City Council - Special Meeting

call the meeting to order. And first thing on the agenda is to approve the irregular agenda of the special city council meeting. Still move. Got a motion to approve the agenda as presented. I will second it. All in favor say aye. Aye. Any opposition? Okay. The next item is a discussion on the first 2027 budget meeting. Josh, I assume you're taking?

Yeah, I suppose this is where I take over. See if you can speed it up.

See if you can break my record.

20 minutes?

No, it was more like 17.

Yeah, I know. Mine was 20, and his is like 17 now.

You're wasting my time right now, Chuck. I want you to beat me. So as we've kind of done in the past, I would like to kind of take these budget meetings a little more holistically as we kind of march towards our final budget in December. That being said, I did include three pieces of paper in front of you. They're also in the back if anyone wants to look at them. They are updates to the proposed tax levy, updates to the what-if scenarios and the average tax impact, and then as much data as I have received thus far on tax capacities, changes, and new construction, that sort of thing, in the two counties for New Prague. But the first thing that I would like to discuss this year are really, really goals for the year. And specifically, I know the big one, um, in front of us this year will be debt service because it is seeing a larger spike kind of than normal. And so I'd kind of like to walk through how we've come to the numbers that are in front of us here. So as I kind of discussed kind of over the spring and summer here, staff have been reviewing the debt service funds and, I'm working to try to adjust levies where possible to ensure that the funds don't, uh, accrue a high fund balance for when they close. Um, usually what happens with these fund balances is that, uh, when we get to the end of a project, any remaining construction funds, because maybe the project came in under, um, under budget a little bit, those construction funds are then moved to debt service fund to help pay off the debt service for that. Um, and then if the, uh, levy schedules aren't adjusted for that, you may then end up with an accrual at the end. Um, and so, uh, I know we have experienced, I think it was, was it last year we had one where it closed with like $300,000 in it and w which is just too high. We could have planned for that and reduced levies sooner. So, um, certainly that we are going through the funds and I'll say we continue to go through the funds. Some of them are a little bit more complicated, especially as you start having to try to project out, a fund that may not close for 12 years is still collecting assessments for the next eight years. Um, assessments get to be a tricky business cause the financial consultants had built in assumptions that everyone will just pay the assessment over a 10 or 15 year period and pay interest with it. While if you come in and prepaid to avoid the interest, I would recommend doing it. I mean you're saving money, but then the city is not collecting that, collecting that interest revenue that it was assuming when it was making assumptions. It's always kind of a juggling act, especially as you get farther out. But here, as we get to some that are closing in on maybe five years to go, it really does, you start to eliminate a lot of those assumptions and you get a better idea of really what you're looking at. And two of them in particular are shown in this. And as we continue to work, there might be some more that have adjusted. So if you look at that large sheet in front of you, the one with the green L on it, you'll notice that our general debt service levy For 27, at the moment, the proposed budget drop is almost $150,000 over last year. Now, the reason for this, one, we are taking on a couple bonds. So we do have two bonds in 2025 that we're starting to pay on later. one of them for the street project and the other for the police station. So those two bonds are adding. Um, and then we also have a couple of bonds that I am proposing we do not levy for in 2027 because we no longer need to, to make our payment obligations.

Uh, just a second, Josh, when you say take a look at the sheet with the L on it, are you looking at this one?

Correct. The green, the large green L. Okay. So the first bond we'll look at is the 2020A bond. This is a refunded bond back in 2020. We had four past infrastructure projects, 2010, 2012, 2012, two from 2012 and one from 2013. This bond no longer needs to be levied for. Basically, This was a looks like this bond going all the way back did have some construction funds that were moved into all four of those funds. And so once the, um, bond was refunded for refunded, they moved all that funding forward and just reset, reset their schedule and kind of kept that all moving forward. Well, that means that we're going to end up with, um, a decent, I'll say a decent, we're gonna end up with a high fund balance in that one. And so, Um, while we are unable to move that fund balance out right now, it does mean that we can just stop levying forward early. And, um, once we get to the end of that one, uh, we can then take that fund balance and move that over to other debt service funds because it was levied as a geo. We have to move it into another debt service. We can't just flush it into the, um, general fund, but it would allow us then to reduce future levies when that one comes off in 2028. Uh, Of note, and I know Bruce asked this. Thank you, Bruce, for sending some of your questions early. While we can just stop levying for it, we are unable to pay it off early because it's not callable at this point. We kind of have to ride that out and continue paying the interest on that particular bond.

And I think you had just, you previously answered my other question was because it's a geo, you can't, you can't in a sense, correct the overpayment.

You can't pull it back out because it's geo. Correct. We, we levied for it as a debt service. And so it kind of has to stay in geo construction money. Yeah.

And just for everyone here in the room, a geo stands for, Oh, sorry.

