Common Council - Regular Meeting

All right. Good evening and welcome to the city of Ithaca common council meeting of the budget kickoff for uh next fiscal year 2027. Uh I'm going to call this meeting to order. I'll let the record reflect that Mr. Keel is excused and Mr. Shapiro is absent. Um, everyone else is in attendance. Uh, please join me in welcoming in person, uh, new city controller, Cararissa Rablowski. We are delighted to have you. Thanks for joining us this evening. Excited to be here.

Uh, before I turn it over to the administration for their presentation, just give council a kind of quick quick overview. Uh, this is a I've been informed like tight 50minute presentation. Uh we are going to again kick off the budget and our our sort of framed expectations for the year. Um I'm going to request with an asterisk uh that council keep their comments and questions confined to either clarifications about the presentation or highle budget questions about sort of macro trajectory. Um, we of course will have ample opportunity to discuss the nitty-gritty of budget procedure as we get underway, including providing our budget guidance to the administration, which we're going to begin working on following this evening's conversation. But I don't want us to get uh into the weeds about any operational detail. Thank you very much, Chris. Um, and then just so that council is aware, we will have a brief executive session following the budget kickoff. There will be no voting item at all tonight uh just for the public's edification. So, we will end the broadcast.

Um any preliminary questions before I turn it over to the uh acting city manager, Mr. Su, was the presentation uh sent to us or did I miss? It was not. You will receive it following tonight the presentation. Uh Mr. Rekio,

thank you, Mayor. Uh I'm really excited uh to be here to um help give this presentation today. A few very brief housekeeping items before we get started. I will uh deliver a printed copy of this to everyone's uh chairs before tomorrow night's meeting. The document that you have there um we wanted you to have access to it. It's really not going to be relevant until much later in the report. Um, so I would, um, respectfully ask that you hold in digging into the details there until we get to that point and it'll be a nice, uh, piece for you afterward. There's some detail there that's not filling the slides with so much, but allows you a deeper uh, look. We'll publish that and this presentation also on the city's uh, budget web page. There will be a 2027 section for that web page starting tomorrow. And if I could kindly ask that someone turn the light off near the screen so that it's easy to read. We have some data data dense slides and I want to make sure that everyone can fully see it. Um so before we dive in, I really want to thank our um acting controller moving into deputy controller Wendy Cole um for helping put together the information for this uh slideshow and participating in the budget kickoff. Um and it's just been great to be able to to work with her and she's helped set Cararissa up for success in the role of permanent controller. thanking Chris as well from the city manager's office for um quite a bit of research and helping to pull this off as well as human resources. Uh Jamie has done a bunch with some of our data around staffing. So, I just wanted to thank them and I wanted to also welcome Cararissa. Um she started last week and has been here this week in person. Today's only Tuesday and I feel like we've already gone through so much um and really hit the ground running. So, um, we have put a great deal of work into this and we're excited to share with you, um, uh, a lot of information and, uh, happy to answer those questions afterward and in an ongoing fashion through the budget development. So, what to expect today? Uh, the crisp 50 minutes, we'll stick with that

instead of 45 came in a little closer to that. You'll hear today what drives our budget, what's in our control, what is not, how can we meet the city's goals while sustaining our operations, what do we do to plan for 27, and what property tax impacts those items might show. On the right hand side is a general agenda for the sections of this presentation. They mirror pretty closely, though not exactly uh with what we provided you last year. I think this is a nice piece to have in um you able to see the budget kickoff year-over-year and some of the changes in um the impact to our budget that we consider.

Setting the stage for the 2027 uh budget planning process, of course, is looking at our current 2026 budget. And the presentation really focuses on our general funds. So, as a reminder, city services are funded both by general funds as well as special funds such as water, sewer, but we're focused here on the general fund budget, which is $89 million in the current year. That was a $4 million increase from 2025 and had required a 4% increase in the um tax levy from 24 to 25. In these bottom two charts, we're going to get into much more detail on these in later slides, but just to point out on the expenditure side, you can see the largest um percentage of our budget goes to employee benefits as well as salaries within public safety and general government support. And then our largest sources of revenues are um tax revenues uh property taxes as well as sales tax and departmental income which includes things such as facility fees. Next. Yeah, thank you. Uh so this budget really powers an enormous amount of infrastructure that's required for the city to function. It powers our vitality. It powers our economic activity. And on the general fund side, you would say, you know, we have 89 miles of roads. We have 33 public parks that have 378 acres that we're managing. We've got 59 city bridges. And beyond all these data points, obviously the budget funds um people who power our outcomes. Um so they're, you know, a critical part of our infrastructure as well. Um as well as this physical infrastructure.

So I wanted to remind you briefly about the uh groundwork that we laid in 2026 and how we look forward to 2027. So the message at this time last year was the grayed out section on the left and we're building from that. These things still hold true um and they are something that we need to continually build on. So we uh based our budget on the cost of doing business as a city and we did that independent of the rise and fall of property values. We are focused on the property tax levy when it comes to taxes rather than the tax rate. Tax rate is an outcome of our work and not the driving factor of it. Um, we are recognizing that cost of living, property values, and economic indicators have all increased. They are on a continual increasing trajectory, and we'll give you some detail about that. But those things um are all are all increasing. And we are continuing with our goal to stabilize property taxes for homeowners while diversifying and expanding the tax base. And we have some exciting, you know, math and details to show you and exactly how that plays out in our community. So when we look at our constraints and challenges, this is what we're feeling right now in our organization and as we head toward the budget. So the 26 budget, we face significant gaps and they needed swift action before we adopted that budget. Many of you were a part of those decisions and that was those were some challenging cuts and things that needed to happen quickly. We're still feeling the effects of those and making sure that we um you know stay within budget uh with our expenses, but that is requiring constant day-to-day attention. We are implementing the corrective action plan that we've all discussed from the state audit that is in progress. So, we're working on uh generally um getting um some of those corrective actions in place to help set us up for financial success. You'll see throughout this presentation and I will repeat this constantly, wages and fringe for existing positions are our cost top cost drivers. they account for the highest portion of our budget, paying our people and paying their benefits. Um, we also need to balance the need to

pay down debt with our large existing debt load with the opportunity and and pretty dramatic need in some areas to make critical investments for deferred maintenance. Some of those may actually save us in operational costs over time. So, we need to be looking at our borrowing and our debt more strategically and different moving forward. And then and we'll return to this much later in the presentation, but we have these competing workflows day-to-day um in the organization. We have backlogs that we're looking to address. We maintain our day-to-day operations. And then we have these new initiatives and investments that we want to make. And many of us at this table want to see happen. And and I want us to see those three things moving forward in concert and not necessarily competing with one another. And when we look for planning for 27, uh some things to keep in mind and some things that are driving some of our decision-m at the early level. We need to achieve strategic and sustained savings and that will require us looking at programming in this organization differently. We must. There is no other way uh to build a budget in a municipal government um of our size. We have continued progress we're making uh catching up on our past financial audits and you will see over the next two years that really start to pay off in us having more up-to-date information. Our budget must align with council's policy priorities. You've been very clear with the policy priorities put in front of us. We will deliver you a budget that aligns with those priorities. We are absolutely facing hard choices with tax cap constraints and ambitious goals of the organization. Those two things uh do not always work well together, but we will do our best to make sure a budget fits within it. And then I see you and our department heads and and other leaders in the organization really supporting a culture of both accountability and results. And I think that will pay off as we look at these considerations for the organization. So that's just setting the stage for where we're headed. I want to share with you some community and economic context. This is the world we live in. Some of the big considerations around the community to make when we look at our budget. Um our population overview. I kept the language unique

