City Council - Regular Meeting

All right. Good afternoon everybody. Uh welcome to our first of two budget town halls for the FY2027 uh budget process. And um so we are in uh the thick of it right now where the city council will be working through uh the budget recommendations that staff have provided and uh work through a series of public hearings and town hall meetings and work sessions all culminating towards a council vote to adopt the budget on May 11th uh about a month and a half from now. And uh so welcome. Glad that you're here. My name is Wyatt Shields. I'm the city manager for the city of Falls Church. And I'm going to um maybe ask our mayor to come forward in just a moment to make some welcoming remarks. But before I do that, let me introduce our deputy director of communications, Maggie Redden. And she's going to facilitate um our public input during this town hall meeting for those who are participating virtually as well as those in the room. So Maggie, let me let you introduce yourself.

Hi everyone. My name is Maggie Redden. I am the leading director of communications like side. Uh, yep. Sorry. Hi everyone. My name is Maggie Renan. I am the deputy director of communications. Like Mr. Shield said, um, I will be facilitating the question and answer portion of this town hall. If you are in the room with us, we'd like you to uh when you would like to ask a question, push the microphone button at your desk. Um, ask Mr. Shields your question. Joshua, who is my uh colleague here, our web manager, will be helping keep time. We ask that you keep uh comments and questions to three minutes. And for those of you who are joining online virtually, uh please feel free to put your questions in the chat and we will both be monitoring them as well.

Mr. Shields.

Thank you, Maggie. Uh let me invite Letty Hardy, our mayor, to welcome everybody. Great. Good afternoon all. Um, also council member Flynn's in the audience and so thank you for joining us and commissioner of the revenue. So, as Wyatt said, we are at the beginning of the process and this is one of the most important responsibilities that council takes on every year. Uh, besides ensuring kind of fiscal responsibility for taxpayers, also ensuring kind of the long-term financial health and that ultimately our budget reflects the priorities of the community. So, we want to hear from you. Besides town halls today, uh, we welcome public comment. We also have office hours as well as emails. Um, we've heard a number of kind of concerns already. Obviously, the region is going through a bit of economic uncertainty and upheaval. We've heard about paving requests, uh, wanting to upgrade the teen center, um, as well as kind of other priorities of the community. So, we want to keep hearing from you because we want to make sure that the budget reflects the priorities of the community. So, thank you all for being here and thank you to staff.

All right. Thank you, Mayor Hardy. And um so when we do get to uh Q&A, we do have microphones in the room and that's really for the people who are participating remotely so they can hear you and hear your question and we're recording this and so we want your voice recorded for that purpose as well. I have a lavalier so I don't need to have a microphone in my hand. That's how I'm getting away with it. So Maggie's going to drive slides for me and um so next slide. Um, and as we're um, here's what we'll do today. Um, I've got about 30 slides. I'm going to go through them at a brisk pace. Um, I gave this same presentation to the city council on Monday night. U, but we want to make sure there's time for discussion, suggestions, questions. Um, and that's really kind of the main point of today. Um, is to hear from you first. We'll get some information out. So, here's what we'll walk through today. We'll uh talk about the regional context. The mayor mentioned that just briefly. We'll talk revenues, expenditures at the high level. Talk about some of the strategic priorities that we are funding in the budget. Um talk about the capital improvements program. What's where a lot of the action is in the budget. Uh we'll close up with some discussion of our fund balance or financial condition and our utility funds. And then we'll talk schedule. So um so let's go through it. So first um this is uh if you sort of do a chat GPT search on Northern Virginia regional budgets this is what uh kind of they are discussing in terms of their budget. So words like cautious uh slower revenue uncertainty focus on core services um uh maintaining service levels. Those are the things that are our peers are are dealing with and that is the approach that we've taken with this budget. We've tried to develop a budget that will provide reliable services that

