you recommending we do 10?

Personally, I think it oughta be 10 just for the stability of what we have to do. And it ain't gonna get any better. We know the costs are going up, but we can't deal with it. We know the streets that we don't expect to fail will fail. So I think that's why the five-year plan, and even in five years, I expect there'll be some surprises. And so, but I think it's good to have this market plan so people can see we're serious about streets, one. And two is we gotta have faith that it ain't gonna get any better for the six through 10. We're gonna have streets that have to work. So I personally think I don't wanna have to do two sales tax sales. The quirks of society, the needs of the community start overriding the necessities and i i want to deal with what we need to have rather than what we would like to have so i would i would be arguing for 10 all the way but present the public the five-year plan to say and this is what you're going to get as we get to year four we're going to be talking about six and seven yeah i think we could even start talking about

six and seven, even within a year, right? One rolls off, one rolls on.

Five year floating plan.

Yeah.

One other question on what you're going to accomplish, you had down streets and those things, you had sidewalks. Now then, in many of the areas, the sidewalks are not city obligation, except on city property. Are you only talking about sidewalks on city property?

I'm talking about like trails, Denison and Marlette, how we're going to be doing that project shortly. When we do those projects, it's much easier and much cheaper to put sidewalks and trails on them now than it would be to come back. I don't anticipate us doing any sidewalk work in residentials where that sidewalk is the property owner's responsibility.

You're talking about sidewalks on trails, paving those?

Possibly, yes.

Well, I would say to me that's a low priority in the chat and the gravel and a good roller going over would take care of most people need before streets.

Yeah, I don't disagree.

I mean, but that's just... That's just our priority and lighting I mean all of those things are critical signaling I mean I see in some of our CIP we're talking about a million dollars for stoplights or more and at some point in time that's important but I don't know if that answers street.

As a reminder the Commission will always approve any contracts that we have for street maintenance If it's a single street that we're looking at repairing, like an Anderson Street project or a Morrow Street project, or if it's a contract where we're looking at hitting an entire neighborhood with a mill and overlay, the commission will always approve those contracts each year. And you'll have those conversations.

Sometimes we get lost in the weeds in talking about streetscape and signage and those things. And I think if staff talks about streets, we'll keep us better focused. We're still gonna have to do some of the other, I understand. But if our focus is streets and safety intersections, then that is what we need to be having staff, Brian and staff and city and staff looking at. That's my, argument but ten years should be my commitment.

I think we need to consider too how we get this passed and of course there's going to be opposition not you know from particularly the car dealers who are always not happy with sales tax increases there are people like me that feel sales tax is very regressive Larry, you don't have a fit, but we could raise the mill levy three mills and do the same thing. I almost wish there's some way we could charge people proportionately to their frontage. People in Sheridanbrook have a whole lot more street than I do, and so it seems to me a lot more curbs and all that kind of stuff, and Grand Mere. The people who are living close to each other down on that tier don't have as much frontage and as much street to pay for but that's just impossible i know but there are other ways to play for it um and this um it might not pass yeah i think the sales tax you know going back to 2015 2016 with that 1.3 percent um or 30 percent um

influx of people who don't live in the city helping to pay for that.

That's how we always sell it that way, that other people will pay for it. But other people, Manhattanites, even trailers pay for it too.

There's about 25,000 to 30,000 people a day coming to Manhattan to work. Those people aren't paying property tax.

This is why we picked the sales tax right or wrong. I know the arguments, but, you know, I thought Larry, you know, so Kimball we financed with debt, right?

Kimball North Campus, that's correct. That was, yes, through, Jason can certainly talk about it more than me, but through the EcoDevo funds and athletics and City University.

We put out many millions.

True. When you look at it overall, basically the city paid for curb to curb and those other funds paid for everything outside the curb. When you do the math, that's about what it boils down to. We improved Kimball for a lot of reasons. Kimball, really high accident area, really bad sight lines. So that curb to curb really was our cost and then those other entities really helped pay for that behind the curb.

