City Council - Regular Meeting

Madam chair, we're ready whenever you're ready.

Welcome, everyone. This is the Sandy City Council meeting for Tuesday, 04/28/2026. We have a little bit of an out of the ordinary schedule for tonight. Let me tell you what it will be. Council is receiving training on budgeting in our council mayor form of government. Then we will after that concludes, we will be taking general citizen comment. Then we will move on to standing reports. And then finally, we have a closed session on the agenda after that. So that's the sequence of events. We start all our meetings with prayer and a pledge.

Who would like to volunteer to give us the prayer for this evening? Miss Christiansen. Go ahead.

Our dearest heavenly father, we are so grateful to be gathered together as Sandy residents and the people that serve the city. Please help us to be able to understand the things that are placed before us and to take them into our budgeting process. Please bless you make good choices that will better our city, and please bless all of the employees that they would be as safe as they are doing their jobs. We love thee, and we

say these things in name

of thy son, Jesus Christ. Amen.

Amen. Everyone please rise for the pledge? Right. And introductions are next. Dustin, would you like to kick us off?

Of course. Thank you, madam chair. Dustin Frado. I'm with the city council office. There are a couple other council staff members in the back of the room, Justin Sorensen in Liz Theriault. And then, our clerk, Chris Edwards, is just back in the offices right now, taking minutes from there.

Good evening. I'm Tracy. I'm counsel for the council.

Chris Nichol, District 3. Marcy Houseman, District 4.

Brooke Christensen, District 1. Cindy Sharkey, at large. Allison Stroud, District 2. Brooke D'Souza at large.

Aaron DeKeiser at large.

Hi. I'm mayor Monica Zoltansky.

Shane Pace, city administrator. Jeff Robinson sitting in for Lynn Pace.

Alright. We're gonna go ahead and get right into our agenda. Dustin, I think you're gonna introduce our speakers and the agenda item. Please do so.

Yes. Happy to do that, madam chair. First, just a thanks to councilmember Nicholl. She's the one who suggested that we have Carrie and Frank come in and present to us on budgeting in our form of government. So big shout out to councilmember Nickel.

But really quickly, I just wanna introduce, Carrie and Frank Nakamura, other Nakamura and Associates. Together, they have a combined, are you ready for this, sixty five years of experience in municipal government, which is crazy. It it it is, Tracy. It's hard to believe. Frank worked his entire career in our form of government, and, Carrie has had the opportunity to work in multiple forms of government in the state on both the legislative and the executive side of the ledger.

As in their consulting role now, they have the opportunity to travel all over the state and provide budgetary training to cities all across the state. And so we're happy to have them here. And with that, I'll turn the time over to Carrie.

Thank you very much. And is someone pulling up our training slide deck?

Yes. Liz is gonna pull them up right now.

Wonderful. Thank you. Carrie, can I ask

you a a question?

Do you prefer questions along the way, or would you like us to hold them until the end? So I prefer questions along the way. The problem is that that slows us down. And so if I know that I'm going to be answering it later, I'll say, I'm gonna answer that in just a minute even though we'll pause and take the question at the time. I'm here. I wanna provide you the information you want. And so if it means we don't get all the way done, that's great. With that in mind, I didn't realize you had council agenda items after. And so how long would you like us to

take this evening? This is the only item on our agenda. The rest are just typical things that we would do except for the closed session, which is staff afterwards. So we're focused entirely on this topic this evening. We'd indicated to ourselves and our staff that we should plan on two to three hours. Perfect. Perfect. And then what I will do along the way is stop and ask if you want a break.

Okay? Or if I need a break, I'll let you know that I need a break. But with that, I wanna thank you for inviting us this evening. As Dustin said, we do a lot of training now that we've stepped away from our our day jobs in government. Frank was, for a lot of years, with the Salt Lake City attorney's office and then the last twenty years twenty, twenty two years of his career as the Murray City attorney.

So both times working in this council mayor form of government. I love the council mayor form of government. It's where I got my start in government with the with the actually, that's not true. I started in West Jordan, but my my first professional job was in the council mayor form of government in Salt Lake City. I've worked with a lot of different governments. I've worked actually with governments also internationally. And I can tell you as I go through, there are certain truths in government that that come out, and it's that you never have enough money or people. Right? That's what we hear everywhere we go. Everybody always wants to know how can I get more resources for what we're trying to do?

I don't have magic bullets for that, but I have a lot of different things we can talk about that that you might wanna consider as a council. And, Mara, with all due respect tonight, I'm gonna be focusing a lot on the council's role because that's what I was asked to do, and and Frank will spend some time really level setting and framing between the two different branches of government. So with that, if you've been in my trainings before, you've probably seen some of the material. So some of it may be a refresher for you, But we really did kinda do a deep dive into the legislative role. And I think we have a scout in the audience tonight. Right? Are you working on a bad working on a student. Okay. I'm sorry. You have to sit through a three hour budget training.

Except I love budgets, and I think it's really exciting. And so let's just jump right in. Let's see. There we go. This is this I'm taking the base of this presentation from an align and shine series that I've done for the Utah League of Cities and Towns, and it's where we really wanna talk about transparency in the budgets and aligning our budgets with our policy goals.

Because that's where I've spent my career, and that's what's the most fun to me is helping elected officials get their policy agenda done because none of you ran for office because there wasn't something you wanted to do. And I am not brave enough to put my name on a ballot. You will never see my name on a ballot, but I have spent my career helping elected officials get their policy agenda accomplished. And I think the most effective way to do that is through the budget, quite honestly. So that's why I spend a lot oh, sorry.

A lot of my time even with councils and on the council side. And I don't know where that little frog came from. This is just a quick look at tonight's agenda. I'm not going to read through everything, but we are gonna start with that council powers and duties in the mayor council form of government. And then we'll just go as far as we can get.

And if we wear out before we're done, we'll we'll call it quits. I know some of you were at the Utah League of Cities and Towns last week, and you saw truth and taxation. The portion I've put in here on truth and taxation is very abbreviated compared to what you saw last week. Be lucky that you're not seeing truth and taxation in all of its glory tonight. I did have some learning objectives for the council tonight.

I want you to have a deepened understanding of your role in the mayor council form of government and specifically explore some tools that you can use for council fiscal and policy oversight. And then we're gonna talk through the budget process in a way that that will really highlight and emphasize the council's role in that budget process and then deepen your understanding of revenue planning back to the back to that notion of having resources. So with that, Frank, I'm gonna turn the next few minutes over to you to talk through the mayor council form of government. Tell me when you want me to advance the slide.

Okay.

By the way, I have to tell you, this has been the most fun part of my life because Frank was always the city attorney, you know, and I was off doing whatever I was doing. And then when I started my consultancy, Carrie Nakamura and Associates, it was really just me for a long time doing it. And then I I got one job, and I said to Frank, you could really help me if you would come and help me with this. So he became an associate, and now I love that. I love that he's my associate. But the credit card and I hate to say this on the public record, but it's kinda funny. The credit card can't spell out associate, so it says Carrie Nakamura an ass. So there you go.

Yeah. Frank Nacamura, and I am the associate. I wanted to you know, I went to the dentist this morning, and I told Carrie, hey. If I go to the dentist, am I gonna be able to speak at this meeting? And she said, you better be able to speak.

So I wanted to tell you that in advance because I don't hopefully, the words will come out right. But if they don't, please bear with me. I I had some dental work done today. So thank you for inviting me today. I spent thirty two years in the council mayor form of government, and that's your form of government.

And as a city attorney, I I understand that this form of government is cumbersome, and it has some built in friction between the two branches. However, I think it and I may be biased, but I think it's the best form of government. The alternative concentrates too much power in one place. And in this form of government, you are forced to to compromise. This form of government requires more transparency and ensures that a single person or small group does not make all the decisions.

So I I I think that this is the as far as the municipal government, I think it's the best form of government. I did this at Salt Lake City and Murray, and I understand it it is there's friction. Right? That's that's and I know that that's I'm empathetic to the city attorneys that have to deal with that daily, and so I understand that. My purpose today is to just provide you some background for Carrie's presentation on budgeting, which is one of the of your authority and responsibility in exercising your legislative power.

And although the the background that I provided you is basic, I think it's important sometimes to step back. You you all know the the powers of legislative branch and executive. You know that. But I think sometimes, it's good to step back, see the big picture, focus on the the the general powers and what you are asked to do. And so in my experience, I think it it offer the mayor council, formal governor or the council mayor, formal government operates effectively if you exercise powers, number one.

Number two, you understand what those powers are, and that it requires some self restraint that you know where you shouldn't be stepping in terms of executive authority and the executive branch should exercise the same self restraint and not step into the legislative branch. And then then there are times where it's a gray area, and you have to get maybe an illegal opinion as to that. I also understand that you have access to some of the most respected city attorneys in the state of Utah. Tracy, Lynn, Jeff. I've worked with all of you over the past years.

They're well respected, certainly understand and have the expertise. So if you have specific questions, I know that you will be able to go to them and get an opinion as to what is legislative and what's executive. So with that, we're we're gonna just be very basic, so bear with me. The powers of the council are found in title 10 chapter three b part two of the Utah code. The code well, it it sort of stems from a case that I think Jeff and Tracy and then cite all the time, Martindale versus Anderson.

And that case made it clear that your form of government, that the council and the mayor are separate, equal, independent branches of government, and that the council is a policy making they have policy making authority, policy making. And I I think I wanna clarify that even it's general policy making authority. And the mayor has policy execution authority. And so how do how do you exercise your policy making authority? Well, number one, you enact laws.

The mayor cannot enact laws. They can suggest it, but you're the one that enacts laws. And I wanna step back from that for a minute, if I may. And when enacting laws, you have pretty broad authority under a case of state versus Hutchinson. The state said, yes.

There are expressed powers given to the council. You are political subdivisions of the state of Utah, but they they with the expressed authority that they give you, you also have the necessary authority, not just the expressed, the necessary authority to do what is needed to protect the public welfare of your community. Now I will grant it. There are there's laws in in statute that do limit your authority and certain areas of the law of law by statute that you're preempted by state law, by state and county, what they they work that they do. But overall, I think you have broad power, and and she should understand that you you can make make laws to protect the public welfare.

Secondly, you have the power of appropriation of funds. And, Carrie, this is what Carrie will talk about in her presentation and probably will be the bulk of the training, the power of appropriation. The mayor and the staff cannot spend money without an appropriation, cannot enter a contract. It's subject to appropriation. And remember, this is policy making.

You were using this as a policy making, the policy direction of the city. And so you are exercising this power of appropriation. It's it's not just numbers. It is a power to set the general policy of the city. You have the power to review administration.

You can ask for reports. You can do investigations. You have the power you have advice and consent power over the appointment of department directors and the department heads. Now what you cannot do is you cannot fire or hire employees of the mayor. You cannot interfere with the or order of the mayor staff, mayor employees, and interfere with the performance of day to day operations of the city.

And oddly, that was one of the issues that I used to deal with when I was at the city is that the council members would contact city employees directly, and that, by protocol, should go to the mayor. And you cannot act individually. The mayor can act individually. Council has to act as a group. And so I just say that.

I mean, that but but as you speak or as you act, you better make sure that you're not speaking on behalf of the council or you're acting in your own individual capacity. That needs to be made clear. And so on the one of the powers I wanna talk about is the veto power. The mayor has veto power and and can the checks and balances veto a law, veto a tax levy, veto an appropriation. Now you have the right then within the mayor has fifteen days to veto an ordinance or a a tax levy or an appropriation, and then you have, in the next meeting, the power to overturn that veto on a two thirds vote.

So, again, it's it's checks and balances. I I know I know it's it's it's it's friction. It's it's set up that way because it's checks and balances. But in my experience, and I've been in sitting in that role. I I have I've never been involved in a lawsuit with a council or the mayor sued each other.

That's never been in my experience in thirty two years. Now, you know, of course, there's been just serious disputes, but, ultimately, they were resolved. I know that you have a a counsel different from the city attorney. That has never been my experience, but I that's that's fine. But, again, I I think that, ultimately, it despite differences, I think you generally do respect what your authority is, what your power is, and the matters get resolved.

You know, I I still think this is the best way to make decisions for your residents. So with that, can back time back over to Carrie.

Thank you, Frank. So now let's jump into budget. So what is a budget? And at its core, a lot of people just think the budget's, you know, a book full of numbers. You take last year's numbers, adjust them a little bit, and put them forward for this year.

But if that's how you view the budget, you're really missing the magic and the beauty of the budget. Because the budget is really the place where you plan for your goals, and it's where you make your goals happen. And it's also it, you know, the way that you show the community what you value and the way that you show the community what you're what you're moving forward with as a community, the way you communicate with them, how you're spending their dollars. And in in Sandy, as in a lot of other governments, the budget includes a lot of different funds. And this is kind of a piece that I'm adding into the training now because there Cam asked me last week.

Cam Deal asked me to do a whole session on funds. And I said, Cam, I cannot spend fifty minutes talking about funds. And but you know what? We we did. And there were a lot of great questions, and people seemed to like it.

So so you're the first one that I'm training in this new way to say your budget isn't just your general fund, because most of you spend most of your time talking about the general fund. But Sandy is not different than other communities that your budget is actually, as you know, lots of different funds that come together. So I always like to show this. You don't need to tell me as a community what you value. I can look at your budget, and I can see where you spend your money, and I can tell you what you value just by looking at where your money goes.

And I always share this slide because what can you tell about me by looking at where I spend my money? What do you know about me? Travel. Travel. That's right. If you would have seen my training ten years ago, that travel number was very small, and tuition was very large because I had children in college at the time, and I was helping pay their tuition. But you can look at this now, and you can say, at this point of Carrie's life, she values travel. I loathe bank fees. You can see that. I do not like to pay bank fees.

And in fact, those bank fees that I pay are credit cards that help me earn the points to travel. So that's why I'm willing to pay them. I've done the calculation, and I'm willing to pay those bank fees because of what I get for travel out the other side of them. You know? And and you can see other things. I don't love to pay tons of money for vehicles. We don't drive expensive cars. We never have. That's not something we value. We'd rather put our money into travel. This isn't right or wrong. Right? And in your community, it's the same way. It's not a right or a wrong. It's choices that are made, and it's what we value, and it's it's where we spend our resources.

So this is just five different communities. What I did not do is spend time pulling big communities because I usually do a lot of these trainings for smaller, and they go crazy when I'm always showing them big community numbers. So I've tailored it to a smaller community, and I wanted to spend my time pulling your numbers rather than going and getting a other bunch of other big cities. But you would see the same thing if these were larger communities. You can see what these communities value by where they're spending their money.

The the one on the top bar and the bottom bar, lots of money on roads. You know, if we go to that community, we'll probably see a lot of roadwork being done in those communities. It's interesting to me the one that's the it's labeled number two, but it's the fourth one down. What a large appropriation to fund balance. I'm not really sure what that was about.

If I were the the residents of that community, I would be asking about the lost opportunities there, why we were putting so much of that total budget into fund balance rather than spending it. You can see their public safety. Some of them have some of them, like, top one probably doesn't self provide at all. They probably contract with somebody, but then you can see the public safety numbers. So, again, not right or wrong, but you can just see the values of those communities based on their expenditures.

Just like you can my personal budget, just like we could your budget if we took a a look at it. The other thing I like to talk about is that planning matters. All kinds of municipal planning matters, but budget planning matters too. And it's really tough when when you can't get that stuff lined up. Right?

And in budget, it's probably not as clear if you like, the bridge that if you didn't plan it properly, it doesn't line up. But over time, it will be that dramatic if you don't get the the policy and the numbers lined up and moving in the same direction. You'll never get to where you're trying to go if you don't do that. And and I think as I've looked at Sandy's information, you do a pretty good job of laying out where you're headed. I would assume that you do a pretty good job of putting the numbers to that.

So these are kind of the ways that we set budget policy, and it is focused on the governing body. As Frank said at that broad policy level, the governing body sets the policy. You should provide direction, legislative direction to the administration. As I've read through your budget timeline, it looks like you do. It looks like, Dustin, you have some some sessions in kind of the January, February era where you lay that out for the coming year of what your legislative budget priorities are, and you let, in your case, the mayor know or or another executive in the community know so that they can start to build things around your policy direction.

There are a lot of different tools you can use, strategic plans, goal statements, policy statements, legislative intent statements, and, of course, the budget appropriation. I would say that when you give your direction, it should be intentional. You should make sure that you're not just happening into it, but that it's you're you're very intentional about the direction that you give. And I do think you should go back out and make sure that it meets community need. I saw in your budget that you guys have some and we'll get to it later, but you have some goals around public communication and making sure that you understand what it is that the public wants from you that you're serving.

And that helps you actually let your services not get stale because there's nothing worse than continuing to provide a service and then learning that nobody really cares that you provided that service. Right? And so that's the intentionality around it and and the meeting the community needs. I like to have measurements that and I want those measurements to be achievable Because if you I mean, I always say that which gets measured gets done. Right? I mean, weight watchers figured that out. Right? That's why you go in, you weigh in. Because if you measure it, it gets done, and that is no different than in in the role you have as a legislative body. If you're measuring it, it probably will be worked on.

It probably will get done. And so if you care about it, then sit down, create a smart measure, and and then have that measure so that over time, you can measure that you're making progress toward your policy goal. If you only think about the budget in May and June, you're really probably not having a policy driven budget. When you look at this budget cycle that I have on the slide right now, May and June are the two blue parts. So if you're just aligning resources to goals in the tentative budget and then doing your tentative budget process and adopting your formal budget, that's from what?

The the May until June 30 if you're not going through truth and taxation. That's how long that period of time is. If that is when you focus on the budget, you're you're probably not policy driven. You're probably not really making sure that the policies are driving and then being implemented throughout the budget. And we'll talk about some ways that you can be more policy driven later in the presentation. So when you think about budget policy, I think it is the most important role of the council. I mean, I know if Meg Ryan were standing here, she would tell you zoning is, that zoning is the most important thing you do. I disagree. I think it is budget. I think it's the appropriation.

It is, in my view, why I would run for office if ever I thought that I would run for office so that I could be part of the budgeting process and putting those goals, you know, funding those priorities to get them moved forward. And, again, I just really wanna emphasize in budget policy, there is not a right or a wrong answer. There might be some best practice guidance, but there's not a right or a wrong answer. And then your staff and I've been on a council staff in a council mayor form of government actually a couple of times. And your staff can help you coalesce as a body because the legislative branch is always the power of, you know, enough votes to to act as a body.