General obligation. It's kind of general obligation means that, uh, We are backing it with our ability to tax and collect taxes to pay the obligation that we need to. So the other big bond, and admittedly, that was a smaller one. I think in 2026 here, we were only levying $1,700 for it. We already kind of started backing that one off, it looks like, or there was a plan back off. That one will add $1,700 more to it this year since that was on our tax levy rolls. And then, yes, our last payment for that one will be in 2028. So for the 2029 budget, those funds will then get flushed over into other debt service to hopefully reduce that. The other big one that we were able to adjust, I know we've kind of been talking that the police bond is coming off here in a couple of years. That one's the 2013B bond. 2013B. The police bond or the first? CHRIS RODGERS- Fire station.

Fire station.

CHRIS RODGERS- Fire station. Did I say police? CHRIS RODGERS- Yes. CHRIS RODGERS- OK, well, fire station bond is set to come off, also have its last payment in 2028. That is the 2013b bond, which is actually refunding also a few bonds, 2005, 2007, 2007, or 2007b and c and 2008. this particular one in the rendition that was included in the packet, I had reduced the, um, debt service levy for that from 267,000, which we were planning for this year down to a hundred thousand. Um, and further analysis here over the last week since the packet went out, um, we can actually reduce that one all the way down to where we no longer need to levy for the police station bond as well. That one has sufficient funds within it to fulfill, um, its remaining, um, payments. And so I'd recommend once again, also reducing that fire station. I say police again. All right.

Well, I called you Sean three times in a meeting. I'll give you one more shot.

I'm going to start calling on Mike. So I think in the packet you showed it, you originally suggested 163. So is it now a reduction of 263?

So I think in the packet, I reduced it by 160,000. So it reduced down to 100,000 is what I showed in the packet. So we were levying 100,000 for that bond. In the new sheets that I have given out showing levy totals, that has just been removed. I'm now recommending not to levy towards that bond. So from the overall budget levy in the packet to this new sheet I handed out, this one is now $100,000 lower than that one in the packet. Right. I didn't have a starting figure on what the levy was. I think you just wrote that it was reduced. I was using round numbers. I think it was like $267.43 or something. And so now it would be zero for that particular one. And then the other of note, I included a special line for this year, just kind of showing that it increased, our debt service levy payment for the police station. Are you sure? This time, I'm certain it's the police station. That one, we're showing a specific payment to be made of 633,491. It's in your packet. I mentioned a needed for the bond at 683,491. That is $50,000 higher. Usually with bonds, especially early on, you are dealing with people potentially prepaying assessments or being delinquent on their taxes so it's not receiving the funds. It's pretty common practice to add a small amount, especially at the beginning, to build up a small fund balance to kind of correct those. And so this one is showing a slightly higher than what the exact payment is needed for that instance in case a payment isn't made on the taxes and sending that negative. Now, that being said, that doesn't last forever. That lasts for a few years before it comes off. Um, so that's why those numbers aren't going to match up exactly. And it's certainly something we can talk about. That's just kind of general practice. And I know certainly even recommended, um, from our financial consultants as we talk to them as you try to balance those books.

So that is, that section is discretionary and we can adjust it next year, the year after or whatever.

Correct. Yes. So yeah, me, yeah, next year that could come down, that could come up. Um, but the reason why I mentioned that 683 is that we did, as you guys know, um, we've talked about, um, we did receive a million dollar grant from the USDA. Um, I'd like once again, thank representative Angie Craig and our two senators, Tina Smith and Amy Klobuchar and helping us get that funding. Um, and so we are currently working with the USDA to get those reimbursements actually into us. I know, um, talking to our rep, they're hoping we'll have those dollars here by the end of the summer, specifically in our bank account. And I know within the packet, I kind of lay out, well, how could we use that million dollars? Since at this point, we are now paying down the debt.

Question. So the 2025C bond, which is the lease revenue bond for the police station.

Correct.

Is that because the EDA had to go out and secure the bonding for that?

Yes. So that is a lease revenue because the EDA The bond is being paid for by revenue from the lease. And so the EDA owns the police station, and they're leasing it to us in the amount that it would take to pay the bond.

OK. All right.

Thank you. Yep. Josh, can I just back up on, before you get, I think, what you were doing? You mentioned that. you're adjusting the levy amounts on the payments and then once it's matured we can't back it out because it's a geo excess balance but then as it matures then so that large sum that were over accrued in my terminology yep in 2029 that extra goes to the general fund then, or where does it go?

Yep. So, um, because it was accrued for bonds, according to our financial consultants, we are not able to then roll that into the general fund. Um, if you remember, right, even after the bonds gone, correct. Um, because of just how it was levy. And so if you remember, right, the last few years we've, we brought to you as we close bonds, we've got $30,000 left here, negative 20 here as we kind of balance all those out. What we can do is roll them forward into other debt service bonds or into a capital improvement bond, which is where our 499 fund actually has come from in the past. Well, certainly as we get closer to that, we'll be able to talk about how exactly we do that. Now, three years away. my gut instinct would be to roll those into, say, the 2014 bond. And does that eliminate that levy? OK, well, then we'll roll some more into the 2015. And basically, we'll walk into the bonds like that and kind of be able to reduce those levies coming off future. And so while we may not be able to necessarily call any of some of those bonds at the exact moment, we would be able to plan out and see that we would not need to levy for them in the future.