are responsive to our current environment to city needs uh uh resident needs and business needs and to look ahead to be resilient for the future. Uh next slide. So this is a um some additional context. Uh the city is because we have still a great deal of new construction um as well as still rising assessed values for homeowners in the city. The city does have a bit of a brighter revenue picture than our peer jurisdictions. Um in terms of real estate tax rates, what we are seeing is that some of the our jurisdictions are uh proposing to raise the tax rate and others are proposing to keep them stable. The city budget that I've recommended the city council has no change to the real estate tax rate and we'll talk about that a little bit more. Next slide. Um and these are some of the things that are happening um terms of uh looking at other revenues to try to close budget gaps. Fairfax County, the big one for them is a new meals tax. Um public safety is a um is something that there's a lot of market competition. There has been really since the great pandemic. Um and so you're seeing really sharp increases in public safety compensation and we try to address that in the city um to be maintain competitiveness and that's a big part of this year's budget. All of our uh peers are eliminating vacant positions. The budget that I'm recommending the city council does the same. We'll talk about what those are and what the impacts are. Next slide. So uh we'll give a next slide. Next, kind of a quick overview of the budget. So, the bottom line is a budget of $134 million. Um, about a under a 1% growth overall to the total city budget.

The general government operations is growing 3.4% or $1.8 million. The school transfer is growing 4.1%. um because there's a de decrease in state funding for the schools, their overall budget is actually growing 3.1%. It's important for people to have that context. Um we are going to have a contingency in the budget. We're recommending to maintain in the tax rate in the operating budget some contingency to deal with sort of bumps in the road over the coming fiscal year and also to give the city council some flexibility as it tries to solve for this year's budget when they adopt on May 11th. Um a slight decrease in uh debt service uh pay as you go capital. We have decreases in our use of capital reserves uh for our capital improvements program. Last year, we factored into the CIP the anticipation of a $10 million payment from the phase two of West Falls uh right next to Meridian High School. Uh the developer there has indicated they are not able to proceed with phase 2 and so we've pulled that 10 million out of that anticipated 10 million out of our capital reserve projections and accordingly made reductions to our capital improvements program uh because of that. And then tax relief and incentives. That's money that goes both for uh seniors who get tax relief and veterans who get tax relief as well as some of the city's economic development tax incentives uh that we have uh for for projects in the past. Next slide. So, our revenue picture um just for everyone's sort of situational awareness, we are an organization that is highly reliant on real estate taxes that funds 61% of the city and schools operating budgets. Then going around the

horn, so the next 20 uh 20 to 25% are business related taxes, males, meals taxes, sales taxes. Also notably, we are a self-funded organization. The people who live here and do business here fund almost all of our operations. 4% of our budget comes from the state and federal government for our operating budget. Now, we talk CIP, we're bringing in uh about 94 million in state and federal grants into the city, but that's for one-time capital investments. This is for operating budget.

Yes. CIP stands for capital improvements program. Yeah. Yeah. Thank you for that. Next slide. So, no change to the real estate tax that is proposed. Um, as the mayor noted, we we recognize that there's increase in assessed value in homes and we're we'll talk about that um in a bit more detail in the next slide. Um, well, let me just mention one other thing. I I will touch on some of the fee increases for utilities, solid waste, and building permit fees later in the presentation. Okay, next slide. So assessed value um market appreciation of 6.2% for residential, new construction 1%. So overall 7.2% increase in assessed value uh for homeowners in the city. Um a big one in the commercial area 6.5% that's much larger than what you see in the region. Fairfax Arlington's commercial assessed value is dropping. Um, ours is growing because of new construction and the main part of that is West Falls. But it's important to note that is new money that's coming into the city and that new money from commercial construction is already spoken for as part of our plan of finance for Meridian High School. That new money coming from West Falls is being used to cover debt service for the $120 million bond we issued for the Meridian High School. Uh, next slide. So impact to homeowners for the median home o and the city is uh 1,73,000 u for the median home owner no change in the tax rate would result in a 5% increase in the tax bill or about $611 for the for your median homeowner in the city. And so the city council is paying very close attention to that and and trying to manage, you know, what what the tax burden is on

