Town Council - Regular Meeting

Good evening and welcome to the town of Lexon special council budget workshop meeting focused on the upcoming fiscal year 2027 enterprise budget. These workshops are less formal meetings that allow council to receive information from staff and consultants and to discuss budget matters in detail. I will now call the budget meeting to order. We move right into the tonight's business item, the fiscal year 2027 proposed budget on enterprise funds. And we will start with town administrator Rachel Cleing. And I also want to encourage the council to listen to each other's council. I mean each other's questions tonight and take notes um on their questions so maybe we're not asking the same thing because I know I tend to do that sometimes. to take notes on what is being told to us. So, Rachel,

thank you, mayor. Tonight, um you'll first hear from Kathy, our finance director, and she'll give you a highle overview of the status of the enterprise fund revenues, expenditures. You'll then hear from David Wyman, our utilities director, and he'll walk you through some of the highlights of what's proposed for this year. Um and then at the conclusion of their presentation, uh we'll take questions and we can walk through the proposed budget that was provided to you all. Um without further ado, I'll invite Kathy up. Michael should have the presentation.

Good evening. Um I'm going to start with an enterprise fund overview. We have strong long-term growth primarily driven by utility revenues. So um over time both water and sewer revenues have grown steadily. Water has increased from about 4.4 million in 2011 to 8 million in 2027. Sewer has grown more significantly from about 6.8 million to 21.8 million. This tells us that the sewer services are the primary driver of growth in this fund. Okay. For the year 2027, our revenue um base remains stable and is driven almost entirely by water and sewer services. Uh sewer revenue was projected at 21.8 million and water is 8 million. Together, those two categories make up nearly 90% of total total revenue, which is a strong indicator of reliability since these are recurring service-based revenues. We also see contributions from capital contribution fees and smaller sources like tap fees and miscellaneous income. And I would note that the interest income, we had a spike in recent years, but is expected to normalize. Basically, I'm very conservative about budgeting for interest income because it come it goes up and down with the economy. But we have budgeted 750,000 for interest for the year. Okay. For our expenditures, um we see noticeable increases in recurring operating costs, salaries and benefits increase. And part of that is going to be just filling the positions because we did have some vacancies and then there's some um just

over time the number of positions have grown. Other areas of concern of consideration are contractual services and then operating costs. So for 2027 our biggest expenditure is going to be in the capital improvement plan 15.2 million. Other costs other major costs would be contractual services and salaries and benefits. The higher total expenditures are largely driven by investment in infrastructure not just operating costs. So this is a capital heavy budget year. Um so our debt service coverage is looking good. Total coverage is projected be 2.26 and 27. And even if you exclude the CCFs, we still remain above one and a half times. Our B bond requirements are 1.2 times. So that just shows that we're really strong in that area. Okay. Um, the next chart shows you how our positions have grown over the years. As the customer base has grown, um, it requires more people to service the sewer lines, sewer and water lines, and to service the customers. The headcount increases are modest, but there have been some compensation benefits and staffing um, changes. The key takeaway is that revenue remains strong and stable driven by utility services. We are in a period of significant capital investment. Operating costs are increasing but debt coverage remains healthy.

Staffing growth supports operations but contri contributes to cost pressures. Overall, the enterprise fund is in solid financial position today with strong core revenues and debt coverage above required levels. With that being said, we see consistent increases in operating costs, including salaries, contractual services, and other expenses. That makes it necessary to have a rate study. You'll see in the finance department, I have budgeted for a rate study in the coming year. This is a year where we don't do a rate increase and we do the rate study. And historically over the last 15 20 years we've done a rate study like every six years. The rate study is necessary because of the significant capital investment. It ensures that we maintain healthy debt service coverage ratios. It protects our financial position and our credit quality. It provides a forward-looking financial plan. establishes a multi-year rate strategy and it'll provide for a long-term financial roadmap. And so now I'll turn it over to David. Good evening, Madame Mayor and Council. All right. So, I'm going to start out with um mentioning that uh when reviewing the budget, um there are two

primary takeaways I'd like you to focus on. Um they're the biggest ones. One is um focus on hiring and retention and the second is the commitment to capital investment which um Kathy alluded to in her presentation. Um so the proposed budget addresses um our top concerns which is essentially uh retaining staff the active hydraulic models um our Milstream station upgrade shore road station and force main upgrade and increased pump repair and replacements. So, um, in order to look forward, sometimes it's good to to look back and see where we've where we've come from. So, we had talked about, um, doing a few things. I'm just going to walk us through real quick. Um, in fiscal year 25, phase one of our hiring and retention initiatives, we talked about reorganizing positions with standard industry names. Um, providing a path for promotion. Um, through the new positions, um, we talked about a a sign on bonus, um, a referral bonus, and, um, established on&m and culture expectations for the entire team. So, all of these things have been completed in phase two, which was fiscal year 26. Most of those are completed. Um, we're still working on filling critical positions with qualified staff. Um, I'll say we're a little bit hopeful. We we've filled a lot of the major positions. We have a few that are still vacant, but we have talent and potential

within the department that we are working to develop that I think can fill those positions. Um, so it's not quite as bleak as as it sounds. Um, we have provided training on regulations, how to do the job properly. This training was um thought highly of and I was asked to provide that training at the um the Midlands Capital District for the environmental conf um association. Um, we also are working on providing and repairing needed tools and equipment and some of that you will see in the budget as well as we have a lot of of um vehicles that have hit the end of their life and are are failing on us. Um phase three, which is our current focus, is adjusting pay grades um for positions requiring D-Level certifications or higher existing prior to fiscal year 25 and also growing the internship program that we had rolled out um in the pres uh previous phase. So the next is the current org chart um that we rolled out in phase one. Uh the names of the innocent have been redacted to protect their them from public um humiliation. I left mine. I'm used to it. Um so the proposed budget would include no new positions but it would include a new position uh for um position spot which would be trainee. So underneath before if we hired people in that have no experience, no

certifications, um they would come in at a traininee role um and that would be at a proposed um paygrade eight. From there, once they um satisfy their requirements, they would be promoted up into a level D certification. Um and then from there, it would continue on as we've as we've done. And I'll circle back to the promotions in a little bit um to tell you about how we've done on that. So, um I think it's important to note that since fiscal year 23, we have dropped our field vacancies from 65% to 22%. Um which is a a pretty large amount obviously. Um and overall we're sitting at 41 of our 51 positions are filled. Um so that's 20%. So, as a whole, we've we've made progress um on the hiring front and digging into this slide, this highlights that um retention is not a new issue. So if we go back for the past 10 fiscal years, what we see is that of the 64 employees hired, only 17 remain with the town. That is a little over 26%.