But if we had the opportunity that we were past a call date, we could use those funds to prepay it then?

I'm not entirely sure. Yeah. I mean, assuming something was callable, then you, yes, you could use those funds to make, to pay a callable bond. Yes.

So a bond matures, we have an extra, whatever, half a million, million dollars. Yep. And it sits in this debt service fund that's unassigned.

Well, yeah, so what would happen is we would come to you when 2020A is done and say, hey, we've got this bond 2020A. We'd like to close it out. I believe you passed a resolution, Robin. Is that right? That basically closes out the resolution and then assigns that money somewhere else. It has to be assigned to a specific bond issuer?

Can't it be in the debt service and discretionary to any bond payment?

we assign it to a specific, um, debt fund.

Yeah, that is where staff, we do our homework behind the scenes. And so we could see where exactly that could drop to potentially reduce future levies, that sort of thing.

Yeah. Cause it's still going to help to, to your question of can we move it to the general fund? It's still going to help reduce the levy and have funds set aside. For payments, it's just we can't pay off more than what the bond schedule calls for.

Yeah, just not as flexible. If you had the ability to move it around in a particular year to whatever bond seems the most attractive to reduce.

And we potentially could. I mean, that's a question we can ask the auditors once we've already reassigned it. Can we reassign excess funds? I'll call it prematurely without the... bond being completed.

Yeah, if you wouldn't mind getting more clarification for my purposes. Sure. Because it seems unfair to me that if we get a million dollars available to us in one particular year, we have to make a decision this year on the way to use it and assign it to particular bonds into the future. That might go out five or ten years. So it just seems like I would wish that we have more flexibility when that year comes. And now that we know we're going to get it, because we already have it,

Well, some of that needs to be part of our planning. Yeah, and I will say, I mean, as we work through our long-term financial plan with ABDO, they are actually doing all of this very, Robin and I have basically done, I'd say, to the best of our abilities. They're really digging into this. So some of these may even lower and change again throughout the fall here as, like, they go through the planning process on long-term financial planning. Because they were even asking, okay, like, what are we shooting for at the end? Because you don't necessarily want to shoot for zero just to make sure you're accounting for some of those things, but you want to shoot too high either and then, okay, we have $15,000 left. Do you want to roll that into a capital improvements? Do you want to roll that forward? And so, um, they are digging very far into that. Um, some of it, for example, if we've got, half a million dollars left, we may see that we have a bond that is callable in five years, and we know that we are scheduled to levy $100,000 a year for the next five years. Well, we know that if we place the $500,000 in there, that eliminates a $100,000 levy for the next five years. I mean, that's the sort of planning that we'd be looking at.

Yeah, and I think we need to think about this creatively, because there may be other ways that if we're looking at borrowing into the future for whatever reason, that we can look at either a shorter-term financing vehicle instead of a longer-term bond and pay it off early because we get caught up, it seems, sometimes because we're locked into these call lockouts. Like the one has a 10-year, well, most of them have a 10-year. But if we have some particular borrowing that we could do in a shorter period of time that we can prepay, there's some advantages to that. So it's just another thing to think about. But then I wanted to, the one bond issue that was shown in the audit has a small balance, and it's maturing in 2027. It has an excess of about $300,000. Is that becoming available to us next year, then? 211A, I think it is.

I would have to take a look at that. If you could. Yeah, I mean, if there's excess balance in there, then yes, in that same way, that would be available. Then we could use that for payments for next year in our budget. Correct.

Yes.

For next year's budget, if that's the case. Yeah, if that's the case, then yes, we could use that.

Okay.

And then the numbers are up for last audit, Bruce?

Well, I'm just looking at, I'm not sure. I think Eilers did that.

That looks like the ABDO presentation. So it is in our audit every year. They kind of discuss the fund balance, like the fund balance remaining. And then the audit doesn't go into what the scheduled levy amounts are. I don't believe it does anyway. No. Um, and cause a lot of those are, you're working with four or five sources. You might be getting some money from the storm and the sewer and assessments and electric and all that other stuff. And so, um, it really becomes a, you're kind of working with the information you get either. Well, for us it would be Baker Tilly up until a couple of years ago. And then now for the last couple we've gotten them from Ellers on how to piece those together and, um, try to juggle it. So you're both getting, making sure that you can meet payments while not undercutting yourself and that sort

until we're closing the funds and transferring them to auditors to Josh's point, just summarized, aren't doing a deep dive questioning managements. What are you getting for assessments? What's waters portions, storm and sewer and such.

So, um, Yeah, and I'm not familiar with what this bond is for. Maybe it's a special assessment, so it might not be able to be used the same way, I would think.

Yeah, we'll certainly look into that one as well and let you know. But like I said, Robin and I are continuing to dig on these, and like I said, even Abdo for our long-term financing.

Well, it's kind of a learning process, but even if it's a special assessment bond, if there's an overage at the end that the bond is closed out, it still goes back into the debt service.

Correct. Correct. As far as far as I'm aware, but yeah, because we'd also be lobbying. Um, at least as far as I'm aware, we don't have bonds on the books that were strictly assessments. So we could say the assessment revenue was for, I'll call it like the first payments and then the later payments were levy portion. So we could still have the flexibility to say that it was levy funds going, being transferred at the end. Does that make sense?