It's never one individual legislator. I mean, you see it at state. One can't do it. You see it on your council. You see it at the county council.

I mean, it takes the council coming together, and your staff can really help you coalesce into that area where you're moving as a body and you're putting things forward as a body. And then the hard truth is that staff should never substitute its policy goals for the council goals or for a council member goals. And and I will tell you, I like municipal council mayor form of government, actually, even better than I like working in the county's council mayor form of government because where you had nine partisan council members, partisan, and each of them at a time, they've changed it now, but each of them had their own staff. There was a lot of staff substituting what they wanted for, like, where the member was going. And there were famous conversations where I would be as when I was representing a council member, I would always say to staff in a staff meeting, is that what your boss wants, or is that what you want?

Because when I talk to your boss or my bosses talk to your boss, we haven't heard that. And so I think that that's one thing. You know? And and for staff, staff has to remember that we have to step back. We're staff. We help the council coalesce, but we do not substitute our own direction or feelings for where the council's trying to go. So this is kind of a breakdown of budget policy making, and you can see the first is to establish your budget policy. That's kind of in that January to February time frame that we talked about. You could have an annual goal setting session with the council. I would say that if you do that, please include all your funds, not just the general fund.

Talk about what you wanna accomplish in, like, your water or your sewer or the other funds that you have. You could create a five year plan that you review and update annually. I don't know if you do that in Sandy. I like five year plans. I like five year look back, look forward. I know others in public public budgeting and public finance don't like five. They think five's too hard to look out to. I like five. And I like five because it gets me out of four, which is an election cycle. It makes me think beyond an election cycle.

And so I kind of like that, having a moving, you know, five year, but always doing a five year look back and look forward so that we can start to see what's gonna happen with the fund balance. You know, when when must we make a decision about property tax or cut expenditures in a dramatic way because our fund balance is gonna be kind of whittled down to a place that we don't want it to be. The next part is to allocate the financial resources. That's where you are right now. That's the part of the budget cycle that you're in.

So from kind of March, April, and then into early May, that's on the the administrative side. They are putting that budget together. The mayor probably mayors have different processes, but probably asks all the department heads to submit their requests. The mayor then goes through those requests. And then what's gonna frustrate you, if it hasn't already, is once those department heads give it to the mayor and the mayor puts it in the mayor's budget and it becomes the mayor's recommended budget, you're gonna wanna call those department heads in and say, what would you do different?

And they're gonna say, we want what the mayor wants because it's the mayor's budget. And and I have to tell you, in this form of government, that's always the tension, but they're absolutely right. Once the department heads give that to the mayor and the mayor puts it in the budget, that is what the department heads want. That's what they want in their budget. That is the way the form of government works, and it's it's really I mean, I I wanna I don't wanna have to choose words super carefully, but it's almost unfair to put a department head in that position as a council to say to them, well, you know, ignore your mayor over there.

What would you do differently? Because the process works that they've told the mayor what they want, then the mayor's made a decision. So that's kind of the bummer of being on the council side, right, is we don't get to hear from the department heads directly what they might do different in the budget. The the budget they have to defend now is the executive's recommended budget. And that's true in every mayor council form of government.

It's true I mean, I've been at the state legislature enough to know legislative committees call department directors in and ask them the question, and they say, what was in the governor's budget is what we are most comfortable with and what we support. And it frustrates legislators, I know. But that's that's the process. Right? So then you adopt your budget by June 30. You go through all of your deliberations. I don't know the tools you use. Do you use a list where you add and subtract, and that's kinda how you go through it, Dustin?

No. Our finance team puts together this really great budget tool that we're able to go in and make changes to what we've actually proposed, which is a a great tool that we use every

year. That's better than I ever had access to on the legislative side. We always did a list. We we called it a red green list where we were adding or subtracting, and then we knew the number we had to get through with the council at the bottom. So that's great if there's a tool that you can use like that.

And then, of course, you do all of your your meetings, and you do them all in public, and and you have all of those deliberations in public because it unlike the mayor, you have to do that. You have to have your deliberations in a public setting. You don't get to go behind closed doors and and make those budget deliberations. And then by June 30, if you're not going through truth and taxation, you adopt your budget. And then you get to the fun part, which is you get to monitor the budget for policy and fiscal control throughout the rest of the year.

And there are a lot of different ways you can do that, and we'll talk about some of those as we go along. I think the council ought to be looking at quarterly financial reports. You probably are because you have Brian Kelly. Where's Brian? Yep. You're probably looking at quarterly financial reports. And then on the on the administrative side and think of being a council member in one of these forms of government where you have to wear both hats. Like, you're the administrator of the streets program, but then you're a council member who gets to set the broad policy. And what if your council doesn't the policy you want over the program you administered? There's a whole another conversation.

Right? But but that's not your role here. Your role in your form of government is not to look at monthly necessarily, but to look at those quarterly reports and understand at a a higher level what's going on as you move through the budget. I don't I I I should have asked you this, Brian. I don't know if if you amend your budget often during the year.

I would hope so. What what I don't like are the scenarios where council members kind of agree in concept to a budget amendment, but we don't actually amend the budget. And then we do one fell swoop amendment at the end of the year. And, inevitably, I get calls from council members saying, I really don't wanna vote for what I said I'd vote for three months ago. I don't wanna vote for it now.

And the truth is they don't have to. So if you're amending your budget as it needs to be amended, I think that's a much better process, and I think it keeps the council more in that role of monitoring the budget and making those amendments throughout the year. Is that your scenario? You're monitoring you oh, you're doing an end of the year cleanup rather than periodically throughout the year?

Okay. We we can do them throughout the year. Right. Yeah. We do a carryover at the end of the year as well.

Right. You you have to do that cleanup at the end of the year. But if you know you need something, I'd go ahead and amend your budget.

We do that. Okay. We do that. Perfect. Perfect. So, Carrie, I have a question for you, and I'm not sure if this is the right part. I'm depending on you to tell me. We'll get to that later. So this goes back to what Frank was talking about about the tension that between the two branches of government. You talked about that we should potentially be creating five year plant spending plans by fund.

But the budget that comes out is the mayor's budget. It's not the city council's budget. We can change the mayor's budget to match the city council's budget, but we can set we can indicate what we're looking for. We can do it at a high level. We can do it at a granular level.

We can pass a resolution saying we expect that we want this thing to be funded in this way in the coming budget, but the mayor doesn't have to do that. Correct. So I I do wonder how much effort the council should put into defining a very specific budget when we don't know the mayor isn't necessarily listening to what the council is saying ahead of a a budget that comes out.

So so a couple things. Let's unpack it now, not later because I don't wanna forget. But a couple of things that I'm hearing in your question is, number one, when I say a five year plan, that's not a five year budget. It's a plan that that, you know, you're gonna have and and budgeting, remember, is art, and things are gonna change and circumstances are gonna change, which is why it's a plan. And you're just kind of estimating what you think might happen in different areas over the five year period of time.

That's what I'm talking about there. But, yes, you're right. The way budgets are set up is the mayor does present the mayor's budget. But the budget that's passed, the council's budget, that is the capital and operating budget for the city. It the mayor's budget no longer exists at that point.

What you adopt is the operating and capital budget for the city. And if there are things that you want more emphasis on, you need to add the emphasis. And if there are things you want less emphasis on, you need to take the emphasis away. But you have the same the same responsibility that the mayor had in the tentative budget, which is every single fund must be balanced. And and as you move forward, you know, that is your prerogative.

And your budget that you adopt as the operating and capital budget for the for the city, it may look 90% similar to the mayor's. It may look 50% similar to the mayor's. That's your your choice. At the end of the day, that is your choice as to what that looks like, and then the mayor will execute on it. You know? And that's that's the way the budgeting process works. So I just wanted to be clear in that. She has a very clear role, any mayor does, in producing that tentative budget. But once it comes over to you, it's your responsibility to get an operating and capital budget adopted by June 30 if you're not going through truth and taxation. You have till September 1 if you're gonna raise property taxes.

Does that make sense? Yes. Perfect. Okay. So this is where it got really fun for me because I looked at Sandy's guiding principles, and you I I thought it was really great. You're really clear. You've got protect, connect, and create, and I don't need to read the detail to you. You created those. Right? That's those those should be part of your guiding principles as the governing body that you set.

And if not, I would say when you go through that process at the beginning of the year, that's when you you change that direction. If we're gonna change and we're not gonna protect, connect, and create, but we're gonna build, plow, and do something else, I don't know what they might be, that's when you set that direction that kinda signals to the mayor and her department heads, where you wanna be moving and what you wanna see, for the city. And then your next document that you have that I thought was really great, and I assumed you were involved in in the putting this together as well, is your vision, your mission, and then your 2026 goals. So that's what's that's what's out there publicly. This is what I could find when I look publicly for Sandy City.

So you know? And then I would if I'm your legislative staff, I'm making sure that the things that I see in the mayor's recommended budget line up with these statements that are out there as our guiding principles and then as our vision, mission, and citywide goals. And if you really wanna nerd out with me, then when we start to do when we start to have performance measures, the performance measures ultimately tell me how we're getting here. And so, ultimately, it tells me how we let's see. Let me remember.

Protect, connect, and create, and the measures are a way that I can look at. Yep. That's one way that we're protecting or we're we're connecting or we're creating. And so and then they would line up to these goals. And that's when it's all working the best, when the measures are lined up through the organization, because then what that does for your employees is give them the really clear north star of where we're driving as an organization, where we're headed, what we're trying to accomplish, what we're trying to achieve.

So, again, I just bring you back to this slide to remind you that you set the values for the community. Those are your values that I can see in the capital and operating budget that you adopt as a county council as as part of the budgeting process. So last night or late yesterday afternoon, I got a request that you wanted some examples of budget policy statements because I had on that slide previously budget policy statement. So the first thing I'm showing you is your goals because I think those are pretty good budget policy statements. At the end of the day, a budget policy statement is some kind of document outlining your priorities, outlining your goals or fiscal strategy for the coming year.

And and and it helps with budget preparation if we know what those are as we start to line the dollars up and align them. So I thought your goals were pretty good example of what a budget policy statement might be. Here's a statement. Sorry. It's a little small. This is from another community, and it's their approach to budgeting. And you can see there's you know, they're talking about what they're going to do, as they move forward in the year. So you can take a look at that one. And then I've got one more for you that I found that that this is another community that's laid out. They have essential services, community safety, capital improvements.

You probably can tell by one of them what community it is because it's talking about the West West Side and Ballpark neighborhood focus. And then they have some transit and employee support. So it can take different forms. And, again, I lean back into there's not a right or a wrong, but it's up to you as a body to coalesce and come together with that kind of direction. It's not one council member's direction.

It's not what one council member wants to see. It's what the council has coalesced around to say this is the general direction that we wanna be heading in as a as a community and a council. Oh, there's one more. I threw in one more, and I only put part of theirs because it goes on for a long time. I mean, they have a lot of things outlined.

Theirs is that they're moving toward performance based budgeting, and I'll tell you who this is so you can go find it if you want to because it's actually quite well done. It's South Jordan. So if you jump on South Jordan's website, it looks pretty good. So now I wanted to spend some time leaning into what Frank talked about as policymaking versus policy execution because that's always kind of the tension. And and like I said, and like Dustin told you, I spent time on both sides.

I've spent time on the administrative side, a lot of years in a budget office on the administrative side, some time in, like, a department that's actually delivering services on the administrative side. And I spend a lot of my career started my career on the on the legislative side, and I've gone back and forth a few times between administration and let and legislative branch. And I have to tell you that when I'm in the legislative branch, sometimes the jobs on the administrative side look more fun because they are the ones that are executing, and they're out there doing, and we're the ones that are back policymaking. But both are really fun. But but you have to remember which lane you're in, and sometimes we get really frustrated because we're in this lane, and we really wish we were in this lane over here doing this other thing.

But both are fun. Both are a lot of fun, and you just have to remember that there is a difference between making the policy and then executing the policy. And some days, execution looks kinda more fun. You get to be out. You know? Do it you you get to be out on the street, so to speak, more often. So and and then sometimes it overlaps a little bit. Right? And there's a little bit of overlap. So policymaking, as Frank said, is general.

The specific details of how things get done is policy execution, but it isn't science. It's art. So remember that as you go along. And then Frank alluded to this, to the tension where you have to then come together and work together. And I think the most effective examples I've seen, and I've I've been on both sides when it's tense, and it's it can be really tense sometimes.

But when you can finally find a partnership and be then everybody pushing in the same direction, that's when the when I think real magic happens. When you can you have those tough conversations, you get through the tough thing, and then once a decision's made, then we all start pulling in the same direction and and get the decision done. So you here's your I wanted to start with your citywide goals, and I wanted to talk through a couple of examples, and this is gonna be a little bit interactive. Okay? So you have a citywide goal to maintain a highly qualified workforce. I think that's a great goal. We see that in a lot of our communities. Right? We wanna maintain staff turnover is expensive. We wanna maintain our staff.

We wanna have a highly qualified workforce. So is it is if the council said, we want an annual compensation package that is to be market driven, is that policymaking or execution? Making. Right. That's policymaking. Right? You're setting the parameter. We want a market driven compensation package. Next, the entity's compensation will be in the top 25% regionally. Policymaking or execution? Making. Most likely. Right? Making. How about we want to establish a goal that $0 are spent on car allowances for executive employees?

That was real. That came from a real experience I've had. So is that policymaking or execution? It's execution. And let me tell you what happened in that scenario.

Because there was a statement that we wanna maintain a highly qualified workforce, and we want a compensation package to be market driven, When the legislative body said we're eliminating all of the money in the budget for executive car allowances because we just disagree with executive car allowances, the mayor said, I'm gonna take money from other places in the budget, and I'm gonna fund car allowances. Allowances. Because in the market, I see them out there, and it's part of me maintaining a high highly qualified workforce. And I want car allowances. And the council amended the budget and went in and took the money out again.

And the mayor came back and said, this is this is execution. This is not policymaking. I'm putting the money. I I will find other money in the budget. Now we're cutting other things you might want, but I'm putting it back in the budget to provide these car allowances because it aligns with the direction, it aligns with the policy indicators, and this is policy execution.

And at that point, the attorneys helped the council get to the place to say, it really is policy execution. And we can do this all day long. We can cut the budget, and we can get the budget completely gone because we keep cutting that amount of money that we don't wanna have spent that way. But at the end of the day, that is policy execution. It's the way that the executive within because, remember, your appropriation power is at the appropriation level. You don't appropriate at all those line items, really. You appropriate at an appropriation level. And so that I I've always liked that example. What about directing that all employees receive a 2.5% COLA? Is that policymaking or policy execution?

That one's kind of a little bit of an overlap, isn't it? Because I've been in scenarios where they will budget a two and a half percent COLA. When you get the mayor's budget, the budget will say, we've got budget in here for two and a half percent COLA, but we're not gonna do that across the board. We actually wanna look at some positions that are further out of market. And because we have a market driven compensation philosophy, we might give some employees a little bit higher and some employees not quite as much. It's not gonna be right across the board as as we go through with that. So that's one, and I put it in there intentionally because it is a little bit might be a little of both.

Yes. I have a question. So going back to the established a goal of $0 towards

Yeah.

Employee allowances, the council could enact an ordinance or write policy saying a car allowance will be no more than $300 a month, and that's what would have to be stopped you.

Sure. Sure. But but I would probably if I were your staff, I would say, oh, that's pretty in the weeds when what you really want

We have a policy now that states the amount.

Right. And and I would say that is kind of in the weeds, maybe. But because what you really want is a high quality workforce, and you want a market driven compensation policy. And And do do you you wanna wanna have to change your resolution or ordinance when the market moves what that car allowance is? Or do you want the administration to be able to have a market driven compensation policy? But if at the end of the day, the council as a body said, we want that to be the max, guess what? I'm not substituting mine for yours. Right? So that that's how I would view that if I were staff. Okay.

So I I just take you back again to your guiding principles, and we're gonna go through a couple more of these examples, but I wanted you to remember your guiding principles as we go through them. So here's your citywide goals again. Let's take a look at this one. Develop and improve the city's recreational trails and increase recreational opportunities, I. E, provide park park I think it should have been park and green spaces for recreational activities and to enhance the environment. Right? You recognize that? Okay. How about this one? Adopt a CIP five year plan for trail development.

Policymaking or execution? Making. Right? That's policymaking. That's well within your purview to have the administration propose to you and then you adopt because they have the technical experience, right, to at least get a five year plan mapped out. You may change it a little bit, but then you adopt it. That is the policy then that we're driving toward. Right? How about establish a goal that 20% of the five year plan is implemented each fiscal year? I think that one's making.

I think if you if you're willing to put your appropriation dollars to it and say, we have a goal as a council that we have this fantastic five year plan, and we're gonna fund it at 20% a year so that we can get it done, that's pretty decent policy direction. And I'd be able to see in your budget that you value trail development because I could see that you're making this commitment into trail development maybe at the expense of other things in the budget because you have a goal that you're working toward that. What about once the bids are received, you decide to fund trail a at 70% and trail b at 50% instead of both at a 100? Pretty clear policy execution. Right?

And in fact, we're gonna talk about it a little bit in the capital project fund. Once you set up a capital project in the capital project fund, your appropriation level is at the fund level on that fund. You have the authority to create a new project. But once projects are in there, the administration can move the budget between the projects to try to execute on the fund. And that is I mean, you will hear from cities that have made maybe agreements with one another that if there's more than a 20% shift in a capital project, the administration will bring that back to the council for just to let them know.

But that's only as good as, you know, as good as the administrator wants to bring it back. Because statutorily, the administrator cannot sign an agreement with the council that gets rid of authority that they have in state statute, and state statute lets them do that. And it's because it's execution. Right? It's because it's not perfect.

Bids are gonna come in high, low, and you have to be able to move those project budgets around a little bit to make the projects happen. So that one is pretty clear execution. And then what about eliminating trail c from the five year plan? To to to be making, you'd have to open up the five year plan. Right?

You wouldn't want the administration to just say, it's out. That one's out. So once you've decided what the projects are, I mean, and you've appropriated dollars toward the projects in the capital project plan or the the capital projects fund, it's your expectation that those projects move along. Now one of your monitoring tools is that you're gonna look at that from time to time, and you're gonna say, why aren't we moving on this project over here? Like, it was important to us.

