City Council - Regular Meeting

Good evening and welcome. Uh we're having another budget special meeting for us to discuss the 2026 2027 budget. Uh Mr. Meredith has produced some slides for us to kind of go through a few things and once we go through that we can have some additional discussion and move forward from there. I want to thank everybody for coming out. Thank everybody who's watching us online. Uh we have had people ask questions. I know some people may come out this evening that want to speak. We will have public comment time during our regular meeting coming up at 7. That'll be right after the start of the meeting and we'll go from there. So Todd, what do you have for us this evening? All right. Thank you, mayor. Uh, I have prepared a few slides. I know that council had a few questions last week. Uh, one of the things we wanted to look into was, uh, budget cuts to see if we could cut anything out of the budget. Uh, we spent the last week going through it with a fine tooth comb again and we were able to find some cuts. Uh what you see on the slide right here, these are budget reductions that we've made since last week. Uh the general fund, we've reduced it by $81,000 20 $81,26. Water wastewater, it's been reduced by 47878. Electric 258745 solid waste 3,886. Internal services 58,7798 for a total of 391535. So those savings have been adjusted in the budget uh with uh with keeping those in the fund balance so that the city can benefit from those and and invest in capital and and fund balances. So that's what we've a

Yes. So if we look at the general fund, I know this is really really small, but uh there were a couple things that happened in the general. We did have a few increases along with those reductions. Uh legal services, we increased it by $50,000. the city has been uh the legal fees with with everything that's been going on the last year has increased that amount. So, we went ahead and we thought it would be prudent to go ahead and budget for a few extra for extra funds in legal services next year. Uh the independent auditor for the forensic audit uh we believe that most of the work will be completed before the end of the current fiscal year. We have projected just given the timeline that they've given us to complete their work that there will be approximately $21,000 uh that will still be owed in the new fiscal year. So we increase the budget by $21,400 for the forensic audit.

Todd, just real quick on that, but there is a chance that that could be dependent on what the APA's ruling that may may be reimburseable by the state. We don't know that yet, but a chance of that.

That's correct. So, uh, the forensic audit, it's certainly a question that we're going to ask is, you know, um, you know, the city's already, we're going to move forward with this, but the APA, if we if we continue through this process and the state does does give does say that we fully uh meet the criteria for that, the APA has, but it still needs to go through a few committees. It needs to go through the governor's office and DHCD. once it gets those reviews and uh you know if we get if we get those boxes checked funds may be available and certainly we're going to ask if the forensic audit can be part of the consulting services that they'll fund. Thank you. Y

um just a few I'm not going to hit them all but but a few of the big ones. The recreation center uh we decreased uh a position there. We eliminated them. It's a property maintenance worker. Um the salary for that uh was 53,371 um that we were able to achieve some savings there. Um the library was another place um and I thought I saw Elizabeth here. Elizabeth, uh thank you so much for being proactive and helping us hunt and find those funds. But the library uh we we decrease part-time wages and benefits by $52,122. And we believe that we can do that and not reduce any hours. We think we can make it work. And thank you, Elizabeth. Yes. For for doing that.

While we're while we're on that subject, I want to ask Charlie the same thing with the property maintenance worker. How's that going to impact you at the rec center in terms of being able to keep things moving forward and and offer the services we offer?

Okay. Okay. I just wanted to make sure we weren't going to put ourselves in a position where we couldn't do some of the things that we need to do, but I appreciate that. So, thank you both. I know everybody has been scouring everything trying to find any savings that that keep us uh a little bit tighter. And the same thing with Lindsay. I just wanted to point out you've got that up there with the computers. Um she was great and and talked with a number of us about how we could hold off on that. I do want to caution that at some point in the next few years, there's going to be some computer upgrade costs. So, we got to build that in at some point. You know, this year we get a little bit of a break. That's fantastic. That helps us, but we got to be prepared for whatever the the state and federal government says we have to do, especially before the 2028 presidential election, which, you know, nobody really knows what we're going to absolutely have to have. I mean, she was fantastic in trying to find these savings and help us there, but just as a little caution that we're not totally done with that. Go ahead. I'm sorry.