Yeah. Yeah. Well, To me, it's very good news.

So then ultimately, like I said, the last thing I was kind of talking about there is that million dollars that we were able to secure from the federal government and kind of how that million dollars could be used. And within the packet, I kind of laid out three really generalized options. The first option would be to exhaust the fund as soon as funding as soon as possible, which at a million dollars would basically exhaust it over about a two-year time period. it would be on a partial and then ultimately partially levying for the 2025 C debt and 28 when a full levy in 29. Um, this first year the city would be able to use the grant, fully fund our 27 bond payments and then like I said, partially fund them in 29 once or 28 and by 29 we'd be fully levying. Second option would be the spread, the funding out over the full length of the bond, which at this point is 30 years. The idea behind this would be to take the million dollars as well as any remaining construction fund balance, which it is looking like we will have some and split it up by 30 and for this grant, it probably looking at around lowering the overall grant levy by about little over $33,000 a year. Um, might end up being a little bit higher because we would be able to gain a little bit of interest over time on that money. And then the third option, which is the one that I'm actually recommending and have built into this proposed budget in front of us, is starting with a larger amount in 27 and kind of decreasing that year over year. The idea behind this being that the grant funding would have the most impact this first year and then lessening each year until it was gone and the city is levying for the full payment. In 2027, I'm recommending the city use $250,000 towards debt service, 2028, 225, and decreasing year after year by about $25,000 until it is expired. Um, some of the reasons why I'm kind of recommending this is that it is attempting to eliminate, uh, kind of the, any large spikes as much as possible and it kind of ease us into this a little bit. Um, as well as giving us flexibility so that we see if we see other fluctuations within the levy, we are able to adjust the amount that we put in there, um, or use from these grant dollars. And so I guess, First kind of question coming out of this is what are your guys's thoughts on how to use that grant funding? And, and I guess going further, do you just kind of have any questions or whatnot about debt levies or service debt service levies? I've laid it out.

Another question. What is 2025 C?

That is the bond that we use to pay for the police station. What is 2025 B? 2025 B I believe was the CIP project we did over here. Um, just on the other side of Columbus, this infrastructure, like all the, all the streets on the street, not the last of the fall.

I just wanted to know which one was which because these numbers here and not calling it out. No, it, it seems like we're hiding some things because I have to go back and then look cause cause you have it in your, in number three in your notes or where did I see it? Um, In the first one, even though we're not doing it, it's the amount, the increase to the levy was, I don't know, I can't find it right now, $483,000.

So, and then. I guess I didn't mean to certainly confuse you on that. I know we don't call out really any projects, like it's just the 2020.

Well, you just say, yeah, all you say is here's infrastructure project.

And there's two levies, so I didn't know which one is which. CHRIS JERRAMSEN. I guess to answer the question you didn't ask, the reason why you don't see a 2025A there is that was the original bond we were going to use for the police station that we ended up not going forward with. And so you don't go back and use it. Ellers didn't go back and use it. They just kept moving down the line. So there's a B and a C, but not an A for that year. CHRIS JERRAMSEN.

OK. Well, what I wanted to do, oh, it's 433,000. I see 491.

Yes, and so when you take the 683 and you subtract out 250, that gets you the 433. So the property tax levy from the differences So right now the difference, the difference is sitting at in this proposed budget of 11.41 with an average impact to residential property owners of 8.16.

But the overall levy amount went up 11.41.

Right. What is that number though? 639,443. Over last year? Over last year. OK. Thank you.

Where is that number listed?

So yeah, if you look at 639,443. It's right there.

Which page? It's this one. It's the sheet that I handed out there. These numbers here. 7.41 increased. That's the dollar amount of increase.

That's the average. We know that we have that million dollars, right? We know it's coming. It's just a matter of when. We're basically filling out the paperwork to get it, yes. Okay, so there's not going to be any surprise that all of a sudden, well, they've tried, but... I was going to ask that same question. Is it...

uh, at the end of the year. So, so basically the, we talked to the rep, um, and he said that he is getting the formal application finished on his side of applicant. Like it was, it was granted to us back November. It was part of the bill that ended the shutdown back in November. Um, uh, and then we've kind of been working through them through this whole process of, okay, like what qualifies, what doesn't qualify, that sort of thing. We have gotten a thumbs up on ultimately $1.8 million in qualified expenses. So that covers our $1 million threshold. Our representative is filing the rest of the paperwork and whatnot. He said he's just finishing that up. And then he's going to start collecting receipts from us to start the reimbursement process. And who's that rep when you refer, I keep referring to him as a rep because I don't necessarily want to put his name out there cause he's just some guy that works for the USDA that is basically filing that paperwork. And he's the one that told us, um, that he would expect us to have the money by the end of the summer. Okay.

And you mentioned 1.8, but that's the expenses, but what qualifies as a million?