circumstances here because the city is growing in population. You know, I don't know how many upstate uh cities are growing in population, but I don't think very many of them. And we are one of the few and we are uh doing so at a pretty decent clip. COVID really impacted a lot of things in our community and every community. So, some of the data is a little hard uh to look at. We these numbers have not changed significantly from last year. The biggest change has just been in the general large population growth uh that we've seen over the last year. We see less married couples, more single households, many more renting households, and on average lower um 65 plus living alone than New York State. This is the second year we've been able to pull data on community needs from the 211 helpline. This is really informative when we look at the things that like the regular person in our community is is seeking support on. They're calling the 211 helpline operated by Human Services Coalition. That constituted 9,200 calls in 2025, down slightly from 10,000 the year before. You see the two biggest boxes on the left uh showing the total number of calls across each. Number one, housing and shelter. Number two, transportation. Clearly, it shows the need for continued housing development and affordability on behalf of the city. And the transportation access box is actually the only substantial change year to year. And that's because 211 started a new one call, one-click uh transportation center. Affordability and wages. We have seen the living wage and the cost of living in our community grow substantially. We are seeing 65 to 75% growth in the cost of living over the past decade. This is pulled from the Tomkins County uh living wage study. Those external pressures that we see increase costs for people in our community. We saw the biggest jump from 23 to 25. That's a similar time where the city saw a big jump in our expenses for our employees to catch up on wage wages that needed to increase. Um affordability resonates obviously personally with all of us, but then

also, you know, politically with the general population. It's a big narrative across every, you know, election and race. It's something I want to make sure we're looking at the data around in our local community as well as we look at the national context. At the same time, average area wages have also grown um and they have not grown at the same pace as uh the living wage. Some of this um wage data is um a little bit lower in the in our area due to the student population and how that impacts the data. But a 42% growth over a similar time frame for wages is is a marker of a strong economy. that does not mean that it's making up for the cost of living, but it is um a good economic indicator. And of course, our local unemployment rate remains um a good when considered against New York State uh and the region and the country as a whole. So that's the world we live in and this is how some of the world that we live in really impacts our budget more directly. These are the external factors that impact our budget. So we look at inflation. Um as when I pulled this graph uh from the University of Michigan, it was at 3.3% over the last 12 months. Today it was just reported the same data at 3.8%. So we are seeing that inflation rise. We are expecting continued spikes with the global uncertainty and and war that are way too frequent in our lives. And um inflation both increases the cost of living for the consumer, but we also have to think about it at this table as something that increases the city's costs and reduces our purchasing power. Um and so it's something that's um of course we have a lot of considerations to make here and we can't just tie increases to the to the consumer price index, but inflation is a driving factor for our budget and all budgets um from home to a whole meter belly. Want to show you here sales tax. This graph is particularly showing well what I want you to focus on here is sales tax as an economic indicator not just a budget

line. We'll return later to how sales tax comes into our budget. We do show you the two um lines here. The top line that's orange um shows the actual receipts over time and the blue line shows what we've budgeted. Um we were spot on in 2025. You know, kudos to Wendy uh for putting that number together. That was pretty pretty spot-on. So, but I want you to see this as an economic indicator. Sales tax benefit from strategic planning and commercial growth. Our community is seeing substantial commercial growth. We are seeing new developments where sales tax is paid often to uh for the materials on those developments. We are seeing um a lot of retail activity in the Route 13 corridor, which is where a majority of these revenues come from. There's very few, if any, actual um empty storefronts in that area. It's a very desirable place to open a business and the traffic is significant. Um, and so that does that does lend well to our um sales tax over time as an economic indicator. I also want you to know sales tax is a the city's receipts are a percentage of a percentage, but it's a percentage of the total sale. So things like gasoline, as unfortunate on your wallet as it is when gas goes up, it does have positive sales tax um repercussions for the city in terms of our budget. We don't want gas to stay that high. Um, but we were basing our budget in part this year on things like tariffs. It just so happened the impacts may be more on gasoline. This is a a slide that I'm really excited to share. It's not one that comes up for a city like ours often. Um, and you know, I'm repeating a lot of the things that the mayor has uh really said. His words have helped inform how I put this slide together. These are outside investments in the city of Ithaca that come with opportunity for us. We cannot miss this opportunity as an organization, as a community. $10 million is being invested in our downtown. $27 million to improve our state roads where many of our pothole complaints come from, although we have

our own to fix. Um $38 million for a new neighborhood at Southworks. Those are just from the state alone. Then you look at on a more micro level, you know, over,200 housing units pending or under construction right now. retail market having a renewed interest and um and energy. And the bottom line here is what investments do we need to make to leverage these? These will impact our community, our economy, and our organizational growth. We cannot be left behind. We need to be planning with these things in mind.

So, we do want to be mindful about how this population growth could have an impact on city services. And, you know, we're going to have a lot of conversations with different departments about that as we go into the 2027 budget process. And so as we know uh you know there are some parts of city operations where density actually is more efficient. If you have a water pipe that where that you have water traveling through you can send more gallons of water through the same pipe without additional um tremendous additional cost if any. Um whereas something like we have a data point here on this slide. We're seeing with increased population growth that may be what's leading to additional costs to the fire department and needing to look at that. Um, not only is our resident population um, growing, you know, it's about 34,000 right now, we also have a daytime population increase of about 45% daily. And so that puts greater demand on these resources like our roads and our bridges. Um, which is, you know, it increases Ithaca's quality of life for those permanent residents that we have the economic activity. You know, we wouldn't have as many restaurants if we didn't have all these visitors and commuters coming in. Um, but it does increase um, the investment we need to make on those types of services. uh we did look at a couple data points just to kind of get a a sense right now of how we're doing in the current year and or how we did in 25 in some of these service areas. So we're happy to see that actually calls to the police have remained steady um and actually which is really great to get to report is that part one crime declined pretty significantly from fiscal 20 from 24 to 25. Uh violent crime was down 25% and property crime was down 12%. Whereas on the other side of the spectrum, we have seen a pretty large increase in demand uh in demands or calls for service for the fire department 7.6%. Um if that type of rate, you know, increased uh we continue to see that type of trend, we'd want to look at that when we're think having budget considerations. Uh we've also seen just tremendous um interest in utilization of our recreation facilities. And like a really striking example is the Cass Park pool and rink admissions which went up almost 20% in one year. And you would just be amazed at how much um just having more people utilizing a facility like that, how much

more often you need to clean the bathroom, right? Um so we just need to kind of look at these facilities, see what kind of feedback we're getting from the folks who run them um to understand um how much more um we're getting utilization, which can potentially um be tied to that population growth. And thanks to council for helping invest in the uh new cast park bathrooms that we're uh building. That was that was a good one because we are we are making some of that investments. and Senator Webb