I want to just to make sure that we're focused and that we're staying on track and making sure we're talking about the same things sort of in the line. Commissioner Morrison was talking about what we did at the North Campus corridor with Campbell, with Dennis and in college. That is not street maintenance. Those are street upgrades. So we would not be looking at doing those types of projects with this funding. This would be street maintenance for streets that are already existing.

yeah that's a great point so i would just real quick just share that i agree with the sales tax over property tax for paying for the road since i mean the amount of people the amount of residents outside the city is kind of growing it's continuing to grow so we're seeing you know and we're still going to pay you know the city residents are still going to pay sales tax for sure but also a lot of other people will too so

So just to throw in my comments here, I'm not sure we've ever done a sales tax of just five years. So I would agree with Mr. Morrison that we ought to be looking at 10 years. Secondly, a half percent sales tax would get us about $8.5 million. We've been using total sales of $1.7 trillion. And the one thing we're totally ignoring is the debt problem that we have that we've tried to figure out different mechanisms. And one of those we've talked about for the last six months is using some of the sales tax money for additional debt service. So it would be my idea that, yeah, 5% or half a percent sales tax would be reasonable, but have 0.4 of that. go to the streets, which would get about 6.8 million, close to 7 million as sales tax grow, and use the other .1, 10%, for debt service.

Yeah, Commissioner Fox, I appreciate that. The one thing I would just add is that we made a lot of progress with our bond and interest mill levy this year. We've made some changes with those franchise fees, with those budgets. We've made a lot of significant progress moving cash balances from those other funds to stabilize that bond and interest fund, that debt service fund. We have been able to push out what we thought was going to be not having enough money in 2027. We were able to continue to push it out until 2031, and we have stabilized it with this year's budget to 2034. So if we can continue being disciplined and continue to do those work with finding ways to be more efficient in the way that we deliver our services with the general fund, and continuing to be disciplined in how we issue debt and how we pay off debt and how we pay for our debt. I believe that we can manage that within our existing mill levy and continuing to be disciplined with that. I do think that, again, our rating agencies, and we've talked a lot about our rating agencies, They want to see that stable revenue source for your debt services. And so I would be curious how other commissioners feel about using part of this sales tax to make a case to the community about what it looks like to pay for debt that has already been issued with future revenue sources.

I also think it would be a challenge given that we do currently have the economic recovery and relief sales tax, 70% of which is going towards debt payment, my understanding. And so to have yet another sales tax with some portion of it dedicated to debt, Yes, we have concerns about the debt we do have, we are incurring, but I think we are tackling it in a concerted manner, as you've just mentioned, as we're seeing in your budget plans for this year. I think earmarking additional funds in this current tax raises a red flag that we don't necessarily have to raise. We're making progress on paying down debt We've we're making progress in terms of maintaining our reserves and growing the reserves If we go to the to the public and say we have we want to put still more money towards debt I think it it we risk people thinking it's a much bigger problem than it is.

I would also share that we have stabilized that bond and interest fund, that debt service fund, through 2034. That economic development recovery sales tax that we are using for debt will be up for renewal in 2032. So I think that that will be our opportunity to continue that

sales tax that is already being used for debt if we need it moving forward yeah I think if you want to have it pass you need to streamline it and not make it this or that it's just to fix the streets yeah I think after I'm willing in well I would just go with the ten years in the streets and I think that's where I'm heading

would I would just Andrew I think I concur with you and Commissioner Morrison I appreciate again the evolution we've had in our discussions and thinking about this Commissioner Fox I've expressed my appreciation to you both publicly and in private meetings, the tremendous deep dive you have taken in trying to explore ways to structure this tax and trying to appeal to a number of different constituencies. This is not to minimize the hours and hours you have put into this effort but I do think streamlining it for the benefit of the public and reinforcing again the part of your respective campaign efforts to say we were going to focus on roads I think you this is

Showing your constituents our constituents that we are taking that request seriously I do hope before the 18th Maybe you'll get some feedback from the Chamber of Commerce and some of the businesses on you know, kind of where they are on this Yeah, I appreciate that Commissioner McCullough I have been visiting with the Chamber of Commerce already and I have actually sat down with our car dealerships and and gotten their feedback, and part of their feedback has been taken into consideration for this recommendation. Thank you. So public comment?