Correct, yes. We were given a million, and we had to come up with $1 million in qualified expenses. We were able to come up with almost 1.8 between the architecture fees and equipment and all that other stuff that went into the building. I share Sean's nervousness about it because we've been at this for three or four years, I think.

And, uh, and it's been kind of like, you'd want to say anything because the way the grants have been pulled back. Um, so are we expecting any kind of documentation that says, yeah, here's your check. Are we just thinking it's going to go through the normal process when we get the money in?

At this point, the documentation we've received is emails from them. And like I said, when he fills up, when he's, He said when he finishes the final application, he's going to send it over to collect whatever signatures need to be collected on that. I'll be honest. This is kind of a new process for me as well. I've never actually received a grant from the feds. Okay. Well, maybe I should just ask this question.

Whatever the resolution, hopefully we get the money, it will be before the end of this year. That is everything that I've been assured. Correct.

Okay. Thank you. I don't understand how hard it is to fill out paperwork and federal government, federal government.

It can be hard. Yeah.

Yeah. I got the call from Amy Klobuchar in November of last year congratulating us on getting a million dollars.

We weren't quite sure what she was talking about because we weren't even aware that we, I mean we were basically told that that was a continuing resolution and that our money was off the table cause they had to pass a full budget. But apparently, Somebody got it in.

It wasn't in the form that I had thought it was coming. It's coming through a USDA grant, right?

Yes. So because we're considered rural, our application was through the USDA. Department of Agriculture.

Makes sense. I mean, they're selling the houses and everything else.

Let's not forget that that's still our money, though. It's not like it's coming from somewhere else.

Well, it has no strings attached to it.

No, I understand. I'm saying that our tax dollars, federal tax dollars.

Right.

So just when we actually get the money, we should do a press release because at least I've never been confident of it. No, that's fair.

And there's some of the two, like I said, we haven't done much discussion of it until now when we've gotten the budget process because, yeah, you hate to say something and they tell us, oh, your reimbursements don't qualify for it.

The check's in the mail.

You don't want to talk too loud about it. So I guess kind of going back to that, what are your guys' thoughts kind of on the three options or if you had a fourth or fifth idea on how we could possibly divvy out those funds to try to use them as effectively as possible?

Well, I'll jump in. I support the number three, that approach. I would support that approach. But I think that we would want to, I would want to leave our options a little bit in the next few months here to think about this once we get more comfortable. If we have $1 million in debt service coming available in 2029, how does that factor into this decision? And if there is this other one, 2011, that's got $300,000, or 200 something and we get that next year. Should we reduce it by that too? If you find out that that's available to us and maybe I'm misreading this, I don't want to say that, but if those things are available, I think we should consider that this week because I think the value to the rest of the, to the taxpayers to get the benefit of the lower rate sooner, I think that's, I guess my, my thinking.

Okay.

And I think this is reducing the spike, but you could even reduce the spike more possibly.

Okay.

Yeah. I mean, I guess I will say, and just keep with note, then this is something I need to confirm. I don't know if say that, um, the 2020 a money that we talked about coming available here in three years, Because that's GEO money, I'm still not entirely sure if that can be then put towards EDA lease revenue. Because it's a lease revenue versus a GEO, I don't know the mix and how that's available. And that is something I still need to check on. But yes, I agree that this is a fluid process. And as we go through this year, or next year, the year after, we may look at it and go, we should use a little bit more, a little bit less, as we plan this out as much as possible to try to take advantage of it.

CHRIS RODGERS. And your question is, can we take in... get it and then give it to the EDA?

Yes, can it go to the EDA lease revenue bond? Because it's a GEO bond.

I think that's a very good point, but I believe that even our projections would show that we have plenty of other debt service that we could use to reduce it, so the net effect is the same. Yes, fair. It's just where you're putting it. I can't see that we're not going to be borrowing money for the overlays and all that stuff, right? Yes.

So in scenario number three, what happens to the levy five years after that? So we bought down the debt for 26, bought down the debt for 27. Now the million, then in 28, Yeah, I guess. And eventually the million dollars is used up. Right. So now what?

Correct. So, I mean, the idea is in that that particular funding, um, with what at this point working with the architect, there's kind of an estimate on the remaining construction funds available because we have been very lucky as we're literally looking to move in now that much of our contingency is still intact, which means that'll be money. One that both frees up because we put some of our own cash into using the contingency. So that'll free that back up to come back to us. As well as cash that would just be then left over from the bond that would get moved over to the debt service for that. I've mapped that out. It maps out roughly seven to eight years if you kind of continue that step down without any changes in it. not accounting for interest, not knowing what kind of interest. But the idea would be that it steps down so that that last year you've got about $75,000 left. And so the year after that, then you would just be fully levying for that police bond amount.

Well, if you decrease it, like you're saying here, $25,000, uh, you, I don't think you can get eight years cause you're still using two 52, 25, 200, one 75, I mean, the first two years, you use half of the million dollars almost.

CHRIS JERRAMSEN. Correct. And I can certainly show you my work if you'd like to. By that last year, yeah, I'm using $100,000. It goes into that very last amount of fund balance until that amount is done. And it's just the decreasing amount. The decreasing nature of it, it lasts a little bit longer than it looks like it would last. CHRIS JERRAMSEN.