Uh, staying with the library, uh, Elizabeth was able to find a few more savings uh for the cities. Uh, there's a decrease in books and subscriptions that's decreased by $7,000 and K9 supplies was reduced by $900. So, um, once again, I can't say it enough. Thank you so much for for helping us out with that. Um the uh let's see um and you can see the transfers that's how it was balanced out. We achieved these savings. Those are the transfers that are going into reserve accounts in the general or staying in the general fund balance. Uh the highway fund just keep in mind this is really a wash. Uh this is this is funded by state VOTE funds. But uh um we did VOTE eligible increased construction contracts by 344,000. Uh public grounds increased personnel. We did add a laborer back in there. That labor is fully funded by VOTE. It's state funded position and we felt like it was important to add that back in. So we put it back in the budget. Um it's a labor one position. Uh health insurance the overall increase. I know this is small. It's $9, but the city is getting a credit back uh with the company that we switched of of approximately $90,000. And that's just how it breaks down by in that department, but it is it is an increase of $9. Um yeah,

did have did have one question. I just wanted to confirm there will be no additional cost to our employees health care this year. Is that correct? No increase. Okay. the city the it was approximately $12,000 and in the fiscal year 27 budget rather than pass that on to employees it's it's being covered by the city in this budget. I did have two of two employees reach out that they had thought that maybe it would but to my knowledge it wasn't. So I just wanted to confirm that that will not happen this year. And I do want to be clear uh the premiums are not going up. So they're not going to see an increase in their monthly payment. What is increasing is the deductible. It did go from 1,000 to,500. Okay. So, the deductible did increase by $500.

Okay. Thank you. On the highway fund. And just to for clarity, these are funds that primarily come from VOTE that can only be used for this purpose. Correct. That's correct. And so what we're really doing is just shifting some things. So rather than transferring this in reserves where we hold it a little while longer, we're going to use it. That's right. Okay. Yes. Um internal services. Can I interrupt? We need to check with Dawn on those uh benefit rates. I don't think it's 100% neutral, but I do believe the increase is negligible, but I don't think it's 100% flat. Okay. Okay. Thank you.

Find that out because that was my understanding from the presentation the insurance company made, but you know, I don't know how everybody's individual piece goes. And I guess it maybe might be different if you have family members on it as opposed to a single. I don't know.

All right. And uh in the highway fund, of course, we've reduced the transfers because we're paving. We're going to we're going to try to get some projects completed next year. Um transit fund, once again, this one um there's only a $1 change. Uh I did want to put it up here just because we're talking about all the funds and that's a rounding issue. It rounded up to the next dollar. So $1 increase. Uh water wastewater fund. uh the water treatment um decreased we decreased personnel by 31,557. This is for an operator trainee and we believe that we can operate for about half a year before we hire them in. So we were able to capture about half or or exactly half of of a year's savings from that position. So we'll hold it frozen for half the year. Uh that's an that's an uh position that we've added since um our last meeting. Health insurance overall increase of $10 in the water wastewater fund. And internal services, there's an uh overall decrease of 16,000 uh 331. That's mostly from the uh mechanic. We're reducing uh the uh um garage by one mechanic that was projected to be filled next year. So, we'll keep two mechanics in the garage instead of going to three. Um and of course, transfers. Uh there was an increase uh to transfer to reserves by $47,000. the electric fund. Uh the line construction project, we reduced it by $250,000. The thinking there is, uh if this project is completed, uh we're going to begin construction on it spring 2027, so it'll be near the end of the fiscal year and it can be spread across two budget cycles. So, we reduced it by $250,000. Of course, we're going to continue to look for savings with that project if possible. We'll try to bring it in under the uh appropriated amount. Internal services overall decreased by

$8,758. Once again, that's that's with the garage, the mechanic uh holding back on that. And health health and dental insurance, there was an overall increase of $13 in the electric fund and the transfer to the uh electric reserve increased by 258745. Can we talk about that decrease in internal services? Are we holding off on doing some repair work or what's the the thought on that? It's the mechanic in the garage where we're pulling back on that. It's how it breaks out by department.

Okay. Does that you know, we've held off on some pieces of equipment and everything. Does that put us in a difficult position with some of the equipment getting a little bit older or is that going to be functional? So, are we going to send some of that out or how how are we going to address it the with the equipment issues? Yeah. If we have one less mechanic in the shop. Uh so, if if the work volume gets too gets to be too burdensome in the shop or they get they start to bottleneck, we'll have to send them out to a garage.

Okay.

Yep. Okay, the solid waste fund uh refused collection. Um there was an increase there by approximately $58,000. There's a sanitation worker. And just a little bit about that, each truck there. There's three trucks. Each truck requires three people. There requires a driver and two people on the back. Um, right now there aren't enough in in the sanitation department or or the uh solid waste department to to fully staff them uh without pulling pe someone from the streets and we have cut there. So, we felt like it was important to we felt that it was important to add the sanitation worker back in. Um, refuse disposal. We decreased professional services by $50,000. There was question about the mulching um and uh we checked into it and Rodney who's here uh Rodney says that we can complete controlled burns with the brush pickup. So there's no need to mulch that um um and pay the $50,000 annually. So we haven't paid it yet this year. We haven't had them come in. So it'll save $50,000 in the current budget. Okay.