and Senator Webb, of course. Absolutely. Um, so now we're going to look, so we just saw the external factors, the pressures and opportunities that face us. Now we're going to look at the internal factors. These are the nuts and bolts of our budget. This is where um, a lot of those those things that drive the hard decision-m and the operations of what we have. So our cost drivers, personnel, biggest cost driver. Most of the city's budget goes towards staffing direct services. We have deeply analyzed this. We'll give you some data on exactly how that shakes out, but it is true that most of our budget goes toward the line staff doing the direct work to uh meet the needs of our community. Annual costs increase at a higher rate during our step program. I know that council members are familiar with the step program where we hire someone at um one rate and then work them up over several years to a competitive working rate. Um so later you'll see some information on how that impacts our annual payroll budgeting. Annual costs are increasing per payroll. That is just a a truth within the system that we currently have. Um employee retirement costs do also continue to increase when we increase those salaries. Retirement costs have to increase because they're a percentage of those salaries. Um so that is a large cost that we continue to shoulder um as we increase the the pay for our employees. Our share of our health insurance costs. The other share is the employee. Our share is estimated to jump again this year around 19%. came in a little closer to 15% last year, but we're estimating 19%. Uh we cannot continue to shoulder this level of increase annually. It is substantial. Um it is our largest fringe cost. It does keep us an attractive employer. Great benefits are really incredible for attracting and retaining talent and we need to put those things into practice and make sure we're doing that justice. Um but we do have an immediate need to examine cost-saving proposals in this area. We'll return to that later. The other third the third uh large cost driver we want to go over a little bit today is capital and debt. We uh covering our annual debt obligations

is a cost driver for us. While we are focusing on that long-term planning and you'll hear more about this next month to address things like um stabilizing our facilities, addressing deferred maintenance um and we'll have some opportunities for costs. There's going to be an increased annual expenditure in this area for next year that will have to be made up for and we are actively and working very diligently on um trying to lower our debt load by recovering reimbursements that we expect and that is an ongoing complicated uh work product that our staff are working very hard on. Uh and then here we'll we'll show you um and again we're going to give you printed copies after it'll be online. Um but what we have here are two graphs that show our general fund staffing. So on the left hand side you see a um sort of collated bar graph on the in each department which is along the bottom axis. Uh you see both the number of positions which is the dark dotted green bar and the uh relative amount of payroll and fringe budget on the right hand side. So you see here our large departments, police, fire, um, etc. with complex operations account for the largest portion of both our workforce and our costs. It shows the investment we make in those frontline staff. Outcomes are powered by people. As something Carissa said, we're going to return to that message. Um, but you see how something like DPW in this graph is very efficient relatively because there are a lot of positions and the payroll and fringe budget is relatively lower. Um, and so one of the things that's a little different between last year, some of you might be thinking about last year's graphs and how it impacts this. Uh, last year's was not just general fund. We wanted to tease out for you today just general fund. Um, the DPW chart looks different when you consider water, um, sewer and and the other funds there. So, a reminder, it's only general fund. Now, on the right hand side, this is really interesting. This, uh, shows our payroll. So not including fringe, just the payroll broken down by the

types of position that we have. So administration, that's management type staff is on the far left across all departments. Second bar that jumps up nearly not quite but nearly $25 million is our staff salary. Then we have hourly full-time, hourly part-time, overtime. Um this reflects recent investments we've made in those salary adjustments. We have made our employment here competitive generally in the area and we've worked to address cost of living for employees. Um but also in that large staff salary line. I want to reiterate this is the frontline customer service staff that make up that largest portion of the budget. Public safety departments, police and fire account for 61% of that bar. Um so that's where a majority of our investment goes to those departments. And it's just important to note as we go through this

next the next few slides break down uh some more detail of what Dominic has been talking about um regarding payroll and fringe. And so we know that we're going to have steady growth over time in these areas because we have negotiated colas cost of living adjustments as well as the step increases. And so when we look at 2027 our initial baseline estimates are that we're going to see payroll costs increase by about 6.4% and fringe costs 17%. We'll talk a little bit more about fringes on the next slide, but again that's really driven by this known uh 19% increase in health insurance. Um you may be thinking, you know, again Dominic mentioned the STEP program. So you might think, oh, generally payroll that would go up about 3%, right? That's about what a COLA is. But we do have the STEP program where an employee comes in and over the next five years on average their step increase per year is 5.72%. We do have some employees who get 11%. That's the highest that we have between the years. And so that's really what drives that 6.4% because we know we have about 25% of our workforce that's not yet at the top step um in that program. On the fringe side of things, this pie chart just really helps demonstrate that health insurance is more than 50% of our fringe expenses when you look at retirey plus current employee health insurance costs for the city. Um those again we're going to continue to work with the consortium and think through some creative solutions for how we can kind of not sustain that 19% increase year-over-year. And as Dominic mentioned before, our other fringe rates are really tied to salaries um because they grow proportionally. And so, uh, this bar chart, the stack bar chart on the right where you have the orange on top and that shows, um, general fund positions that are not police and fire, you can actually see, um, between 24 and 25 how that kind of really grew at a larger rate. And that really demonstrates how those market salary adjustments that were made. And we don't expect to see that rate of growth, 26 until 27, that will stabilize. It'll grow, but it'll stabilize. And the real reason that we have that chart um broken

down as a stack chart showing the breakdown with the um police and fire positions is just to kind of illustrate what we know intuitively is that from a retirement standpoint, even though 40% of our total staff are police and fire, they make up 60% of the retirement costs. Another cost driver of court of course is our debt service and our debt schedules right now are we're showing an estimate to increase our debt payments by $450,000 in 27 compared to 26. So debt is a four-letter word but it doesn't have to be a bad word. It's actually a really important strategic part of you know funding um government and municipal services. It's a part of a strategy. we can use it very strategically to save costs in the future to deal with um you know make sure we don't have deferred maintenance, make sure we're not running into emergency repairs on facilities. So we can use debt very strategically, but we know right now if you look at 2027, we are seeing there's a larger percentage of these this ban um principle and ban interest compared to bonds. And so we're going to have this two-prong strategy for how we move forward to make sure that the city gets to a place where we're getting the most competitive rates as possible for purchasing and our and our borrowing power. The short-term strategy is that we're going to come to you with a band conversion and payown strategy um to try to address in the short term get as much savings as we can as possible. And then we're also going to be presenting a long-term five-year plan for really what are the steps that we need to do. It's going to be very extensive, but one part of that plan is to show what are the steps that we will get to in order to make sure that we're getting our bond rating um so we can get more competitive rates. We wanted to share with you at least initially uh this far through the year we have been thinking quite significantly about savings considerations um saving opportunities because we'll know we have a gap to make up in our budget and so we look at those cost drivers and that's where we start to think about how can we um leverage any savings within them. So the top bit

here is just about operational costs. So I want to reiterate co cuts in the 2026 budget they make this more challenging. It's a harder starting point to come from because we lowered our general operating um expenses to help uh close our budget gap last year. It shows that we need to be more strategic and more forward thinking and that is our intention with presentations like this and the amount of detail that we are giving you. We will make progress in 2027 um toward performanceinformed budgeting. That's a part of um you know council's legis legislative priorities and I think we're heading squarely there. But we need to gather programmatic details and we need a deep analysis of program costs, revenues, and return on investment for the city so that you all have the tools to make the best decisions that you can. Uh we have some planned savings initially. These are small, but they're important um to consider because these add up. Um we're planning to save around $145,000 annually on leased space costs, $80,000 plus on parking equipment for pay stations and and such maintenance. Um, you've heard about those before. Um, but then we have opportunities to look more broadly at parking operations, including whether and how we operate garages in the future. Um, and that's a much deeper consideration for us to run numbers and bring you more detail. Uh, but it is one of those areas and operations that's ripe for deeper consideration uh from us. When we look at fringe costs, yes, we've talked about the consortium. I won't dwell on that. We have to lower that annual expected increase over time. We also have to help eligible retirees transition to supplemental Medicare coverage. that will lower our general fund outlay specifically to that cost. They're paying for it in their Medicare um you know taxes over time anyways and we need to make sure that they're able to take advantage of those resources at a lower cost to the city. Um we need to consider other retiree health insurance cost structure adjustments over time and how we're able to both maintain a competitive environment where we have good benefits but also um budget appropriately based on the fiscal