Are you ready? We should put this in front of you. I know. You're beating me to it. Sorry about that. Is there anyone in the room who would like to make public comment on this sales tax issue? No one is approaching the podium, so I will close public comment. Manager Doolin, do you feel that you have sufficient guidance on moving forward with this?

I do. I think that we are going to move forward with a half cent for street maintenance only for 10 years. That's what the language will look like on the 18th.

And I do like the language, by the way.

Thank you. Appreciate that.

Rachel's first ballot question for the city of Manhattan Thank You Rachel Thank you, we'll now move on to our second item on the agenda discussing housing policies

good evening stephanie peterson director of planning and development we have another housing policy discussion for you all this evening we took i think we've talked about this a couple of times this year so we've taken the feedback that you've given and hopefully put that into draft policy manual resolutions that reflect that feedback So there's a couple of different items in your mail folder. There was a redlined version of the policy so you can see what is currently adopted compared to the changes that are being proposed. And then also in your packet for this meeting was a clean copy of the draft. policies. As they're adopted right now, we have four housing policies. There are two independent RHID policies, one for infill, one for greenfield. Part of this recommendation is combining those. So there's three policies that we'll run through. Hopefully to make this fairly painless, I've just outlined what's changed, the significant changes there. If you have any feedback or any questions on specifics of those policies, feel free to let me know. So the first, we'll start with RHID. It has the fewest changes. We, as I mentioned, consolidating the two policies into one. They follow the same statutory process. It's just that with an infill RHID, you have a different eligibility than with Greenfield. All of the policies, you'll see this, that we are suggesting we add language that a application is considered withdrawn if you haven't taken action within six months. For example, we have an RHID that's, I think we've had since 2024, that's never come before you. They've never pursued the next steps. So it'd be nice to be able to get that kind of off the books and then have them start over should they want to move forward. And then lastly, the other significant change to this policy was that as part of the preliminary application, it would be, and this is some feedback that we received both from you and the Board of County Commissioners, that we would use that opportunity to go to the taxing jurisdictions, the three jurisdictions that have approval considerations in this, and take that project to make sure that all three were interested in moving forward. Um, mayor, would you like me to pause here on our HID and take questions or do you want me to go through all of the policies and then come back?

I would prefer it if we discuss each one separately, if that's okay with everyone. Um, Stephanie, you and I spoke before the meeting, um, and it may be my fault because I did not look at the red light, uh, version, but, um, in, uh, you just mentioned that you've combined the RHID policies for both Greenfield and infill. However, there's only mention of the infill. There's not a specification in the copy that I looked at for what are the requirements that an infill project must meet. We have a section on a project proposal for RHID Greenfield must meet these requirements. concomitant section on what are the requirements for an infill project and apologies again if I'm looking at the wrong top wrong copy so you are correct and thank you for that catch we'll just strike out greenfield the the requirements are the same okay the the others well then my other question is given if a proposal comes before us for greenfield development that has implications for infrastructure that the city would have to support for one of these projects. So maybe they're not the same requirements.

Are you looking at section B?

Yes.

OK. So those, I believe that they would be the same. So those requirements are the properties annexed and already zoned. That's just so that you're not having to make a funding decision prior to going through that statutory process of rezoning. The second one is that there's a net gain of two or more dwelling units. Mostly we just don't want to do a single family house. There's a lot of work that goes into putting this together. And then the third one is that the applicant either owns, has an agreement to purchase, or has the property owner consent.

Okay, so maybe it's my misinterpretation of Greenfield. It's a Greenfield development, one in which sewers, water lines have already been installed.