residents in the city. We have been able to reduce the tax rate in recent years, 17 cents worth of tax rate reductions over the past seven years. Um, and assessed value uh has increased at a more rapid clip than those tax rate reductions. Next slide. other local taxes, uh, growing 6.9%. Um, and so, uh, personal property is new households moving into the city and we're capturing the vehicles associated with those new houses, uh, with the commissioner revenues, uh, work in that space. And then other taxes, the hotel taxes, that is one where that the sort of the regional changes, changes in federal uh, actions is impacting our hotels. they're they are feeling that pain based on what we can see from uh from tax receipts. Next slide. So shifting to the expenditure side. Um education is and always has been the largest uh component of the general fund operating budget at 43%. Debt service is 8% of our total budget. And then going around the horn, u police and fire, our public safety functions is our second largest uh component of our budget at 13%, public works, the maintenance of all of our streets and infrastructure and buildings um is 7%, wreck, parks and library 5%. um housing and human services 4% and then community development which includes our building safety division, planning, zoning and economic development uh is 4% of the budget. Next slide. So that's a kind of an overview. Now we'll start to we'll shift to talk specifically about sort of the big things that we had to accomplish in this year's budget. And um and with the growing uh revenues uh in many respects

that was very helpful for the budget and we had really significant challenges uh in balancing the budget this year and we'll walk through kind of what those were. But one uh investment in the workforce that's a a just a crucial thing for maintaining reliable services and um and uh we propose a 4% merit increase in a uh for police officers inclusive of that 4% a total of a 14% increase in our public safety personnel and that reflects what's happening in our peer jurisdictions uh with compensation increases in police departments across the region. So we need to um uh be competitive and and keep our officers uh working here in the city. This is a big challenge for us this year. So a combination of both our interjurisdictional contracts with Arlington and Fairfax and other contracts uh for basic core services in the city whether it's IT functions um electricity uh fuel going up $2.5 million uh altogether. So that was our our biggest problem that we had to solve in this year's budget and it's frustrating because that's to maintain existing levels of service not to do new things. Another challenge is uh with declining interest rates and we've spent a lot of our ARPA money. If you'll remember during the pandemic we were given money by the federal government. We were collecting interest on that. That's all spent. So we have a $1 million decrease um in investment returns. We used that investment money. We knew it wouldn't be with us forever. So, we used it to surge our efforts on street paving and we used it to u uh for our affordable housing initiatives. So, the budget does prop to pro proposes to take some of that money that from investment returns that was used for

that purpose and that money is now gone. We uh are freezing or defunding seven vacant uh positions in the city and I'll talk about those in detail. And um and all of our department heads went through their budgets and found efficiencies about 700,000. So on the next slide we sort of show a pivot table that takes those big chunks and walks us through how we balance the budget. So tax revenue uh 2.5 million in new revenue uh for general government operations. Similarly on the school side because we do a 5050 revenue share split the schools also have 2.5 million. Um so first we pay for the compensation uh for employees. We pay for the special um market adjustment uh for our police officers. We cover our interjurisdictional contracts of 1.3 million uh 1.2 million in contractual costs and then the reduction in investment revenue. So we we're about a $2.5 million gap um after factoring in those things. So to balance the budget, we pulled out the dollar for dollar what we're using those investment dollars for affordable housing and paving um uh operational savings. Um, and we'll we'll talk a little bit more about some examples of those and u and the reduction in vacant positions. That's how we got back to a balanced budget. Next slide. So, with respect to street maintenance, the budget does have 1.5 million built into the tax well 700,000 built into the tax rate and $800,000 use of capital reserves in the operating budget for maintenance. In addition, uh we've applied for I think we're going to get uh what used to be called the primary

corridors paving program. It's the state of good repair program where we'll get money in to pave Route 7 and Route 29, which is a those are really big important roads for us to to maintain. So that's that million dollars is very helpful to us. What we'd be losing on paving is the use of investment revenues. So on Monday night when I presented this to the budget, sort of a big theme of the council's commentary is about maintaining state of good repair on our streets. And I think we're going to be doing a lot of work with the city council on uh analysis about how we're we're funding our street maintenance. Next slide. Similarly, with affordable housing, we have $200,000 and that's down from 500,000 which included the investment revenue last year. On the positive side, we do have u earmarks, what used to be called ear marks, now congressionally directed spending uh for the affordable home ownership program and for housing preservation. In many respects, I think that's appropriate. We need the federal government to help local governments fund uh affordable housing programs. It is too big of a problem really for us to be able to address um as a as a small local government. So, having outside money is very helpful. Next slide. So, these are the positions that are defunded in the budget. A code inspector position, uh, two IT positions that in fact we're taking those FTEEs away, but we're going to be contracting in the private sector for SISO services and project management services to move uh, some of our technology initiatives forward. Uh, maintenance worker position in DPW and a school resource officer. uh we had gone up to two SRO's and we're going back to one which is where we traditionally have been but we had gotten a grant for that second SRO about four years ago. So that is a loss for the organization. Uh but one of the