Why aren't we moving on it? We wanna see that project funded, and that's a very fair question for the council to be asking because you could have a situation. I'm not suggesting you have. I've seen it before, though, where something gets funded, and then we just it just kinda gets back burnered, we never really work on it even though the funding's there for the project. And if the council cares about it, then the council will tee that up publicly every so often and say, where are we on that?

Like, why aren't we moving on it? I'll give you one really good example. It's back when Frank and I this was really fun as a couple when I was on the legislative side, and he was this in the city attorney's office. And at that point, the council wanted the this is gonna shock the other attorneys, but the council wanted the city attorney to put computers on every attorney's desk. They didn't have them. Frank was still writing things out on yellow pads. And the the city council said, that's crazy. We want an a computer on every attorney's desk. And the city attorney at the time didn't spend the money, And he said, my attorneys are paid too much to have a computer on their desk. And the council said, this is early days.

Right? Council said, your attorneys are paid too much to not have a computer on their desk. So the council put the money in the budget again the next year and said to him, if you do not spend that money, like, there will be hell to pay. Spend that money. Get your attorney's computers. And so he did that year. That's when the the attorney's office finally got computers on all of the attorney's desks. But it was the council monitoring that and saying, why aren't you spending that money we're giving you and we're putting in your budget? Because we really want you kinda to modernize that attorney's office. This was many, many years ago.

Okay. Let's do our policymaking or execution one more time. Strengthen communications with citizens, businesses, and other institutions. How about establish a goal to have the municipal communication strategy reach 70% of the population? Policymaking, execution.

It's probably making. Right? Like, you're not telling them how to do it. You're just saying we want some we've got a measure, probably a pretty aggressive measure, but we've got a measure that we want 70% of our population to be touched by some form of city communication. And then what about establishing a goal that 80% of communications will not involve printed material but will be electronic?

I think that one's execution. Because how can they hit the 70% if you're cutting off you know, you're you're basically tying an arm behind their back and saying, go out and do this, but only in this one medium. You can't use other mediums to do it. You've gotta you've gotta really rely on the one medium. And then the other is establish a goal that the parks department will not hold community events that are not open to all residents.

Making. Right? That's policymaking. So you what you can't do is you can't have niche groups that the parks department's doing all of these events for. The the events that we're having our parks department lead in our parks need to kinda be open for for all of our residents in our community because we're trying to strengthen our communication with our our residents. And then lastly, establish a goal that zero community events focused on fostering relations with dog owners are held. I'm glad that you all laughed at that. Think percent get That's super meddlesome. Right? And it it isn't getting you toward your goal.

And I picked dog owners because I know we all love dogs, and we would never have such a thing. But but you can see the point. The point is that's pretty you're it's not help letting the administration have the flexibility to really get to the policy goal that you wanted, which is strengthening communications with citizens, businesses and other institutions. And if I remember on your connect, we even link back into a strategic priority on trying to connect within the community. So, again, I think it was Justin that said, did you really want these slides repeated?

Yes. Because I just wanted to put it in front of you again and remind you, you establish the values and these are the ways you do it. So the mayor's budget when the mayor's budget comes to you, have a budget message. And then I think when you adopt the budget for you should also have a budget message for the operating and capital budget of the community. And what you're really trying to do there is be transparent and demystify the numbers for the public so that the public can understand what were your intentions.

You know? What major assumptions did you use? Maybe you describe some of the areas where you differed from what you received. You know? We did it a little bit different than what the mayor proposed, but this is what our budget is now moving forward.

You'll probably the financial, economic, and inflation factors will be really similar to whatever were identified by the mayor in proposing the budget. You might have unique opportunities that you wanna talk about in any given year. Maybe you're buying a piece of land that came available, wouldn't be available in another year. Maybe you pulled back on 20% funding into trails because you're gonna put the money over into buying a piece of open space, not necessarily trail related, but it's a unique opportunity. Those kinds of things can be like, when you're gonna deviate from a policy direction, you'd probably talk about that in a budget message so that the the public is focused on that.

K? So that's, like, kind of a lot about budget, but now let's get into understanding just some of the basics before we go very much further. So this is just kind of our definitions, deadlines, and requirements. I always like to tee up to everybody. The the state auditor's office has some amazing tools that you can go out and use. One of them that I go to all the time is the uniform accounting manual. Whenever I update my training, I go to that manual and make sure that I'm aligned with everything they've got. It's pretty cool because when you look at it online, if you a lot of people will ask me, like, where's the statutory language? Give me the statutory language for that, and you can link right in that manual. They link the city statute.

They're not your city statute, but the state statute that applies to cities so that you can then really understand where the statutory language is coming from. So I think it's a great resource in there. That's what it'll look like on the front. They update it every year. So the one I have a copy of there is from May 2025.

So we've talked about this a little bit before, but just remember that your your budget for each fund must be balanced. You cannot deficit spend in the state of Utah. We're not allowed to by constitution. All funds added together are your total operating and capital budget at the end of the year. And then at on June 30, when our books close on June 30, we do this snapshot in time, and every fund, anything that hasn't been spent during that year lapses to that fund's fund balance, and the exception is the capital projects fund.

And we'll talk about that a little bit more in just a minute. The maximums for the general fund balance, if you're a town, it's a 100%. If you're a city, it's 35%. If you watched the legislative session last year, there is legislative scrutiny on the city's 35%. Some legislators wanted to take that back down to 25%, which is where it was about ten years ago.

And the thought process is that they don't want you taking in more of the public's money than you're going to spend. They want you to have a little bit of a rainy day fund, but not very much rainy day fund. Now my my own little editorial comment is districts also get a 100%, and I see a lot of districts with budgets that dwarf some of our city budgets, and they get a 100%, and our cities get 35. So it the the whole thing, I hope if they think about it again, they think about it driven on the budget number, not driven on you know, I've got tiny, tiny little cities that their budgets are smaller than towns, and they're limited at 35%. But because they have 1,200 people, they're a city instead of under a thousand in a town.

So, again, each fund must be balanced. Just remember that. Every single fund must be balanced. These are the different types of funds. Brian's probably walked through walked you through this before, but we have governmental funds. And if you read your financial statement, you'll see a section that's about governmental funds. Those funds account for your tax supported kind of day to day services. Accountability is what we go for in those funds, and so that's why we monitor. That's why we do different things to be accountable in those funds. And then we have proprietary funds.

Those include anything that we run sort of more like a business where profitability might be more of the goal for us in that fund. And I've listed there the prof the proprietary funds that you have here in Sandy City. So most budgets most municipal budgets include multiple funds, and I wanted to share these two examples between Salt Lake City at a $2,200,000,000 budget and Helper City at a $6,400,000 budget, but look at both of them. Salt Lake, their general fund is only 24% of their total operating and capital budget. Helper City, it's only 33%.

So it doesn't matter that one budget's enormous. They still the general fund doesn't make up the bulk of what they have. Yet if you listen to budget discussions in both cities, the discussion is almost exclusively around the general fund. And it's because it's the fund where we pay taxes, and it's the fund where we provide the basic services. Right? This is your fund structure in Sandy. I'm sure you've seen this. I actually Brian, kudos. I thought this was great that it was laid out so clearly for the public to be able to understand your governmental funds, your proprietary funds. And you can see that other line of proprietary funds that you have there that are called internal service funds.

And when we go through a fund by fund description in just a minute, you'll see those again. This is just a look at your revenue, 2025 actual revenue by fund. So you can see if you look at it, your general fund is the largest, and it's the governmental fund. But when you add the others together, it's not necessarily the largest, and the next chart will show you that. Oh, I was gonna ask you if you knew what your operating revenue was.

It's a 185,000,000. You probably knew that already, though. And then this is how your funds break out. So your general fund is a little bit larger in terms of your total than Helpers was, and it's about 15% larger than what Salt Lake's is in theirs. Salt Lake's, they get dwarfed by that airport because the airport runs as a separate enterprise fund for them.

Yes. Are these new slides you added? Because they're not matching the slides that we got.

I added slides I added slides last night based on the question about policy execution and making. And so this is probably five slides down now. Okay. Because I added those slides. So it you have a link to the newest, but yeah. Thank you. Yep. But this one was in already. This slide was in. It was those others.

And, counsel, I noted in the staff report that there were some slides that were missing some Sandy specific information, and that's what Carrie would have added. So we can send you the the updated ones after the presentation today, though.

Yep. Yeah. Sorry. I I was at the league all of last week and didn't get your all of your information embedded until Sunday night. Okay. So it requires a council budget amendment to move money from fund to fund. Why? Why do you think that has to come to the council? If I'm gonna move money from the water fund to the general fund, why as the mayor do I need to bring that to you? It's a policy change.

Right? It's a policy change. If I'm moving money from one fund to another fund, there's probably a policy decision going on somewhere. You're the policy setting body. You're the appropriating body, and the the definition of a fund is a self balancing set of numbers. So the council is required to make any move from any fund to another fund. Even your internal service funds, if it's going from one internal service fund to the other internal service fund, the council has to weigh in on that. The council has to take action on that. Okay? And that's true everywhere.

That's true no matter which city you're in. It requires council action to move money from fund to fund. So let's just really quickly talk through the different fund types. And we talked about, the general fund is a governmental fund type. Your main sources of revenue, sales tax, property tax. You have a utility tax, energy utility, energy sales and use tax. You bring in your class c road funds through your general fund. You may then transfer them out to a capital projects fund, but you bring them in through the general fund. You have fees. You have fines.

You have different charges for services that make up your general fund. Your general fund expenditures are kind of the general governmental things, police, fire, parks, planning, those types of things. K? That's the general fund. There is a belief, and it's growing stronger at the legislature, and this is out of that uniform accounting manual, these definitions, that this belief that you should not accumulate funds within your general fund without a specific purpose is growing stronger.

Just be aware of that. K? These are some examples of general fund revenue for different communities, and I like this chart because there are 22 different revenues reflected across these communities. And some of our communities, I would say helper in particular, they they find every every different fund funding source they can, and they bring it in. And and it's interesting to look at, you know, what they're doing in Helper with all of the different revenue sources that they have.

This is your actual general fund revenue by source. Brian provided some great data so that I could show this to you, and you can look at you can just take your time and go through and look at that at your leisure. I know you didn't see it in the deck that I gave you originally, but this is what got added. So you can look at each of your different sources. And then later, not right now, later, I have a trend chart for you so that you can see the trends, and we'll talk through that in just a minute.

So I just told you that the council has to take a has to do a budget amendment to move money from fund to fund. Within the general fund, the council also has to be the the entity that moves money from appropriation level to appropriation level. And what I mean by that is from police to public works or or and it's it's whatever's defined in your budget as the appropriation levels. Okay? Your and it's your department is largely what that is.

In fact, in the truth in taxation legislation that just got done last year, that that impact schedule that you have to put together, the reason we have you put it together at the department level or the appropriation level is because that is the legislative authority level. So what the legislative body cannot do is go in and or or or I shouldn't say cannot. You could. But the administration can move money within the police department from personnel to capital outlay or to charges for services, however they have those categories laid out underneath the police department. That doesn't require any council action.

That's that's the administration executing and and realizing that the budget is a target that we're trying to work toward and that we might need to move money from those different line items within a department as we land the seven forty seven of the budget. Right? But if we're gonna move money from one department to another department, just like if you're moving fund to fund, it probably is a policy change. You're probably pulling back a little bit on one so that you can put more into another. That's why the council needs to be involved in that because you're the policy setting body.

And so you need to talk about those changes that happen from appropriation level to appropriation level within the general fund. You have a debt service fund. This is where you'll have bond proceeds and then payments if you have long term debt. Or if you have a loan, you'll you could run that through your debt service fund as well. Special revenue funds. You use special revenue funds a lot, and it was interesting to me to dig into it. And, again, there's not a right or a wrong. I just found it interesting. So you have special revenue funds, and that means it's a fund that's restricted or committed to a specific purpose other than capital or debt service. And yours are you've got recreation.

You've got a CDBG fund. You've got community art, street lighting, special purpose stormwater, and RDA. And I don't know why why your stormwater is special revenue fund rather than an enterprise fund. Some communities have it as an enterprise. It could be the way that you're doing your user fee in it.

I don't know. You might not have it be a traditional user fee. That may be why you're not an enterprise fund. But but Brian and I had some really good conversation around the special revenue funds because those are policy decisions to have those revenues come in like that as and have it be in a special revenue fund rather than just part of the general fund. And, you know, if you felt strongly that something shouldn't be restricted, if you don't have a bond document or something else restricting it, you could make a different policy decision of how that revenue flows.

There may be you know, there probably are good historic reasons why Sandy chose to run these different funds as special revenue funds. And then your capital projects fund. I have to tell you the schedule that is in your budget, I love. It's one of the best capital project schedules I've ever seen. I was really fond of it. And you can see some of the different capital projects there that I've put in the graphic on the side. I love the capital projects fund. If you've sat through my training, I tell you how much I love it. But now some people some communities are starting to game it a little bit, and it's I'm training not to do that because it's gonna hurt us all if they do. You do not do that, by the way.

You're not one of the communities doing it. But what happens is we have communities that are bumping up against their fund balance level. And so what they'll do is they'll move money. They'll transfer money into the capital projects fund because then when the books close on June 30, it's not in the general fund, and it doesn't get counted in that 35% number. And then what they do, and legislators have seen this happen, is in July or August, there's another budget amendment, and they move the money out of the capital projects funded back into the general fund.

And so the legislators are saying all you're doing is trying to get below below that level. And I have trained for years that you all have capital projects that you're trying to accomplish, so I don't think anyone should be over the 35% savings level in the general fund, but it seems like some people were a little too liberal with how they took that advice from me. Because if you've gone through and you have bona fide capital projects, then, yes, you can put money in those projects, but you probably shouldn't just move it out at the you know, once the once the book's open on a new year.

You know, Carrie, because we got so into fund balances in the last legislative session, So Cam said at one LPC meeting that you can't do that. You cannot move money to a capital projects fund and then move it back to the general fund. He said you can't do that. And I I went, wait. You why can't you do that? So I went to our finance department and asked them, and they said, you shouldn't do that. Correct. So you it's not illegal, but you shouldn't do that. And they felt that in an audit, you would be you would be called out for it.

That's what I know. That's exactly that's the that's the problem that's happening right now. You aren't doing that. But, yes, you can move the money, and then you can amend the budget and move the money back. You shouldn't do that if you don't have the need for the money at a capital project.

You shouldn't do it just to get below your fund balance level, and that's what's been happening, and that's what's put kind of the spotlight on it. So, hopefully, through this year, we'll get more communities to adopt the capital projects plan and then have their capital projects plan laid out in their capital project fund, and then they can put money into the different projects that they really want to accomplish. And the reason I love the capital projects fund is because it doesn't revert the fund balance at year end. It stays with the project. You can save for multiple years to accomplish a project.

If you wanna build a community swimming pool, you could put money in you could say, we're gonna save for five years so that we have the money we need to build the swimming pool, and then we're gonna build the swimming pool. And if that's outlined I think that's the key, Chair, to get us out of this is that if people have the capital improvement plan and then they have projects in the fund that align with the plan, and they have some timelines on that of this is how long we need, then I think that that we get out of that scrutiny that we're under right now as local government. So this is I just wanted to show you a copy of yours. You've probably seen it, but I thought it was really great. Like, I loved the detail of these different projects.

I I love this. And I love that you're you've got it planned out exactly as we said. You know where you're going, and and so it isn't a shell game. Right? You're putting the money in because you've got four or five years that you're trying to save the money up and do different these different projects. So I might use this in training from now on because I thought it was so good. I really like it. K. Oh, there was one more that I highlighted, but we don't. Okay.

So just in closing, what makes the project, capital project fund so special? The council establishes the projects within the fund, and, hopefully, that's guided by a capital improvement plan. We've talked about the unexpect the unexpended funds don't lapse. They stay with the project until the project is completed. And then just a reminder, there is no budget requirement to move money from project to project. The administration can move money from project to project. And then only projects associated with governmental funds should be in the capital projects fund. If you have water fund projects, they'll be in the water fund. So if you've got other enterprise fund projects, that's where they'll be. K.

Now just to take a little break, let's play a game. Is it a capital project? We'll fly through this because you guys know these. Town hall, capital project. Yep. Would see it in the capital projects fund. Waterline replacement, capital project? Yes. But we wouldn't see it in the capital projects fund. We'd see it in the water capital. Fire fire hydrant repair. Nope. Maintenance. You're right. Street overlay. Capital project. Right? K. Pothole repair. Nope.

Not a capital project. But you could have a line in your capital projects fund that's maintenance that includes and and that's where you do kind of, you know, all kinds of road maintenance out of that capital project. Bridge repair. Yep. Capital project. HVAC system in a town hall. Exactly. Have you sat through the training? Yes. Okay. Was here with you eight years ago. Streetlights in a neighborhood. Capital project. Replacing a streetlight bulb. Not a capital project.

That's right. K. New community swimming pool. Capital project, playground equipment. Brooke sat through the training. Maybe. Right? It depends. If if it's a maintenance and we're just replacing on a normal replacement schedule, might not be a capital project, might just be maintenance. But if it's part of an upgrade to a city park and it's a larger project we're doing, then it might might be a capital project. So that one was one that was kinda iffy because an upgrade to a park is. Snowplow. This is especially important for our smaller communities. They can they can run that as a capital project because it's big. Wildland fire, they can specifically do that one as a capital project.

Fire station, no doubt, it's a capital project. So, again, strong encouragement toward the capital project plan, improvement plan. That's what you do as the council. Then you lay out the projects just like you've done in that very fantastic capital project plan that that Brian has tracking for you. Proprietary funds, they account for your business type activities. Usually, it's fees. They're fee based. The definition of a fee is that it equates the cost of delivering the service. K? And we're gonna talk a little bit.

The fee doesn't have to recover the cost of service, but it can't be more than recovering the cost of service. So if you make a policy decision on any of your fees, you could make a policy decision to not fully recover the cost of service. What you cannot do is use the fee to just generate revenue above and beyond the cost of service. K? These are your internal service funds.