No, so that's a great question. So with the Greenfield, it's vacant ground. So the way that that would work is that the applicant would come to you, seek annexation, and then rezoning if not already rezoned. And then from there, they could come and request the RHID. We may or may not have their plot done at that point. In this situation, we would not have a benefit district. We probably wouldn't have any agreement for public infrastructure. That would be all in advance of that infrastructure being built. So part of the RHID question at that time is, do you want to extend our infrastructure? Is this a project that you want to see happen? And do you want to provide an incentive or a tool to allow that to take place?

I think it would be my preference to have some mention of infrastructure included in this. Jason, you're leaning towards your microphone. Do you want to?

The greenfield RHID, it's gonna look and feel different than your infill RHID. So I do think if you're open to a greenfield type of RHID project, it's gonna take a different form and you're gonna get explained what it is the proposal is contrary to an infill RHID. They are drastically different because you are talking about the process that we already follow for special assessments in our benefit districts and RHIDs will play into that approach. So Manhattan's uniquely positioned because of our history with benefit districts to be able to educate fairly quickly on an RHID. Most communities don't deal with that infrastructure in the way we do. So I think we've tried to identify both are available. But if that greenfield subdivision is something the governing body, county, and the school district, everybody wants to get supportive of, it does take a completely different approach than an infill.

Given that this is going to become an official policy, I think I would like to see at least a note or a reference to another set of procedures, a footnote, just some recognition that there are additional steps that would be required moving that kind of application forward.

And Stephanie, correct me if I'm wrong, Didn't we get feedback that greenfields weren't necessarily where the majority was? Yes. And we were probably trying to just kind of bypass that definition and process, Mayor? It doesn't mean that it has to leave. It's just what we heard from the governing body was that wasn't necessarily going to be something you would all be supportive of.

I think that may be where you had one of those evenings when you had four or five different opinions being raised. Possibly, yes. I guess I'm kind of thinking out of the box and down the line. We do have ADUs floating out there, and I know that's different from what we're talking about here, but we've had no discussion, for example, about tiny home complexes, which is becoming a topic that other metropolises, other cities are talking about. And I could see where this, if a developer came to us with a proposal to do affordable tiny homes, we might be more inclined to support that kind of greenfield development. So I may be making this more complex than it needs to be, but these are questions I had as I was reading.

Sure. So I think we can make a general note in here that traditionally, greenfield RHIDs are or helping to provide the public infrastructure that's needed for a development, whereas an infill RHID is helping with the vertical construction. And that's exactly how the state statutes kind of, we've taken it upon ourselves to really distinguish those two. The statute blurs them a little bit more. But I think that we can just make reference that in a traditional sense, that's how the two tools would be used. Of course, at the very end of your policy, you still have flexibility. that you can kind of do whatever you want within the confines of the statute? Would that maybe satisfy what you're looking for? Okay, yep, we can add that note.

And just to add to that, Mayor, you recently had a presentation from a developer in a new subdivision, and there was consensus amongst this body to proceed. It's not going to be an RHID, but it could look like one to an outsider. Because you're willing to look at investing in the infrastructure with the developer to offset costs that would have been passed on to the property owner, the housing owner, you don't need to have the school district and the county go along with you to create that environment. If you put Greenfield RHIDs in your policy, you may send a signal to developers that you're ready to take those. We know there are other entities in town that would have to participate to get that RHID going. We haven't seen that from one entity for sure that they're really willing to do that. So you can modify, which is what we've done with a recent discussion in that subdivision, to actually accomplish something similar. So we didn't want to put something in our policy that we knew, well, it's in there, but we're not sure you can actually get one done.

maybe can I ask your indulgence of making some of the changes or the edits and revisions that we are talking about in agreement with and let me read through it let us all read through it one more time yeah sure of course yeah any of the feedback that you share tonight I can

put that in these documents, and then we can send that back out to make sure it's reflective. The other option that you have, which would be probably more in line with how other cities have their RHID policy, is we don't use the words infill or greenfield. Statute would just, it's really gonna be up to statute whether that project qualifies for vertical construction, the infill RHID or not. Otherwise, it's assumed that it's a new development with infrastructure. So that's another option, too, if we wanna keep it very, very broad.