things we needed to do to balance the budget sheriff part-time deput deputy in the library is losing a half-time uh position a library assistant position. Next slide. So the city council just recently is with great clarity and uh and and uh and purpose identified environmental sustainability, transportation transformation, economic development, housing and responsive government as five key priorities. And we're trying to do that in a way that's reliable, responsive, and resilient for the future. So let's talk about some examples of where money is in the budget. Uh next slide. So in terms of reliability, that investment in our workforce is key. Uh 1.5 million in the operating budget for paving plus the grant sustaining our CCAU, our committed affordable unit program. Um continuing with our fire hygi services. Those are some examples just some some examples of of the way the budget funds reliable city services. Next slide. Um, in response to a lot of feedback from the community, we do fund watch night and we're working right now with the business community on kind of a reinvented watch night. So, we're looking forward to that moving forward. The process improvements that are really important for how we deliver services and make them accessible to the community and really effective for the community. A big one is transformation and transportation. Our CIP has a hundred million dollars of projects in our transportation infrastructure in the city to make them more walkable, more bikable. Um, and that's just a key part of of the city's uh future. Um, funding contracts, you know, I put that as responsive because that was a big challenge for us and we had to make a lot of adjustments in our budget to create to free up money to meet those

mandatory costs coming from our our uh partners. Next slide. And then we have some in the sanitary sewer and in storm water. I know Fred watches this very closely, but uh storm water in particular. Um big rain events are more common in a in a in a warming planet and we are investing in our storm water system to be more resilient to that. Next slide. So summary of our CIP. Uh the big uh the big work is in transportation. Um and uh and then kind of investment through through all these areas. Uh for a small city, $162 million CIP. As I said, this is where much of the action is in the budget. That's over six years. So that's not in one year. Uh but that is a lot of the people in this building have dedicated their lives to administering these projects in a cost-effective and and uh and good way. Most of them are grant funded and so there's a lot of uh requirements that come with it. Next slide. So as I mentioned grants uh 94 million of our CIP is in grant funds most of that in the transportation space. Um a lesser amount of capital reserves um u than what we saw last year because of the uh reasons I mentioned earlier. And in terms of debt, um, we have really been very light on taking on debt since the issuance from Meridian High School. Um, and that was in 2019. And, uh, we have not issued general fund debt since then, and we won't until 2031. Uh, the next issuance of general fund supported debt will be for the fire station 6 uh, roof replacement. Last year, we had the property yard in FY28. We have we're recommending to the city council to give us some more time to

think through uh you know what we're going to do with Gordon Row Triangle more largely and uh the property yard itself. It's a crucial city facility. It needs investment. Uh but we'll take the time to to study that uh appropriately. So uh next slide. So this is the city's uh unassigned fund balance, capital reserves and permit reserves. So the big sort of thing at the bottom here is unassigned fund balance. That's really our shock absorber for big fiscal uh crises in the city and we have had them in our past during the the great recession. Uh but from a policy perspective, that lavender color, those are our capital reserves. And so we do in the CIP draw them down to about $3 million, which is our policy minimum for capital reserves. Um and then their permit fee reserve, as you can imagine, if a big project like Westfalls comes in, they pay hundreds of thousands of dollars of permit fees. We put them aside in reserve because it takes us three to four years of inspections before those are they get their certificate of occupancy. We do plan to use all those permit uh reserves absent any other big projects coming online. Those permit fees uh will be spent down by that time. We are recommending an increase to our building permit fees to sustain our building safety function. We haven't touched those fees for about 10 years and it's time to adjust those for inflation but also to cover our actual costs. Next slide. So, uh, other fees, storm water fee, we are proposing a 7% increase. That would be about a $23 increase over the course of a year for the average homeowner in the city to address uh the capital investments that we're proposing for storm water. the