The fees that they charge are to your city departments. So that's where they get their funding is they have a fee structure just like any proprietary fund, but they charge your different city departments for the services that they provide. So you have an equipment management fund, a fleet fund, your information technology, you run as a an internal service fund. Your pay and benefits management, you run as a an internal service fund, and your risk management, you run as an internal service fund. And that's common in larger governments.

I see that a lot. K? And then you have another type of proprietary fund, which are your enterprise funds. And these are your golf fund, your waste collection fund, your water fund, and then you have an Alta Sports Center fund, which is a different fund. So within those funds, again, if you wanna transfer money from one of those funds into the general fund, you can do that.

But with with these funds in particular, you need to notify the rate payers of the fund that you're doing that. And this is outside of you can charge an administrative service fee to these funds from the general fund without having to go through that notice. You just charge you Brian's probably got a calculation that you charge out to your enterprise funds for the services that the general fund provides to them, and then that revenue comes in. But a lot of our communities don't wanna raise property taxes, quite frankly, and so they wanna take some excess revenue out of the water fund and put it in the general fund, you would have to let ratepayers in your water fund know that. I don't know about your water fund.

I know Salt Lake City's. They provide services outside of the geographical region of their city, so that gets really tricky for them. Right? Because then all of a sudden, when I was living in Holiday but on Salt Lake City water, I don't want my water revenue going into their general fund because I'm not a general fund taxpayer at that time in Salt Lake City. So that's I don't know your situation if you provide service outside of your city limits or not the way they do.

But those are your enterprise funds. And then the policy questions, and and we were just starting to get into that. Should we transfer revenue over into the general fund instead of raising taxes? Believe it or not, we were in a training four or five months ago, and a council member said, can we transfer general fund revenue into our water fund? And I said, why would you want to? Like, general fund revenue is so precious. Why would you want to? And they didn't wanna raise water rates. And I'm like, oh, man. I I yes.

I guess you could, but that is not something I would advise or that I would do. Transfer your general fund money over into an enterprise fund where you have revenue generating capability, but you are the policy setting body. And then and then the same thing comes we've had questions about should I transfer could I transfer money from one enterprise fund to another enterprise fund so that I don't have to raise the fees in the other revenue in the other enterprise fund. And those are all very interesting policy questions that you all put your name on the ballot, and you all get to decide when those questions come up before you. So, again, just remember, every fund at the end of the day must be balanced.

K? Some final fund notes. When you decide that you no longer need a separate fund, the remaining fund balance can be transferred to the general fund, and I've got the code citation down in the bottom there for you. And then local governments may authorize interfund loans and transfers subject to certain specifications. And that's always been an interesting policy thing for me to explore where we have a fund that might have a large fund balance and we have a quick need in another fund.

You know, could we, one fund, loan the other fund the money rather than going out in the market to get the money? And and there are certain specifications that you have to pay attention to, but, yes, the answer is you can have one fund loan another fund money. So this is your budgeting basics for all funds. You know this. You're on a July 1 to June 30 year. You have to have budget public hearings to adopt and amend your budgets and to transfer money between funds. Okay? You need a monthly budget report for your management side. You need quarterly budget reports for your legislative body. You need to file your budget with the state within thirty days after adoption.

So once it's adopted, your budget officer gets it filed. And then you have another financial filing package that's due to the state that goes on the transparency website, and that's due a hundred and eighty days after the close of your year. So it's usually those reports start coming in kind of in January after the close of the prior fiscal year. It's after your audit. So it's your audit and some other statements that they do about the audit. So I wanna stop there for just a minute. We've been going for a bit. Are you okay? I'm okay if you're okay. K? Prow forward. Okay. Great. This is a snapshot of the municipal budget process for all funds. This is assuming no property tax increase.

K? You're not gonna raise property taxes. Oh, sorry. Look. I was gonna ask you for a break right there anyway. The budget officer prepares the tentative budget in March and April, and then the budget the tentative budget is presented to you, the council, by the first meeting in May, and I think you're a Tuesday meeting night. Right? So it'll be next week you get your tentative budget. Council, Dan, you adopt the tentative budget, and you set a budget hearing date for June. And that budget is the budget hearing date is really to allow the public to weigh in on some of your deliberations around the tentative budget.

I know some communities will have that public hearing really early after the tentative budget, but then the public doesn't give get to give you any feedback about anything they've heard you talk about. So I kind of like having it more in the June time frame so that you've had some time to work through the budget, and they can see some of the changes you're thinking about when you have that public hearing. You need to adopt a certified tax rate by June 22. This is one of the crazy things that got changed in the law. You used to have to have your budget adopted by that day, and then the legislature changed the legislation, and you don't have to have your budget adopted until June 30.

But you have to know the property tax number that's gonna drive the budget. You have to adopt that certified tax rate by before June 22. You need to get it to the county auditor. And now there will probably be a question of what if we don't get the information from the county auditor. That's the flaw of the process right now. County auditors are supposed to get you that information by June 8. They don't always hit that. Brian, have you ever had is he still here? Have you ever had June 8?

Usually a few days after.

Yeah. Usually a few days after. And so we actually wrote part of the new truth in taxation legislation to allow for that, to allow beyond up until June 13 for one of the statements that need to be made so that we have time for the county auditor to be a few days late and you to still have an opportunity to decide whether or not new growth was sufficient before you decide if you're gonna have a property tax increase. So that's but those two dates are really important. And then within thirty days of adopting the budget, which needs to be done before June 30, your budget officer will file it with the state.

Usually, on this slide, I bring in now two gold pieces, and it will happen in just a minute, I think. The the budget officer preparing the tentative budget and filing with the state auditor, those are administrative pieces. Everything else in between is all you. Making sure you get that budget adopted by June 30, that's you. You need to you know?

And and Frank talked a little bit about one of the powers of the mayor is that the mayor can veto. And if your budget process has been contentious and you think that a veto might happen, you probably need to think about that when you're scheduling your date so that you have time to react to a potential veto. So you don't wanna adopt your budget on twenty ninth and have the mayor veto, and you have no time to make your statutory obligation to adopt a budget by the thirtieth. So, I mean, I've been in legislative bodies where we have a calendar that works both ways. Like, if things are feeling really contentious, we're gonna adopt the budget here.

If things are feeling like we're gonna be able to not have a veto, we can adopt it a little bit later in June. So that's just something to keep in mind, but you are statutorily required to hit that June 30 deadline. K? This is where I would have stopped and said, do you need a break? But you don't, so we'll go on.

Madam Carrie, can I ask Carrie a question? It's me over here.

Oh, yes. I'm on there's a voice from on high. So

just I just wanna verify. Nothing changed in terms of the date we have to adopt the final budget by in this past legislative session. We still have to adopt prior to June 30.

Yes. Okay. Yep. Before June 30. Yep. And your your June 22 is is also there. I had until three months ago, I had left that June 22. I hadn't had it on the slides. And then as we were going through this truth and taxation process, it's like, no. Everyone, even if you're going through truth and taxation, you have to hit that June 22 date with your property tax levy.

So everybody has to do that regardless. Okay. So this is where see now the gold comes in on those two so that you can see the two administrative pieces versus yours assuming no property tax increase. I wanna just quickly who was in Saint George? Raise your hand if you were in Saint George.

For those of you who are not in Saint George, you will really enjoy this next slide. This is the budget process in a snapshot if you are not going through truth and taxation. This is what it looks like if you are going through truth and taxation. And the blue, the the light blue, those are the legislative changes this year. And so if if you're going through truth and taxation, there's a lot of work to do.

But if you're not, then then it's okay. And I just wanted to leave that in to show you. We'll talk a little bit later about truth and taxation, but that's the ugliest slide in any slide deck ever, by the way, but it was necessary. K. So as we start through this, looking at this, your mayor will present the budget to you next week, which is by the first Tuesday in May, which is when the mayor is statutorily required to.

Sometimes when the legislative body and the mayor have you know, are working well together, sometimes legisl or the mayor will or the executive will give the council sneak peeks at part of the budget, usually not the general fund because that's usually where a budget speech is and and where they want that emphasis. But I know in some communities, they'll let them see enterprise funds or something before so that the council can get a little bit of a jump start on the budget, but it's certainly not required by law. By law, it comes on on the first Tuesday in May or the first meeting in May. K? This is your budget process, and what I took the slide of your budget process and then showed you down below, this is the part where you're you're driving it.

You drive the process from May 6 all the way to August 19 if you're going through. It's my understanding that Sandy routinely reserves a date for a property tax increase, that's great. You you let the county auditor know. We only learned it. It was it was really interesting. We were doing the planning for the training, and we're also helping another community that's going through truth and taxation this year. And when Frank called the county auditor, county auditor said, well, I've already got other municipalities lined up on this one date, so why don't you have your municipality go on this date? And Frank said, well, who else is going through? And he said, well, Sandy got a date. Frank said, did Sandy tell you that there and then I called Dustin.

He said, no. We just routinely request the date so that we're on the date calendar. It's kinda funny. So we talked I don't wanna spend a lot of time here. This is the administrative responsibility.

This is how the mayor puts the budget together, gets it to you. In the mayor's budget as well as in yours, I always talk about transparency. Truth in taxation legislation this year was at its core all about transparency. It was about bringing the public into the conversation of a tax increase at a much earlier stage. And I think we do a pretty good job in Utah as cities and towns of being pretty transparent with our budgets, but I will continue to beat the transparency drum and say, you you are only benefited by the time that you put into educating the public about the great services that you provide and the way you fund those services.

They need to understand what those tensions are within the budget, cut the kind of decision making you need to do even if you're not going through truth in taxation, even if you're not going through a property tax increase. You know, I would always on the side of more and more public education about the budget so that the public really understands how you're spending their money. And most of the time, that means getting it out of numbers into some charts, into some narratives so that the public can understand it. It's really hard to take in and understand budget spreadsheets. Right?

So this is an example of really great things you guys are doing right now. You're demystifying the numbers. I think it's great. These are in your budget book. I love them.

I I will probably again use many of these in future trainings as examples of things that you can do to demystify the budget. And so Brian and his team, I think, are doing a really great job at trying to put information out there in a way that's digestible and understandable for the public. This is one of my very ugly charts because I'm not a graphic artist, but I at least could take the numbers Brian gave me and give you a chart. This is a look at your general fund revenue. You are you know, we say in the state of Utah, local governments are about 14% as a as a rule dependent on property tax revenue.

You're around 17. But remember in that, that's accounting for, like, Lyman who is point o eight dependent on property tax in theirs versus, you know, we've got other communities that are maybe over the twenties, maybe 22, 23, 24. That's where it settles into that 14 statewide. So those were your revenues. Council responsibility is, of course, to make the tentative budget available to the public at least ten days before it's adopted.

You probably do that on your website. You might put it in your libraries, you know, different places that the public goes that they can access it. And then you have to set a hearing date. That's the date that you set on the date that you tentatively adopt the budget, and you need to have at least seven calendar days notice for that public hearing. And then more of your as you have your deliberations, you probably have additional meetings in May and June, I would assume, right, as you go through budget or longer meetings in May and June as you go through budget.

A lot of communities find that they do that. You might do you might have some straw polling. You might do work meetings. You might have legislative intent language. And Dustin said that one of you was interested in that concept of talking about legislative intent.

I'm really fond of legislative intent from the legislative branch. The the organizations I've worked in when we do legislative intent, we will do intents as we go through the budget, and then our the the council staff will track those intents. And they'll probably ask the administration to come in, like, quarterly and give you an update on the intents. And the thing that I like about legislative intent is it doesn't always just end in the year. It can span.

So, you know, some of the best reports I've seen, we might have intents still that are three or four years old, that are still intents until staff will bring it back and say, we might have a new council now. Is this still your intent? Is this still what you wanna be directing? And and play with it and figure out different ways that you can track and monitor those things that you all decide as a body are important and that you wanna strive toward. I mean, one intent I remember some time ago was paying a a living wage to every employee, and it was like it's the you know, we had within the organization, we had employees that were making minimum wage.

And they said if if somebody's working forty hours a week, we wanna make sure that they're not qualifying for benefits, that that it's a living wage, that they can raise a family on it. And that was a council intent. And so then, again, what gets measured gets done. And so the organization started tracking to see, you know, how can we close that gap and get some of those lowest wage jobs that we have in the organization. And that gets back to that two and a half percent going across.

It's like, how can we bump some of those a little higher so that we can try to do that? And that that again, not you may or may not agree with the policy direction, but that council decided that was something that was important to them and they wanted to work on, did a legislative intent, and then they were able to track that over time. Yes. Yes.

If I could just jump in on that. Yeah. And there may be others who were interested in legislative intent, but I know I was one that said K. I'd like to learn more about that. So I have a couple of questions. Uh-huh. First, the the legislative intent. You also earlier spoke about that within our authority, we can ask for regular reporting.

Yes.

And you just sort of connected that to legislative intent in terms of we can indicate this is our legislative intent. And then we can also say we would like quarterly updates on progress being made towards this intent.

Yes.

That is not that does not that is not contrary to what you said earlier about we cannot direct staff. Like, could you clarify

Mhmm.

What what how that is within our authority and is not directing staff?

Right. And, Frank, you can, add if you wanna add anything. I think what Frank means in directing staff is you can't call up, you know, a a supervisor in public works and say, hey. There's a street down here that's in really bad shape, and I need you to send a street sweeper down to clean it. That's directing staff.

A legislative intent, while it may be the HR director's purview to do that, you didn't direct the HR director. You gave a policy statement about what you wanna have happen, and that happens to be the person that would move it through. But, ultimately, it's the mayor who's probably gonna come in and and respond to you on the legislative intents in some kind of a quarterly fashion or something. They'll probably pull it together and respond on behalf of the administration. They may not. They may have the administrator present to you, but it's not you directing that administrator to do it. I don't know if there's anything else you wanna add to that. Correct.

Other than the you know, the statements are relatively general. They're not, again, specific. And that's what I was trying to make a distinction is you the legislative intent is general, and then the mayor, under that general step statement of intent, will execute, they deal with the details. I'll execute that. That's

And I and I love throughout you've you've done this in different ways both verbally, but also written words, around outcomes. And, that's I love priority based budgeting actually a lot. Yeah. We've just not been able to quite get there even though that's something I'm hoping someday we get to. But Yeah. I if if our intent is communicated, are we also allowed to define what outcome measures like, what do we define as success? This is our intent. We feel we will have achieved that intent. Success looks like this. Yeah.

And so then could the reporting that we ask be relative to, here's our intent. This is what success looks like. Give us an update relative to your progress towards success.

Sure. And that's where remember when we talked earlier about being intentional and having a measurement? Yep. You can you can. Now one of the things that you'll wanna do in that is you'll wanna make sure that whatever you're measuring, they have the ability to give you the data, right, regarding, if they have to collect new data, they may come back and say, there's actually a cost to us doing this because it's not there's not some proxy data out there that we can use to show you this.

Now we're gonna have to set up how to track that data and monitor that data, and then the council will need to decide, you know, is it important enough that we would fund the data collection to show that measurement? That the policy based budgeting or the performance budgeting, it's hard because of that. Because what you have to do is sort of you don't wanna get into collecting a bunch of data that you're not, so you kind of wanna look at what data do we already have and what could we use as a measurement to say, this is getting us to this policy goal or this legislative intent that we have over here? And then the monitoring of those updates is still within our authority is is we've we've defined what success looks like. We are looking for evidence of progress towards said success.

And if we if we, like, don't see that, what what are what are the levers

we have? What are the tools we have?

Your tools are create ordinances and appropriation. Right? I don't think it would get to that. I think usually in the scenarios I've seen, when the council says it's a legislative intent that we're moving this way or that way, I usually see the administration say, great. If that's your intent, then we will start to do that. They may come back and say there's a cost to it. We and we need to talk about how we're going to do it or what we're gonna do without so that we can do that. But you you don't have different tools than what you have generally if you don't see that it's being moved along. But those are pretty powerful tools that you

have. Yes. And so then my other wondering is with your experience, the timing of that. So so, like, we just held our January budget workshop. It's the second year we've done that.

Yeah. You know, work towards shared understanding of of kind of the priorities that we hope will be reflected in in the tentative budget that comes to us. Where in that timeline do you recommend calling it on on top? Like, is it in addition to our priorities, can we also layer upon that our legislative intent for a, b, c, and d is this. And so we would do we what language is that?

We hope to see appropriations recommended in the tentative budget and alignment with intent a, b, c, d? Like, talk me through that process, and where does it fit into the timeline?

That's not usually where I see legislative intent come up. That's more in the strategic the strategic area, but you could do it there because there's not a right or a wrong. Right? And, usually, a legislative intent will say, it is the intent of the council that, and then you state what the intent is. I usually see those come up during the budget deliberation process.

Oh.

That's usually but to your point, if you're saying, you know, we actually wanna signal that intent really clearly in January or February, and we would expect to see it in the tentative budget. And then if you don't see it in the tentative budget, you adopt the final budget. And so you can make and and you've been pretty crystal clear up front of where you're going to head if you don't see it. And I would think that usually you would see it because they would want a first crack at at least getting where they think that you're going with it. But I have not seen legislative intent used as strongly there as I've seen it during the budget session.

And then if you watch the legislature, they do legislative intent right during their session as well. And so I usually see it during that kind of the appropriation process when it's like, okay. We're we're not gonna figure out a way to fund a b c right now, but we want it. Like, it's important to us, and it's important to us. What I would encourage you to do is say because it aligns with these things that we're trying to accomplish. That's the importance. And so we wanna start seeing a movement toward that, and that's how you could direct it. Okay. Does that make sense?

It does. It does. And and I I'm gonna I'm gonna keep listening and keep pondering k. Because we did we did definitely, through our budget workshop, identify priorities. And so it sounds like your your recommendation would be have this sort of in in our mind as we are going through the budget process and and if there is an opportunity to be even more clear relative to, hey. Yes. We we we share these budget priorities. But as we're deliberating, these other things have kind of come to the surface, and and we see an opportunity to layer upon that legislative intent. Sure. It sounds like maybe for us, that might be the

And and if it's funding something, I mean, that's why you have staff, and staff can go in and say, okay. Body, what are the priorities? And that's this this red green list that I talk about. Yeah. What I've seen used effectively is the fiscal staff on the legislative side doesn't chase for any one council member.