It's a question, what do we have in our policies about a project that's been approved, but then nothing's ever been done?

We don't have anything right now.

At what point, we have one, yeah? At what point does that go away? Does it get terminated?

Yeah, we don't have anything in our policy right now to address that. So that's why we're suggesting that we add this, so then we don't have that issue.

Well, that's applications.

I assume that means... Oh, are you saying a project that the commission's already approved? Yes. Oh, most all the development agreements require some sort of progress, whether it's a certain time for a building permit to be pulled. Typically, after the building permit, they have to commence construction within a certain period of time. Those are all things that I monitor on an ongoing basis to make sure they're in compliance.

What if they never get a building permit?

then that agreement, it depends on how it's written, but typically that would be grounds for that agreement to be voided.

Is there some kind of time limit?

It depends on the agreement, really. If you want to tell me what the project is later on, I can look into that if you think that there's a project that isn't moving forward.

wouldn't that be something we'd like to have in the policy if you haven't got your act together in six months you're gone no matter what we've approved commissioners i'm sorry go ahead i would recommend that we don't necessarily put that in policy a lot of these projects are very unique and have different ways to go about them different milestones that they're requiring that's why they're in the development agreement that's why those benchmarks those milestones are are in those agreements and so we can certainly bring up some of the ones that we've done recently and you can take a look at what those benchmarks have been what those milestones are what those timelines look like i just i don't know if we're

I feel like by doing this, we're saying we want RHID applications, and I'm just not sure that we do, but from a county perspective and from a city perspective, so that's kind of, I don't know.

Andrew, I've... mentioned this before, I don't think we should take tools out of our toolbox. It's an opportunity when and if a project comes before us, that's an opportunity for us to discuss it. I think there's been some change in this policy in terms of when we do go to the county and the school district to be able to have preliminary discussions to gauge their interest. I think just because we've had some opposition from one of our partners does not mean that that might change in the future if the composition of that commission changes. This is a state-sanctioned tool that we can use, and I think we'd be remiss if we don't keep it as an opportunity, my opinion.

Any other feedback or questions on RHID?

Thank you, Stephanie.

The next one, we've traditionally called these IRBs, industrial revenue bonds. Our bond council refers to the residential IRBs as multi-family housing revenue bonds. So we're going to change that verbiage just so that there's not any confusion between bond council and us when they're preparing these documents. So again, just highlighting the changes here based on feedback that we've heard from the commission and you can certainly correct me if this is not accurate. But we've eliminated the property tax abatement component based on a majority of the commission's direction. You'll see there again that withdrawn, applications considered withdrawn after six months of no action. And then there's also, this is rather insignificant, but I wanted to bring it up just in case there's questions. We've also added language that some projects may go through the non-housing IRB process rather than going through this process, or rather than going through the MHRB process. A good example of this is the Hartford project, just further down on points. It has 50-some residential units in it, but it did not go through this housing tool. Instead, it went through our EcoDevo process because we looked at that from a total investment perspective in the commercial space that we were getting as part of it. So we just wanted to make sure that applicants were aware that even if they apply under this program, we may shift them over to the EcoDevo IRB process instead. Those were the three major changes of this policy.

Stephanie, again, as per my earlier comments about aligning these projects, the version that I looked at in the application process does not include the list of what the application should include. I'm looking at section... Sorry. Section C, you have project eligibility and then the application process. In the other two documents, you include that the application includes the form and attachments, the legal description, the names and addresses of the owners of record, et cetera.

So yes. So for this one, the sales tax exemptions, they're really straightforward. Bond Council requires A little bit of information that's already in our application. So we don't really have a lot of discretion there. Bond Council tells us exactly what they need. And so we provide that. We kept it vague just in case the bond council changes what information is required. We can pivot and make sure that we're adjusting it there. But the sales tax exemption tool is the most simplified that we have. It takes the least amount of work, I think, for all parties. So that's one of the reasons why it's not specifically listed.