Um, so significant because all of that turnover means we are continually hiring, we are continually interviewing, we are continually training, and we are rinse, wash, and repeat. Um, and that's that's taxing on everybody. Um, and that includes more than just our department because of course we're running background checks. HR is onboarding. Um, so it goes on, it touches a lot of people, has a big impact. Um, I'm going to point out for um the mayor because she had the the luck of seeing us at work, the team out um on a job that ran till about 1:00 in the morning and the experienced worker that was in the hole that night um is no longer with us. So um

Amen. I think you affectionately refer to him as big arms. He was in there flexing in the arms. Tried to arm wrestle him. Yes. Yeah. Um Yeah. So he he left for for another job making a significant amount more. Oh my. He was so

Yeah. One of the few people we were able to bring in who had some experience that translated. So just to make it a little bit more personal. Um the slide also highlights what it takes to maintain. So if you look at that slide, the last three years um we have been hiring a lot of people um between 15 and 16. Um this year we're already at 15 hired and we still have a quarter to go. Um and so that trend doesn't look to stop anytime soon. Next slide. So as they're coming in, one of the things that's important to Oh, I think I was jumping ahead of myself. So, I'm going to pause real quick. Um, in order to change things, you have to track things. Um, so obviously I I track a lot of things. I'm going to hit you with some some data here, but the most important thing to take away from this slide is that 66% of the people who have left in fiscal year 25 and 26 so far um left for better play pay or less overtime. There's other things listed there. No certification requirements, um, take-home vehicles in some case, um, or a combination of all those things. Um, so working in the utilities field, it it's a commitment. It's not easy. It's not easy on your families. And a a lot of people, especially if they're young, they're coming into the industry, um, they give it a try, they go, "This isn't for me." And they they walk out the door. And the bottom left um points out that 80% of the people that left during that time frame, less than a year. I challenge how many people actually know what their job entails, you know,

in a matter of months. Not many. Um so that's a big that's a big um a big deal. And honestly, the the sign on bonus elongated that because once people realized they had to pay their sign sign on bonus back, if they didn't make it a year, we had um at least three people that stayed a year then left just so they wouldn't have to pay back the bonus. Um so I've been talking to Rachel. We've evaluated whether the sign on bonus is actually bringing us value. Um it probably has um some good application with the with the town. Not sure. It's it it is in utilities. So that might be something that we we look at later and um maybe do away with. Um this just highlights again coming at a different angle from what you saw financially in Kathy's presentation. Um water customers have increased 10% over that time period that's shown there which is um the preceding five six um fiscal years. Sewer customers 22% um our staffing 4% during that time. Um overall our customer customer base has grown 18%. So um that 18% means of course additional workload, more assets to manage etc. That said, when I was up here before um I told you we had some plans to roll out. I think last year I had two

councilmen that asked me what I needed and I told you I wasn't going to ask for anything until I proved um that we were implementing and bringing forward what I had already asked for. To that end, um I'd like to point out that despite the growing systems, despite having an a workforce that is majority untrained, um we have been able to consistently drop the overtime that we've been paying out. And this is due to a lot of it's a multiaceted attack, which is basically we are training people. Um, we are focusing on preventive maintenance. We're focusing on instrumentation and other things that give us data to make informed, smart decisions. And we're also working on that culture change that we've talked about. Um, it's a large crew. Nothing's perfect. Um, but we are definitely going in the right direction. And um I think that this is one of the few metrics that helps put that into um perspective. Um fiscal year 26 by the way that that's projected based on um the monies through I think three quarters of the year and then projected out the last quarter based on that. So

um Madame Mayor Yes. Can can you just explain we we got numbers on two y axises there. Correct. Okay. So, um, based on the federal labor standards, we have to report overtime, which is just what you think it is. We also have double time. So, the red line is our double time. So, anytime our folks work on weekends, they get paid double time. I mean, um, holidays, they get paid double time. The gray line is straight time, overtime. What is the The y axis though like

the y axis is the double time and the straight overtime because that is such a small amount compared to the regular overtime. No, what we're asking is is you got numbers on either side. There's numbers on the left side, numbers on the right side. So the numbers on the right side are for double time and straight time. So if you look at that for example, your straight time overtime projected for fiscal year 26 is $25,000 on the right axis. So for the blue line, look at the left. For the other two, look at the right. Correct. Okay.

Okay. And I'm sorry. And the numbers. So blue line left, the other's right. And that's what do those numbers represent? Those numbers represent the three types of overtime. They represent hours or they represent money. Money. Yeah. So, in fiscal year 26, we're saying that there's $80,000 I'm sorry, there's a uh like 100 almost $120,000 overtime item for the blue line and the others are around 10 to 20,000 essentially. Yes.

Okay. That's I mean those are those are relatively small overtime numbers for $3 million in salaries, right? They are. Um and again we try and be efficient. So um there's you'll never get rid of overtime. There's a lot of jobs we have to plan to do after hours. Um, a lot of times when the breaks happen, you go and respond and they turn into overtime. So, yeah. Um, okay. Yeah. But we're we're proud of it.

Um, this is one of those I'm going to walk you through this one, too. Um this slide here just um highlights the buyin of existing staff as they work towards the promotion paths that we created. So um on the left side there's a line down the middle that shows distribution. The blue dot is where we were fiscal year 24. So in dist distribution we had 11 DLE certifications on staff in fiscal year 24. Now we have 12. Um we had zero C level. Now we have one. We had one B-level distribution. That was the previous director. We now have three on staff on the right side of the line. Those are collection system certifications. So previously we had four, now we have seven. And B level they had zero and we have five currently. So that helps highlight one the certifications that are coming. Um the other thing of note is that um staff has passed 15 distribution and 10 collection system certification exams in that time period. um you cannot get receive a certification until you have reached minimum experience time. So that's why tracking of exams is different than um certifications on staff. LLR will hold. You have to have a minimum of one year before you get a D. You have to have two years before you get a C. So we have some some staff that have passed exams. LLR is just going to hold that application until the timer goes off,

then they'll mail out the certification. So, um, exams passed will spike before the certifications catch up to it. Um, and in that time period, nine employees have earned promotions um, since the reorganization. So, we're we're proud of that because that buyin is from both field staff and supervisors. So yes, you have the the buyin of the field staff that say, "Hey, I like this. I'm going to work towards it." But you also have supervisory staff that have given time tutoring that have signed them up for external trainings. Um we have sat down with them during um annual reviews and talked about their future, where they want to be in the organization and what we need to do to support them. That might be leadership classes. Um last week while we were at a conference, we had a potential um supervisor in training who we allowed to fill the role on an interim basis. Um and then we were with him via conference calls, phone calls, um emails, the the whole way and we let him get a taste of it. So that way by the time we get to a point where we're promoting someone, it's not a question of whether they can do the job or whether they get into the job and decide they don't like it. Uh by the time we develop them for that, um hopefully they know that they want to be in that role that time. So that's just um I want you to kind of end, you know, as we work back to the beginning um get a feel for where we're going. M mayor.