Right? They might help put together a proposal that gets pitched to the council, but until the legislative body says, we want you to go find funding for this or we want you to remove funding for this, fiscal staff doesn't work on that. Because, again, you work as a body, And so they need to have some pretty clear direction, and that's when I talk about the straw polls. I mean, that's you know, I've seen I've seen legislative bodies say, do you wanna add that to the list? You know? Does everybody and we'll vote. We'll straw poll. Do we or do we agree we're gonna add it to the list? Yes. We agree.

We'll add it to the list. Doesn't mean we agree we're gonna vote on it. It we mean that staff can work on it and bring us back proposals around it. We've added it to the list. That's how I've seen that work. And then at the end of the day, before June 30, you gotta get all of that ironed out so you can get to your number.

And so the the process because I like to think, like, what is the system? What is the process? So the process could be a a member of the body sees something, a pattern emerging, and says, I'd like to have us colleagues think about really identifying some legislative intent around that. Then there's there's collaborative conversations, etcetera, etcetera. And then we as potentially as a body, not a formal vote, you're saying, but more of a thumbs up, thumbs down, how's everyone feeling about this, then we say we'd like

Yeah. That's that's if you're adding and subtracting these items off the list. A legislative intent, you would have the body vote on. We would. You would write it up. You would present it to the body. Okay. And then the body would vote on it, and then it becomes the council's legislative intent list. And only those items, I gotta tell you. I mean, I had a boss that had me write legislative intent statements that did not get support of the body.

He might have another member or two that would support him, but they I mean, you don't know how many years Jim Bradley wanted to go after outlying these single use plastic bottles in Salt Lake County, but he couldn't get the votes because people just said, it just Jim, we're not gonna get there. We're not gonna get there. So Okay. That that helps. Yeah.

Because I was trying to understand how to use straw poll versus so it really could be a proposal by a council member Yep. That brings forward legislative intent language that seems to be aligned with some commerce. Okay.

Yep.

I just needed to understand process.

And And then you need to think about how you put that on your agenda, you know, so it's got full transparency. The public can see that this is the proposal that's before the council. I know in in one of the bodies I worked on, there was always a section there each week during budget deliberation. Does anyone have legislative intent? And the body would not entertain legislative intent that they had not seen already. Like, they said, we're not gonna sit here at this dais and read this and try to comprehend it. If it's not here in advance, we're not considering it on the day that you want it there. Gotcha. So they were holding themselves and each other accountable on that.

Yeah. And and and, again, I'm I'm just buzzing around in my brain with this. And so something for us to think about is, would legislative intent follow our same policy around two readings? Or, like, a that's not a question for you. I'm just sort of

throwing it. But I am very interested in body had that two meeting thing, and legislative intent did not follow it because it wasn't an ordinance or a resolution that they were passing. So it was part of the budget process.

So it was just organically part of the process but still required a a vote to be embraced as the body's legislative intent?

Yes. Okay. And they would vote on the final legislative intent list when they adopt the budget.

When they adopt the budget.

But they would vote on them as they go. Sure. Do you know what I mean? If somebody proposed one, then they would say, yep. And then if it got votes, yep. That one's on. Now there's one more chance that somebody could say, no. I don't want it on because they would vote then on the set.

Gotcha. Thank you. Very, very helpful. I Yeah. I know that took a bit of extra time, but I was really curious about legislative intent. Thank you.

Madam Chair, can I add something to that? So

And, Carrie, thank you.

Just I just wanted to point out, you know, council member former council member Robinson and council member Hausman two years ago said, hey. Let's start doing these budget priorities workshops. And we talked. I don't know if we use the term legislative intent, but we talked a lot about that. And so I just wanna point out to you that if you look at your budget priorities, what was adopted for this year, we have put legislative intent statements at the end of each of those priorities. They're the ones that are highlighted in green. K? And so those are they're broad, and they're leading into the tentative budget. I love what Carrie's recommending in terms of, hey. Well, let's look at it during the budget process.

But I think you could look to those as good examples of what what legislative intent statements might look like. And that was our intention when we helped draft those, presented them to you, and then you adopted them. We were thinking along those lines. So just maybe look at those as kind of an an example. And I'll also point out that you'll notice that your priorities aren't necessarily listed as the citywide goals that Carrie pulled up earlier, and that's because the citywide goals are in the budget every year. They don't they haven't typically changed all that much. You guys can change those if you'd like to. It just hasn't necessarily been the practice of the council to do that actively. So something else to think about.

Great. So some points to consider when you're reviewing the budget, and I know your staff is already leading you through a lot of this, but I always like to ask myself, are the revenue estimates realistic? I was working in a legislative body once where we had a new mayor elected, and the new mayor brought in a new revenue planner. And all of a sudden, our revenues were projected to be higher than they had historically been if we looked at them over a five year trend. And it was because, quite frankly, that mayor wanted to do more things and needed more money and so wanted to be able to appropriate it.

And and we had to go in and say, you you cannot do that. We actually have some goals around we want projections within x percent of, you know, where they're really going to be, and you don't get just to project additional revenue so that you can put additional expenditures in the budget. So that's why I like that five year trending and to take a look at it so that I can it jumps out to me if all of a sudden we're projecting some revenue sources to increase at a pace that we haven't seen previously. This is one where the fees reviewed and adjusted, and Brian has suggested to me that you do a regular fee review, and that's great because if you don't, inflation eats your fees. And remember, your fees get to recover the cost of the service, and your cost of service goes up every year.

Your cost of service has inflationary pressure. And if you're not reviewing the fees on somewhat of a regular basis, then inflation is eating away at those. You do not I I said this to you earlier. You do not have to recover the full cost. I was doing at one point in my career, I was doing a lot of different business license fee analyses for communities when the law changed.

You used to be able to have a business license fee structure that sort of looked like a gross receipt structure. It was based on the gross receipts of the business. And that so the large businesses paid a lot, and the smaller businesses didn't pay as much. The state legislature changed that, and they said you have to collect business license fees that are related to the cost of regulating the business. And so I had a whole consultancy for a few years based on doing these fee studies for different municipalities.

And there were fee categories where councils would say, we can't charge that fee. Like, those businesses will not be able to exist, and we want those businesses to exist. So they made an intentional decision in certain categories to not charge the full fee. And you need to make sure that if you're not recovering full fee, it's with that kind of intentionality that you've made a biz or you've made a policy decision that you've chosen not to. The business category where I saw it most often was home day care.

Because if you run the process of regulating home day care, it's very expensive because you gotta send the fire department out, gotta send the health department out, and you capture all of those costs. And then if you pass that on to the person who's trying to run the home day care, it's very, very expensive. So most communities would say, we're only gonna recover 30 or 40% of the regulatory cost for that classification of business, for that specific category, and then they still could collect a 100% for the other categories. Does that make sense? So just a good example of why you wanna review your fees and make sure that if you're not collecting the cost of service, it's because you made the policy decision not to collect the cost of service for the fee.

You wanna look at how onetime money is used in the budget. You should not be using onetime money to fund ongoing expenses. Don't give your pay raise with fund balance. Not a good idea. You only get that once, and then that fund balance is gone. And so you don't you wanna make sure that you're aligning your ongoing expenses with ongoing revenue. Now there is a whole budget argument to be made that there are certain amounts of onetime money that come in all the time. That's true. But I would still in the for the for, like, at a high level, I would try to align ongoing expenses with ongoing revenue. Are transfers from other funds to the general fund reasonable and sustainable?

We've talked about that a little bit. Are expenditure projections aligned with historic trends? Again, the reverse side of that same thing. Like, why all of a sudden are we saying that expenditures for animal control services are gonna drop? Like, what's causing that drop? Do we understand what that drop is, or are we just trying to get within a balanced budget? Budget? So so I would at least look at those things and make sure if they're off of historic trend, you know why. You're cutting the service or or something's happening along that line. Are appropriation units in the tentative budget aligned with council's direction?

You do not wanna change your appropriation unit level willy nilly because it hurts historical looking, but there there are times when you might wanna change them. For example, we had one city that for the longest time had a public safety department that was both their police and their fire. And then they had this moment in time where the council said, we really wanna see the difference between instead of lumping it all together in one public safety appropriation line item, we wanna split those out. So they split it into police and then into fire. But, again, make sure that's policy driven.

There's a policy reason why you wanna change it because you are going to mess up a historic analysis, especially if you change them very often. You don't wanna, you know, be adding and subtracting appropriation unit very often. Were alternative service yes.

Just really quick and clarifying question because I just I I wanna make sure

that I understand. When you say appropriation unit, can you be maybe a little more specific with what a unit is in the context of this? Yep. In the general fund, it's your department. And then for all of your other funds, it's the fund. Okay. Thank you. K? Were alternative service delivery options considered? Some of you might have been in office, and and I love to talk to John Park about this because I thought it was really bold, and I was glad that he did it when he decided that he was gonna cancel the contract with the county for snow removal throughout Cottonwood Heights and that he was going to contract that out to a private contractor.

And then that was that winter when we had, like, the worst storms ever, and the contractor wasn't able to come to keep up with it. And so, unfortunately, the council pulled the plug on that and said, we don't need to go back to the county, but we're gonna do it on our own. We can't rely on a contractor. But but you have to test things once in a while, right, and see if a different service delivery option works. I was working in a city one time where we had a a municipal sidewalk repair program, and we had part of it that was contracted out and and part of it that we were doing with in house crews.

And when we were looking at it, the cost of the in house crew was more expensive. And and so the initial reaction was cut the in house crew program, and let's dump it all to the contract out. And we said, time out. Let's, like, do an analysis. Let's figure out why does it cost us so much more money to run this program in house.

Well, what we found was we were requiring the contracted crew to pour concrete at a much lower level than we were requiring of the city crew. So then what we were able to say is, what's the best engineering standard, and let's have both of them do it the same way. Then we can analyze it again and see is one really dramatically more costly than the other. And in the end on that, so you know it ended up, the in house crews actually were our best route. So we canceled the contract and brought it all back inside.

That's the kind of fun stuff that you get to ask questions about during the budget. Right? Like, have we looked at these alternative service delivery options? Are we doing things because we always have? This gets back to that making sure that we're aligning our services with the needs of today. Today's communities need very different things than communities even twenty years ago needed. And so are we making sure that our municipal services are aligned? I know, you know, within the last twenty years, we built skate parks. There wasn't a skate park when I was a kid. I mean, we didn't have we had parks, but not a skate park.

And so we're align we align those things. We adjust. Right? Is the capital improvement plan and the maintenance plan being implemented? And then I would ask a side question of, you know, do we have maintenance plans on things that that really probably deserve a maintenance plan?

One of my pet peeves right now, not substituting mine for elected officials. Okay? But one of my pet peeves is I'm working with a community that has numerous parks, dozens of parks, and they have playground equipment in all of those parks. And I said, do we have a schedule that we know how often that playground equipment we know every twenty five or thirty years we need to replace it. So how much do we need to budget every single year so that we can stay on track that we are continually replacing that equipment on some kind of a schedule.

And and I was shocked that in 2026, the answer was we don't have that plan. And so now they're getting that plan so that then we can say to the council, this is how much we need every year if you wanna keep playground equipment not becoming obsolete, that it gets replaced every twenty five to thirty years as it wears out. Those are fun quest see why I get excited about it? Those are fun things to do. And then, of course, finally, are our services aligned with our organization goals and the community goals?

So those are just points to consider. Council member Hausman, you already hit on this, and it's, you know, starting to look at what we're buying versus what we're spending and and starting to look at some of our out out comes instead of inputs, outputs, time. And I don't know about you all, but when I am in municipal budget processes, it seems like here's our base budget, and here's the new stuff. And all of our discussions is about the new stuff, and the base budget gets precious little look. And that's where those questions that I just teed up to you of, are we doing it because we've always done it?

Is it aligned with the community need? That really starts to dig us then into that base a little bit, right, and to to say, are these the services that we still need? K. So after you've adopted your budget, then you monitor and amend throughout the year, and we've talked about that a little bit. You should be, you know, looking at it usually quarterly. I don't know if you have an ordinance. A lot of communities have an ordinance that say how often they're gonna do a review, and then amend as necessary between your appropriation levels. Said that a few times. I might care about it. K. We're to at another to another break point. We've been going couple of hours. Do people need a break? Quick one?

That's too quick.

Quick break. Okay.

Ready when you are.

Perfect. So now we'll go into one of the deep dives on monitoring the budget. And I was just telling Dustin, I'm gonna try to go more quickly so that because I'm watching the clock, and it's getting late for you.

But Madam chair, may I ask a question real quick?

Of course.

We were just on this in the previous slide, and you had mentioned this at the beginning. You said that you'd hope we amend our our budget often. And when you originally said that, there was kind of some murmuring murmuring, and maybe different thoughts on that. But I'm the the least tenured council member, and I just wanted to know why, because in my view, there's very little, that we have to work with. So can you give me some examples of what what a council would do in in terms of opening and closing the budget regularly and what what amendments they would make?

Yes. The amendments you would make would usually be brought to you by the administration, and it's because as they're doing execution, they need money moved from place to place. And what has happened in smaller communities, I will I will say, it's usually in smaller communities, is they will go to the council, and they will say, we need to make this move. We need to move money from here to here. Do you generally agree with that move? You know, count they'll call each other council member. Council members will say, yeah. I generally agree with that move. And then they won't have a formal budget amendment. So it'll sit there.

That might be two or three months into the fiscal year. And then at the end of the fiscal year, they'll do this amendment, and they'll keep track of all of these side conversations that have been had of things we needed to do as we're doing execution, and we money we needed to move. And we have this list of them now, and we're gonna do one big cleanup budget amendment that moves all of that, that does it all. And I will tell you, I have answered the phone calls from council members who said, you know, when that was presented to me five months ago and there was nothing else going on at the time, it sounded like a good idea. But now that we're five months further down the road and I know some of these other things and I know some things that I think are coming up, it no longer feels like a good idea to me.

Do I have to vote for it? And I'm like, no. You don't. But you did give your word that you would, and they moved along, and they planned the budget as though you were going to vote for that budget amendment. And so if you don't, you're putting them in a really precarious position.

That's why I think and and I hope I didn't say the word often because I don't think it's an often budget amendment, but I wouldn't shy away from once a month if you need it. I mean, if the if the administration needs to move money around in order to make the budget work, they ought to be bringing it into the council, and you ought to be holding the budget hearing and moving the money. And that way, I don't get that phone call from a council member that says I don't wanna do it. It's if you do it and you do it regularly, then it's, like, too bad. You already voted on that one, and your budget is now as amended.

And then the next time you amend, now your budget is this, but it's the budget now as amended. And so that's the point I'm making is especially in some of our small communities, they just save them up. I don't know what your cadence is here. I think other communities, there are some that do quarterly amendments. There are some that do. And and what they'll do is they'll say the administration will say to its employees, we're gonna have a budget amendment once a quarter. So things that you need, you need to get ready and bring it to us once a quarter, and then we're gonna take it to legislative, take it to council, and go through the budget amendment process. Does that make sense? K.

I was just gonna ask, you know, thinking about that, we don't do it as often as as maybe we should or as the needs arise. And, you know, my my personal thought is to do it when it comes up because then you have the freshness of the conversation, the context. But it also seems that while you you're having this transparent conversation at the end of the year, it may be more confusing because you're talking about things and conversations that have happened throughout the year. Right. And so even from, like, a transparency with the public standpoint, doing it at the time the appropriation is needed would be considered more transparent. Do you does that come into play at all?

I I would probably agree with that statement. What I wouldn't do is wanna be amending the budget every other week. Sure. Yeah. I mean but I think if you were on some kind of a regular schedule that you said we're gonna do, you know, every month or we're gonna do every quarter, we'll open the budget up and make any amendments that need to be made, then that's what we work on. That's the budget then that we work off of. Okay. So that's just I mean, that's like I said, in this world, there's no right and wrong, but that's what I would guide a policy body toward rather than saving it up for that end of the year amendment. I do not like that. I do not like never amending the budget and then doing this whopper of a budget amendment at the end of the year.

I was gonna say, you know, for myself, I even find it difficult to keep track of the the the the context, the conversations that led me you know, or led us down the path that we were at. And so, anyway, my preference would be to do it as as

I think that cities that do it more often, the council and mayor feel more cohesive when they because they're being, taught along the way the council is. And so amending it, I think, drives a unity too. I've seen like, South Jordan, they go in and amend it. It's it's the council getting educated on what the administration wants to do. That's just

That's an interest yeah. That's a good viewpoint.

We only do them on, like, an as needed basis. Seems like every year, we do it once or twice. But here's what I'm wondering. If you save them up, that means you're moving the money before the legislative body is giving authority to do so? That doesn't seem right to me. I know our our finance department doesn't do that. They don't move the money until we vote them being able to do that. Right?

So some of our communities, smaller communities usually, will call everyone and say, are you okay with this? Are you okay with this? Are you okay with this? Yep. Everyone's okay. We'll wait and do it in our end of the year catch up budget amendment. And I just I don't like that practice, and so I'm trying to train that let's not do that. Let's let's amend our budget when we need to amend our budget. But, again, there's there's a happy medium. Right? We're not gonna amend the budget every week or every other week because there are requirements. There's notice. There's hearing, things like that that we need to do. Okay. Monitoring.

Let's jump in to monitoring the budget. Again, we monitor I I'm showing you that again just to remember that we kinda monitor throughout the year, but it helps and ensure not just budgetary compliance, but policy compliance. So, again, we've talked about it. When you're monitoring the budget, be sure to look at revenue. Revenue projection, I like to say, is part art, part science, part philosophy, and part luck.

And so what you're hoping is some of your revenue sources come in high enough that for the ones that might lag, you kinda balance that thing out as the year goes on. Some communities, get pretty sophisticated around their revenue planning, and we'll have some goals around we want the revenue to be projected within x percent of of where it actually comes in so that they can kind of monitor that revenue planning. I don't know if you need to do that or not. I've just seen that in some communities. And then, of course, keep an eye on expenses.

I like to start talking about the revenue because I think it's really easy for us to jump into monitoring expenses and not really pay attention to the revenue quite as carefully. I was working in a community one time where we had a golf fund, and I had a really hard time convincing the golf manager that he had not overspent his budget because he had not spent to the appropriation level that he was given. He was under the appropriation level. He's correct. From that technical definition, he had not overspend his budget.