It'll also save $50,000 in next year's budget, which is approximately $100,000. Uh so so that was a a large savings. Um internal services overall decreased by $12,000 and transfers they increased by $3,800 in solid waste. Internal services fund the garage. This is what we've been seeing in each one of these slides. Uh it decreased by 58,798. Uh we're holding back on a mechanic that had been in the original draft budget to they had been at four mechanics in the garage. This year we pulled back to two. Uh we had budgeted to add one mechanic back in. But uh uh right now we're going to we're going to continue to to make it work with two mechanics. So we did pull back uh on a mechanic. But that's a decision that if we get halfway through the year and we find that we're really struggling and having to send so much out that we can always adjust if need be. Correct. Yeah.

Yes.

Uh so we discussed uh a c we discussed uh several different scenarios last week uh with regards to real estate and water. Um, what this page here is is a summary of each one of those options and the impact that it has on on the water account and the general fund. And I know there's a lot there, but just to just to sort of begin to dissect this, there are nine different scenarios. Uh, they are and and here's how they're how they're broken out. They're broken out by a two-cent increase on real estate, 3 cent, and 4 cent. And for each one of those real estate rate increases, so we had proposed 5 cent. If we pull back to two, three, and four, for each one of those, we have ran scenarios with a $2.50 per unit charge um um on the water, which is 1,000 gallons. And the reason you see the 3432, 3632, 3832. It's because our minimum bill is 4,000 gallons. So, if we go up $2, for every dollar we go up on the rate, the minimum bill goes up $4 because it's the minimum bill is for 4,000 gallons. And the the thing I'd like to draw everyone's attention to, um, of course, the column in red, um, that's our reduction in in real estate tax revenue. Um, I put that in red because it's it is negative. Uh, if we go down from five, so it's relative to the 5 cent that was proposed. So if we pull back to to two cent that's a 3centent reduction. So it's $354,000 uh that we have pulled back on the revenue in the general. Uh but we make up for that with a transfer to the general from the water. So and pilot. So when we recalculate pilot, what you'll see in that uh in the fifth column is the transfer to general plus pilot. it's going to e equal the uh the the

reduction of the real estate revenue. So you'll see for options one, two, and three, we're pulling back $354,000 on uh general fund revenue uh per um real estate tax. And we're making up for it with the transfer to general from water and pilot recalculating that. So you'll see $354,000 there for each one of those different um uh rates. Hey Ton. Yes. Just for everybody listening, can you go over what pilot is again? Yes. For people that may not.

Yes. So pilot is payment in lie of taxes. So each one of our proprietary accounts, they operate like a business. Electric fund operates like a business. Um water, solid waste. So if they were a private privatelyowned company, they would pay taxes to the city. Well, what we do, we calculate we calculate what that amount would be and make that transfer from the enterprise fund, electric, water or solid waste. We make that transfer to the general and and I shouldn't even refer to it as a transfer. It's a payment to the general. So,

so I just want to clarify too because we talked a lot about pilot over the last year internally and externally a little bit about maybe asking the university to chip in on some additional expenses and that would be payment in lie of taxes. But that's not this. This is our own funds, our electric, our water, our solid waste, all the enterprise funds internally. This is no external money coming in.

That's correct. And so the general fund misses misses out on real estate, personal property taxes. Were those privately owned? So, uh, it's it's an internal payment. It comes from those enterprise funds to the general. It's treated as if it's part of our general fund revenue portfolio. uh the transfer to water reserves. You can see that on the far column. Of course, we have several different scenarios there. You can see how much gets transferred to the water reserve with each option we have um available to us. Um we calculated the water a two $2.50 increase $33 $3.50. So just walk just to walk through this option one. If we were to pull back to 2 cent on the real estate and go up $2.50 on the water, the minimum bill would become $34.32. It would reduce the revenue to the general fund by $354,000. It's made up with the transfer to the general and um an increase to pilot so or an increase in the pilot calculation. uh the transfer to the water reserves would become it would it would um increase by $363,000 um $360. So for every dollar we go up on water it gets approximately $447,000 in revenue. So and every one cent on the real estate is approximately $118,000 in revenue. And you can see the transfer to the water reserves of course is going to increase as we go up on the on the water rate. So, and I can stop here and take any questions. Well, I don't know why, but I was proposing a 3232

only going up $8 instead of going to the 34 42. Okay, you with me? And and my thinking on that was again my thinking is we're trying to get to 48 bucks, you know, and if we do eight dollars for the next three years, our budgets that would get us there. I I I don't think I like seeing going up to $34 this year. Okay. Just my thinking there.