Yes. Question David. Um with these certifications are these employees uh receiving promotions based on that or is it So the pro the way the promo promotions work um certifications are a part of that for sure. But besides um certification exams passed, you also have to pass competencies. So we have con competency tests that as they demonstrate those, we have checklists. They go through this checklist are done and then that along with the certifications qualify them for a promotion. Gotcha. Thank you.

So the last one um is about um personnel. I talked a little bit about um the utility portion um in terms of we're not adding any new positions. Um let me rephrase that. We're adding a new position. We are not adding any additional staff. Um, so we would be adding a training position and part of that is as people are working towards it, if they decide to leave, they leave at a trainee position um salary as opposed to um a certifi certified operator um pay rate. um all in. If um if you're looking through our proposed changes that I'm requesting, it totals about $246,000. Um which is less than 1% of the proposed budget. Um so I think it's really a small um small investment to to work towards being one of the best utility staffs in the Midlands. and um hopefully help turn around and help us be the the prime employer that we want to be. Um with that, if there's no questions on that, I'll turn it over for Kathy to talk about her requested.

Um yeah, you want to do questions now? We whatever you like. We can do it now. We can do it um after. What's Kathy going to do now? I was Yeah, you just go ahead and do the whole presentation.

Well, I was just going to tell you a little bit about we need another position in finance due to the increased number of customers, the growth in the fund size, increased compliance and reporting requirements and we need stronger financial planning and analysis. So, that's just a justification for the position in finance. Okay, now we will start um with questions and please make sure you ask for the floor. Madame Mayor, may I? Yes, you may.

Um, so like I think we have we say we have 51 allocated positions that we budgeted for. We have 41 filled. So we had 10 salaries that we didn't use or not using in this current fiscal year, which just for just for uh ease sake, let's just call that 600 grand. A million plus million. Mhm.

Pays a little better. Uh, so where did we allocate the million dollars that was budgeted for this fiscal year that hasn't been used for salaries? That will fall into the fund balance. And if you look at the funds and expenditures and then other sources and uses, we're planning on using $11 million of fund balance to pay for a lot of the capital projects for onetime expenditures. So that's kind of where that went to. When you say capital projects, are we are we allocating that for some of these is that for new capital projects or is that for some of our aging pump stations that maybe we're behind on? I it's $11 million. There's a lot of stuff in there. I just want to know what's the priority because that is a that's kind of an undesated number that gives us some flexibility to play catchup.

It it does a little bit. So, what we talked about doing was going back. We have a lot of pumps we have to um purchase. Um and so the thought would be to ask for approval to take the that money and put it towards the pumps um that need buying. So, do you have like an internal uh priority list of smaller capital projects kind of like our LTIP for transportation? Yep.

Okay. If I may, Councilman KS, um, we're speaking about two things capital related. One, capital equipment, which in the budget packet on page 31 represents those particular pumps that we're talking about as they're prioritized. Um, and then separately the larger capital projects that we've been planning for the past few years. So, between those two things, that would encompasses the the 11 million. Madame Mayor. Yes, M. That's Miss Smith. You were done. You go ahead. Go ahead.

All right. Um I have a question for Kathy and then I have one for David. Um I'll start I'll start with Kathy since she just got up. Uh so Kathy, in reviewing the uh finances, I noticed uh two things. First, that our operating expenses grew at about 8.8%. 9%. But our revenues are only growing at a rate of about 2.83%. Um, should that give us any cause for concern? How sustainable do you feel that is? What kind of trajectory is that putting us on as we move forward? Especially as we're looking at these substantial capital improvements and then also knowing we have some even more substantial capital improvements in years to come. I think that just speaks to the fact that we need the rate study so that we can analyze the rates and we can analyze the growing costs and see what we need to do going forward, which is one thing we've got budgeted in the 27 budget.

Okay. Um I somewhat interpret that as loosely we're in need of a rate increase more than likely.

Okay, good to know. Um and then one more financial question for you. So I noticed uh in reviewing the financials also that the debt service coverage ratio declined uh from a 3.58 to a 2.26. Obviously that's well over the um obligation that we have to fulfill a 1.2. However, uh seeing that decline obviously raised a red flag for me. Now I did go back and look historically I think since 2022 and it's been even lower than a 2.26 at times. So, I guess my question is, um, how comfortable are you with that debt service coverage ratio? Is there any concern with our ability to service debt, especially knowing that these significant capital improvements are coming again in this fiscal year, but also in years to come?

In the short term, I don't see that there's a problem, but I think it does speak to the need to do the rate study to make sure that we've got everything covered. Okay. Um, thank you, Kathy. Madame Mayor, if I may ask uh Yes, David. That's you.

Uh so, David, I want to take a minute to just say um on the record that you have just I'm so impressed with the work that you've done in the utilities department. Um and I I want to be on the record saying that um because anytime that I have called you, whether it's on a Sunday afternoon, I specifically remember calling you on a Sunday afternoon, or if it's in an evening, you always answer the call. Um and you always help me find a solution. So, I'm impressed by many of the things that you showed today, but also just your ability to be reached and how responsive you are. So, thank you. Um, appreciate that.

I think that you were the first hire uh we as council contributed to when I came on council. You you came in right after I came on council. So, it's been fun to watch the job that you've done since I've been here. So, thank you for the work that you've done. Now, on to my question. Um, so a few months ago, uh, we all read the story in the state newspaper that highlighted the sewer spill, the sanitary, um, sanitary sewer overflow or whatever.

Um, and you mentioned in our conversations and also in that article that, um, there were a few things that contributed to that, which was pump failure, an alarm system issue, the system being overwhelmed because of heavy rain. I know that you took a number of steps uh, to prevent that in the future. Um, but one thing that you specifically mentioned is that you need to budget for a hydraulic model. Um, so I'm not an expert on the enterprise fund. I'm still learning. Uh, is that included in this budget? Um, and is there anything else that you need to ensure that an issue like that doesn't happen in the future?

So, regarding that issue specific, you're going to see two things called out in the in the budget. one is the hydraulic model. Um two, you're going to see a Milstream um station upgrade project. That project is going to address a lot of the issues at Milstream, which for those of you that don't know is our crown jewel of of the sewer system. So I think maybe 90 to 95% of all of our flow goes through that station.