However, his revenue did not come in as projected, and he spent more than he brought in. And so he overspent his budget. I said, as a manager, you are supposed to be monitoring that. And if your revenue is not coming in, you gotta start pulling back on some of those expenses. You can't just keep spending because the council gave you this number and and not care that your revenue isn't coming in.

And so that's just an example of why you've got it both sides. Right? And even you as a legislative body, you need to understand, and you need to understand revenue patterns. For example, if you get quarterly reports, you are going to see precious little, if any, property tax at the end of your q one, and and probably at the end of q two. You're gonna see your property tax receipts come in in q three because everyone pays in November and December, and then it all comes in at once.

So you can't be alarmed when you look at that first revenue report and you say, oh my gosh. We gotta cut back spending. None of the property tax is in yet. That but but if you're not looking at these reports and monitoring it, you don't understand those variances. You don't understand that their you know, sales tax is gonna come in at a different rate throughout the year than it comes in in your January and February checks.

Those checks are gonna be really, really big after the holiday season, so you don't get overly alarmed, that, you know, you're not at 25% or you're not at whatever percent of your budget is expended at a time without understanding the variances of revenue. The same goes on expenses. You may have expenses that don't hit in an even twelve month period. They hit harder at different times of the year, and it's only when reading these reports and looking at the reports that you start to understand that variability throughout your budget in your city.

I have another question Yep. On that. Okay. So in in projecting revenues, say revenues are projected, the council appropriates revenue at that projection, it doesn't come in as expected, How

what is

the best practice for adjusting spending from a department to department standpoint? Like, how do how does the priority how do departments get prioritized for the revenue that does come in if across the board it's less than projected?

Does that make sense? Yeah. That's a really hard job. Right? You have to cut if the revenue is not coming in, you have to cut expenses. Let let me give you the COVID example. Right? We were terrified in Salt Lake County government, when we declared the emergency for COVID that the revenue was gonna just dive. We didn't know what was going to happen, and we had to cut, and we cut $70,000,000 out of county budget because we were worried that the revenue was not going to come in on the pace that it had been projected. Now, luckily, that was an that was an overreaction.

The revenue didn't get hit quite as hard as we thought it would. But those are decisions though you have to work together, you know, with the mayor in those decisions to decide where are we gonna cut. If our revenue is not coming in as we projected, we need to start cutting back some things. And and the slide that I was gonna blow through that that we can talk about a little bit more right now and still blow through it is, a lot of your departments are really heavily dependent on personnel. That's really hard to cut back on if you don't decide to make your cuts until fourth quarter.

Right? Those are really hard decisions, which is why you've gotta be monitoring it throughout the year and probably trying to understand why is the revenue dip happening. Can we are there onetime things we can scale back first before we start doing, you know, more draconian things with the of, you know, cutting. But but if you let it go too far, you have left yourself in a really, really tricky position to try to figure out how to close that budget year, especially on your departments that are really heavily dependent on personnel services. And they're dependent at different levels.

Right? I mean, police and fire. Police probably is your most heavily dependent. Probably, if you look at their budget, they're usually 80 to 85% personnel. Fire, sometimes they're a little bit lower because of the infrastructure, the the trucks and everything that they have to purchase. But, yep, that's a great question, and it's it's it's as hard as the budget question when you're setting the budget if you have to cut. But actively managing the budget throughout the year is helpful in making sure that if we do end up

in a situation economically or for whatever reason, we can adjust before we're in a

bad spot. In the least painful way. Otherwise, you would

have to use, like, the general fund oh my gosh.

The rainy day fund balance.

Fund balance. Thank you. That could be a strategy. To to cover it, but then now you've dipped into that, and it has to potentially be replenished. Okay. Yeah. Okay.

Thank you. Very difficult. Very difficult conversations. But that was a good segue into the kind of things that can affect both revenue and expenses. First is economics. Right? Just what's going on in the economy can have an impact. Secondly is weather. My gosh. I feel badly right now for three years in a row for Moab. I am certain that they do not have in their budget, you know, having massive flooding going through this down Main Street in Moab. Maybe now they do because it's now becoming kind of a regular thing for them. But but weather can have an impact. You know, you have a cold, wet spring, you might not have as much golf played. All of a sudden, your golf fund, the revenue's off.

You have a dry, hot summer, your water fund probably has excess revenue. People are watering more. Right? They they are doing things like that. Utility rate increases. Those impact you just like they impact your residents, and they impact your department. So when things go up or down, you need to keep an eye on it. Natural disasters that you know, the Moab one falls into the natural disaster area as well. Judgements or levies. You might get sued. You might have to pay out some money. You do have an opportunity to get some judgment levy money with that. But if you know, it depends on how you decide to handle it as a community when those happen. I don't know. I can't remember what that one was supposed to be doing.

But unfunded mandates, things that you need to comply with that you maybe didn't have put in your budget. Legislative session ends, all of a sudden, things kick in in May. You're eleven months into your budget, and there might be things that you have to do all of a sudden as as legislation becomes law. And then we talked about this a little bit earlier. You might have a unique opportunity that comes along midyear.

You know, maybe you didn't purchase maybe you didn't budget for an open space purchase, and all of a sudden, a piece of open space that you've had your eye on that you really want go you know, you hear it's gonna go on the market, and you wanna figure out a way to take advantage of that opportunity. That's that's part of monitoring that budget and making sure that you have the ability to make those kind of movements. So Frank talked to you about your authority and your limitations. And when you monitor for council comply or when you monitor the budget for policy compliance, you wanna remember those. You you still wanna remember the things that you can do, the authorities that you have.

They don't go away, but the limitations don't get lifted. And so you just really wanna lean in to your staff to help you find those lines when you're monitoring for compliance. So these are some ways. I'm gonna build this slide pretty quick. Oops.

We'll go back one. These are some ways that you can monitor for compliance. First off is your annual financial audit. When I was working and I'll tell you, it was when I was working for the Salt Lake City Council. At that time, when I was fiscal lead for their staff, the council decided that they because they have the ability to review the administration and audit, they wanted to be the ones that that manage the financial audit contract because the auditor was auditing the administration.

And so prior to that, the administration, you know, had been the one that periodically had released an RFP and picked a financial auditor. Now in this scenario, the financial auditor still works extremely closely with the administration because that's who they have to work with in order to manage the books, but we actually switched it so that the council was the one that was hiring the auditor each year each five years. We had it on a five year cycle that we would go out and audit. I'm not suggesting that's something you do. I don't really know how much control it gave them at the end of the day, but it was something that council members on that council at that moment in time felt strongly about, and it certainly was within their legal purview to be the ones that were hiring and and retaining the external financial auditor.

You can do we've talked a lot about this, the quarterly performance report quarterly performance reporting. That's on performance measures. If you have performance measures, you ask for some kind of quarterly performance report on that. We've talked a lot about the legislative policy intent statement. I don't know if you all do any kind of routine performance review.

I've worked for organizations that do this that actually fund within the council office, within the legislative body, routine performance review. And then what they do is they adopt a review schedule so that they know, and it's usually aligned with some of your priorities about the big things that you care about, and you might hire an independent consultant to come in and review that and and give you a sense of how it's going, how a department's functioning or something like that. And I think those are really helpful. I mean, a lot of times, those reviews come up with really great ideas and suggestions and savings, but you have to invest in it in order to make it happen. Yeah.

You know, you would have to put some money in the budget and hire the consultants and have them come in and and do that, and you probably would want a policy that guides it because you wanna keep politics out of it. Right? You want it to be a policy review, not a, you know, oh, this is our pet peeve over here, and we're gonna go after it every single year, but some kind of a schedule of us doing our review of the administration, and this is how we're going to accomplish that review of the administration. Staffing document, I see yep. Yep. Mhmm.

Sorry. Gotta be on the record on microphone. So, yeah, just trying to move before before you move on to the next thing. Yeah. So we have put in place management studies. We've we've done one and another that is in the works since and recently modified. And I agree. I think those have been really insightful. A lot of the budget priority decisions we've made, for example, in the fire department have come because of the management study and and just real clarity on on priorities and strengths and opportunities, etcetera. So but in what way is you're you're calling it routine performance review.

It's the same thing.

Okay. That's what I wanted to ask. Is is so a management study outside eyes looking at at all aspects of efficiency. So not not a performance review in the in the sense of an like, a a management evaluation of staff performance. This is at the departmental level Correct. And and alignment to budget priorities, things that legislative intent, all of those kinds

of things. Okay. Maybe I'll change the name of that if it led you to employee performance because that would be no. Totally not a Totally different. That's why

I wanted to make sure we're clarifying that performance review Right. In terms of administration oversight of staff is different than Yes. What you're indicating. Yes. But I I do really like the idea of so okay. So management studies, we have a policy where we are doing it, and I believe it's on every other year cycle. And we've got a we've got a Your list? A list great. Okay. So that's kind of what you are okay.

Yep. I think that's fantastic.

K. Thank you. Then I have the clarity I needed.

Thank you. And I'll change that so that it's more clear. We'll call it management review because that'll make it more clear. So another one, I see in your budget that you get the staffing document that, you know, you get to see that. You appropriate.

They're they're the staffing. You get to say the FTEs that are there. One of the things that I've liked to review when I'm on legislative staff and even when I was in a mayor's office, I like to review it for our departments, is I like to see the vacancy reports. For example, again, back to during COVID, when we were having to cut $70,000,000 out of the budget, I said, I wanna see a vacancy report because if we have lived without a position for nine months, we're gonna live with it probably permanently right now. And we're just gonna get rid of the position, and we're gonna save the money and the budget.

So those can be powerful tools. Now, you know, sometimes there are reasons why. Like, there were a couple of positions that staff would come back, and they say, we have been actively recruiting for that position, and we just cannot find a qualified candidate. But please don't take the position because we need it. It's just that we haven't been able to find anybody yet.

So it's it's never black and white. It's art. Right? But but having that information and at least understanding what you know, the vacancy reports, we were able to cut quite a bit of money out of departments without hurting current operation at all because we had said if if they've been nine months or longer vacant, you've been almost a year now. And so it's not gonna hurt current operation necessarily for us to pull those positions back right now.

The capital projects fund. So one of my favorite stories is when I was a young budgeteer very early in my career. Look. This is why I love the capital projects fund. I had a council who wanted to do some things, and that's when I learned this little trick that the cap that the money stayed with the project and the capital projects fund until it's closed out. Your staff already goes through and and routinely closes those at the time. The organization I was working for, the staff did not do that. So this little budgeteer was able to go and say, hey. There's $2,000,000 in closed projects, counsel. We can just close the projects.

Here's $2,000,000 you now, one time, can appropriate elsewhere that you want. That same community now has a policy because they don't want to decrease their spending on capital improvements. So their policy is that as those projects get closed out, that money stays in the capital project funding, gets reappropriated back to other projects through their budgeting process. So just another thing that's kind of fun to to think about that you stumble on as you're monitoring doing monitoring and and looking at reports. Finally, grant applications.

One of the things that I have come to learn over my career is that every grant needs a match, and every grant has reporting responsibilities and reporting requirements that cost us money. And so one of the things we've put in place in different places that I've worked is that we've involved the legislative body more in the front end of the grant the granting process so that the staff doesn't expend a lot of time going out and writing a grant and then bringing it to you and saying, well, we wrote the grant. We received the grant. Now we need to budget the match. And so we turned the process around and said, before you before we spend our time writing the grant, we want you to come in and make sure that the council is willing to entertain the match and wants the match and that the grant program is meets all of our budgetary alignment before we extend those resources.

Oh, and by the way, do you have the capacity to do the reporting that's required without any additional resources. So that was another way that we empowered the legislative body to be more involved in that grant application process. And quite frankly, it's because I got tired of having so many things in the budget be, well, you can cut that, but we're gonna lose access, you know, to a million dollars that we spent money and wrote a grant for. And it's like, you you know, I was feeling like my legislative body was backed into the corner on some of those things, and I wanted to unback them from the corner and have them more in front of it. So just another idea.

You may already do that with your grants here. Some effective ways to monitor the expense budget and the implementation of policy. We've talked about periodic financial reports, audit reports, legislative intent, performance audit, and then the last one there is that historic revenue and expenditure analysis. I think I think Brian runs one of those. He's doing yeah. You run you run that routinely for them. Right? And so you keep that rolling average of five year. I think that's brilliant. I love it.

I wish every community would do that because it really does help you see the decisions that you're making and the impact on your ongoing fund balance because that's gonna trigger when you need that property tax increase, when your fund balance you can't you can't dip below 5%, and you only get to spend your fund balance on ongoing stuff one time. And then you're digging this hole that you've gotta do a property tax increase probably to get out of. So this is just an example monitoring report. I had one community that said that they wanted to have their fund balance be about I I think they wanted it at, like, 25%. And so this is just looking over time where they were able to monitor the fund balance and see, you know, how close are we to hitting that target where we wanna be with our fund balance.

And you can see they hit it in year four. They exceeded it in year five. And then I just remind you that fund balances are a discussion at the legislature, so we don't know where that will go. Yes? In terms of fund

In terms of fund balance, it's it's usually shown in the context of a percentage in that way. But, like, what it feels arbitrary a lot of the times. Just say, we wanna be at x percent. Mhmm. You know, there's gotta be some, you know, background thought put into why why does this equally a good healthy fund balance? What are some of the thoughts or considerations in terms of coming up with the amount of money that then, you know, gets shown as a percentage? Right. Some of

it is bond rating. And so if you go out to the bond market, your finance team knows what the bond market wants to see in terms of having a healthy fund balance for your community, and you know that a healthy bond rating saves you money. You get lower borrowing rates if you have it's like a credit score. And so as a community, you wanna have a healthy fund balance. And and others might be things that drive even like they would in your home or a business.

How how much operating money do you wanna have set aside? And that is you go through a fund balance policy discussion. Your your staff and the finance staff can talk to you about what all of those elements are to help you decide where you wanna be. I have yet to see a community that adopts the fund balance policy to be the maximum allowed. They usually have the fund that like, their fund balance goal is a little bit below the maximum knowing that if if there was some extreme thing like, I was talking to a community in Central Utah.

They they are exceeding fund balance every year right now, and they're terrified. And it's because they're getting some lease payments in that they didn't count on. And so and it like, they said, we don't wanna just spend money willy nilly, but we're in this place where we keep exceeding the fund balance requirement. You don't know if something like that's gonna happen. I think during ARPA, a lot of our communities exceeded fund balance because all of a sudden, with that those dollars coming in, they were dollars we didn't plan on in local government. And so all of a sudden, it pushed our revenue and our reserves higher.

Okay. Well, and our budget's quite a bit larger than some of those lower communities. So, you know, 30% of their budget is very different than, like, 30% of our budget. And so instead of just using a, you know, some arbitrary percentage Right. Like, trying to figure out how to thoughtfully back into what how much we need to cover what and what that looks like as representative percentage.

Yeah. I'd talk to your finance team and kind of see where they're coming from and, you know, where they want it to sit and be part of that conversation with them. If you wanna have a fund balance policy, you could get samples of fund balance policies. I think Murray has one that's pretty good. I'm pretty sure Salt Lake County has one. Salt Lake has one where they've they've sat down with their council and discussed, this is where we wanna be. This is kind of where we want it to sit. Thanks. Yep. But I will tell you bond ratings have a whole bunch to do with it. So k. Oops. Let me go. I thought I hit. So these are some other things to look at.

Staff staff turnover often results in underexpanding your budget. So when you're in periods of high staff turnover, you can have some underexpand that you'll experience. And your pretty sophisticated budget staffs like yours probably already account for that, and they already know, like, this is kind of what our our underexpand because of turnover looks like looks like year over year so that they can kind of count on it. But my my caution would be sometimes there's a tendency in staff turnover to hire hire in where the staff who left was, and then you lose that. You you only then get the momentary underexpand of when the person when the position was vacant.

And what we were used to previously is that when people would leave and they were, like, maybe seven or ten years into their career and then they would leave and would start them back at the beginning, then would have, like, multiple years of, okay. We're not spending quite the same on the same position. But since a lot of communities have gone to market driven compensation, we're not seeing that as much anymore because now you're saying this is what the market will bear. This is what the market will pay. That's what we're gonna compensate, and it doesn't matter how much you know, how many years you've been with us.

We're gonna pay you related to what the market is. So that's just something just for you to understand and know. I like systems that reward programs for creating underexpand by sharing some of the savings with them on one time wish lists. I've seen that used pretty effectively in some governments. And then council member back to yours, start to focus on the outcomes rather than the outputs. But in government, as you know, we are so good at inputs, outputs, and time cycle. We can measure that all day long, but getting to those outcomes is a lot harder. It takes more time, but it can be done. Now I'm not moving. There we go.

These are some of the budget creep things to watch for as or as you're monitoring the budget budget creep. Midyear raises and reclassifications. And I know those should be in two different categories, but anytime that we're, you know, taking ongoing compensation and boosting it in the middle of a budget year, and we didn't count on that at the beginning, that's budget creep. And all of a sudden next year, that's just built into base now. I've already talked about hiring above the, entry level.

Accrule of comp time, and your attorneys, I'm sure, work with you on this. You know, you can end up having huge liabilities if you decide to say, you know, these aren't employees that are gonna get money. They're employees that are gonna accrue time, and then you don't have policies around it, it gets really messy, and it can get really expensive fast, especially if those employees decide to leave and they have time that's recorded on books that you have to pay out. So that's something to think about. I've also seen a lot of communities start to get a lot I don't wanna say the word smarter, but maybe more intentional around vacation, sick leave, things like that because they're trying to kind of put a box around those liabilities for when employees leave so that the the liability isn't quite as large.

Grants, we've talked about those a little bit. Contract increases and decreases and change orders, you'll see that in monitoring reports in your departments that have a lot of contracts. If all of a sudden their their numbers are going different than what maybe the budget was, there might be a lot of change orders going on. And that's something that if I were doing a management review and I had kind of seen that, I it might trigger me to say, I wanna kinda get an understanding on, like, how much of that is happening for us as a broad organization, not just a specific contract. That would not you know, that would be kinda in the weeds for the council.

But as a larger question, you could ask that kind of a question. Some other budget ideas, and I had somebody come up to me the other day and tell me this was the most important thing they learned from me is that if you don't understand it, ask questions until you do because this isn't complicated. It it's budgeting is not complicated stuff. It can feel like it, and all of the funds can feel complicated, but you should be able to understand it. And you need to be able to explain it to the public so you should be able to understand it.