And and we can make that calculation pretty quickly. But in the parentheses for is is that the additional like if it goes to 3632 that's an additional $3 per bill or per gallon. It's per thousand gallons. So your minimum bill would increase would increase by $12. It would go from 2432 to 3632. But everything past the 4,000 gallon minimum, it would be an additional 3,000 or or excuse me $3 per thousand gallons beyond that. Right.

Yeah. So, the 3432 would be about $120 a year extra for water for folks. Um the 3632 would be $144 extra water for folks and the 168 would be or the $38 would be $168. So, that's just something for us to keep in mind for that overall impact. Like when we're looking at the real estate tax rate and what that means on a 200 or$300 or $400,000 house, I think this is a good calculation. Now, the caveat is if you have a lot of people living in the house and you use a lot of water for showers and laundry and all that, it could be significantly higher than that because you may use more than 4,000 gallons. Um, that's why I wanted to see it stay at $2 instead of 250.

And your increase is only 96 bucks per year. Sure. No, I get that. Moving on.

All right. Uh there was a question about solid waste trucks last week. So we gathered some information regarding the uh the city's solid waste trucks. We have six trucks. Three are in use. The three highlighted in yellow are backup trucks. Um they use those if if one of our main trucks goes down or is being repaired um we use one of the backup trucks uh to fill its spot. Uh these trucks we on our depreciation schedule we have them uh being depreciated every 10 years. That sounds about right. We may want to do a little bit more research on them, but it looks like we need to replace those just about every 10 years. Uh unless we find some information that indicates otherwise. But if we take a look at this and we are supposed to replace them every 10 years. Um our we in 2028 we'll need to replace a truck. In 2029 according to the 10ear schedule we'll need to replace a truck and in 2033 we'll be looking at replacing a truck. They're about $300,000 a piece. Um now that's an approximated number. Uh they'll probably go up. So over the next seven years, um, the city's looking at approximately $900,000 to a million dollars in solid waste trucks potentially. I would advise that we take a good we take a look at putting money back for those so that we hopefully we don't have to borrow uh we we can borrow less money to replace those trucks, which we save money in interest if we do that, but we need to be thinking about putting money back for the replacement of those trucks. Um just a few thing just one more point. Um the 2008 Sterling the odometer does not work correctly. So that's not an accurate number for the mileage.

How oft do you think it is? Like a lot a little. Why isn't it working? It's probably if I were to just guess it's probably 150 around through there. Just judging by like thousands the 2007. Um I would say it's probably off about 40 or 50,000 miles. probably similar to the 2007. Yeah, that would make sense because they probably were run almost the same. Yeah. Well, that's that's a lot. A lot more. Y Okay. Life expectancy on years or on mileage? Yeah, that was my next question.

Um so when we depreciate an asset, it we do it in years. Um a vehicle, you know, um like a police vehicle, you might depreciate it over six or seven years. um a tra the trash trucks or the solid waste trucks, they on our schedules, when Trish looked at our depreciation schedule, it looks like they're 10 years. They're being depreciated over 10 years, which indicates to us they probably last about 10 years. Um we're going to have to do some more homework on that just to see how long a trash truck actually does last. But 10 years sounds, you know, just intuitively it sounds about right. Well, there's a question.

Yeah, I know that when we were our first years on counselor, we were talking about replacing some larger vehicles and we really needed we we should have incorporated the amount of hours that they had also, not just the mileage. Um because depending on how much you're using it, that depreciation can be smaller in a bigger city or longer in a smaller I don't know. I mean, I'm not a professional construction equipment person, but I I I did research after that and I do know that hours mean you need to put that into the equation from what I've read. So,

yeah, it' be interesting if it if you could find kind of a comparison on the total mileage since, you know, I I think we're nine square miles whereas a a trash truck maybe in a larger county is going everywhere. So, you know, I don't know if a better judgment of replacement is a year or, you know, and I'm sure it varies case by case. I'm sure 10 is just kind of a a standard to look at, but if we could kind of find like a mileage where it really really starts to show wear and tear would just be be good to know. Or is the operational time the main determination of when they wear out rather than mileage. You with me? That's what I'm saying. Hours, right,