Wow. Um and if it's not up and working properly, we put ourselves at risk. Um so that that project addresses a lot of those those issues. Um it gives us flexibility. Um it addresses our ability to properly maintenance um pumps and wet wells and and things that frankly hadn't been done before. Um, I'd be remiss, especially since, um, you gave me a compliment, if I didn't point out that a lot of the issues on getting over the hump, um, fall on the shoulders of my team. Um, so between Madison, Andrew Stubing, um, Bobby Larn, who's a recent hire for our super to supervise our system, um, and a lot of of the the staff that have been here that have bought into um, they're much more focused on it now. They feel empowered um, to talk about what they need, where their issues are so that we can focus on it. So, um I I let Rachel know quite a while ago that um before you can get to where you want to go, you have to get your house in order. and we were going to take some lumps in doing that because when you do things properly um you wind up in the paper sometimes and I assure you there's there's absolutely zero joy as you know being politicians um being in front of a a newspaper person asking that you know answering the hard questions. Um, but you got to do it and you got to own it and you got to say we understand why it occurred and we understand what we need to do to to prevent it. Um, so that's what we did and um I look forward to the city of

Columbia recapturing its its title next year. So So David, just to be clear, uh I don't think any of us mind answering the hard questions. Um we should do that. But what I want to make sure that we're doing is empowering you to do the hard work because at the end of the day, we might answer questions, but we're not in the trenches with y'all doing the hard work. So, I want to make sure, just to be clear, you're getting the hydraulic model that you need through this budget. We are. Yes.

Is there anything else that you need to ensure, and I understand that you can't say with 100% certainty, but to make sure that something like that doesn't happen in the future. Is there anything that keeps you up at night?

I say the rate case so that in the future um as because when that hydraulic model comes out and by the way one of the other things we're doing which I didn't touch on is we are doing um SEOM investigations. COMM is just an acronym. It means we're going out we're actively investigating where we have issues. We're using sonar to listen for for issues in pipes. We're using cameras to find where leaks are. Um the areas say the the Watergate system we purchased where we have high ini. If we can identify where those things are um understand where we have infrastructure that is failing. You add that together with the flow um projections and and the hydraulic model that's going to tell us where we need to spend our money. Um and that's going to be a gamecher. Now, it may highlight things we don't know about currently. Um, so as long as we've got a a vision for the future, um, and we're proactively attacking it, I think we're going to be in good shape.

All right. Thank you, David. You're welcome. So, before I let somebody else speak, David, I'm going to take this privilege and say something. For the last month, I've spent more time with your department than I probably really would like to, but we have spent a lot of time together lately because of fiber companies and different things going on. I've learned so been learning so many things and what you were just talking about about using the different equipment to look at different pipes and to check all different kinds of things is there. Um, and just knowing what y'all do from watching the two water mane breaks that I've experienced, one of them from 2:00 in the afternoon to I think y'all went to after midnight

getting one of them fixed, the other one fixed a lot quicker for y'all.

But with that being said, the what he's talking about is important. But what's really important is that team that you had to get in place, your house that you had to get in place. And taking care of our employees means taking care of our citizens because they are the ones doing the work every day. I watch these people there for hours, including the management coming out and staying, you Maddie and other medicine and others. It's harder than ever, and I know that from owning a small business to find qualified people willing to step into these roles. When we lose good employees, we lose experience, efficiency, and service quality. And those are not easy to replace. And we all know that. I watched that young man that you're talking about down in that hole for hours working and steady working and knew what he was doing. Recruiting is tough. Training is costly. Retention is critical. We already have a strong dedicated team. If we are not intentional about supporting and keeping them, it would directly impact the level of service our citizens receive. If we want Lexington to continue to thrive, we must invest in the people who make it run. And that's not only for your department, that's for all the departments here. Our staff, watching them, being in the field with them and seeing what they do across the board, all of them. from the videos that are done, from the stories that are covered and making sure we're being covered right in the media when we can to watching you. Watching you come out at 9:00 at night to check on your people and be there with them. Bring them pizza, bring them stuff to drink. Watching our upper management, all of our people is what makes this town hall run and be efficient for our citizens. And that's what should be most important to every one of us up here. And making sure, like Mr. Smith said of having the equipment that you need to do the job. Now, we do all know we have a budget and

we have to work on those kind of things, but it is important to take care of y'all and retraining somebody is costly. So, we should take that into consideration. Making sure that somebody has a driver's license is costly. Getting those CDLs are expensive. So, all of these things play into it when we're looking at these budgets. And I think more than anything, we need to make sure we're invested in our people, too, to keep y'all. Oh, Madame Mayor, definitely appreciate that.

Um, David, there was a couple of questions I had. One to piggy back on the mayor. Um, is the constant hiring normal for this industry or is this happening more in the town of Lexington?

Yeah, it it is. There's it's definitely symptomatic in the industry. Um so it let's go back before um COVID hit. Our industry nationally was 50% baby boomers. South Carolina that that number was 55%. Okay. South Carolina is also one of the fastest growing states. So our workforce is aging out. Our infrastructure is increasing. It's putting a burden on everybody. When COVID hit, um the baby boomers were an at risk population. So, they were allowed to stay home in a lot of instances. They realized like this is pretty good. I like this. I'm going to retire. So, it hastened the the retirement um that we're seeing. So, that's the long answer to say. Yeah, absolutely. Um, and what that does, it ramps up who we're competing against. And, um, this industry, we are competing against other municipalities. We're competing against special service districts. We're competing against private employers. So, we are competing against Michelin. Um the employee we referenced before went to Starbucks processing $5 more an hour. Um you've got the brewing company in in Colombia that is stealing um industry. Why? Because these places have water and sewer on site. They have mechanical needs that the people we train have um pipe abilities. So the well crafted jack of all trades that we are developing are in high need across and that's we're competing with all of them.

Got one more question. So on this budget it looks like um we're pretty capital heavy capital investment. Um, is that in your opinion or is this to piggy back on Councilman Smith, is this enough or is this is this a band-aid or is this because in the future I mean it's important for our water system, our sewer system to be maintained to get up to standards to continue to move in advance in replacing you know making sure it is some infrastructure that is in place for a long time to come.