constraints we have. And I want you to know that initial analysis we did look at if we were to offer a like second tier um uh health insurance program in addition to the tier we currently have that employees could choose. Um even if we offered a lower tier um as a as an option for people, it really would not net uh many positive savings for the city ultimately um and it would reduce our competitive positioning as an employer. So I I really don't know that at this time based on the initial analysis that's a worthwhile path to go down. But we do consider uh we do have several other areas in fringe costs to consider. When we look at our vacancy rate, you've heard this over and over for me again in the monthly reports. We budgeted 5.5%. We're averaging two percentage points higher so far this year. We're on pace to save um what we've budgeted for and perhaps a little more depending on how other costs come in. But next year as we enter 2027, we're going to start at a much more conservative space. We're going to start at a 3% uh vacancy rate consideration and build from that. we think that's a more appropriate place to go and um you know we've heard some of the considerations and concerns uh from council and um in those conversations we've already talked a bit about debt uh we will look to pay down existing debt load and I really do think that if we're able to make a solid case for addressing some deferred maintenance we can save costs at the end of the day for operations for example investing in an elevator upgrade uh may be a cost we have to pick up over time um in terms of borrowing costs But it absolutely will reduce the amount of service calls that we have from the elevators companies which are substantial many thousand each time that that call comes in. So we have to weigh those considerations along with safety of our visitors and employees. And those are the types of considerations around deferred maintenance that you can expect to hear.

On the revenue side, we have an ongoing commitment to stabilizing property tax to stabilizing the property tax levy by diversifying the commercial share. Uh I won't steal Dominic's thunder, but he's really going to show that in a few um in future slides that we really are already making progress in that regard. Uh and we just really need to be very good stewards of our our tax revenues. And so we like we've said, we're going to identify a gap and it cannot be um met just through um the property tax levy. At the same point, the supply and demand, the increased value of single family housing, it will continue to um be, you know, there will continue to be a higher property tax as that value, that assessed value goes up. Uh we do expect that sales tax will continue to increase and we're, you know, going to conservatively estimate in our 2027 baselines that we're going to continue to see that just there's rising cost of goods and that's going to be reflected in our sales tax revenue. And finally, for our departmental income, you know, you're now getting monthly financial reports from us that give a bit more detail about the monthly revenues for each of those. We'll continue to be um as clear as possible on the seasonality of some of those revenues. You can't always just look at each month and say, "Okay, are we up to 112th and you know, are we on track?" But we're really glad to be able to report that we are achieving um our expected or our budgeted parking revenues thus far. And even with the situation at the Senica um parking garage, uh we have seen well there's two two factors. One is that the increase in the parking fee has not driven down demand which kind of shows that we've right sized the fee. Um in addition,

you just say that part again into the microphone.

Uh we have rightsized the fees um because we have not driven down demand um from those fees. Um, in addition, we're just we're seeing um that the other paid parking spots in the city have been absorbing the Senica Street um garage parkers thus far. So, we're just we're happy to see that that that those fee revenues are coming in as expected. Uh we also are estimating revenue-wise or we are including in our estimate that we we will have an increase in the fire contract with the town. And we also, you know, when when uh the city made the decision to look at parking fees, I believe that there had been a lot of other study and look at other fee adjustments, um we're going to continue to look at that in 2027. Ultimately, when you're looking at all these different possible revenue sources, um user fees are like one of the least regressive ways of paying for a government service because you're, you know, directly charging those who are directly using those resources. So, we want to make sure that we're right sizing any fees that maybe have been overlooked over time to make sure that they're fair. So you've seen the community context, economic context, external, internal budget drivers, and now we'll show you the property tax trends and and how we're planning around that and planning for the future. So here you can see the total assessed property values in the city of Ithaca. Taxable assessed value is equivalent to about $2.88 billion across the entire city. that has increased about 12 and a half percent since 2023. Um that is a nice trajectory for us to see. It's um you know continued growth in people's property values. Um you can see here also that the commercial share uh has increased at 12.6% whereas residential share that's that single family home has increased at 12 at just 12%. Um so this is a pretty great thing for our local economy. residential property values are increasing but not at the same rate as the commercial property values which means that a larger portion of the total

property tax burden shifts to those commercial properties. That's a way to distribute that cost amongst um a larger building or larger you know sort of economies of scale that can pay a larger share and that does moderate the impact on payers with a smaller share of value. It goes without saying we're all very aware 58% of the property value in the city of Ithaca is taxexempt. Um that is not just university use but it is uh in a majority sense the university use here in the city. So property tax values increasing. We don't take that for granted. Um and what we need to know about this a little deeper dive for you. Ithaca is a desirable place. People want to live here. They are willing to pay for it. Um the market drives the values. It's typically what you can sell your home for. Um, in many cases, people are seeing their personal wealth increase in their single family home. Uh, but people aren't realizing those gains, and it's not money in their pockets unless they sell their house. It's not like a, you know, this is a um a way to make up all our money or anything. It's just important to note that we are we have a local economy that is helping people build wealth in their property. That's a positive thing for us generally. I believe most assessments in the city of Ithaca will stay level again in 2026. In the tentative, I think it's called preliminary at this stage. Actually, in the preliminary tax role, there have only been 149 assessment changes in the city. That's out of you know 4,000 plus properties um essentially. And that 149 assessment changes accounts for $40 million in new value in the city. That's driven by construction and improvements. This will start to show you the value of new development in our community. Now, when we think about those new developments, there's some caveats and some things to remember. Commercial properties are incredibly important to diversifying the tax base. They are our way to do that outside of things like sales tax. Um, apartment buildings are treated as commercial properties. So, when we're thinking about those, that includes multi-unit dwellings. um

development. You know, we've already gone over the commercial share assessments are based in a commercial sense on the rent that tenants would pay, not just the sales price of a particular property. It's a lot more complex when the assessment division at the county looks at a commercial property. So, keep that in mind because commercial buildings do show depreciation. So, new construction is very valuable uh to us on the tax uh end, but generally once a building is constructed uh we see depreciation in a lot of cases over time. that might impact something more like a big box store than a large apartment building, but it's worth noting as a caveat. Won't show up in our data because we have a booming uh development scene, but it is important to note. Um, and so here's where the rubber hits the road on attaching property assessments to when we consider our property tax levy. So, if we were to increase our property tax by 1% from 26 to 27, that would net us around $350,000 in in additional general fund revenue. This is the math that shows that commercial share and how how we would moderate impacts for um the single family homeowner. So, that commercial share of the total property value again increasing at that 12.6% rate over that 12% rate. That means that the median single family home, even while their value is increasing, that's a lower share of the total, the median family home share of the entire assessed total in our community decreased by 210,000th of a percent from 25 to 26. That's how we moderate taxes on single family homeowners. And how does that play out when we look at our budget context? If we were to increase our budget 1% year-over-year, gain that $350,000 in value, that $350,000 home, that median home would see a decrease in their tax bill. That is buffeted by those additional new developments that have come in. And so that's the moderation effect. Single, we raised our tax levy

last year by 4.3%. Single family homeowners not paying in every case 4.3% higher in taxes necessarily. It is um it is maintained by that. And then you can see the two through 5% just examples of how the revenue and um and increases play out. Um you know, we came in at somewhere around 4.3% last year. And if we were I'm not saying we should yet, but if we were to come in at a same similar percentage this year, you can see what the increase in that single family home bill may have been. Mayor, did you have a question? I saw you pull the mic up. Similar to the parking, I was just going to um ask you to just sort of restate with with pregnant pauses and emphasis the impact that development is having on the tax burden and tax smoothing.