of use. Okay. Yeah. So, so I mean I assume we've not done any research into what's the more important element there. Yeah. Time that it's running or miles that it runs. So, I think that may be a question we'll ask Sterling and Freight Liner and Kenwood. But, uh I will say, you know, it's it's I'm sure it's a lot like, you know, your personal vehicle as well. It isn't always the mileage or the age. It's also how it was driven, maintenance schedules, uh, you know, have we hit, have we changed out the transmission fluid when it's supposed to be done? Have we changed out the oil when it's supposed to be done? Um, I'm inclined to think that we have, but, um, but I don't know. Um, this is about as as as deep as we were able to drill within the last week, but

this is more information than we've had on these kind of vehicles before. And I I think it's good to come up with a good rubric for our decision-m process on these. And you know, there may be something out there that other communities are using that go through them a lot faster and and that would help us understand more about ours. But are we putting anything away this year toward a truck or is that not budgeted for at all in this budget? No, the the solid waste fund uh the only thing we're putting back is $3,800 in the solid waste fund. So realistically then for the 2728 budget, we're going to have to try to figure out some way to replace a truck at a cost of minimum $300,000, maybe maybe more than that. Correct.

Okay.

Correct. It's just something to keep on the radar as we start talking about overall rates and things like that because those are the types of things that we have not really looked at with capital improvements um in recent years that we need to uh to know, okay, here's pieces coming up that have to be done. I know we've still got an ambulance issue out there. Uh some other question marks. We really need to look at all that. Maybe that's a work session once we get all the way through budget, but it's something for all all five of us to keep in mind. that any monies that that might be above what it takes to balance this year's budget help keep us from having a larger increase in 2728 28 29 as we look toward these pretty big expenses and go from there. But it's always tough. I mean, you know, when do you pay for it?

Do you put some back or do you just borrow? If if the city can put any any funds back, it ends up being cheaper in the long run, right? If we can, the more cash we can bring to the table, uh, it does save the taxpayer dollars. Absolutely. Uh, so, sorry, Todd, one more thing. Did we say how often we use these backup trucks? We use the the backup truck. You see the I just saw the highlighted at the bottom. It says, "These are our backup trucks." How often do we use the backup trucks? Is it hardly ever? Is it every time? It's a good question. Um, I don't have the answer, but that is a good question to ask. Um, I know we've had some trucks go down.

Yeah. But how often I mean, I know you can't expect when it's going to break, but I mean, have you experienced Okay. Well, that's with a lot of things that are made these days. They're not made like they used to. So, okay. Thank you. We'll get some data on that. Just curious. I mean, if they're I imagine we're going to be using them more and more. Um, but I was just wondering how much we're using them now, I guess. Uh, any other questions on uh solid waste? Okay.

Absolutely. Um so next steps just looking forward uh April 21st we will have a public hearing first reading of ordinances for the budget tax rates utility um rates and fees. Uh April 27th we'll have an optional work session. So we've penciled that in uh if we feel like we need to to hold that. April 28th second reading of ordinances for budget tax rates utility rates and fees. And with that, I will turn it over to council for questions and discussion.

Thank you, Todd. All right. I I think some of the big questions for us tonight are to start to gel around where we are with these rates so that folks can know what we're thinking as we move into not only the first reading and the public hearing next week, but then if we want to have a separate budget work session a week from tonight or two weeks from tonight and then our final reading of the ordinances on the 28th. So, you know, I hear what you're saying, guy, about $32. I I think wherever we land with water, the lower the better is going to help our folks who are maybe um not as well off uh who maybe are heavy water users, but does that impact where you are on the real estate tax? I mean, we we talked about where do we find balance in this? Are we at three cents, 4 cents? Are we at uh you know, $32, $34? Where where are we with all this?

I'm still at two cents and $32. And I want to point out while before we get too far away, is our public hearing the 20th or 21st? The 21st. We're not having a meeting on the 20th. It's the 21st. Thank you.

Where's everybody else sit with rates and and uh fees? Well, I've stressed that my concern is exactly like we're hearing tonight. Um, we really have no contingency plan in some of the rates that we're proposing. If anything goes wrong, then we are looking at taking another rand out or creating another crisis where I feel like we really need to start um finding a balance. No one wants to raise taxes. No one wants to put undue stress on our citizens. So we I think all five of us can say that um and and say that wholeheartedly, but I think also we certainly don't want to create a crisis for the community if our water tank um has an issue or one of our trucks, our ambulance. So there's just every single department is in need of something major and I think we have to start planning for that. We can't just go in as with a flush budget. It's not planning. You wouldn't, you know, you'd try not to plan your household that way um without any contingency for emergency. And I feel like that's that's where we're at.