So, absolutely true. And I'm also going to piggy back um whoever whoever mentioned that we had to balance that um you know with with the budget. I'm gonna assure you that this staff right here, we put in hours hours in that conference room together um going through um that capital budget painstakingly um trying to prioritize trying to make sure that we kept the um the balance of money to keep us where we are. financially yet provide the coverage and the time to address those needs. So, it was not a decision that any of us took lightly, but it was something that when we got done, we felt really good about. It was a um and I assure you I I I went through that process on the entire budget, the operating um you if you went line by line, you'll see things that drop down. You're probably going, "Why' this reduce?" It reduced because we needed that money somewhere else in the budget and increasing budget line items. It was not something that I took willy-nilly. And when you apply that to the to the top, it's something that we all take very seriously.

Yeah. I noticed that the chemicals jumped um significantly. Yes. So chemicals um that's going to be the move going from lime feed to mag hydroxide. Mag hydroxide um is going to be something that is going to address the H2S. So when we're looking longterm, hydrogen sulfide gas eats away the systems and we have a lot of a lot of issues because of that. So rolling out this change over to mag um changing the location where we pump it. So, we go out as far as we can, put a small system, let it flow through. That'll protect the tributaries um before it gets to our main lines. So, um that's what you're seeing on that one.

Thank you. You're welcome. Anyone else? I'll go. Okay, Councilman Williams. So, David, um how close will be we be on estimated expenditures versus actual expenditures for this year? Does anybody have a swag? Not just put David on the spot, but Miss Kathy, do you Yeah, we may have to have Kathy grab that for Yeah, I gave my best swag, but I'm going to state that my expertise is not financial.

While they're looking for that, how many times can we rebuild some of these pumps? Because I know when I first came on as council member, we had to fly a pump out of here one time because we didn't have enough pumps to fill a hole to rebuild it. Yeah. And that's um Does it vary by what happens to it? Is it kind of like a car motor? You can rebuild it, but then something flies apart, you can't rebuild it.

You can do it for a certain amount of time. Eventually, it's going to the voluute is going to wear out so that all of a sudden they're not efficient anymore. Um once you there's all kinds of things that are going out there and again, we have 136 stations with more coming on every day. Um, we haven't even fully cataloged um, all of the pumps that we have in our system. Um, we're going through in order to do that, you have to pull them all out. You have to get the name plate data. You have to try and determine um, when were they put in there and there's a lot of records missing. So, we're still going through that process. Um, but we've identified the most critical and as we're working through our critical list, um, we're catching up on the back end with the other. Of course, we also added a asset coordinator and planner. Um, so as we get these things, they're now actively being managed. So when we buy new pumps, for example, um, we've got a system now where we have the warranty. If this thing fails beforehand, we're going out, we're going to warranty. if this thing has been um repaired at some time, we'll go back to them and say, "Hey, is this um did the repair hold or is this, you know, a new type of item?" So, um to answer your question, it varies. Um but yes, there is a lifespan. You can only repair pump so many times.

Okay. So if you look on page five of the document that we sent out, the second column is our 26 estimate and this is the fund as a whole. And the third column is the 26 amended budget. So we had planned to spend $9 million of fund balance, but if you look at our estimate, we're figuring we're not going to spend but like 121,000. So our revenues have come in higher than expected. Mhm.

Our expenses are a little bit lower. Part of that is going to be salaries because we do budget as if every position is fully filled for the whole year. So that has a lot to do with why the expenses come in a lot lower. Well, that's certainly a great thing. And then I noticed on on page three under operating expenses, some of the salary numbers or um administration, finance, information technology, building maintenance, all those numbers seem to be shifting around. Part of that is the restructuring that we did in 25. Okay.

So 26 was the first full year of that restructure. So yeah, it did kind of shift around. Okay. And then back to Mr. David. I notice on your capital expenditure on page Oh, well, not one you enterprise funds 31. There it is over on the side. Um, you're asking for 11 trucks and uh you specified which trucks, but it just says 100,000 miles. Can you uh could you give for us the actual mileage on those trucks? So, we're not know, you know, are we talking 200,000 mi on some of these trucks? Are we talking 105,000 mi?

No. Um I don't think we have any that make it to 200,000. Um life is tough for those, but yes, we do have that document. Um we have the issues for each each truck, so I can get that for you. Um, the majority are in that 95,000 to 115,000. Um, we've got trucks with 90,000 where the transmissions have shot. Um, we've got axles breaking on the back because we're towing trailers and that are filled with soil, you know, dry going, wet coming back. Um, it's a rough life. They idle a lot, which is not good for for engines, as you know. Um, so we deferred four last year to try and get last year's down and um, to a degree that kind of bit us in the butt this year and kind of made it look a little bit worse. So, but yeah, if you need that, I can get you the list of the trucks, um, how many miles they have on them and what the issues are with each of them.

Well, I also noticed that there's one truck listed U8-6 is listed twice. So, I'm wondering if it's a different truck out there or if we just probably Yeah, I I would imagine I I think that's all I That's all I wrote down at this point. Thank you. Anyone else? Yeah, Madam Mayor. No, go ahead. Go ahead, Todd. You have it.

All right. I'll try to I think I'm ready now. uh rapid fire and and you just kind of just give me the uh the high level. But Kathy, you I looked at the positions. I I didn't see a new position. I thought what I saw was 12 and 12 as far as total number of employees in finance. The position chart does not have the new positions in it just because it's not approved. So the position chart um that's in your packet I don't know what page it is. Will it be listed in yours?

So on page 26, that's what you're talking about. Um maybe I mean where showing total number of employees. So the this page is just what's in the current budget. So if we add position like if we add a position to finance it'll be added to this. So we'll have 12 and 27 instead of 11. Okay. Well like yeah on that page it says current year f fiscal year 2026 62 total employees budgeted fiscal year 2027 62 total employees. What am I missing?

This page is just what's already approved. This doesn't include positions that have not been approved, but we hadn't approved 2027. We haven't approved 2027. Okay. So, the the So, is there a request for that to go to 63? Yes.

Okay. All right. That's uh that'll do in that. But but on in that same vein uh I mean obviously this is a very complex document. So all we can do is kind of look at overall trends and try to just understand trends. And on page three where we're in operating expenses like operating expenses fiscal year 2025 operating expenses on third line down we have finance at 1.53 1,530,961. You with me there?

Mhm. And then it's at 2.3333 in fiscal year 2027. It's like a 50% increase in two years. So, and I know we haven't added that many staff or I just something's a miss there. Maybe you can fill in that blank for me. Let me look. readers associated.

Yeah, we did add two meter readers in 26. So that would be significant plus two more trucks in 2026, which would be significant. Two trucks. What does that mean? We physical trucks.

We had two trucks in 25 and in 26 we had four trucks. In 25 we had two meter readers. In 26 we had four meter readers. Part of that was due to the size of the system and part of that was taking over some of the AMI work that had been being done by utilities. It works better for it to be done by our meter readers that do the an that work with the annual billing and it took a little bit of work off of David and his crew. So there was some transfer of personnel from the utilities line to the finance line.