Absolutely. I I can make it clear and you will see a couple of great examples of of specific developments in a moment. Um when the commercial share the total amount of of property value that is multif family dwelling units and anything but a single family home when that increases at a higher rate those properties are becoming more valuable. It's more valuable to build and um and rent apartment buildings or operate a business in our community. Those those uh buildings are attractive to build. They're attractive to buy and operate. um when those increase at a higher rate than the regular single family home which in our case uniquely is also increasing in value uh at a at a pretty good rate. In our case also at the difference of two 10,000 of a percent only. That would mean that if we if the city wanted to gain $350,000 in new revenue that would actually be a decrease on the single family homeowners annual tax bill. Um that doesn't happen every year. It does happen in years where there's some big developments or things that draw that up. It happens more when property assessments are paused. Um and uh it happens more when commercial uh property um investments increase. We're going to return to this a little bit. So you'll see other opportunities for pregnant pauses um from me, but I want to hit on um that Ithaca is building and we are planning for more. We have ambitious housing development goals. You all have been instrumental in setting and helping us work to achieve those. Um we are developing strategies to meet those goals. The data here is from our housing dashboard which you've all seen and have access to. It's publicly available document or uh dashboard on the city's website. This development, this is exactly the type of development that spurs our tax base. Um updated zoning code will incre will support increased density targets. And I want to return here to show you this. This goes back to that investment slide we showed earlier with the downtown revitalization, the increased uh traffic that we have um and new development opportunities in the

Route 13 corridor. Uh College Town, Waterfront, Southworks, we have some booming areas of town really. And when you look at the pipeline of potential development, that's a good thing for us and we need to continue on that trajectory. Now on the right hand side, this very similar graph to what we showed last year, but it's really important for two reasons to see. Part of the reason that our single family home values are so high here is is simply a supply and demand um game. We have only built 22 market rate ownership housing units in the past six years um versus you know several thousand uh new um units overall of housing. So you can see in this graph um the market rate rentals that we've built nearly 2,000 um over that period of time far dwarfs the amount of uh market rate ownerships. Now, something that's really cool here and that I love to point out, I was just pointing this out in a meeting I was in with some stakeholders, community stakeholders earlier when they were asking about housing. Nearly 30% of the housing that we've developed over this period of time has been affordable, low to moderate income housing. So, even while Ithaca and our cost of living and other things are increasing, um, we are making space for people of different incomes and I think we'll continue on that trajectory. It's really important. We need to continue. We do not need to slow down on that work. We need to maintain it. But it's really it's great to see that that's close to 30% because that's a that's a difference we really can make when we help incentivize and support affordable housing in our community. Little bit more detail on housing to help drive home the point. Our housing market is primarily rentals. 70% of the units in our community are rentals. That's far above New York State on the whole and it's trending even slightly higher than New York City. Um we have competitive and expensive fair market rents. This again goes to that importance of affordability and developing affordable housing and leveraging every tool we have to be able to do so. Only downstate the city, Long Island, fair market rents track higher than the Ithaca um MSA. That's the

metropolitan statistical area, which is technically just the county for us. Um, and yeah, affordability remains a top concern, but this shows the valuable and desirable rental market as well for developers, which helps show that we can continue to count on some of that development in the future, uh, increasing that commercial share. Then we look at single family home uh, value distribution. Our median single family home of $350,000 is driven by a lot of homes very close to that $350,000 value. Uh, that shows that we have an older housing stock. units are entering the market at that rate. Um, we do see that drive a lot of things like sales tax with home improvement projects that happen here when homes uh trade hands, but we're not developing a lot of new homes. So, all the energy goes into improving the ones that exist. So, now you've seen how property taxes impact um the taxpayer and how our decisions impact property taxes. Let's look at the city's maintenance of effort budget. So, we're going back a little bit to those cost drivers. We're looking at um the expenses when it comes to the cost drivers for the city. All things equal, looking 26 to 27, we are estimating a $6.6 million expense increase year-over-year. That is driven again by those payroll and fringe costs. It accounts for operational costs increasing at the rate of inflation. Um and that's from the lower numbers after the 2026 cuts. But it does also include our known expected increases like TCAT, things that we know we're going to be having to continually invest um in. When it comes to our revenues, when we look at all things equal with the information that we have available today, this one's most subject to change in my opinion. Um we're looking at $1.7 million in revenue, but that is outside of that property tax. So, um we'll come back to the property tax again, but this $1.7 million in increased revenue um can help address that $6.6 $6 million. It doesn't include property tax and we'll have more information that you'll see in

your monthly financial reports moving forward. So the bottom line here u when we look at our next steps, we're calling this really our fiscal reality for the city. We are estimating a 5 to6 million effort that we will need to take together to close the gap and allow for some new investments. We all need to I think at this stage assume that we'll take on some overtarget request items. We will take on some new initiatives. Um, the difference here cannot entirely be made up from our property tax levy. You saw that slide earlier that looked at one through 5% and what that might look like revenue-wise. Let's say we came in last at last year's at 4.3. That would net us an additional $1.5 million in revenue. Um, so we'd still have some effort to do to make up that gap. And that's why we say that it is going to require organizational changes to make up that gap. We're going to have to make some hard choices while we look to the future. um paying down debt may help. Uh we aren't sure of the exact implications of that on on a next year basis. Um and I want you to just be thinking, you know, ahead, we are looking at those savings opportunities that we detailed in an earlier slide. So we gave a much uh truncated version of the taxpayer personas this year. Last year we did a deep dive into this and this is what those printouts that you have look at over time, those graphs. And so we wanted to show you not just that median single family home. We wanted to show you how a bunch of different people in our community uh carry the cost of our property tax burden. This includes someone who receives a senior exemption, a property with a um a more valuable property. Breaking out the median apartment building in the city, what one tenant share of that property might pay, typical big box store, and then some other business activity. So on this graph here, and yes, some of this is in your in your charts, too. I just want to show you the 25 26 numbers. So this is based on last year's budget that we passed. You know, the median household

city tax bill is about $4,300 and increased $100 year-over-year. I want to call Oh, yeah. Please. Did somebody have question? Oh, sorry. I maybe it was reverb I was hearing. Um I want to call out specifically tenant toeer here. Um so all things equal, we take a look at a landlord. what a median apartment unit in the city um might have. And I think that comes out to four units, nine bedrooms or something along those lines. That apartment buildings tax bill. It's about $7,200 a year. And one of the tenants within that apartment uh building, this is cost passed on to them. They're not paying this bill extra. This is passed on in the least costs typically. Not all landlords do it that way, but is typically how it is done. they are shouldering an $800 uh share of that tax bill annually. And their increase, you know, that that that they would see would be about $19 with last year's budget. Um you can see also how like a typical big box store, how their increase may happen when we increased our levy. You can see that they because the commercial share is a bigger portion of the of the total um they're paying a bigger portion uh you know, $3,700. And then I showed you at the budget presentation last year um an example property that uh you know really grew in value from one year to the next and how that 85% increase in their tax bill alone helped moderate things. We have a couple of those outliers again this year as it plays into our tax base. And when we look at those I want you to see both the impacts of new construction on the lefth hand side and then I'll show you the impacts of adding land to the tax role on the right hand side. So these examples show that individual properties impacts as development. So this is that opportunity to really hone in development new development in the commercial share will moderate the impact on single family homes. So one property for example its value from 2025 to 2026 increased by $4.7 million. That