I think where I'm at is I I'm at the two cent on the real estate and I could go up to the 34 32 or the 32 3 whatever is proposed for a couple reasons. I think that there it's undeniable that in three years we have done a ton of heavy lift and that would be 20 cent on the real estate. I I understand and completely agree that we are trying to wean ourselves off of reliance on transfers to the general fund. You also have to be mindful of the impacts that that have on our citizens and yes there will have to be continued moderate increases over time. I mean, I I think that we have to continue to do that, but we also have to give our our households time to hopefully their income is also rising. Hopefully, we're being able to lean out throughout the city to be able to cut some of our costs and also hopefully we're able to grow economic development that can offset some of those costs. So, I totally agree. What we should never be in the position we're in anyway where one storm puts us in a huge hole, but it's just the position we're in. So yes, long term I think we absolutely have to be able to re rebuild our reserves. We have to continually replace things. It's a matter of time. I just think that we have done our part of of increases and and we've had to and I've supported that. I think we all have. I think we have to continue to do it. I just think that we have to do it moderately. Um and I do think that this does that. I'm very mindful that and and I'm also mindful in these increases that we're proposing that we also have a 5% on the electric and there was really nothing we could do about that, but that hurts everybody. Um so that's kind of where I'm at with that. Um I agree with what everyone's saying. We do we have water tanks, we have equipment, all of those things have to be addressed, but it has to be done in a moderate fashion. And I think 20 cent in three years on the real estate. I mean, I think I don't know of any other locality around here that you could point to that has done that. So that that's that's where I'm at and kind of why.

Well, and to point out we're even with that, we're still the lowest. So even with that, so what I want to say is I take full responsibility for in the past not making the incremental increases. We did not do that. We were advised we didn't have to. we were a 50- vote in those budgets based on the information we are providing and you'll hear us refer to that time um ringing our hands saying we really wish that we would have done something but I'm going to say now this present is the most important time we have so we we can't keep creating that same perfect storm and then going back to the past and say well we didn't raise taxes then so no I mean we we have to now we have to kind of grab that bull by the horn. We know we didn't raise taxes when we should have. Even with that increase, we're still the lowest in all the region. So, we can't keep ringing our hands and creating the same instance again and again and again. So, personally, I'm going to say I take responsibility when we should have made the incremental increases in the past. But I'm not going to take the responsibility for not doing what's necessary, even though it's hard and I know it's unpopular. But I do feel like it is in the best interest of our community to remain a city. We are not at the rates that we would be if we were a county. We're still going to be the lowest around. And so with all of that perspective, I mean, no one wants to say the obvious, and I get it. It makes me very unpopular, but I'm not running for prom queen. I'm here to do a job. So,

Kelly, what are your thoughts? I appreciate what you just said. Um, and I agree with both you and Seth. I feel like this information has given me a a lot to think about and I need to marinate on it a little bit more now that, you know, these numbers are a little bit clearer. Um, I am very afraid that we are going to have a situation where we're not going to have the funds that we need to fix a problem or a truck or lose employees and and need to do those things. Um, those those things are very real and they will happen. Um, there's there's no denying that and um I don't want to deny the fact that we have made unbelievable strides over the past few years. I mean, the fact that we are funding our own budget is huge. It's not a I mean, there's lots of number changes, but the fact that we are not borrowing any money to to make this budget work is is an accomplishment in itself um to to hard work that we've done. I'm not sure where I met honestly. I thought I knew where I was at when I walked in. I I do want to think about it a little bit more, but I have a I understand that we that we are still lower. You're you're not wrong about that. But if you look at the amount that we have over we have increased all of our rates over a really short amount of time. I I have heartburn increasing them as much as what we may need to do. Um and and what I think we will benefit from I I still have to come to terms with the percentage that we've increased over the past couple of years. Um, and it is a very difficult decision and and these are not decisions that a lot of people would have the guts to make because you don't see people beating