Well, utilities didn't change their number of personnel. We added to the finance and took over some of the work. Okay, I'll I'll jump in that one because like the same thing. I'm just trying to get my mind around the numbers because like in utilities, if you come down four lines, um the utilities line is 12.5 million. Mhm. and then it goes to 177. The 25 is actual numbers. So for utilities

in 25 they were not fully staffed but when we budget we budget as if they were fully staffed. So there were positions that are vacant today that we're counting the expenditures in 27 but in 25 that's an actual number. So that would be the actual salary well the actual expenses of that year. Okay. All right. So so based on fiscal year 26 we have a budget of 16.4 and we've got an estimate of 134. So we got $3 million of budgeted money that we don't anticipate spending in 26. Okay. All right. And then Gavin had mentioned two point maybe the coverage ratio of 2.26 but um the fiscal year 2027 budget on page four.

Mhm. Like we're we're projecting a 1.72 coverage. The 1.72 is without counting CCF revenue. If you go up above about halfway down the page, it says debt coverage ratio that includes your CCF funds. So if you include CCF funds, the debt coverage is 2.26. So So the 1.2 uh benchmark is that benchmark based on with CCFs or without CCFs? With.

Okay. All right. But since CCF revenue is not guaranteed, it's kind of like if they're doing development and the town's growing, you get CCF revenue. But there's a possibility that you could go a year without getting CCF revenue. So, we like to look at it with just operational coverage to make sure that if we don't get CCF revenue, we're still covered. Well, I know like the bonding companies and the rating companies, they they benchmark that.

Yes. But they I would imagine they benchmark it based on operational not on CCFs. All right. All right. I think that I think that covers it. So the the additional finance position is that is that a field-based position or is that

it's a customer service position. It would be for more reporting and analysis. and taking care of the customers. Right now, our customer service ladies that work the windows also do a lot of reporting. So, by having a person to do most of the reporting, that gives the customer service ladies the time to work the windows and to talk to customers on the phone and make sure our customer service is adequate or better than adequate.

Okay, let's go to page 12 real quick. Um on page 12 towards the bottom we've got uh sewer treatment and water purchases down kind of the last two lines before the first underline.

Yes sir. And so and sewers like the fourth column over is $4 million under sewer treatment which prior years was 400 I mean 400,000 19,000 it jumped to 4 million those that particular page is departments so if you look at the top so the first column is department 370 the second column is department 375 then 380 then 390 to come up with a total. So if you look back on page 11, that's all of the utility departments added together. So you can see the sewer treatment estimate for 26 is 3.5 million and the the budget for 27 is 4.4 which we had budgeted 5.2 2 and 26 based on the increases that Casey had given us in the prior years and they didn't increase. They actually went down in 26 which we weren't expecting. So anyway, the budget goes down in 27. Does that make sense?

Well, I found those numbers on page 11, so I can I can go back and look at those. It's just that that just caught my eye because it was Yeah. So page 12 is just having all the departments showing how all the departments roll up. Gotcha. All right. So that's not that's not a year-over-year. That's different departments, I guess. Right. Um All right. And then I guess the the final question, I don't know who this goes to, is I know that that uh at some point in the not too distant future, there's going to uh there's going to be a a required uh expansion of the sewer treatment plant in

Casey. Um and so what's what kind of allocation plan do we have for that? better is that um do we have a capital allocation plan for that or we planning to bond out all that money? I know that's maybe going to be the most significant spend in the last 20 years. So, is there a plan for that or what does that look like? We do have a five-year capital improvement plan. If you look on page 32 of the document, know which one It's not included within that. It's not included in the five years. So, we think it'll be more than five years.

Um, we're still trying to evaluate that. So, staff is meeting with Casey in the very near future to review the peer and better understand what the needs are going to be and the plan will develop from there. um the town as well as the our partners with joint municipal and Casey, but it is not currently included in the five-year CIP. What is a PER?

Good evening, mayor, council. Uh peer is professional engineering plan. So what that means basically is uh plans for the development. That's the first step in the process. So in the case of expansion it will be um the plant will go to an engineering firm and say hey we want a peer or we want a professional engineering plan of what this would look like. So they'll draw up designs for it and then they'll start doing uh first drafts so to speak on what they think it will cost to do some sort of expansion and then we'll start the process from there. um in terms of uh design drawings, 30 60 90% drawings, and as we get closer and closer to that 100%, we'll start dialing in on what that impact will be financially to the community. Does that answer your question, Councilman?

Yes. All right, that's it.

Todd, brief briefly, uh good evening. I have just a couple of quick questions related to the contractual services. I'm not sure who's best suited to answer this, but it looks like we have a I was unaware of this, but we've got an Adams and Reese lobbyist finance line item for looks like page 14 under 370, page 17 under 375, page 20 under 380, and page 23 under 390. There's different items. 7,600, 7600, 14,250, and 41,800, which totals $71,250. What What are we getting for that? And is it necessary? And is it also necessary for each of those separate accounts?

I can speak to the separate accounts. We allocate costs for I20 and what do we decide to call the other one? Currently, Watergate Yeah, I've given up on that. I've seen it printed about 15 times in here. So, we obviously don't. But we allocate the different costs to the different plants so that when we come to do the rate study, we wanted to make sure that the customers in those areas are paying for the cost of redeveloping the plans, the plants and the lines. Okay. And everything like that. So, that's why we split it up. All right. Then maybe just holistically, what are we getting for $71,250?

Uh Adams and Ree works with us to help identify and procure funding at the state level and the federal level for all of our projects to very specifically actually include the wastewater treatment plant expansion. They help to uh connect us with funders. They work with both us and our partners to put together the financing options. uh possibilities and explore different grants and those sorts of things. And we've always been doing this. It's my understanding. Yes. Since I've been here. Yes.

Okay. I know we used to have a little bit more of a contract relationship with someone and we ended up deciding that wasn't a good use of funds. I don't think I was tracking that. We were doing it here as well. But you feel good about the return on that is that we we believe that those those are funds that we would not otherwise get access to. Yes, sir.

That's a sounds unfortunate. Um second question. Um on page 20 again with contractual services trying to help understand the difference between Guess it is just gets muddy waters. I don't see the right ofway clearing in such an abundance on all these until you get to the um the 380 account. Got a 100 grand in right-of-way clearing. Um are we really spending that on clearing right away?

That's the goal, too. Our rideways are are um not good shape. And so we're we're trying to plan to get to to the rightways. That's probably going to be something that we're dinged on once the um regulators come through. Um you're supposed to have cleared right away so that you can um travel them during rain events, make sure low manholes are are um inspected, etc.