increased its tax bill by 341%. That's not something we can count on every year, but we can count on that for most of the new developments when they do happen because we have valuable land. We're building that land up to the highest and best use. Sales prices are driving valuations. This is a good thing for us and they're paying a bigger portion um and distributing across a bigger number of residents to help share that cost of operating the city. Um and then on the right hand side, you know, council made a decision to return the College Town Fire Station property to the tax roles. It's a unique one in terms of how it's valued and when it came in and when the sale happened, but all things equal, the updated valuation for the first year is going to be at a $1.5 million property. They had to value it based on what it would what a fire station would be worth there. Next year, it will be valued much closer to the sale price of I think close to $5.5 million. So, just in the first year, and this will show up in our 27 uh taxes, they will go from having paid zero dollars on that property because it was ours at the city. we don't pay ourselves property taxes um except in unique scenarios um to $18,000. So that is the impact of returning that to the tax levy and or tax roles and then you'll see again when it's reassessed to its use that it will ultimately be on that site or closer to the sale price that dollar amount will continue to rise. So there is significant value in this economy in adding land to the tax role. So we went over a lot of this just to reiterate this is what we learned for personas uh from these personas. Property taxes are rising proportional to our cost of doing businesses doing business. Uh scarce housing increases its value and the share of the overall tax paid. Renters contribute greatly to property tax. It's just hidden in their lease costs. And commercial properties overall have seen stagnant growth, but those new developments really show uh the difference. And that stagnant growth comes from that depreciation um and reassessment. It's not that they aren't worth a lot of money. Um it's just that

that commercial properties are a complex assessment game. So now we're going to bring it home with some goal setting and considerations. Um thank you for bearing with us. I know it's a lot of information. Um so this is when we're looking at the big picture moving forward. So I want you to take all that into consideration and then this is how we're going to set ourselves up for success over the next several months as we lead into the budget um development. council will help provide budget guidance to us and this is to help set some of that framework if you so choose to use this information. So I want you to see from my perspective I've been in this acting role for a little over 5 months or so and you know I want you to hear some things from the bird's eye view. So when we're looking at the budget context you know wages and fringe are driving our budget outcomes are powered by our people. It is that is a reality of our organization. is not easy to make cuts in this organization that do not directly impact people and that's just a consideration point that we have to know and have but wages infringe are driving our budget we are going to be aligning our work with policy priorities that is important that is important to you that's important to us but I want us to recognize that that comes with both opportunities and just reality challenges that face us we're looking at how do we sustain our oper or how will we sustain our operations while we look to the future it's going to force the question of what operations do we sustain? That's that performance-informed budgeting that we'll work toward. We'll do some version of looking at that for 2027 budget, but we can really do that in earnest moving forward. But we have to be looking at what we choose actively to sustain as an organization. And then, you know, I'm very excited about the revenue diversification and about our tax based growth. Those take time, those take focus. Um, and we are well positioned there, but they do we do need the time and effort to be able to spend there. They're not going to happen overnight. And then I look at some of what I think I've seen over over the last several months, and these are the competing workflows that just make some of the nuts and bolts of operating the city on

a day-to-day basis difficult as it relates to financials and money. So, the ground level sort of day-to-day work. We have backlogs in the city. We have things that have been, you know, past practices. We have we have persistent things that need to be addressed. It limits our time to get to those new initiatives that we want to do and we have to find ways to address them or move on from them. We have to do that strategically and thoughtfully. Um, we have to maintain our day-to-day operations. That's the second arrow here. We have to remain responsive and accessible to the public and we have to meet those key customer service demands and we have to get projects done that are mid-stream. Um, working through those cost changes. Costs are only going to increase in the future if we don't address things on a on a sooner basis when we know we have to. And then you know everybody at this table we all share our interest in having new investments and new initiatives. My goal is to help from a budgetary perspective, from an organizational planning perspective to help make those things possible. How do we align uh you know new activities with key policy priorities? How do we increase quality of life in our community? But how do we do that in a way that matches up based on the resources that we have available to do so? So some key key considerations we're going to build on this framework with you. And you know, I want council, we want council to provide us some high level guidance, you know, on the operational and capital, you know, budget items in advance of this process. This will inform both the base budget and overtarget requests. You will not see your policy priorities only show up in overtarget requests. I hope that we're able to deliver you something where we can clearly show how those priorities are woven into our our day-to-day budget. Um, we're going to contextualize those budget requests and things that come forward in those three buckets. Addressing backlogs, maintaining operations, and making progressive changes and investments. And so, we've listed out for you several key initial considerations based on time and based on bandwidth. We're not going to detail all of them for you tonight because this could be, you know, another three hours that we

sit here. Um, but I want you to see things that staff have been raising to uh the controllers's office and city manager's office. Um, when we look at big big picture items, things that I think are on the radar, things you've already helped identify, what we'll need from you following this is what's missing from this list. You know, we'll detail the issues. We'll give you opportunities, financial impacts, decision-making points. We need to know what additional information you need. You can expect this list to grow when we deliver the executive work plan next month. So, this is not the end of this list. It's just the list we wanted to make sure is on your radar today. And we're going to share three very brief examples for decision-making. I don't particularly want all of our question and answer to focus on these three examples, but they're they're more illustrative of what you're going to see in the future. But they're really important investments we need to be thinking about, and there are three things that are sticking out to me because they're indicative of the types of opportunities that are in front of us and how those are challenges. So, one of those items is maintaining our fire fleet, um our apparatus. We are over budget for annual fleet maintenance um by $75,000 year to date. Um we have spent um you know a significant amount of money in this area. We are lacking for mechanics and capacity and we have limits on the specialized work that we're able to do on our equipment and that is driving a huge cost for us. We have increased wear and tear on our vehicles when we transport them or get them out of out of when they're off the line and and unable to be used. And so others are increasing their wear and tear and we're paying a lot on overtime for transporting these fire trucks out of the community to get fixed as far away as Syracuse. Um this is not a unique situation to us. TCAT has similar concerns, but we need to look at it through our lens. So what you can see on the right is just a couple of key questions for you. You know, will council support adjusting positions or finding new recruitment strategies? Will you support a new position duty