down the door to run for city council. Um, they're they're not easy decisions. Um, and we do have to make the tough decisions and not worry about the popularity, but I agree with that also. Um, but I this this spreadsheet gave me a little bit more to think about honestly. Um, I want to make sure that we can take care of our citizens and that means providing services like water and trash and things like that, but it also means making sure that they can provide food to go on their table and roofs over their heads. So, I I'm I have some things to think about honestly and I I think I have some time to do that. Um, but yeah. So, thank you and I appreciate everybody's comments on this. I'll just point out a couple of things and and you know, we don't know exactly what it's going to be, but tonight, for example, Todd mentioned we really should look at purchasing a truck for the 2728 budget. Okay. Well, there's three cents on the real estate tax by itself. Um, that's with no additional raise, no additional expenses, no additional concerns for anything. weather,

no weather, no no nothing. But that's something we already can see coming toward us. If, for example, we we landed at three cents instead of two cents, there's $118,000 toward that truck that we haven't necessarily budgeted in here that we could potentially put back. Um, I agree with what everybody's saying. I wish we could go a few years without having to increase much of anything. I don't think that's practical for the city. And you know, one of the things we've talked about is the choice to be an independent city is really the decisions that we're making with these budgets that we're trying to balance the different needs of the different departments, that we're trying to pull together the resources, that we're trying to be considerate of our citizens, that we're trying to find that path forward that that makes sense. Um, and so it may be somewhere in the middle instead of five cents, you know, maybe it it is three cents, maybe it's uh two cents. I don't know. Um, I I do think we need to know, well, we absolutely have to know by April 21st because at that night, we have to be able to establish what those rates are going to be. Now, having said that, that's first reading and we can change them by the second reading, but time is growing short and then we'll be locked into a position of where we need to be. So, how about this? And I hate to ask you all to keep running more scenarios. We've got nine scenarios here. Um maybe adding in the the $32 scenario um as an option and looking at that um on water and then trying to figure out, you know, where we can go in terms of what could be set aside for emergencies, for known purchases, for addressing some of the issues we already have. we can get it done.

I also have an additional question for for Todd. So, I know that everything on this this summary of options list is um not what you recommended in your original plans. H and I know that we've done additional cuts and and we've made some changes and we've increased and we decreased some things and and you know people like our um amazing departments have found additional cuts which we greatly appreciate. How if we if we decided to go two cents and and $2 uh you know the the option zero which you're going to create let's say we did that. How much is that going to affect you having to adjust the budget that you've already kind of worked on so far? Because those those are big differences from where you what your original recommendation was.

It makes so uh the first thing it does it makes everything much more tighter. Uh it's going to reduce the amount that we can put into the city's uh funds for the general the water. Um the the city right now, you know, looking at at all the information. We're still gathering information on infrastructure, things like that. Uh and other necessities that we're going to need over the next several years. Um you know, it it's an incremental step forward, but it's a smaller step forward. uh the cash will will be a little bit tighter. Uh the fund balances will be lower. Um and you know just and the transfers we're still very dependent on those transfers which long term you know we're not going to get off of the transfers overnight. That's just not going to happen.

But uh I I think we need to think about you know how large of a step we want to take forward. Um at $22, um it's a step forward from from the previous couple budgets. Absolutely. Um but the cash flows will be very very tight. But is there anything that's going to be majorly impacted like if we go this low man, we're really going to have a problem in this area or that area? Or is it just going to be a general everything's going to be a little bit tighter? Is there some major thing that you might foresee that is going to be a a huge hole or So we are learning a lot about infrastructure. Mhm.

So, one of the biggest concerns is let let's say we we come down to $22 and it's going to work, but it's it's, you know, a ra a razor thin margin. If we have any hiccups or if a vehicle breaks or if we have anything, you know, that we're not taking into account happen, uh, you know, the city's going to be looking at loans again. and loans ultimately cost the taxpayer more in the long run than bringing cash to the table. But I can't point to one thing right now and say, you know, this will be a disaster. And I know I put you on the spot. I was just some kind of major thing in the back of your head that you thought we would be impacted.

Yeah. It's it's it's the it's having cash Yeah. on hand. And you know, I will say we we don't know yet how what where we'll stand with A at the end of the year. So that's still looming out there. Uh we may make more progress on AP or we may not. Um I I don't know yet, but uh but that's going to be a huge driver for FY27 as well. Okay.

And and I agree. I don't I don't think that anything lower than what's been presented would be doable. I mean, I think that you go go lower than anything that's been presented, you're going to have to make it up in other places because I think that you would start digging into it. So, I I would agree with that. Whether whether you rearrange how you get there, I don't know that you could do much lower than than these options and still be able to be in a place that we want to be. But in your proposal, you had the five cents, but only $1 per thousand gallons, right? Correct. So, do I remember that going to $2, that additional dollar brings in 400

447,000 coming down three cents is three times 18 354,000 which leaves you a gain of 100,000. That is correct.