sanitary sewer rate. That 5% increase is really driven by what our partners are doing at Alex Renew, the big sewer treatment plant that mo half of our flows go to and at four mile run where the other half goes to. And so we're getting increased uh capital costs and that 5% is to cover that. That's about a $27 increase for the average household over the course of the year. And then solid waste. Uh with that new fee, we will adjust it every year to deal with contract increases and tipping fee increases and 4% is the number this year. Next slide. So the last uh slide that I have and then look forward to discussing this with you. Um right here we're at our budget town hall number one. The city council has a whole series of public hearings and work sessions. We'll have on Thursday, April 30th. It'll be a nighttime meeting. Everyone's welcome back. The city council, I think by that time, will have signaled some of the policy inflection points that they are considering. And that second town hall is a way for us to talk about those and get feedback on those. Final markup on May 4th and then final consideration and public hearing on May 11th. So that's what I have. I don't know how many minutes I took. Well, took about a half an hour. U thank you for bearing with me as I walk through those slides and um and now it is uh for questions, suggestions, uh comments and uh we'll open up the floor. We do again ask people to use the microphone. So Andrew, you might have to come to a different table and that's for the benefit of the people outside this room. And we have we're joined by our awesome city staff uh and in the room as well. So anybody who has questions it's uh it's it's time.

So I guess I'm on Yeah, you have to see the green light.

I'm not. Okay. So my my uh I first I appreciate there's money being put in the budget for planning stormwater concerns because that that's something that we've been advocating for and I think that's the first step to to to really determine the next step how big and correctly should pipes and systems be sized and then to actually make the improvements where the real money comes. But it it needs to start with a study and an analysis. So I appreciate the city putting money in for that. Um and and and I hope as part of that that you will emphasize looking at the T-zone uh properties all across the city and how they connect with the current system. That really was not done as part of the approval of that reszoning. And we are seeing right now two or three projects near us. There may be a couple more over even the next year or two where we had um parking lot type runoff being replaced by directed roof runoff from multiple buildings. We don't know what the impact of that will be, but it's important the city plan for it. I watch these pictures of um uh from China where the under the water undercuts the road and boom, you know, cars fall in. Well, in our case, you know, garage um building inhabitability, etc. could be a result of of poor water management. So, it's not just a runoff into the streets, but it's are the pipes adequate and are they are we planning for that? So I I hope that the city will will as it spends this money spend an emphasis about the T-zones because they were not in the prior plan and they were not planned for as part of that process but they do have an impact in the community and we we should assume maximum development and then look at how that models for our resources. My suggestion.

Yeah, thank you for that comment. Uh I'm Fred Thompson. not uh really work on behalf of the uh Broadway homeowners association as their kind of community relations contact with the city. Yeah. Not an unpaid volunteer position.

And so a key part of uh planning is to do buildout scenarios sort of build out completely based on what zoning allows and then study the impacts to school facilities to park facilities to sanitary sewer and as you mentioned for storm water. that is a I think a core planning function and um and on the stormwater front we'll be doing that. One thing that is positive about new development in the city is that most of our old development had no storm water controls whatsoever. And so uh to comply with new codes and existing codes, they have to detain and hold back more water on site than the status quo ante. Um so let's measure that. must understand how that all works together as a whole because everything is connected and uh so appreciate that comment very much.

Yes. Hi, I'm Jeremy Schneider, uh president on South Oak Street. Um, my real estate assessment has gone up 20% in the last two years, and I'm just curious to know what data was used to compute the increases from 24 to 25 and 25 to 26. Um, I'm not on a cursory glance, I'm not seeing the same data, so I'd be interested in knowing what that data was. Um, uh, I hear that I heard you say in passing that some money is being spent for more walkable and more bikable. That's one of my major almost a single issue for me as a voter. And I've been very disappointed with the way the city has uh pushed uh walkable and bikable actual projects into the future as part of uh street maintenance. For instance, that intersection over by um the new development on at West Street is a complete cluster for a pedestrian or a cyclist or a kid trying to get to school. I can't believe that was ever done um the way it was. So, I'm I'm very disappointed with that. and and basically the the fact that walkable bikable is given a lot of lip service but I don't as a bicyclist I don't see a lot of actual improvement in that area. Um, and as a comment, um, I was very interested to hear you say that there's been no increase in 10 years for the permit fees. And considering how much the developers get out of the development, I think that

it's warranted to have them keep up with inflation at least, if not a big catchup for the last 10 years. I think that could give us a lot of uh um revenue to make up for these shortfalls. So, thank you very much.