Other comments, Commissioner, on this tool, on this policy?

Stephanie it looks like you can move on to the final one on workforce housing okay this one's a little bit more involved let me pull up my version of the policy Okay, so starting off under the eligible uses of the workforce housing sales tax, we did add a point here that one of the eligible uses would be for property acquisition for a community land trust. And then you'll see towards the end of the policy, there is a kind of guidelines for establishing a community land trust. These are just at minimum, kind of what Daniel spoke to earlier. Each of those eco-devo agreements that we have when we are When we are awarding workforce housing sales tax, they can be more specific. They can require more than what the policy does. These are just some general guidelines for considerations that we should have when using it for this use. Next, we added the ineligible use for allowing workforce housing sales tax to be used to pay for special assessments. That's based on feedback from your July work session that we had. on a potential project. Again, you don't have to use this source of funding in this way. It just allows you to be able to if you have a project ever before you that you want to use workforce housing sales tax for. So we used to require a preliminary application for all of our housing policies. What I found after about a year and a half of doing this is it just created extra work for myself and for the applicant. Originally, we were doing that to make sure that an applicant wasn't spending a couple thousand dollars in an application for us to be like, oh, sorry, you're not eligible because you're not zoned properly. What we found out is that developers or applicants are savvy. They're going to contact staff before they apply. And so we can kind of go through that checklist to make sure that they are meeting all of our basic requirements. Based on your feedback and some that you heard from some public comments, we are changing the application period to make it year round rather than just twice a year. And almost the last year, we've only had one, maybe two applications. So I don't think that's going to overwhelm staff if we open it year round. Again, what I believe that we heard from your feedback is that our definition of workforce housing is housing units must be sold for less than 300,000. That does not mean that every single project, you have to have that as the cap. Again, through that development agreement, you could say we want units to be sold for 260,000 for this project. It still gives you discretion through working with that development agreement. On that note, there is no mention of rental rates. That isn't something that we really heard from a majority that we wanted to continue to use this for rents. If we did, I would suggest that we use the 80% LIHTC rates. That's what we had been using in the past. That was what the most recent projects were. We can always bring those back before you if you would like to see those. And then again, that last provision that I won't repeat just for your sake. Um, any feedback or comments here?

Just a question on the community land trust incentive. Uh, number four D says units must remain owner occupied and not use the short term rentals. Is that, Should that say any kind of rentals? Or are you allowing long-term rentals?

No, because that must be used as owner-occupied. That automatically doesn't include long-term rentals. And in the short-term rentals, you can be an owner of that property, but then still rent it out as a short-term rental. So that's why we included that provision there. We've actually included the short-term rental provision in most of our other economic development agreements for housing incentive projects.

Stephanie, I had a question on the next item, protections if the CLT fails with the reversion back to the city. Are we talking about just the land, or are we talking about any structures that may be built on the land?

That's a great question. We had that conversation internally as well. Again, I think it's going to be based on that project and the merits of the project, who's doing it, We've said before the city doesn't really want to be landlords or landowners in that sense but we do recognize this as being this project would be built with taxpayer dollars and that we're responsible for some sort of oversight there so That revisionary clause is really just a protection. We haven't defined exactly what that looks like, but at least we're acknowledging that that is something that the governing body would need to talk about with that specific project. And how is failure defined? Not meeting any of the requirements in the development agreement, which again, I know this is sounding like a record on repeat, it's really going to depend on the project and the specifics of that to define what failure is.

Commissioners, other comments on this one?

Yeah, I like the workforce housing sales tax. Hopefully we'll see some community land trusts develop in the city. I think if we're going to use public dollars, I think if we can extend it and continue to make it lower income housing for a long time, that would be the best way to go.

My question, I'm not savvy in all your lingo of what is and isn't, but it sounds like it's going to work and it's effective, but have you shared it with any of our quote developers? I see a couple, three out here that might qualify to see if they see any flies in the ointment.