So just keep asking questions. Be creative and test some new ideas once in a while, and then don't forget and don't be afraid to educate the public about the real cost of services. I think that that's one of the things that that maybe if there's an area where we could educate more, it's educating the public to understand that when you want that firetruck to show up, and you want it to show up in two and a half minutes or three minutes, there's a cost to that. And if you're not willing to fund that, then then you're not gonna have that level of service in your community. Same with police.

Same with public works. Like like, really start to help the public understand these are amazing services we provide, but they're not inexpensive services. One thing I will tell you this is the slide we're gonna blow through, so I'll pause on it for just a minute. One thing I will tell you is the Utah League of Cities and Towns has just invested in doing a series of, like, five or six different little short videos on property taxes, and they're doing it specifically to help with truth in taxation. But they're general enough that if I were you, I would grab them and start using them at different public events to get the public to understand property taxation and and why we have to rely on property taxes for our municipal services that we provide.

I'm gonna go through this slide. I'm not even gonna talk to you about it because we've already talked about that if you do not pick up, underexpand on personnel until q three, you're in big trouble. You've gotta pick it up earlier. So if you need help, like, learning how to look at one of those numbered charts and pick out the big stuff really fast, your staff, Dustin, told me he can help you. He can help you go through that. So now we're to kind of getting to fun parts, revenue in Utah. I'm gonna go through this really fast. I've got sandy examples buried in it. You guys are taking a lot of the different revenue opportunities that you have. You already use them, so this is more education.

So can you fish in the stream? Income tax. Nope. You cannot. Alcohol tax. She's been in the training. Yes. You can because you have your own police department. Only communities that have their own police department get that liquor revenue. You have your own police department, so you get it. Payroll tax, no. Right? Right? Obviously. Soda pop tax. I always put it as a no, but then inevitably somebody says, but you have to pay sales tax on it. I said, yes, but it's not

a specific soda pop tax.

Same thing. Sales tax, obviously. Right? You get sales tax. So let's talk for a minute about sales tax. It's a tax on goods and selected services, and it is the largest source of revenue for cities and towns. We collected a billion dollars collectively as cities and towns on sales tax in fiscal 2025. They typically contribute 40 to 50% of a local government revenue. There are many different sales tax opportunities. Not all of them are open to every community, and you're gonna see that in just a minute that there are certain ones that some communities can get that other communities cannot.

There's a general rate. There's the transit and highway rates. There's a hospital rate. How many how many cities and towns do you think have a hospital rate? You've been in the training? Okay. Okay. One. One has a hospital rate, beaver. They have a hospital rate.

We have arts and zoo rates, city and town optional rates, which we all have, and then impacted community rates, which is a rather new thing, that's been put in place. So when you when you look through this oh, it keeps kind of lagging. Total sales tax in Utah ranges from in any community ranges from 6.35% to 9.85, and you can see the average there is about seven point o eight. This is what the makeup of a typical 6.35% sales tax community looks like. You can see their different pieces there.

On this one's kinda fun. Which entity has the high oh, I went too fast. Dang it. Which entity has the highest sales tax rate? You're gonna go with Dutch John. Yeah. Which one has the lowest? Which one? Provo. Provo? You're right. Provo's is the lowest. And then you've got Orderville and Salt Lake not too far from one another. And then this is this is you can see what makes up their sales tax tax rate. The ones in black are things that the city doesn't have control over.

The ones in green are the things that the city has control over and the city was able to decide that they wanted. Now remember when I talked to you about those special rates? You can see this correctional facility rate. There are two cities that get to have that. They have the two big state correctional facilities, Salt Lake and Gunnison, and so they were able to put on the the correctional facilities tax.

And then this is interesting. So look at Provo's art and zoo tax versus Salt Lake City's art and zoo tax. The difference is because Salt Lake County assesses the art and zoo tax, Salt Lake City cannot assess it separately. But because in Utah County, Utah County didn't assess the tax, Provo was able to assess it. And then oh, I was gonna ask you if you knew Sandy's rate, and Frank said, don't ask him.

Just tell him what Sandy's rate is. So that's Sandy's rate, and then that's how your rate's made up. And you don't have a lot of opportunity for additional rate in yours, but you're at 7.45 right now. So that's anything that's purchased here. This oh, I'm glad this is showing up. It wasn't showing up on my screen at home. You know this. This is the way sales tax is distributed in Utah. It's a fifty fifty distribution, 50 of sale, 50 population. But the one thing that got hived off was that the Utah legislature wanted to make sure that everyone was invested in helping with helping the unsheltered.

And so the mitigation fund for communities that have unsheltered services comes off of the population piece before the population piece gets distributed. And so those communities that are hosting shelters, they they split up that mitigation fund based on their public safety expenses. So we're gonna blow through this stuff because Beaver's there. K. Arts and zoo, you already know that. Right? Is that something we can do? Yes. It is. Well, not everybody.

Some can. You can't because the county's already doing it. Just so that you understand that these are the counties on the list that have implemented it. So any city not in those counties can decide to implement either an arts and zoo or some call it a recreation arts and parks tax, a wrap tax. And Salt Lake County has implemented it, and I took out the thing where I show small communities that they can do it. Yes. If

if when that goes back out, the ZapTax goes back out to vote and it does not get approved, does that could that then come back?

I guess if the voters of Salt Lake County opted not to approve it countywide, then, yes, it would no longer be in countywide than cities could, but it has the highest success rate of any tax that goes on the ballot. I figured I'd just wanna technically ask. Super, super popular tax, and so it usually gets overwhelmingly reapproved. It does have to be reapproved every ten years, so it goes back on the ballot every ten years. This is a resort community.

Do you get to fish in that pond? No. You don't because you don't meet the definition of resort community. You would have to have 66% of your bed beds in the community not be residents. It would have to be, like, hotels, motels to be a resort. But that leads us right into transient room tax. Yes. Yes. You can, and you do. So you have the municipal room tax. You can put up to 1%. I think you're at the maximum. Right, Brian? You guys assess you assess 1% in your TRT? Yep.

You're at the maximum. Some communities are not, believe it or not, but they aren't. This is where it goes. That's who's charging it. Sandy's there, and I think I'm gonna build this really fast. It gives you really small community examples. And then oops. Go back. There's Sandy's. I thought it was really interesting to start to look at these taxes.

There's your population. There's your revenue for the tax. And to start to understand that there's a $60 per person offset because you have this tax, there's $60 of taxation you don't have to do otherwise on your community. So people who pay this tax are visitors here. They don't live here, and your community realizes a $60 per person offset because of it.

When I looked at that for some of the other communities that are underneath and they're small, I mean, Brian Heads is, like, over a thousand dollars offset because they have the TRT. Others, it's it's smaller. You guys were kind of about in the middle of where some of those other communities were. I haven't looked at other big communities, but I thought that was just an interesting statistic as I was pulling your numbers together. Transportation taxes, can you fish there?

You bet. And you do. This is just how gas tax works in Utah. There's it's it's a it's the only tax in the state that's considered revenue sharing between the state and the municipalities. Traditionally, we don't share revenue between different levels of government, but the gas tax is shared by law.

So 246,000,000 came in in fuel tax last year. You can see a 172 of it went to UDOT. 73,800,000 came to local governments, 44,280,000 went to cities and towns, and 29,520,000 went to counties. So when you talk about your class c road funds, that's it. Your share of 44,280,000 is what your class c road funds are, and it comes from the gas tax, which is why and and and it's the way it's described is that it's actually the state of Utah paying you to take care of the class c roads within your community.

That's why it's restricted in how you can spend it because it's that you are being, like, their service provider to take care of those roads within your community, and they're passing through the revenue for you to do that. K? This chart is a little bit hard to read, and I'm gonna leave it with you. But how many of you hear about the first quarter, second quarter, third quarter, fourth quarter transportation tax? Have you heard of that? And then have you heard of the fifth quarter? Yeah. Isn't that clever and very confusing? But this goes through each of those quarters, and it tells you, you know, who can implement it. And if this is implemented, then that can't be implemented.

And we're putting together this dollars and cents book. We're doing an update on it right now, working with the League of Cities and Towns. Roger too is very involved in it. And I love this chart because when we talk about transportation funding, this helps, I think, get a really clear understanding of what those different pots are. So if people start asking you about transportation funding, you now have the chart. And the fifth fifth is they're just being clever when they called it the fifth fifth because they already had all these quarters or the fifth quarter. So you can see those there. This just goes through what the different ones are with statutory reference because I always get asked for the statutory reference. This is out of your budget book. I thought it was great.

So what your finance team put together was a way to start to talk to the public about the way that you fund roads in Sandy. And I thought it was a really great graphic of explaining to the public the way, like, the different sources of revenue you pull together for your road program in Sandy. In the new well well, it's in this law. I'll tell you something else. How many of you have heard of this transportation utility fee that was passed in the last session?

Session. And I don't know if you're considering it. I don't know if you all are going to look at it, but it is a new opportunity for communities in Utah local governments to get transportation revenue. I know precious little about it because it's so new, and I wasn't involved in any of the legislative discussion, but I at least wanted to tee it up for you and let you know that it exists, and it's there if you wanna think about it. But what you need to know is and I think that number three is the most important.

The the process you need to go through to do it is doable. It's not easy, but it's not impossible. So it's it's difficult by design. So I would say don't let the difficulty scare you off. It was intentionally difficult. But if it's something you think you wanna do, then you all ought to look at it and and consider it because I think that everybody who I've heard talk about it considers it a big win for cities and towns to have it. So what about a restaurant tax? Can you fish in that pond? Nope. County gets to.

County's getting to fish there. This one's easy. Natural gas and electricity. Do you get to fish in that pond? Yes. You do. Your municipal energy tax. You have the municipal energy tax in Sandy, and I think you're already at the maximum rate of 6% on that tax. So that just gives you a little bit of information about the tax, and it was historically called franchise tax. But you are one of our communities in Utah that have it.

The this, again, is just one of those fun charts that you can see, and then there's yours, and your offset from that tax is about $71 per person in taxation otherwise offset. Now your residents do pay that tax because they pay it on their gas and electric bill, but who else pays that tax? People who don't pay property tax pay that tax. And so it is a way that you are getting money into your city from from other properties that are otherwise exempt from taxation. This is a way that they're contributing to your general fund.

Unfortunately, there's not a way that you can just apply it to those. You have to apply it to everybody, so the residents do end up paying it as well. Telephone, yep. You know that. You you've got your telecommunications tax. You are one of the cities that does it, and then I'm gonna just build this for you really quickly again. It's kinda fun to look at some of these small community numbers. There was one last time where I think Eureka gets $14 a year from one of the taxes that they levy. But on this one, you bring in about $598,000, and so your offset's about six twenty three on that one, and it's just because your revenue norm number's a little bit lower. This one is on the cell phone bill, and it's on the bill to the ZIP code of where the bill is paid.

So Roger two always likes to say that Kayesville, where he lives, is still getting the tax for his children who live out of state because he pays their cell phone bill for them. So the memo is pay your kids' cell phone bills forever even when they move away, and you keep the the money coming here to your home community. I think we're still paying our son's cell phone, but he's in New York. Yeah. I don't know why. He he's making more money than I do. So okay. What about public safety fees? You get charged for public safety fees.

Yeah.

Certain ones. Right? And you do. So these are some of your public safety fees that you have in Sandy, and there's your revenue history that Brian generously provided for me on the different kinds of fees that you have. There's one fee that's missing there, and it's the police fee, and it's because you can't collect it.

So so you can establish nonprohibited public safety fees, and we're gonna talk about the prohibited ones, but you can establish nonprohibited ones. And, again, remember, they don't have to recover the full cost, but the goal is usually with a fee that you recover the full cost, and you'll review them periodically. So that same transportation utility fee bill that I told you about that gave you this new opportunity for transportation utility fee revenue took away the opportunity by and large for local governments to do a police fee. Now how many were living in Salt Lake County when Salt Lake County did a police fee? Any of you?

Do you remember that? Yeah. I implemented that fee, and it was so horrible that the state legislature took away the ability to do a police fee at that time. It never should. You know, it was good public policy, but I I understand. It was Salt Lake County, and it was the Unified Police Department that implemented the fee. No. It wasn't it wasn't sheriff Kennedy. It was under sheriff Winder when it started. Sheriff Winder.

But it was it was honestly the county mayor and the county council who pushed who who forced the issue into the fee, but that's a whole another conversation. But, nonetheless, not a popular fee. And so I was really surprised when I started seeing local governments starting to charge police fees again. We had some small communities up north, and they're like, yeah. We just put a $2 charge on the light bill on our our our bills, and now we're doing public safety fee.

And I'm going, well, I lost the ability statewide for cities and towns to be able to charge fees for police. This bill, like, puts a puts a quest a punctuation mark after that, prohibits a city or town from charging a general fee for public safety service, creates an exception for cities and towns of the third class and below. So it doesn't apply to you, and there are only two experiences where they can have the fee. And if they don't meet those requirements and they currently have a fee, their fee has to go away by 07/01/2027. So once again, I can now train that, no.

Police fees are not something you can do unless you meet this very narrow window. Okay. What about licenses? Can you charge license fees? Yep. You can charge license fees, and you do. You can, again, recover the full cost. You can charge building and development fees. And, again, my reminders about fees, they're on that slide. This is your revenue from your business licenses and your permits.

In your budget book, those roll together, and I had asked Brian to split them out because I just wanted to for me, in my head, to get an understanding of your business license fee revenue versus your permit fee. The policy question I would ask myself if I were a council member is I would look at the business license program and say, does the program cost us more than 1,500,000 administer to run the the cost of regulating the business? If it does, that's my trigger that I should look at those fees and make sure that if I'm not recovering the cost of service, it's because I made an intentional decision not to. That it and and I have no idea. I didn't go look at the expense side to see what are you, you know, what are you paying.

But I sense that in a community of 96,000, it might cost a little more than that. I'm not sure, but it could be a question to ask. What about the facility use fees? Yep. Yep. You can charge those, and I'm sure you do. So for different spaces, you can charge the fee. Again, one community that I know of has decided that they're not gonna recover the full cost of renting sports fields because it basically gets rid of any kind of public rack because they can't afford to rent the field at the cost that it costs you. So you subsidize those with nonfee revenue. Grants.

We've talked about grants. You certainly can apply for them. And then just in addition to the other grant considerations, make sure it's aligned with your strategic initiatives. There are some some people, sometimes, like, in administrative positions, are really good grant writers, and they just love to go out and grab all of this grant money, whether it's kind of the direction you wanna be going or not. And I just like to watch for that and say, like, let's because there are those reporting requirements.

And writing the grant is time consuming and extensive in another in and of itself. We've talked about the match before, so we don't need to cover that again. This is your revenue trend that I told you I was gonna show you. So now that we've talked through all of the revenue, I I wanna ask a question. Did you guys increase property taxes in kinda twenty four ish where there's that little dip up?

You did. You increased property taxes. So you could see that your property tax was on a downward bias prior to that, and then you increase property taxes, and now you can start to see kind of the downward bias starting again. That's common. That is the nature of property tax, and it's because the rate setting process itself removes inflation.

And so we see this downward bias in property tax over time. Your sales tax is flattening out. That's very normal. That's what we're seeing across the state in different municipalities, which is a little concerning, because that is such a heavy driver of our local government budgets. Budgets are gonna get tougher as as we continue to not see the year over year increases in sales tax revenue that we've experienced previously.

So any questions there? The next section is going into property tax. I wanna ask you if you wanna go there. It's our last section, and then we do truth and taxation. But if if

I I will leave that up to the council.

I was thinking that we could skip the last two segments and go questions because I know I have about five questions piled up. And I

And you've seen think most of you have seen the property tax.

Yeah.

Yep. I don't know how ever anybody else feels.

Brooke's

seen it twice.

From from what we understand, we are not considering truth in taxation this year, and so I think we're safe to skip that one. Okay. So property taxes, ever anyone feel like they want that covered?

I just wanna ask a question. Does anybody think that a resident's property tax goes up because their valuation increases?

No.

Thank you. Then I've done my job, and we do not need to go through the simulation to show you that it does not.

K.

K.

Alright. Perfect. So that's the end of my prepared remarks then if we're gonna skip property tax.

So you said you have questions. Go ahead. So

going back to what Frank said at the very beginning that everything is subject to appropriation.

Uh-huh.

So if the council would like to pull back an appropriation that's recommended by administration, how does that functionally work? It just goes back into fund balance?

You could budget it there. Yeah. Okay. You could you what you would do is if you wanted to zero something out Well Yep. But but you

could. Yeah.

Yeah. Or reduce. Then you could increase the appropriation to fund balance line if that's where you want it to go, or you could increase a different appropriation within the budget. K.

What do you think of nondepartmental? I I mean, what do you

mean what do I think? I think it's a valuable tool.

In what way? I mean, I want you to tell me what the pros and cons, good and bad.

Yeah. Nondepartmental is used for things that don't easily fall into one of the other appropriation levels. I I your nondepartmental, it looks a little large. I haven't compared it to other communities. I don't know. I would probably have to do more of a deep dive into it to give you an opinion Okay. Or a thought, which I haven't done. Sorry. But I did see I mean, it was but but I see that in a lot of communities. I see that nondepartmental sometimes is and it's because of what gets put in there. A lot of times, compensation gets put in there. You know? So a compensation adjustment for the year might be budgeted into nondepartmental before it gets split out into everybody.

K. And so we have a lot of lines that say meetings or miscellaneous or special projects. What do you think about those kinda nondescriptive? Well,

I think to remember that your level is at the appropriation level.

Mhmm.

And what I would hate is to get lost in the detail and not stay focused on the big picture. Is it And on on whether or not, like, we're moving toward what our policy and goals are. Like, one of one of my trainings used to always include, like, please don't get caught as a council counting paper clips. Because if you're counting paper clips, you are you are not doing your job, which is this higher level

policy. Much to expect from our level that we have a definition of what can be spent in meetings or what the what that means. What does meeting mean? You know? And I don't they don't have a definition.