Well, thank you. Um so, I I'll try to address um your questions. yet sort of three big uh areas of questions and we can follow up on each of these as well but the particularly for the technicalities of how assessments are done in the city. I can speak to it at the broad level but I invite anyone who has questions about their assessment to contact the assessor of real estate and and they will talk you know they'll walk through with you hear what you have to say. uh they are empowered to make adjustments if they feel that the data supports that and then ultimately you have the ability to appeal to the board of equalization if if you think that's um appropriate. Um the data that they use is the sales data um from for homes across the city and then they marry that up with the specific data about an individual's house. So they can sort of in terms of knowing how many square feet you have, how much is finished, unfinished and they have some uh sort of pivot points in terms of the quality of of construction and that type of thing. That's at a high level how they do it. It is a mass approval process and so they kind of press a button once all the formulas are in and it does the assessment for everybody. So it's important for people to understand it is uh it is a mass uh assessment process. So it's the same amount of increase for everybody regardless of their particular situation.

No, it um you say massive. I don't understand what that means.

Yeah. And that's where you need to bring the assessor into it because I you know I know that there is variance from home to home in terms of how those formulas then get applied to an individual's home. They also break the city into neighborhoods. And so they can they take the sales data and apply them to neighborhoods. And those are constructs that they sort of put into their GIS mapping. And so that is why there can sometimes be parts of the city that have a steeper increase than other parts. And that's because the sales in that neighborhood indicate that that's where the market is. It's a complex uh profession. And uh so I spoke to it as best I can, but we have experts who will speak with you about any individual property.

Thank you.

Um and then the second question on uh walkability and bikeability. Um I I hear your comments and I think the city council hears them as well. I think one of the kind of the main things that the public speaks to the city council about is safety on our roadways. And so, uh, we work very hard at that. And let me just talk a little bit about Westf Falls. Um the as we were going through our approval process for the West Falls project, we had to um work with Fairfax County and Fairfax County insisted on certain road levels of service and that's why there were additional road lanes added at the intersection for HCO and Route 7 at Fairfax County's insistence. They we kind of had to do it. And then Fairfax County had a series of public hearings about three years later and all of their citizens said, "We want bike lanes. We want walkability." And Fairfax County changed its mind. So the good news is is that we will be working uh with VOTE and with Fairfax County to increase sort of the width and accessibility of pedestrian corridors along Hok and Shreve. Uh we have one really important grant for the Shreve leg of that that's going to be an important leg on the safe routes to school. The harder part is the HCO part has just been built and we will get some additional money though to put in dedicated I believe bike lanes ultimately on HCO to complete the leg to Mustang. So I'm excited about that. But it was a frustrating process where with VOTE and Fairfax um some decisions were made that we didn't agree with but we had to go along with and we'll rectify in the future. We also have other ideas about working with HOAs and community

members about other routes, safe routes to school for cyclists and walkers and those are pending. Uh we need some agreements with our homeowners associations. Um and that could be difficult, but uh that's one of our top priorities is the next uh safe route to school um with for cyclists and walkers. And hopefully we'll we'll have something good come out of that. Just as a clarification, I'm sorry I wasn't clear. I appreciate the work that's been that's going into that West End, but the the pain point for me personally has been the the intersection of what is it? West and Park at uh Founders Row. Okay.

There's very little accommodation for pedestrians there. People wait so long for a pedestrian walk signal that they just go anyway because they give up waiting. Okay. I walk through that intersection very frequently as well. So yeah. Okay. Well, thank you for that comment. And then the third increasing uh permit fees. Yes. So I think point heard and and understood. Um and we'll we're carrying that forward. We have been uh well at any rate heard and understood. Thank you.

All right. I'll I'll piggy back off a couple of those just to start. Um there's actually a call next week with the bike and pad advocates for the Hawk and Street section. Okay.