So I will say that the year-round applications, that is something I've heard for probably a year now from various developers. I think they're going to be fine not having to do a preliminary application because that was just extra work for them. I have not talked with them about the housing units, our definition of workforce housing. That isn't something I've heard, but they may share that with you this evening.

It'd just be good if they were halfway on the same page so you didn't have to fuss with them and we didn't either when they say it's not fair.

Well, hopefully those this evening can share with you their thoughts on that and get it out there in the air.

Thank you, Stephanie. And we will now open the floor for.

I have one other thing. So I'll try to run through this quickly. We brought a, so you guys have been talking about wanting to do something for owners to rehab their property. And so we had brought a recommended program a couple of months ago now, maybe at the beginning of the year. And it was really more of like a smaller ticket kind of items around older neighborhoods, allowing homeowners to invest in their property. The workforce housing sales tax would pay for a portion of that. And that wasn't, I don't think overly well received. So we're trying again to see if this is maybe a little bit closer to what you were looking for. So we're calling this our local NRP or neighborhood revitalization program. I want to be clear in that NRP is a tool that is recognized. It has very specific process that must be gone through. It includes the county. And typically it abates property tax on whatever increment of that improvement. We are not proposing a traditional NRP. This would be our local version, and rather than abating property taxes, we would be using workforce housing sales tax to reimburse a property owner. So the objective of this program would be to encourage reinvestment in Manhattan's older housing stock We have not defined what older means. We're kind of floating this idea. If you like the way it sounds, we can bring back additional details and you can help us to find some of the context around this. It would be for single family homes. We are saying here that it could be rental or owner occupied. And I'll give an example of kind of what we mean there. However, if that is sold either by the landlord or by the person occupying that unit, the benefit would go away. It wouldn't be passed on to whoever buys it. Um, for the purposes of this conversation, we're saying that you could have a three year deferment of property tax. Again, we would still be collecting the property tax or the County would be in dispersing it, but the, uh, property owner would be reimbursed by workforce housing sales tax for whatever that amount is. And we're saying that this needs to be a decent level of investment. So at least $50,000 is what you're investing in this property. Um, and the way that the city would benefit is that if somebody is investing this kind of money in their property. we would see an increase in their property taxes in later years. So the example I have, and we can apply this as if somebody was a, say a developer, they purchase a home, it's valued at $180,000, and so right now they're paying 32, $100 a year in property tax. They make $150,000 improvement in this home to make it habitable, to improve the overall quality of it. And then this new valuation is maybe around $300,000. That new valuation, that property owner would be paying about $5,300 in property tax afterwards. So what this program would do is take the increments. So in this example, it's about $2,100 a year. And we would say we were willing to give you $2,100 a year for three years in workforce housing sales tax for that improvement that you made in your property. So over a three-year period, that's just around $6,300. Again, they're making a pretty sizable investment in the property, but this is kind of how an NRP would work, and this is another option of how you could get maybe people to invest in their properties or even buy a property that isn't in the greatest shape and put some love back into it and get it into a place that brings a little bit of additional revenue into our community as well as decent housing for people to live in. So that's the idea. We are open to suggestions, whatever you may have to share.

So a question. You have a developer that pays $300,000 for an old house, practically rebuilds it, sells it for $700,000. Does that qualify under this?

That does not because they sold it. So you're right, I forgot to do the example. If it was a developer that bought this, they would have to rent it out for that three-year period in order to qualify. If they bought the house, flipped it, and then sold it to a new owner, that benefit goes away. So you have to be either residing in the home or be the property owner the entire time of that three-year period.

And any kind of value cap?

That's up to you guys to share with me if you want to have a value cap. So if we're really focused on the older part of our community, I do think that we're going to see just a cap of what the market could bear. But if you want to say that the original value has to be under $300,000, $250,000, we can bring back some data to show you what current prices are, if that helps you make a better a more informed decision.