Well, that's an interesting comment.

Plus, yes, so, but I mean, yeah. But it's five years, right? Or what does it work out to be? Two, three, four, five, six, seven. The seventh year, you'll use the finish of it. That is adding in, like I said,

$250,000 from the construction fund that's not going to get used that was borrowed as part of the contingency It's getting you it's getting you to 1.25 million Yeah, I guess my opinion on that is not to use that as part of this but just to apply it directly directly similar to my my hope was to use the ambulance fund to pay it down directly in the same style and

I think that's certainly an option. We could do that. That would lower the payment by 250 this year, but it would be, it would be something you then have to make up in the next year. So it feels like it's slightly delaying and you're kind of creating a small hump next year for that 250, but it's certainly something we can do if you'd like to.

My original thought was that we're trying to reduce the spike that's going to come in 2029 or so, but Oh, from a bike truck? I feel that a lot of this is pretty fluid because of the new information we have here.

Yeah.

I think that there's a lot of different options, but my basic thought is to use it more quickly. Three or four years seems short a good time period.

You're suggesting five or more? I'm suggesting five to seven to spread it over that. that just as I've run the numbers, that to me feels like the most gentle glide to fully levying. So obviously the shorter you do it, the faster you're getting yourself to a falling off and having to pick up that levy. I mean, I can crunch the numbers real quick to see kind of what it would be. Um, but yeah, I mean, you'd certainly, I do not disagree that you would reduce that levy by 250,000 this year, but then you'd have to pick up that two 50 next year for the next or the next.

couple years yeah right but still it's the better it's a better result for the taxpayer isn't it to have the not pay as much taxes earlier the longer your loan is inflation dilutes the value of your dollars anyway but your tax base will go up also

You assume. I was going to say, yeah, you're assuming an increased tax base, yes.

It went up 3.8%, almost 3.9%, based on the initial numbers from last year to this year.

But that would support the argument of putting more up in the front, paying more down in the front, and using it more quickly.

And I think the strategic plan will show that, how they estimate uh, our assessed values are going to go in the five year strategic plan that we haven't worked on right now.

So, so of note, if we end up using that, um, that would basically mean that we're using 500,000 this first year, uh, towards the, the 680. And then, so like I said, it's, you're going to get more of a, Instead of kind of a jump and then a more gradual off, you're going to get more of a kind of a skyrocket effect over about two or three years where you're like, OK, we're adding another 4% to 5% for the police levy. OK, we're adding another 4% to 5%. I'm not saying we can't. I'm just, that's kind of, and I can map out those scenarios if you'd like for our next budget meeting. I'm just, I know this one to me felt like it was a more gradual landing of the whole effect.

CHRIS JERRAMSEN. Right, but I don't disagree with you, Josh. It's just that now that I know that, I would be making, I'd be an advocate in 2029 to start using that to reduce it. So I don't think you're gonna see as much of an increase after 2029 because I feel that I would advocate to use some of that million or whatever that becomes available to us to reduce it. So this thing is a little completely different if we start thinking about using that million dollars to offset some of that. And if there's anything else that comes by the wayside for next year, I can think about that, too.

Yeah, and like I said, we've certainly got time. This is our earlier budget meeting than we've had for a few years. So I can certainly try to map out some of those scenarios for our next meeting, too.

And I think there's some unknowns, too. I mean, we have a developer looking at developing some land. Now, that obviously is going to increase your tax base, but also permits and fees and things like that that right now we do not have in this budget. So I think we need to take that into effect, too. that to Bruce's point, if we use the set more of the million dollars knowing that we're not going to budget and we're pretty confident we're going to, this is developers going to go forward, then we're going to have additional fees.

I think the tough thing with that Chuck and I, you're not wrong, but we also have to be really careful about that. Um, I know we as a city, we're not, I think the state statute has been very, we got to make sure we're not balancing the budget with permit fees for one thing. But also too, it's very interesting if you look back at all of our permit fees, I think Was it ten years how far back does this go can that we've had Yeah, like we've we've had really good years and we've had some bad years and I'm not saying balance using that as a budgeting tool I'm saying if we budget zero this year and

and then it comes true next year we're going to have actual permanent fees that we didn't budget that we could use to soften the blow. I'm not saying that we're using it as a to balance the budget item. I'm just saying next year if we had what were normal permits and fees of 260,000 but because we have this new development starting early 27, And I don't know, what is a house permit fees or a developer firm? Is it 20,000?

So for the homes issued this year, the actual building permit fees that go to the inspections and permit review is about $4,300 per home, not including park dedication, hookup fees for utilities.

Yeah. So, you know, I'm just saying you might have a chunk of money, not projecting a chunk of money, actual chunk of money in 27 that we didn't budget for. That's what I'm saying. I'm not using, To your point, I'm not using it to balance the budget. I'm not saying we've got this home developer, so let's increase our building permit fees on the budget. I'm saying leave the permit fees where they are. If this thing happens, we should have much more permit fees than what we budgeted, which should be excess cash that we should be able to use to soften the blow.