I I don't know. I get I guess I don't usually get down into that kind of a line item. Well, some

of those line items are rather large. So just is it too much to ask that, like like, say, this this is what we spend in that? Or, you know, I think that having definitions of what

Yeah. Traditional I don't think it's too much to ask, but they're not required to give you that level of detail. Okay. They're required to give you, you know, the appropriation level detail. They give you more right now than they're required to give, and most communities do. Most communities break it down a little bit further. I mean, honestly, I don't see a lot of budgets where we get down into, like like, meetings and paper and and those things. I usually see it at a five category level or a four category level, personal services, charges for services, capital outlay. I mean, that's kind of the level that we're often looking at. I like councils to look at that level because it keeps us talking at the policy level.

It keeps us talking about the policy that we're trying to get implemented. Sometimes those costs interfere with the policy that we're talking about, though. So that's when you're drilling down and you wanna drill down. Yeah. I mean, you I don't know if you feel differently. I mean, you certainly can, but nothing nothing requires them. Like, to for you to say, I want you to change the labels of No. No. I don't

don't want to change the whole thing, but I just I I'd like to know the expectation of what is what's

Right.

What does that mean?

I mean Well, and I ask what it's, how it helps move us forward. Like, okay. If we're budgeting this much money for meetings, how is that helping us achieve our like, how does that align into one of our strategic goals? And and it the more that you can bring it back to that, it then sort of gets the conversation where the conversation needs to be. Like, are those things driving us toward the outcome that we're after? And explain to us how it helps move forward.

So other terms like miscellaneous don't don't you don't see anything wrong with them or special projects?

These are very special projects. Yeah. The you know, do I like to see a large miscellaneous budget in a budget? No. I don't like to see a large miscellaneous. But if there's a miscellaneous and it's, you know, budget dust as I would look at it based on the bigger picture, I'm probably not gonna spend my time on it.

Okay.

Just just on because I'm expecting the administration, they don't wanna bring you a budget that has they don't wanna bring you a tax increase budget for sure. And I think that they would be getting a lot of that stuff out of the budget. And I guess I've just seen enough public budgets to know. I don't think and and I haven't seen yours. I'm gonna tell you that. I just don't think there's a lot of fat left in our local government budgets. And part of it is because of what's happened to property tax and to the chilling of sales tax. I just think, like, the days of, oh my gosh. There's all of this spending going on, and it's crazy. I just haven't seen that in the budgets that I look at. When I

look at our special projects, those have that has increased substantially over the past five years. Uh-huh. And that raises a red flag with me. Sure. Because we're not

If if the special projects don't align with your policy goals, yeah. But that's I think I would always come back to say, how does this align with where you're stated where we're going? Okay. You know, tell me how that aligns.

Can I ask

you a clarifying question?

When you say budget, Jess, like, do you have, like, a percentage or a number? Or, like, what how do you define that, like, in a more concrete way?

It's art. I know. And it's and it's over time, and it's looking at lots of budgets. And so and it's it's contextualized. You know?

For example, if I have a $50,000,000 budget and I'm spending most of my time on a $5,000 line item, that's that's budget dust. I mean, it's just it's not something as a as a budget analyst that I'm gonna spend a lot of time focused on. I'm always gonna be asking how does this expenditure get us where we're trying to go in terms of the strategic direction. And at a certain level, I have to trust, and I know from my own experience. I've been I was on the administrative side of government not that long ago.

Budgets are lean, guys. They are lean. And unless you've been, you know, really ratcheting up different revenue sources, they're they're pretty lean right now. I mean, things have been tough out there. And I I really feel for our local officials, and I feel for the local budgets that we have because I think getting the public to understand and to trust that we're using their dollars appropriately is part of what we need to do.

And part of that is us understanding the services we're delivering, the cost of delivering those services, and that we wanna stay focused on, you know, what does it cost in a in a general way for us to deliver the service that's aligning with the directions we're trying to go. And so, I mean, I guess that's where I come from. As a as a physical analyst and a person who's looked at a lot of different budgets, I just don't see I mean, can we shave a little bit here and a little bit there occasionally? But it's not gonna amount usually to a lower property tax or something like that. Does that make sense? Yep. It does. Thank you. I

have a question for you about quarter monthly and quarterly budget reports. Sure. And it kinda comes from the question you were just answering. If we're not interested in paper clips or budget test, what should council members be because we get this information. Right? We get it. We get it year to date, and we get it in compare our year to date numbers in comparison to the annual numbers. We get some pretty good information. What should we be looking for, do you think?

Yeah. So I would look first thing I would do, and I should've walked through that slide. Man, I should've walked through it. First thing I would do is I would look, and I would say, this appropriation level because every one of them is gonna be Okay? This appropriation level, 80% of their budget is personnel.

So I wanna look at it. And if I'm looking at the first quarter report and 80% of the expenditures are personnel, I better be at 25% or less expended on personnel in that first quarter report, or I'm gonna be a little worried. If I'm at even 26% might make me uncomfortable in that first quarter report. And then I'm gonna look down at their other expenditures because it's only 20% of their budget across the rest of their lines in their budget. And I'm gonna say, okay.

You know, where are they kind of about? And and I'll look at it, and I'll probably in that one, because it's mostly personnel, I would expect it to be kind of even expenditures. Public works, I'd probably look at a little bit differently. And I would say, you know what? I know our public works department. They have a high seasonal team that they bring on, and they bring them on. They're on right now when we start the budget. They're on in July, and then we we then they go away. So when I look at their budget and I look at their I always go to personnel first because that's the one that's hard to correct if I get it wrong. And I'll say, okay.

Are the personnel expenditures kinda where I want them to be, for the part of the year that we're through? Well, they may be a little high. They might be 30, and that's because now I get an understanding that right now is when we have sort of higher expenditures there. So then I might let that roll one more quarter because I might need to see it fall down to maybe a 22 or a 21 in the next quarter because that's gonna kinda even me out as I glide into the next. So you can see I keep a lot of eye on the personnel budget and where it goes for a lot of the reasons we talked about.

Really hard to correct if you don't figure out that there's something wrong. But I gotta tell you, your city, you have a very skilled administrative staff. They're watching that as well. They're they they're dialed in on it, and they're looking at those numbers as well. But but within each of them, that's what you do is you go kinda through that analysis and look at that slide that I built for you that I didn't go through. And then I think that you probably could get them a report of yours and kinda go through and say, these are the things we look at as staff. This is these are the things that would trigger questions for us as we're analyzing this budget.

And I must say to their credit, they make it pretty easy. Yeah. They they work out the percentages for us. Yeah. So if I'm looking at the the budget for the first month of the year, then they should be spending in each category about, you know, one twelfth of their budget. And if there are any outliers, those are gonna show, and we're gonna look at whether but if in the first month they've spent a 100% of their yearly budget for something,

we know they're in trouble. Right?

Maybe. Or maybe Or maybe not. It's maybe it's a charges for services line, and it's a contract payment, and it came due the first month of the fiscal year, and now they're not gonna spend anymore. Yeah. So that's why you have to you have to look at it, and then you ask the questions to say, help me understand why this looks this way.

Yeah. Madam chair?

Yeah.

So I

I just wanna give kudos to Brian and his team because they actually they make it really, really easy. Mean, you've even seen the newest budget tool that they've put together.

Yep.

And they've asked for a feedback on, and it's amazing. It's just as good as the one that we had to get rid of

It looks the same.

A year ago.

Yeah.

And so, yeah, we're happy to walk any of you through how to use any of those tools. I mean, we put that offer out even a couple of months ago if you remember, but same offer on this new tool. Myself or Justin are happy to walk you through it. It's really simple, and they've done an amazing job putting that together and making it easy for

you guys.

I agree. And it was a heavy lift. This tool. I'm very

Well, Carrie, I'm talking about multiple different tools. Brian and his team just do a solid job on that.

Well and you know the help I ask him for here. Kudos, Brian, because all of these charts are because he gave me data. I didn't have to go mine your data through public reports.

It's so great that we're being so nice to Brian tonight because just wait till next week.

Go ahead. I just had a quick question, not related to budgets per se, but more with our form of government. And one of the things that we can do is regarding personnel is advice and consent of department heads. And so I'm just curious what what what a healthy advice and consent process looks like to to you. Consent is an easy one to ascertain, right, because it's an actual vote. But from the advice standpoint, you know, how can we potentially think about improving that process should we decide to? Ideas.

I'll let you answer, though.

Yeah. So, most of the advice and consent I've seen is is, it's not an extensive process. Usually, the council approves, the mayor's appointment. I I'm trying to think of a situation where they didn't. So I don't I don't really have an answer for that.

Certainly, as I said, our your form of government is similar similar to the federal government, the legislature, and the president, and you can see what they go through. I mean, if if there is a controversial or a difficult appointment, I have not seen that where you would if you have concerns, you would ask questions about that individual. It is possible, Jeff, that you can have those in closed sessions if you're talking about the competency of an individual, and you could do that in closed session. I have not seen that. Again, that's never been my experience.

So I have to look at what happens on a federal level similarly, and they you could see what happens. They they they grew over candidate, and theirs is out in the open and and make a decision. But once that decision is made, you're no longer in a position to advise the mayor about the department. You certainly can't get them fired. You you could request.

Okay. Let me add one thing. I have seen processes that that work out pretty well. The the councils I've worked with, like, one of their overarching goals is we do not want to embarrass people in public. So as Frank's talking about the federal system, most of the councils I've ever worked with, in fact, all of the councils I've worked with never do that.

They do not that that's just not part of their ethos that they wanna embarrass people in public. But I have seen systems where they say, we would like to be able to talk to the person before you bring them in. Like, we wanna be able to ask a few questions, And so the mayor will bring the prospective department head in and let them talk with some council members, maybe in, you know, one on one meetings or small meetings. I have seen an appointment pulled back because council members have said to the mayor that we're just we're not comfortable with this person, but it didn't happen in public. It happened in a process that is that preserved sort of the dignity of everybody involved in the process.

And so the mayor was able to pull back an appointment and then bring forth another appointment that the council, after they met the person, was able to go through and do advice and consent.

So my experience, I remember when I was gonna be appointed, I told the mayor that I will not, go through the process of ping. I I gotta know if the council members are gonna vote for this. I'm not going to go through a process where I'm not in public and they say no. So, yes, in in, of course, you can't have forums, but I did meet with the council members, and I needed to understand if that was gonna be a yes or no. So I think that's a great idea that they should department heads at those levels, that's probably the process that should happen. For me that was going to be appointed, I wanna make sure I'm not gonna publicly have the council say no.

And and and we've had that happen when I've worked with legislative bodies, quite honestly, more often on board appointments than on department head appointments. And I don't know if if you're if you get advice and consent on board appointments by ordinance. You do? Yes. Yeah. And and so that's where we've where I really saw it happen was it was like the council just said, we don't wanna embarrass people in public, but, you know, mayor, we're not comfortable with this one. And so if you bring it forward, we're probably not gonna vote for him, so make your decision. And the mayor, in every case, did not put it forward. There was one that went forward. I wasn't there, and it was not pretty, you know, when when a person was voted down in public.

I think that would

be You remember this probably.

I think that would be in the best interest of both mayor and council that that's the process you follow because you don't wanna embarrass somebody, and so you should have those conversations before even going to

a vote. And and, you know, just and I think that we do do a fairly good job of of maintaining, you know, the integrity of the process and, you know, the personnel considerations. I just you know, we we talk about consent, and and to me, some of that process aligns more with consent. And is there something that comes before consent? And it's like advice and consent, and what does advice actually, like Yeah. Look like? It almost sounds like it might just be a word that was thrown in that doesn't really have any weight or meaning.

Right. No. No. I understand. And it it is probably works out to be consent most of the time. I get I get that. But you do have a say. And if you, say, you have concerns about an appointment, then, you know, you have the opportunity to vote that down.

Okay. Thank you. Yeah. Answers my question.

I think I was kinda quick to go this one, but just a clarifying question. So unappropriated funds can't be spent?

Correct. They would remain in the fund balance.

Uh-huh.

And and so an appropriation means it's put in an appropriation level and can be spent.

Does it always have to go back to fund balance, or can it

Has to go somewhere. So some well, now let's go back to your nondepartmental question because that is where I have seen entities puts put money that they don't want a department to have appropriated to them yet, so they'll put money in a nondepartmental line item until they've been able to have more of conversation, and then they come back and say, okay. After we've had this, we'll amend the budget, and we'll move it from nondepartmental into the appropriated unit. Yep. I have seen that as another use of the nondepartmental fund.

But if it's just appropriated to nondepartmental, that's discretionary spending. It could be.

No. Not not usually. I mean, it depends on how you would put it in there, how you put it in. It wouldn't be, oh, it could just be spend on anything. I mean, I think you'd put it in there with a clear purpose. And the time that I saw that used was when the council had not settled on what they were doing with their compensation package for the coming year, so they put it in a nondepartmental until they could beyond budget adoption final, you know, kinda haggle out what they wanted to do with it with the administration, and then they could release it and and appropriate it out into the departments

Thank you for

that preparation. Thank you.

You made the statement that services have inflationary pressures. And if we don't regularly review them, those fees will get eaten up. Yeah. One thing about budgeting that is really intriguing to me is there's a political element to it when we do tax increases and when we don't. So in terms of budgeting best practices, I know that the legislature prohibits us from just doing a automatic 4% every year. Yeah. But as a best practice, what about the council? What are your thoughts on the council having a policy that we're gonna look at that every year and then decide to move forward with truth truth in taxation?

I would love you to have a property tax policy to decide, and you don't have to even decide, oh, we're gonna look at a certain percent every year. What you could say is, as a council, we we favor more frequent smaller increases than less frequent larger increases. That it could be that simple. Or I will tell you the Wayne County Commission did adopt a policy that said, we are going to increase the property tax by the CPI every year. And and you can see it in their numbers now.

They're about Wayne County right now is about 27 or 28% dependent on property tax in their tax mix, and it's because they got it to the level they wanted it to be, and now they're just they they tee up a CPI increase every year. But they have to go through that full blown truth in taxation process to do it. But they are communicating with the people in Wayne County about, you know, your costs went up, our costs went up, and we're go we're taking our stable source of revenue up by CPI every year.

I I love your thought, and I'm glad to hear it because what that doesn't what happens out there, what happens is they're not tracking that, and then all of a sudden, they have to do a 46% or 60% tax increase. Or a thousand percent. We we just found ourselves you know, we we got to the point where we have to or a thousand percent. You make a very good point, and I think that's what cities really need to do is to track that and plan and take a hard look at property tax. Nobody likes property taxes, and they're they're uncomfortable politically.

I understand that. But it is the most stable source of revenue that you have that pays your public services. But I I'll tell you what, it it never fails, and it's everywhere I've been. And I I don't know why, but it's the put off put off put off because it's uncomfortable. And then all of a sudden, when you have to go to the public, you gotta ask for a 50% property tax increase or, you know, a large one to catch up. So I think that's a very good point you made.

Thank you.

Carrie, are you a CPA? I am not. Okay. You don't need to be on I asked a CPA this question. I'm gonna ask you this question too.

If the cost of your services goes up because of inflation or for any other thing, but your revenue goes up in a manner that's consistent to be able to cover that expense, should you still do a property tax tax increase to to cover the cost of inflation?

That's a policy call, and there is not a right or wrong answer to that policy call. I will tell you that in 2006, if I would have looked at local government budgets, which I did in 2006, that's when we started well, we were well into a database by then, property tax across the state of Utah in our local governments came pretty close to paying for public safety expenses across the the state of our local governments. That's kind of when I think we went on this sales tax thing where sales taxes started increasing almost vertically, and I had to spend many years prior to the recession training people that sales taxes do go two ways. They don't always go up. Sometimes they go down because we were tying all of our inflationary increases in local government to sales tax because it was easy.

And so now that gap between property tax and public safety expenditures is huge. I mean, I have to believe that if we could start as local government moving back to educating the public and saying, look. There there are two services that if the economy dips, I can't pull back on. I can't really pull back on police, and I can't really pull back on fire. Those two services are very people dependent.

Lots of compensation involved in it because of the people who are delivering the service. And we should what I would love a policy goal to be is we should have property tax cover 50 or 60 or 70 or 80% of that bill so that when the economy cools, we we don't we're not faced with having to cut why we really one of the reasons we really exist, which is public safety. I I don't know if that's a good policy or not, but it's a policy decision that if I were elected, I might start pushing. To say as a you know, I want our community to look more like that. And I don't know.

You'd have to dig into the numbers and see if what the right you know, just like on fund balance, what's the right place. But I know that having our most stable source of revenue as a ratio against our most important expenditure be so low is not good for local government statewide. And I don't know what yours is. I didn't run a ratio for you. But that's just my thought statewide. 2006, we almost used to cover it. So

Any more questions, council members? Wow. K. Thank you so, so much. Thank you. Really appreciate

that. Thank you.

Gee. That was a long one.

Alright. General citizen comment. We have no blue cards in the room, and I'm guessing that no one here has comment to make. Dustin, will you please see if any of our online participants would like to comment?

Of course. Thank you, madam chair. If you are joining us virtually this evening and you'd like to comment on any Citi business, now is the time. Go ahead and click the raise hand button on your screen. I'll call your name in the order in which you raised your hand, and you'll have three minutes. And, madam chair, first up is Sandra Hawk. Sandra, I'm gonna allow you to begin speaking. Please remember to unmute yourself.

Thank you. I wanted to come as the treasurer from the Dimpledale Preservation Community and give you a report about the, Earth Day cleanup we had this past Saturday. 243 volunteers turned out. That number is down about 100 from what we expected in a bright, sunny spring day. We're finding that the competition with the San Diego Beautification Day is becoming a problem.

For example, we had no city council members on the site on any of our sites. We did quite a few projects that were laid out for us by the county parks and rec crew. We had projects headquartered at Dimpledale Road, Badger Cove, Wrangler, and Mount Jordan Trailheads. There were multiple volunteer groups that provided service. And, for example, there were was a crew from Cox Automotive from the so now I've lost it.

Federal Services Credit Union, which is across the street from wrangle Wrangler Trailhead. We also had runners from the Run on Trails Wasatch Runners who helped the fire department with fire mitigation within the park. There were youth from the LDS church and from the Hilltop Methodist Church that did projects, and the youth also spread native wildflower seeds. And, of course, we always encourage the youth to come back and see if their seeds grew as a way of, fostering stewardship and encouraging families to come back into the park and see what has changed. In the Badger Cove area, there was there were also members residents of the Ridges At Dimpledale condo community.