statement for an enhanced or specialized role? Are you willing to explore these types of things across units other than the fire department? We know the fire department numbers, they're big, they're scary. Fire trucks are easy to wrap your mind around how expensive it might be. Um, but we have this across other units, too. So, when it comes to the financial impact, of course, everything we want to do or everything we want to bring you has, you know, has to have some level of savings or strategy achieved. This is a unique one where we can save $150,000 annually on that increased cost we're shouldering if we're able to get our staffing right. um we can maybe think about some budget neutral positions uh adjustments and we can look at at least $10,000 a year in overtime savings alone. So this is the type of thing we want to bring forward to you. It's a creative but important um solution. The second example I'll show you and this is something that was um deeply discussed in our budget last year but needs to be addressed. Maintaining Steuart Park. The budget for Steuart Park is $115,000 in 2026. I believe very strongly that adjustments must be made for 2027. It is closer to $370,000 to actually maintain Sewart Park at the level um that our staff believe it should be. Um it's a destination park. You have see all the details here. It's an amazing place. It's beautiful. It's a real gem for our community. And we have things that are unexpected and they shouldn't be unexpected in the future when we get some of our our planning a little bit uh more in line. Um, but for example, our water costs for Steuart Park, our utility costs are $150,000 over what we budgeted for them for the splash pad. It's a very amazing, incredibly wellutilized uh community asset, but it's very costly. And I want to make sure that council is budgeting the right amount of money to use this asset and that we're realistic about what we need to operate the things that we have. And then in the future, we're planning realistically for what we can afford. And we're going to put those things, two things together. But Steuart Park can't be missed in the bigger picture because

it is such an important asset for us to maintain. And you know, there's some outstanding questions around staffing. You know, I know we didn't um bring the parks manager position over the finish line last year. You'll see some updated proposals for how we might creatively do that in the future, but the key questions for you are how can we maximize the park's amenities? What immediate investments can we make this year midstream to make up for those immediate financial needs that we know we have? Should we revisit a heart parking fee for non-residents in the park? And are you open to adding a parks manager position to help put some of these things in place? Anticipated financial impact. This is going to cost us at least another quarter million dollars a year in our budget to maintain Steuart Park at the level we need. You can see a note on the left that we need to maximize revenues and we are exploring outside funding sources. I don't want this money to only come from something like the property tax levy. We have to be looking at and we already are creative outside funding sources. Um, but we need to know that we have the support to to do that work and to put that into practice. The last example I'll show you is capital reserves. We have, you know, spent a lot of time talking through our debt impacts. Um, but building a stronger capital reserve for the organization can finance construction, acquisition, improvements, equipment, etc. Reduce reliance on borrowing overtime, smooth out spikes in expenditures and tax increases. But it requires us looking at this as an annual expenditure that we know we're going to set aside, we're going to invest, and then we're going to leverage smartly in the future. We have around half a million dollars in our current maintenance capital reserve fund. That is underinvested in. That's because we have competing priorities and we've used that money. Um, but we need to be looking at a way to fund in my opinion this. So should does council still want us to prioritize this? How much money should we seed something with? you know, funding will need to come from either onetime revenues that we park away, which is a good way to do it, but not

super sustainable long term, or uh you know, to make best use of this tool, it needs to be an annual budgeted cost. Okay. Um

All right. So, wrapping up in terms of next steps, we have a few things we'll be working on in May to deliver to you in June that Dominic's already um outlined previously. We're going to be getting a delivery um we're going to get I'm sorry, a debt payown strategy to you as well as a long-term capital plan um both in June as well as the delivery of our draft executive work plan and that'll show kind of our administration's priorities and how that will line up um throughout this process. We also will plan to give internal budget direction to the department heads in early July and have those budget meetings begin. We'll work really in depth um because we have a lot to talk about um throughout the summer in July and August and we'll aim to get you or we will get you the city manager's proposed budget by late September. So the very last slide uh our key takeaways. Thank you so much for your attention to all of this information this evening. Uh we there's a lot of takeaways, a lot of really important information from all these slides. We could probably have multiple slides of takeaways, but we really want to leave you with these three bolded items. And the first is that um all this economic and community context that we shared is showing that this budget cycle we need to be focusing on opportunity and a budget is not just a exercise and balancing spreadsheets but a budget is an opportunity to tell a story and the story of ETHA is that we have a lot of opportunity in front of us and we want to um take hold of that and we want to be very future and forward thinking in terms of the investments we make with our budget. So yes, we need to make sure we're doing our daily operations, but we don't want to miss out on opportunities um and and be able to multiply have a multiplying effect on these opportunities um by being short-sighted. Secondly, we do face a challenging fiscal reality. Um $6 million is uh not nothing for us to figure out in terms of this gap, but I want to really emphasize that this is not unique to Ithaca. This is public budgeting in a time of rising costs and it's an issue that's at the municipal level, state level. Um, you know, I don't know what the federal government's doing from a balancing standpoint, but when we uh when we need to do a budget, a balanced budget, we

really need to focus on that. So we have difficult decisions to make but we know that we have a lot of opportunities to look at our programs and think about how can we do things differently have creative solutions um because we know that we don't want to rely just on the property tax and we do want to look at opportunities for fees um and other different sources of revenues. Uh again, we just want to emphasize again that we don't want to have deferred maintenance. That is a risk for us for increased costs moving forward. And so we want to be strategic about how we think about our um infrastructure and capital expenses. Uh and we, you know, we have here we say again that this revenue diversification and tax based growth takes time and focus, but we also should emphasize that we've, you know, been able to show tonight we're actually we're doing it and we've made progress. Um and we're in a continued trajectory to do that. So it's not really just something that we're talking about, oh it's going to take time. we're actually already seeing um progress in that area which is really um exciting. Finally, we need and we um are committed to aligning the budget with legislative priorities and we recognize that provides opportunities and challenges because there's a lot of exciting things that we want to do here at the city. We don't want to look at these different workflows as competing. We want them to work in concert. Um when we're thinking about okay, what is this? What can this program do? We want to make sure that we don't have this competing all. Can we do a backlog or this? How can we integrate all the work of various programs? And finally, we do just need to think about, you know, when we look at any service or program that the city provides, we need to say, you know, should the city be providing it? You know, and I think we need to make sure that our answer to a question of why do we do this is not, well, this is what we've always done. This is how we've always done it. So, we have an opportunity. And that's that's the one thing about a budget process, especially a tight one, is it kind of sometimes it gives a little bit more um emphasis. it gives it gives you an excuse to ask those hard questions that are harder to ask in times where um you're not as fiscally constrained. And so that's another opportunity um for us uh which is just my positive take on you know how we're going to go through this budget process. Uh but again, thank you

very much. And I think at this point we're ready for questions. Yeah, thank you Chris.

Great. Thank you so much. Really appreciate this overview and the uh thoroughess with which you've presented this to council and the public. Um, also, uh, recognizing those fiscal constraints, I'd be remiss if I didn't also thank Governor Hokll for the a mill the million dollars in additional temporary municipal aid, uh, that obtains in her executive budget, uh, which will help us offset some of that. Um, I do want to take a I have a number of questions, but I do want to take a hopefully we'll model to council the level of questions we're looking for tonight and go further than Mr. Rechio and say I'd really encourage you to take away uh thoughts and questions about those examples rather than interrogating them tonight cuz I think that it was very useful. I do not want us to get into the weeds about whether or not we want a park manager of Steuart Park tonight. That is outside of the scope of where we are in the process. Um a couple of things. Uh Mr. Blowski, um with respect to the band conversion, I'm delighted to hear that we're going to be doing that. Um, I would hope that with that comes uh an analysis from you and your team as to where we want to be with respect to debt service overall as a share of our operating budget. I think for me as I began to look at this with with council colleagues over last summer uh it was the high uh share of our uh operating budget relative to peer municipalities. I recognize Ithaca is fortunate both in the amount of state and federal investment it historically receives um as well as sort of the tenacity with which our staff pursue grant opportunities. So I'm comfortable carrying a higher debt share. Um for me and I think for my colleagues it's more of a concern about uh is it good debt or junk debt right and I think as we were pouring over the bans you know historical practices we were putting vehicles on the proverbial credit card which is just objectively bad right those should be buried in the operating budget even if it means we have to have