Yeah, I wouldn't count on it, but you're right. I mean, if you look at a multi-unit apartment building, you're looking at millions of dollars in And permits and fees.

Again, I agree with you. Yeah, I'm not proposing to say increase your permit and fees by $200,000 for 2027. No, I'm saying leave it as is, and if it comes to fruition, you may have $200,000 more of permit fees that we didn't use for budget. You should have that excess money at the end of the year that can be used discretionary. That's what I'm saying.

Okay. Yeah, with that project, I just got the packet for the planning commission. It's in there, and I was looking at it, but it's phased in over three years.

Right.

So we don't know if it's going to be 40 houses or if it's going to be 14 houses in 27. Yeah. I thought they were projecting to do three a month. I didn't read the full packet, so I just... At minimum is kind of the idea, yeah.

Yeah. So, you know, yeah, they're not going to do them all in one year, but... Three a month, if you get $10,000 or $5,000, that does grow with all the other fees.

Well, we got lucky that we got a million dollars for our other tax money.

What's that?

I said we got lucky that we could, the fact of the matter is it seems a little disingenuous to me anyways that we're, now all of a sudden we're worried that now we have to soften the blow and the way that we're, that million dollars could have been used for something else. It's still the fact is that we have an $11 million police station that we need to pay for. And it just, again, seems disingenuous that we raided one of our, balance funds this year for the interest in our Trying to Sean you need to validate the money for the police station. It wasn't 11 million it most I'll use what I read in the Star Tribune which was reported and on two news stations that it was an 11 million dollar project and We'll see at the end what everything does come in because I don't have our numbers What is the actual bond? I'm just using the numbers that I've read and heard.

Robin, can you tell me what the actual bond was? Wasn't it 10-7 or? It included another project, I believe. I don't think it did.

No, that one was separate.

No, that was separate. Whatever 2025 B is. 2025 C. C is C, the police station? But I will say it stays.

10 million, 40,000.

So it's a little over 10 million. A pair over 10 million.

Well, that doesn't include the land, which we gave them, which we could have possibly sold.

I mean, we didn't give them. It's us.

Well, it's our, but it is. But there's a value to it. You've got to look at that, right? I don't know what the pipe incident cost us that we had to... That tank removal? Well, not the tank removal, but then there was the pipe that was cut or broken or something that we've had to repair.

The change orders. We don't know the final numbers, but even with that, I can't imagine going up to $11 million.

No. Like I said, ultimately with contingencies, I know...

what I just heard back from the, uh, but let's remember we already used, how much was it? 486,000 to buy down the bond. So we didn't have to go out for the full 10 seven. We paid prepaid the interest.

Yes. Yes. Right now the estimate is having a little over $600,000 left in contingencies and that includes cash that we put forward ourselves instead of bonding for as well as, um, some of the money that was bonded for. So like I said, some of that bonded money comes back to us. We just talked about that. And that cash then frees up because it's already in the general fund. We just have kind of earmarked it in case we needed it. So. Doesn't have to go into the debt service fund? The construction one would. Okay. The other one, if you remember, right, we'd said, hey, we're closing the ambulance fund. Right, right, right. Have some cash.

Yeah, that's just.

We're just going to sit on that and earmark it in case we need it as conditions.

Yeah, it was a very good move. Yeah.

Worked out for us.

I think we have some vehicles to soften the blow over time.

So I think that's what would make sense rather than... And I will certainly put together some of those different scenarios of using, I will say, more and less aggressively using those funds that are available to us and seeing, especially when we get out to 2029 with that available funding, how that may play into account as well. It would have been great if we would have had a firm, hey, you got a million dollars when we applied for it. When we, when we, I think we first applied for it like almost three years ago. Now it was like, it was a long time ago and we got told, yes, you qualify. As soon as we pass a budget, it's yours. And then they didn't pass a budget. So representative Craig reached out again and said, please apply. I'll make sure you get the money. So we applied again and they didn't pass a budget again. Um, the third time she said to apply, I'll get you the money. So we got it in there and we didn't think they were going to pass a budget because we were told it was a continuing resolution. but it got put into that resolution.

That's when we gave up on it though, right? We had kind of given up.

I was going to keep applying, but we had kind of given up on it at that point.

Well, I mean, we say that we're softening the blow, and we are, but we're still at 8.16%. So we're softening the blow to 8%, and then next year we're going to soften the blow to, probably a similar 8% instead of 11% or 14% or 17% or whatever. But it's still growing twice the rate of inflation easily. And I think we need to be upfront to the taxpayer and try to bring that number down. 8.16 is not acceptable to me. I mean, I don't, and that's with softening the blow.

So you want to move everything and make it zero percent?

No, no.

Next year it's 15? No, no, I'm not saying that.

I'm just saying I want to make sure that it's on record that we know that we spent $10.5 million or whatever. I think that's on the record.

You stated that before. You stated that numerous times.

Yeah, and I'm saying it again.

That you stated the $10.5 million. So you can go tell everyone. I disagreed with that. I wasn't involved in that, but it's water over the dam.