So what is Zipility? So that is our CMMS computerized maintenance management system. So um that's one where we are it's a work order system essentially. Um it's also our asset management system. So we're in the process of of building the work order portion of that. So help me understand where there's 147,000 in zip tility water model management water aotment or right-of-way clearing. Is it that we did right ofway clearing through zip tility in 2026 and

no I think those are all three separate line items that are lumped in. It's it's only one line item in that's on 26. I don't know where it end.

So the rightway clearing is is broken out separately. Um in a different department probably was Please put it in a different

Is it le? It's not. No, it's not a lease as a service. It might be software. Apologize. Chad and I were sitting next to each other trying to get this to all balance out. Yeah, last year it was on the 380, but I don't see it.

I mean, realistically, it's one of those things that would be I mean, we're talking about um less than $22,000 allocated across all four of the um the three sewers and the water. Would it have been moved to it? I was just trying to figure out with right away clearing that that number surprised me and then I looked down and saw zip tility. It's again water model management. What I'm looking at line 18 on page 20 just trying to figure out the right away.

Well in 27 that line is blank. So there's nothing budgeted for that line item in fiscal 27. We'll have to find out where zipility is at. I can't tell you. I mean, it's taking a minute to figure it out. Okay. I I don't have any other questions. Will, do you have anything?

I did. Um, first of all, thank you so much, David and Kathy, for all your hard work on this. Um, looking at page 32, I'm not sure if this is addressed early when I had to uh, excuse myself, but um, in the corner of my eye, I see this freight train coming at us in um, 2029. And just for my sake and the public sake, I'm curious, can you give us like a bird's eye view of 59 essentially? Let's look at that bottom bottom number. Um, 59 million in CIP spending. Where are we game planning that to be coming from? All right. So, um going down quickly over the um the projects bringing this to one, we've got the parallel force main um one of the sections of the parallel force main. So, that top line item 20 million,

right,

is um I believe the parallel that's going to the Milstream plant. Um, we also have an East Lexington um, sewer improvement that was previously budgeted. That's an item that once we have a hydraulic model um, that may stay there or it may be get pushed back. We'll know more once we have the hydraulic model. Um the same is the let's see we've got another we've got the Corley Mill. So that all depends on that um sunset split and what needs to happen with the uh sewer line.

Mhm.

We've got um some very small projects. The next big one is also the parallel sewer. So, we've got two par um sections of the parallel sewer main being done going to Milstream and coming out of Milstream. They're both hitting at that time. Um we've got a ballpark number for the 378 um booster station um upgrade. that is a a um a holder number that's going to be informed by um the hydraulic plan as well. Um right now all of the uh development happening on the west side of the service area, everything goes through that station. Um and that's a station where when we have multiple rain events, we're already pumping and hauling from from it. Um so to get it on the radar, we've got a placeholder there. Um we'll know more once we have the the hydraulic model. Um running down some more. It looks like um a few the North Church Street um water line that was supposed to be done this year. We pushed it to next year to move up the emergency Corley Mill um where we lost that section of Maine under the bridge um during the storm. Um when we were going through looking, we were like, we're going to have to push that out to to make this year doable. So that was one of the ones we just slid. Um it's one of the worst um water lines in in town, honestly. Um so that one's staying on the budget, but just got pushed down. Um,

and those are that's the highlights really of of that, right? The the um two parallel force mains, those are big big chunk items. So, you add up very quickly when you're talking about 20 and $15 million projects. And um that's not even the the total of the projects that that project those projects are split over two years, right? That's look at 2029 and 30 as well. Yeah. But when we when he gets the hydraulic studies, that's going to help him prioritize the different projects. And we're going to be doing the rate studies and we'll look at rates and we'll look at doing some long-term debt. So there we're developing a plan for to cover all that stuff. So like bonding it out. Is that essentially what we' be doing? Okay.

Because I was like, there's no way rates are going to cover. But some of that might be able to be pushed out. I don't know. I mean, that's the point of doing the hydraulic studies is to make sure that we do the first things first, right? And do what we have to get done and pay for what we have to pay for. We'll have a little bit of fund balance that we'll be able to use, you know, cash reserves and then we'll do the rate study. We'll do some rate increases, I'm sure.

We're going to look for grants. We have a a meeting um tomorrow, in fact, um to discuss that. Um, we have obviously ready to go projects um for scope. Um, I believe even we didn't mention it. If we find it, it'll be great and it'll be a help. But I think there's a grant out there for um places that don't have hydraulic models yet. So, um, we're going to be combing through that and trying to come up with as much um government money to to help along the way as we can. Excellent. Excellent. Awesome. I appreciate it. Thank you, Gavin. I think you had some more questions.

Yeah, I have two final questions. Uh, since you're at the podium, I'll ask you, David. First, um, I teach my students that keeping a customer is cheaper than going out and retaining a new customer. Similarly, as the mayor just said, it's cheaper to and likely more beneficial to keep an employee rather than to try and go get a new employee. 100%.

So last year during our planning session um over the last year we've had conversations around salaries and benefits and all these things and we've been told wait until the budget process. So we are here and I would like to just pointedly ask you this budget proposal that you have put before us. Mhm. Is this what you need to recruit and retain employees in your department or is there something more that you need from this council because you have us right here now? Let's talk about it.

No, I I think right now that's that's what we need. We need to um obviously attract him and hopefully attract some experience. Um and then we need to to keep him. And I think you know Kevin asked me this question. He goes, "How long is this good for?" And I was like, "Kevin, if if I if I could answer that question, I'd be making a million dollars traveling the the nation, you know, preaching to other utilities. Um there's there's no way to know for sure, but as we stand here, it's our best guess that we make these changes and we're going to be um competitive in the marketplace. And hopefully when we stand up in the future and I go back and we look at it, we start seeing that graph where the people we hire in those fiscal years, it stays green as opposed to turning red. and the amount of people we hire start trending down. So,

got it. All right. And to wrap up on my question for you, the last question I want to ask you is earlier you highlighted that an employee left us for approximately $5 an hour. I did that math assuming they work 40 hours a week. That's somewhere around $9,000 a year. That's less than 0.025% of the budget or something like that. I mean, it's nothing when it compared to the overall budget. So, my question for you is in instances like that where maybe you had a really great employee that you'd like to retain, do you have the ability to go to that person and try to offer them something to keep them? No,

you do not.