I think that would be helpful. And got to say, I love the little diamonds on the... That was an image in PowerPoint. I like this idea. I think that you've advanced some of our discussions to something that we could react to much more firmly. Thank you.

Yes, and I don't have it ready yet. We were kind of waiting to see how this conversation went. but we're pulling probably six different properties around kind of city hall area that we've seen people put a significant amount of money into to bring back real examples of what that looked like before, after, how much their investment is, just to give us a little bit more information on what this program could look like.

Yeah, Stephanie, I think you've all done a great job. And I think the more... different programs we could bring in to assist people. There are places that do down payment assistance. There are even places that help people with their rental when they have to pay a deposit to get, because some people can't get the deposit together to get the house. So anyway, just as many kind of different things and of course the small houses. Always kind of interesting.

I don't know what you know, we're how but Yeah Thank You Stephanie Is there anyone who would like to make comment on any of these policies and the revisions that are coming up? Go ahead guys duke it out

Good evening, Mayor, Commissioners, Josh Brewer, Executive Director of Habitat for Humanity of the Northern Flint Hills. I just want to say thank you to Stephanie and staff for working on these policies. We're supportive of the proposed changes. A couple comments that I did have on the Workforce housing sales tax piece specifically around community land trusts. So we We started working with this sort of mechanism back in 2022 We've put stewarded two homes in trust already and we have four more sites currently under construction to in the city of Manhattan to and then possibly an additional three in Ogden and So a couple changes just for clarity that I would request is on section C number four the CLT when we file a mortgage on the CLT we issue a memorandum of ground lease not a deed restriction and So that memorandum of ground lease is a little bit more appropriate. And then that memo refers to the ground lease agreement, which is much more substantial that we have to keep on file. If a CLT were in partnership with the city, it's reasonable the city would also keep that ground lease on file as well so that it could be pulled if that property were to ever change hands. um additionally it does say in here resale formula insert resale formula so two pieces that are kind of standard practice the ground lease agreement is typically a 99 year ground lease agreement whereas this says 30. i think that's probably just speaking to the the term of a typical mortgage whereas the ground lease is typically longer term and then separately the appreciation share that's typically used is 75 25 and that's the appreciation share that we use as well and in our conversation with other entities across the state that use this tool that's consistent so just a few technical clarifications and there is always that we would advocate for thank you thank you

Josh, I was going to ask, so 75-25, so the 25 is what the homeowner would keep in appreciation? That's correct. So if it went up $100,000, they would go up $25,000 is what they would get back?

Correct, and the 75% would recycle back into the program. So the homeowner would sell the home and receive 100% of their earned equity and 25% of their market appreciation.

Thank you.

Craig Laupe, 3821 Silverleaf Drive, owner of New Place Development. One, again, I appreciate you guys giving your feedback in July. Thank you. Two, city staff has worked really hard on this for a long time, and they put a lot of time and effort in this, so I want to say thank you to them as well. Mr. Morrison, you asked the question, how do we feel about it? I'm here to support it for the workforce sales tax. I think they put a lot of time and resources in this. This is opening broader opportunities for different type of product to be brought to Manhattan. And that's what's needed to get it into the AMI ranges that you guys are seeking. And so the changes that you see here broaden the ability for other developers to come to Manhattan and do this type of work in our community. And so I commend you for putting this in front of you guys, giving feedback on this, and putting us in a position where this could be a success for the community in the future. So I'm in support of it, sir.

Thank you, Craig. Anyone else who would like to make comment? All right, we will close public comment. Stephanie, I believe we have consensus on moving forward with just tightening up a few details in its policies. And thank you for continuing this process. I know it's been an evolution over the last couple of years, but I think we're really moving to having something that we can stand by and utilize. Commissioners, any other remarks or comments?

Good job.

All right. I will entertain a motion to adjourn.

Second.

All in favor, please say aye. Aye. Aye.

Aye.

Thank you, commissioners, for your work this evening. Thank you all for attending.