Pushing um FC DOT to make it more bike and pad friendly. So fingers crossed there. Um my assessment is also 20% uh over the last two years. So I feel you. Um, and what's interesting about the transportation budget is like all these bike projects and pet products rate for like the 90% grant funded, which is cool that we're getting all this money, but also means that nothing we can get the grants and don't get the grants. That's the determinator. Um, I'm still really worried about the paving program because your slide is is a bit misleading. It says street maintenance, but like most of what's kept is sidewalks and everything that's cut is paving and we've underfunded our paving uh program for the last 20 years. Um, and as TPW has told us, if you don't fund street vaping, it gets worse and worse and worse. It gets more and more expensive. I think you see it on North here with a terrible pothole. Um, so yeah, the more I look into it, the more kind of terrifying it looks every year having this year is bad. It's half funded by the capital reserves, which as you said run out in 2030. So like half of our street maintenance budget we only have three or four more years on and that goes away. Um, most of the state repair grant. Most of historically broad Washington Hillwood uh paving reconstruction is grant funded. So what this all says to me is we literally cannot afford to maintain our streets. Like we don't have the money to do it. Um this old CIP talk about taking out debt to do road construction that kind of got pushed out from CIP and now just disappeared. Um so all this just is as you look through the history of the CIPs in the budget, it's really concerning. Um and it's the kind of thing that alert could be quiet and you know your average neighbor shouldn't be aware of it until suddenly there's a green link project when further reconstruction comes back way more than we think it's going to and eventually we're going to have to spend that money I plan on living here for 40 or 50 years let's say um so I want to pay that eventually I'd rather tackle it now and maintain our most expensive

asset and continue to kick the can down the road have a bigger bill later

yeah thank you for that comment Also, I'll add to tangential note. Um, it's I know there was some discussion earlier on in the year about the commercial industrial real estate tax. It's very interesting to me we don't have one when residents are saying my tax bill is going up like crazy and meanwhile our commercial we saw in the chart up here our commercial landlords have seen very little property tax increases and very little appreciation. So we've actually with our tax cut brought their taxes down a lot kept them flat whereas you know residents are paying more and more and more every year. The CNI tax would help rebalance that and would create dedicated funding for transportation. We have dedicated funding for sewer. We have dedicated funding for storm water. We've got these grants for the schools. We don't have any dedicated funding source for transportation. And yet the community keeps saying it's our number one

priority along with development. Are they doing their fair share? So CI kind of issue number one, issue number two that I've seen in the community feedback. Could you introduce yourself? Oh, sorry. Hi, I'm Andrew Wilson. Um, I was on CDC for a couple years. I lead by walk and roll for church. Um, and yeah, happy to be here. All right. Thank you, Andrew.

Yeah, Fred. Yeah, I just have a question about your your property yard putting that off into a future budget. Is all of that under the city control? Like I understand the buyer family wants to sell or develop some property up there. I assume those things were interrelated to some degree. Does that mean no there won't be any development up there for a couple of years or how is that how does um your your proposal to the uh council about pushing this into future years? How does it connect with the idea of of uh development um commercial or residential up in that in that area?

I my personal opinion is they are connected but they um and they need to inform each other but one is not dependent on the other. U the buyer family can move forward with what they want to do with their property independent what the city's plans are and similarly the city can move forward independently what the buyer family is. it would be wise for both of us to pay attention to what the other is doing. Um my personal view is there might be some opportunities for some land swaps around the margins. Probably not major reconfigurations, but there could be some ways that the city could benefit from the buyer's uh plans. And I would want the city to be able to be well positioned to take advantage of that. I think that's kind of my perspective on Yeah. Caitlyn.

Yeah. A little bit of clarity about the 10-year pipeline. Um, as someone who sort of architected that this Yeah. Caitlyn is our CIP uh coordinator. So, she works with all the staff to bring in and the schools to bring in all the capital uh needs and then she turns it into the capital improvements program. So, Caitlyn.