No. And um to that point, we don't have a system as an organization that would even um make it possible. We have and here again at the vision I mentioned this um on the one hand we have a system where we we give merit raises to those that are doing their jobs and that's a great thing. We move them through and that's a recruiting tool. The flip side of that coin is there's no there's no vacant piece of pay grade that allows us to do anything for anybody. Everybody if they're doing their jobs is going to going to cap out. Um and two, since you put me on a on a soap box, um the the pay bands are very close together. So you look at that and you go, man, that's only that's $5. That $5 an hour put him above our assistant supervisors. So a person that has to have a certification capable of placing on the system plus the experience would make less than what he's getting paid to go, you know, do that same work at at Starbucks. Um, so that just kind of highlights like we looked at it, we we talked about it, we were like, man, is there anything we can do, anything we can talk, but there's there's really not. And as much as we did not want to lose this individual, um, even if you do something and it's out of the norm, I've got another 10 people who would be like, whoa, wait a minute.

you're doing that for them, you know. So, I caution I caution everybody, you know, special circumstances isn't really what we want to do. What we want to do as an organization is create a system that is sustainable and it actually takes care of everybody who's a great worker where we go, we don't ever want to lose this person. We want this person to be here working for us and we want this person training the next generation that's coming behind us. I'd also like to piggyback on that because we talked about it over the summer as well. Personal handbook doesn't give me or a director any leeway to um adjust anyone's pay whatsoever. There's no leeway for hiring for um you know an additional you know x% if they meet a certain certification or x percent to try to retain someone. And I'm not necessarily saying that those are the best policies, but we just need to recognize that we don't have that ability. Um, the ability to hire anyone above whatever the standard would be is a council decision. And again, we talked about that over the summer. It's inefficient for us to come to you all every time that happens. So, that's another aspect that we could consider. what sorts of best practices do we have when it comes to hiring to give us a little bit more leeway? And I will say what David is proposing um in in starting in recruiting someone, let's say someone who has a C certification, hey, we can hire you at a higher level grade as opposed to the entry level trainee, which everyone comes in whether you have nothing, whether you have a D, a C, or a B. Essentially, if you're applying for a technician, you all start at grade 8. So, this new structure will help us with that to a certain extent. There will always be positions we're never going to be able to um to match, but goodness,

did we ever try with this particular gentleman.

Well, I appreciate the concept concept the um context. Um I understand the point that you're making, David, that that could be a really slippery slope. However, I I do feel personally for me as a council member that we should empower you Rachel, you are here running this organization every day. We are not to make some decisions when maybe there is a critical decision where we want to do something in a special instance. You are the administrator. I think you should have the authority to do that in select situations. So maybe that's something we can look at as a council. Um, but that's probably not a con uh conversation for here. Um,

I was going to look at um, attorney David and ask whether that was a motion and if we could do a um, but I think that will be a deep one. So, we probably need to wait on that one because it's we've been here for a while.

Yeah. So, thank you David. And then I just have a quick question for Kathy. Um so Kathy earlier you were talking about um the I hopefully I string this uh all together correctly but our debt service coverage ratio including the capital contribution fees. Um so when you remove that obviously lowers the debt service coverage ratio but something that I noticed um is that our tap fees last year um and projected this year are I wouldn't say substantially lower but a good bit lower. So to me that signals that development um commercial development or whatever is u maybe slowing in the town. Um now if you look at Facebook some would argue that's not true but I noticed that in the budget. So I wanted to ask you knowing that our debt service coverage ratio is tied to those capital contribution fees um and seeing the tap fees uh decrease. Does that cause you any level of concern for servicing debt in the future? Not really because the tap fees are not the same as CCS. The CCS come in when they're doing the big development and they're reserving capacity. Tap fees are more when you a onesie twoosy when you're um making sure I'm

when you're connecting to the system, right? So, it's somebody that's not in a subdivision. They just had a piece of property built a house and they need to tap in. And so they do a tap fee. Those are very uncommon, but um we do have them occasionally and it kind of fluctuates, but no, the development comes through the CCFs and they are pretty strong. Okay. So to be clear, uh for example, a tap fee is like I'm opening a restaurant. I want to connect to the system. That's as opposed to like a capital contribution fee would I'm going to go build a new neighborhood or a new shopping center. I'm gonna expand the system. So, I'm contributing.

A tap fee is more like I own a piece of property and I'm putting a house on it. Right. Right. the restaurants, the um businesses, they typically have to do a CCF because they have to there's a residential equivalent unit that we consider and depending on what the business does, we look to see how many of those equivalents that they would need to pay for to cover what they're going to be using of the system. Got it. So, they tend to have to pay CCFs. No, that's good context because I know like in previous life when I was doing the restaurant here, I thought I was doing a tap fee, but maybe I was actually doing a CCF. Probably.

Maybe I need to come learn more about that from you. We don't have to do that lesson tonight. Can I can I jump in? The only thing I would add just for clarity's sake is they're not mutually exclusive. So the house the house that's that's connecting is still going to pay a CCF. Okay. Um a capital. It's just of course going to be for one house. I think I found something I need to come learn more about. Can Can I jump in though? Like every every developer, every commercial project, everybody outside of this jurisdiction, uh, when they talk about a CCF, they call it a tap fee.

Uh, that's the colloquial way to use it. So, I always say tap fees. I never say CCFs. Every time I say it, Rosemary goes, "That's CCF." I'm like, "Everybody else and brother calls it a tap fee." Mhm. So you you were right. It's just the technical language inside. I get it wrong all the time. Thank you, Kathy.

Mayor, I have one more final question, I guess. Um on that same line of thought, um for the capital contributions, two questions. Can we handle to maintain those non-cash um contributions? And do we have replacement reserves for these assets? the capital contributions that are non cash we don't budget for. Okay.

So you we we receive we receive property in exchange sometimes and we consider it a capital contribution but it's not a CCF and it's not cash and while it is revenue we don't count it in the budget because the budget is cash basis. Okay. So, what are you asking about reserving?

Well, if there's if that went away because the developers and builders do pay for a lot of those non-cash contributions, so it's not taxpayer dollars. If that amount, I guess, went away, do we have any replacement cash or reserves? We have cash reserves, but the non-cash contributions are is where somebody gives us sewer lines or a pump station when they're developing a property. Okay?

So, if they're not giving us the non- capital items, there's not property, there's not additional draw on resources. Okay.

Okay. Anybody else before I wrap this up? Hearing none. Thank you staff for all y'all did, all of y'all for working on it so hard and being involved with it. We appreciate everything y'all done to bring it to us. We We don't need to make a motion to put this on the agenda, do we? Because it won't be till May. Correct. Okay. So, any comments from the public or the news media? Y'all the public regarding tonight's agend budget. Any additional comments from council or staff? That concludes our business for tonight's budget workshop. We are adjourned.