a higher tax rate and if we don't want to do that we should say no right so um I'm comfortable floating bans for projects that are going to be reimbursed I'm less comfortable floating bad debt and So I think um I look forward to your team being able to put together a response to that. Um with respect to the tax smoothing piece, I want to tout uh toot your horn a little bit more than you did. Right. So um again, the 1% uh would be an absolute decrease in uh real and nominal uh you know costs to single family homeowners. I want to emphasize that in the 2 to 4% scenarios that you shared uh right again the 3% um inflationary increase to the median homeowner per your slide would be $128.55. The 2 to 4% scenarios represent therefore a real decrease despite them being nominal increases in the in the bill. Uh they are spending less money for the same services. uh in those 2 to 4% increase scenarios on the levy. That is not to suggest that we are predetermining that it needs to be that or higher, but but again as the as the as the purchasing power adjusts due to inflation, we are actually we're actually getting an enormously good deal on that commercial investment. And so I just want to um again commend your team for pulling that that out for the public and really demonstrating how impactful uh that uh development is on our community overall. Um I think three questions for me and I would encourage my colleagues to either uh sort of nod their ascent or definitely raise your hand and disagree. Um but uh as we look at sustaining, enhancing and reevaluating operations, I think a couple of key questions or or thoughts that come to mind for me are uh as we look at vacancies, I'm I know uh Mr. Rekia, we've obviously talked about uh a more conservative vacancy rate. I'm really delighted to see that reflected in your presentation. Um, I would say

going a little bit further as we look at vacancies, especially perennial vacancies, I'd very much like to see the departments justify why they are vacant. Um, we I think have all as a city government been very um patient with the argument that CO was a major disruption and it was right. Um but at a certain point uh you know as as fiduciaries we have to look at vacant positions being carried over year after year after year after year after year and say why can't we fill it and what is the marginal cost of not filling this right and so I I I mean for the positions that are held over as vacant I think it would be very as we as we sort of gesture towards moving towards a performance-based budgeting scenario I think it would be very helpful to understand um what the justification is in addition to the great work that Jamie and her team have been doing in providing the vacancy data um some of the underlying analysis as to why um related to that and um Miss Rey we've talked about this a little bit but uh as we look at uh various departmental functions um I think benchmarking against peer municipalities is also really helpful right um and it doesn't mean that we are going to try to regress to the mean right I think ethicans are proud that we invest more in family and cultural services, right? Gak Youth Bureau and the associated organizations than uh than than the sort of typical municipality. And I think that's something we we we were we're proud to stand by. At the same time again um when we allow the organization to grow untethered to what level of service delivery I think we can expect if we are in the 99th percentile of service delivery in a given area um increasing funding for that particular area it's just not a

good investment again relative to marginal cost right so again like I think I recognize that's a larger project um presumably for Mr. Blowski's team and I'm not suggesting that that's going to necessarily be done for this budget cycle, but I think that's something that will help inform decision makers going forward as we look at budgeting into the future. Um, and then similarly like metrics, right? I thought um the youth bureau did a fantastic job. Uh, I know a couple council members were absent. Hopefully you've had an opportunity to go back and look at that presentation. Members of the public, if you've not seen it, I'd go back and look. They had a lot of really good data about utilization of their programs and their facilities. um the more that and I know it's not as simple for the finance office for example right um or for it right it's really hard to say hey we didn't get spearfished and lose critical critical information to to to ransomware um cough cough canvas um but but the in whatever ways these departments can set their own kind of metrics and again help us understand what what the taxpayer is getting for those investments I think it helps tether our investment in these departments um to an indicator that helps us better understand what that what that utilization the the tax dollar utilization is doing. Um and then I guess just the last thing, you know, I I I very much appreciate um the administration's desire to solicit feedback on the capital budget in particular from council. Um, two things I would uh request that come along with uh that solicitation for feedback would be um a relative tiering of orders of magnitude of cost and orders of magnitude of time. Right? So I know uh the council over the years has had a lot of opportunity to discuss uh the sort of derelict IPD facility and the need for improvements to that facility. And I don't dispute that in any way. I also recognize that that's a great

example of an enormously costly project and a very timeintensive project. I also know that when it rains in Ithaca, it rains in the water building, right? And um I think being able as council to understand like some of these are extremely urgent and they're expensive and they're timeconuming. Some of these may have a lower level of urgency, but I think to um Mr. Blky's point in the presentation overall, you know, being proactive on some of those um maintenance issues now will cost us less in terms of, you know, personnel hours and dollars than it would be if we kicked the can. And so it might be the case that we have some of these like lowerhanging fruit that we actually invest in now relative to some of the larger projects given what our what our debt capacity is. So, just a couple of reflections and a couple of thoughts and I I I look forward to hearing my colleagues comments as well. But again, want to really just emphasize fantastic presentation. Really appreciate the work that you've all put into this and look forward to working with you as we enter into budget season. Colleagues, Mr. S,

um just a couple clarifying questions. On the first slide, you had there are two main revenue sources. One was property tax and one was non uh sales tax terms. What are those? I believe it's sales tax mostly sales and use tax. Um majority of that is sales tax. Um and then if I just another question if um if I understood how you're explaining um apartments in terms of their tax valuation, it's often done in terms of rent rather than the value of the building. Is that correct? Yep. Uh yes following up. So it's less subject to I guess depreciation in terms of tax rent or direct income.

That would be generally cru true true because there's more people paying lease costs and it's an attractive um you know thing to continually lease. There are a couple of different considerations at the assessment uh division at the county that play into commercial assessments. And I would certainly encourage you to invite Jay Franklin, our Tomkins County assessor, to sit in the seat. I think he has a lot to add. Um I really like my conversations with him. I get a lot and it helps me um think about how I want to frame things for you. Um but yes, I think there's sort of the sales price. What would a property cost uh to pay or build? Um and then there is the like development uh cost of something like maybe something is so far into development and we're basing it on what it would cost to do that much work or then there's the ultimate um looking at a property and valuing it on rent. So there's some properties that are larger. They'll also do they'll also assess it based on the um you know they take in data from um from landlords on on how full their units are or how well performing things are and they help uh based on the economics of of how that works. So it's very complicated commercial um commercial valuation that I'm still learning more about but that's the general picture.

Thank you. And then the last question is about population uh predictions. I think the growth basically happened around COVID and I feel like population's leveling off but is that what you guys are predicting? You know, last year we showed it leveling off a little more, but this year in the population estimates in the US Census Quick facts from a calculation that they do based on the American Community Survey, that's where that 33,748 number is. When I went to start to pull that information, I was pleasantly surprised with that bump because we had seen the last couple of years level off, but we're building the amount of housing that's getting not entirely, but it's getting filled over time and those are new people entering our community. Uh so I do think that we are on an increased population trajectory. The data um on that graph in particular, yes, CO's an outlier. Um but it certainly shows that we're on that trajectory.

Thank you so much.

All right, seeing no further comments or questions, I will go ahead and take a motion to enter into executive discuss session to discuss a personnel matter. Mr. Kirby, Miss Moss, all those in favor? Mr. Zul, Mr. That carries unanimously. Uh we can take a brief moment to uh sign off. Thank you uh Miss Ibert.