Yeah. Um, we always uh in the C within the CIP have had sort of a a We plan on a six-year basis, right? We only appropriate year one of that six years, but we're planning for the sixy year. We also have always had a longer term 10-year outlook or a 10-year window. This year, um I'm uh presenting that as the 10-year pipeline. There are a few things that we moved out into the 10-year pipeline this year, some bike projects and the property yard. um most notable probably um because we need some more there's a couple different reasons why things might be moved into the 10-year pipeline, but there's more feasibility and studying that needs to be done. And there's also a we don't have a funding plan. Like we don't have a concrete funding plan when we're talk when we, you know, propose and adopt the six-year CIP budget. We don't really want to adopt a budget that has too many different variables or uncertainties in it. So, we moved those things out to the 10-year pipeline so that we can do that f feasibility analysis and assessment and also develop funding plans or in the bike project case better funding plans. Um, that does not um preclude us from moving those things back into the six-year plan sooner than fiscal year 33. So I I understand that by moving that out to fiscal year 33 plus in the 10-year pipeline that looks like we are kicking the can down the road by six years in future in the you know next six years we may get some better funding plans and feasibility and we might accomplish all of that and be able to advance those things sooner than fiscal year 33. I just want to be clear about that that it, you know, um, as a practice, moving those things out, I think, makes good sense. And it also allows staff to ask for me more resources to do that feasibility and analysis, um, for the property yard. Like we have some facilities planning study money in fiscal year 27 that we

are requesting in order to do that feasibility study for the property and make sure that those things are all informing each other and that we're developing a plan that that makes sense. Um, and you know, I staff also feels the pressure about, you know, bikeability and and walkability projects. We plan to spend the next year looking into different funding opportunities and programs that we can leverage that we haven't in the past um to help with those to help advance some of those projects back into the six-year plan. I think you see this in the the paving budget in the CP historically where like there's always this nice plan that we're going to spend more every year. there's all like unfunded or grants we had to apply for. But the reality is like a grant that pop up wasn't forecast. didn't actually match it more realistic. there'll be a post and then things will pop up in years and actually

and I'm hoping to use the 10-year pipeline to sort of outline our strategy of what are the priorities in our 10-year pipeline that we staff intend to use resources and time and and staff time into developing plans for developing those projects and and being more strategic and more intentional about that instead of just sticking it in year six of the six-year plan and not really developing that. Um that's that's what we're trying to use the pipeline as.

That satisfies my question in the sense that what my concern is that we have, you know, analysis and discussion ongoing because as you said, someone can use their property, right? They can they as long as they build within the rules. That's right. they can do something and and they can bo box in the city to the point where the city doesn't have the flexibility to do what it needs to do in the area that it owns or or is forced into a status quo no improvement strategy which wouldn't be good or is forced into now has a constituency of neighbors who are now going to argue against improvements that need to be made that it's important for those that kind of relationship to be dynamic and and for there to be analysis and discussion you know while the developer is considering what they might want to do in if you can interact and react with that.

I think that's right. And I think what would be a kind of a a way to think about the property is it would be better if we were doing what we need to do at the property before buyer does have some residential component. We'd rather not have 100 and 200 new households complaining about what we're doing at the property. We want to be kind of ahead of that and be well established and doing really good responsible design at the property yard with a new facility uh before we have a whole lot of new member community members who are going to oppose everything we're trying to do there. That's just one sort of practical way of thinking about it. The other is it is going to take some debt to do the property yard. If the Gordon Road Triangle is growing and creating new money for the city, there could be an sort of a uh the city council could say, "We're going to take an increment of that new money and dedicate it to reinvestment in the property yard so that the rest of the city is sort of held harmless for that." That's an approach that could be palatable. Um, at the end of the day, however, this is a critical facility for the for the city and uh it deserves the city's attention and it deserves investment as you're rolling up your sleeves and doing your capital planning. sort of a daunting number is that it costs you know for every million dollar in debt it costs about a h 100,000 a year. So use a 10% factor. So if a property or you know if something costs 30 million that's three million a year in new debt service and so that's a challenge that's that's six cents on the tax rate. Um, so those

are some sort of basic things you have to think about when you uh consider big lifts like that. Yeah. I also want to recognize Melissa Ryman here as our deputy finance director. Everything you've seen is actually coming from Melissa. So Melissa, thank you very much. Um she is just a c a just a key architect of our budget each year as well as her audit all of our financial controls and Russ Alamarie is her right-hand uh person and the two of them do great work together. David our finance director is away today. All right. Are there any other questions? Maggie, do we have anybody online?

Uh no. At this point we don't have any virtual questions. Okay. Well, we'll do this again on April 30th. Everyone is invited. Really appreciate the questions and the thoughtful discussion we had today. I know the city council is listening and uh look forward to working through these issues and putting the city in in good financial condition and making the right investments for the future. Thank you all for coming.