Okay. So again, I am not in the position where I see we're in a eitheror scenario. And I do want to just say that I I really appreciate Todd putting this together and I know that the numbers that you've given to us to consider. I understand that you do think about our citizens. You do have have how conflicting this is close to your heart as well. This is tough. I also want to thank Craig, our consultant, who also helped with the numbers that are being put forth, as well as our finance department. So, um, I'm listening to what you've said and and it it waves on me heavily. I know that you have our citizens best interest at heart and so do we. So, just thank you for the work you did because it's not popular coming up with those numbers to present. So, thank you.

Well, and I'll just add one more note here. I I agree with everything that's been said as far as what we're trying to do and and hopefully some economic growth that should be happening in the next 6 to 12 months will help change this picture a little bit. It'll probably only be a small amount in the current fiscal year, but it starts to change things a little bit more hopefully for the next two or three years as we move forward. I'll just caution this um that you know we got here thinking we were okay with going with lower numbers. Jesse brought that up and that's the only thing that makes me a little nervous is if something doesn't work out exactly right. As Todd said, everything's extremely tight. If something doesn't work out exactly right, we have less wiggle room to be able to adjust that to get to a place where we we've got the resources to take care of things. And the last thing we want to to do is keep raising rates over the course of of a year. Uh making changes along that line. I can give you a good example. The electric kind of got away from us a little bit as the rates went up in 2023 and 2024 and that really squeezed our margins considerably. That was fairly unexpected and and that's the part that you you don't really have the ability to plan for. We don't want to get behind uh on anything. We don't want to push ourselves into a worse cash flow position and and that's the other part to think about. But um I do appreciate everybody's thoughts. I I think this would make a lot of sense if we can get some final looks at at some numbers and you know again whether it's scenario zero or whatever you you want to try to pull together to see as possibilities. And uh all we talked about tonight as a critical need that we're pretty sure we're going to have to undertake in 2027 28 was the sanitation truck. There's likely to be a couple

other things that we're most likely going to have to do in 2728. Correct. Yes. Uh there there are infrastructure needs in the electric department. Um even beyond the project that that we've been discussing with the budget. I know even with vehicles and trucks um in electric um the water tanks would we would like to get them on a preventative maintenance schedule. I think that's I just think that's you know very important to to make sure that happens in the next in the near future. Um

and I would also add I know that you had mentioned two RFPs for looking at some of the some some things too. So I know that that's part of the consideration that we all need to be mindful as well. But the the other piece I think it would be helpful if we could put together a list of half a dozen of those things that we think are going to have to be on the horizon for uh 27 28 28 29 because that could impact the decisions that are made for this year so that we don't come up short as we go just so we're preparing a little bit ahead. And um I I will ask the fire chief Rodney. Um you know I I don't know that we've heard anything about the ambulance for a while and trying to figure out where we are with all of that. Uh that would be helpful to know um you know where we stand. I know we were trying to figure that whole piece out some time ago and and we haven't really come back around to that. Um so not tonight obviously but maybe something that could be presented when we get back together before our public hearing. So what it sounds like on the 21st when we get together that is a special meeting that will include our public hearing. We'll go through a presentation on the budget. We may have a full discussion of some of these elements before we get into the public hearing portion so that anyone who comes out can comment on those things that we've made. Uh we can try to adjust the the rates so that you know what we're talking about. Certainly an adjustment can be made between that 1st and 2nd and we can have a budget meeting on the 27th as well, but it looks like the 21st will be a pretty active evening with a lot of discussion about some of these issues we've talked about this evening and and go from there. Council, do you all have any other questions before we finish this portion of the meeting?

Thank you again, Todd.

Um, another item for that list that I know you and I have discussed is paving. We have a lot of paving projects. So I that we've put off. I'd like to see that as a part of that conversation because I know that um you and I have talked several times this week about different things that citizens have brought to me in regards to paving. And again, I I know this is one of those unknowns like Kelly was mentioning, but you know, we we can't ignore mother nature. We have to keep in consideration that the weather here our trends have not been kind to us lately and we just have to be mindful that you know that that is also something that we can't predict but something that if the past is any is indicative at all to what we can expect. We have to be we have to have a contingency plan of some type for weather

and and could we get a the list of the upcoming paving or the or options for us to look at for that as well? Yes, we're working on it now. Thank you very much. Thank you. Anything else? All right, we will adjourn for eight minutes. We'll get back together at 7 o'clock for our regular meeting. Thank you.