Yeah. Now we have to pay for it. No, I can't pay. I can't forget about when I'm looking at 8.16% and that we're using, we got lucky to get a million dollars from the federal government to soften the blow. It's the point that I'm trying to make is that we're spending way too much. um, with not only this project, but in general, we need to be more fiscally responsible than 8.16%. And that was getting lucky with getting a million dollars from the federal government.

In my mind, you guys might disagree with me, but I'm just saying, I'm not going to disagree with the comment or the comments, but I don't think it's, I wouldn't portray it any way you're portraying it. Um, you know, in 2000, 17 already, we had a tax net, a tax rate of 62%. We worked that down all the way to the 40%. If we would have not reduced it that quickly and put money aside in anticipation of police station, that would have softened, softened the blow too. But the taxpayers benefited from that and maybe would have communicated better if we didn't do that. But we prepared ourselves as far as the city's finances to get down to that. So, we're still not getting up to where we were in 2017 to 2018 and we're still close to or below what we did when the fire department was built. That was a 60% tax rates that we had back then and we were all the way up in the 70% in the last 15 or so years. I mean, so we're not anywhere near, it is a big increase. I'm not saying it's not a blow. What I might, uh, motivation is really to look at a spike and reduce the spike. But it's not, I'm not, I'm not hiding anything or from anyone what the cost is. It's going to be paid. Um, I'm just looking what provides the best value and what's the most financially responsible way of handling it. But no one's kidding anybody or no one's trying to kid anybody what the cost is. Okay. Well, I'm, uh,

Let's go back to Josh's green L here. How come we didn't get the average residential tax impact in those years, 2018?

I started providing that to you two, three years ago. I cannot speak to my predecessor on why that didn't come out. Using this sheet, what is provided to us from the county is the top two boxes. And then I worked with a fellow county administrator or a city administrator on how to put together that bottom box to get us to an average tax impact. I believe we've been talking average tax impact since 24, maybe it was 23 that we first started talking.

Well, the point that I'm trying to make is that where, and to just piggyback off of Bruce's comment, we worked hard in 2011 and 12 and 13 and 14. And we now, I understand we can't put the whole, a decade on the sheet here, but, or, well, we do have a decade, but more than a decade. But our levy used to be in the 1.75 and 2.19 for years. And now all of a sudden we've slowly crept it up to where it's five is becoming fine and now it's eight and we don't know. We're trying to soften the blow. Um, and the point I'm making is, is that it, we were much more, in my mind, fiscally responsible when I first started on the council 15 years ago, um, in relation to where the levy was going, uh, where we were able to give the taxpayer usually two or even less than 2%. And I just would like to see where it was even an 18. But if that number exists somewhere, I would like to go back to 2011 and just watch the progression. of the levy, you know, it's going to rise a little bit. Now we got this much bigger spike. I think that would be an effective graph.

You also were coming out of the council when I was the highest tax rate, the city paid 70.08% 2012. So the city didn't have a lot of choices, but not to increase the levy. They had pretty dramatic during the recession and things. So there was a lot of dramatic action. taken at low increases. So that's off to get that down from 70 to when we worked it down, uh, like the low of 42, but houses were even going with losing value.

So we couldn't a lot of that money. So I think that's why we saw the, where the tax capacity went up to 70% as opposed to, but it was that high before already in 2002.

2003. Okay.

Let's move on.

Okay.

Was there any other debt service questions? No? All right. The next kind of big thing that we talk about every year, so we can start talking about it now, and we can kind of discuss the assumptions. Last year, the city began using a new compensation study as what they're putting wages into place, and so we did use that this year within the budget again. Of note, so within this particular budget as a starting point, I've used a 4% increase to the 2026 scale for the 2027 scale, and this is why. Kind of a couple of different ways you could look at this particular adjustment. One way of trying to look at it is by trying to track inflation. And I know, according to the US Bureau of Labor Statistics through 2026, because that was the last data I could pull, or of May, the CPI raised nationally from January to May about 3%, and about 3.4% here regionally. Anecdotally, we've actually seen inflation fall a little in June. But those hard numbers, at least when I put this report together, hadn't come out yet. It may not be out of the question that we hit 4% by the end of the year, but we'll certainly see as those numbers play out. Kind of without uncertainty, 4% felt like a solid estimate of just guessing at this point of where that may go each year. I've also included the Social Security data within your packet, kind of what they're looking at. As of July here, estimates are ranging anywhere from 3.7 to 4.5 as to what Social Security increase may be for this coming year. So as I have in the past, I did graph these all out within your packet. There is a sheet in there that shows these. I believe I have it named.

And again, for the record, using acronyms, CPI.

Oh, yeah, sorry. Consumer Price Index. I know, but I think. Yep, that's fair. So that. That was kind of the first reason why I put 4% in there. The other reason is we also track what other communities are doing, knowing that will affect the city both in capacity to hire as well as whenever a new compensation study is done long in the future. And if we obviously track too far ahead or behind, that is partially what us trying to make adjustment without having to make large adjustments. So to this point we have seen surrounding communities ranging anywhere from three to five. So, um, starting at 4% as a discussion point was kind of why, um, that was kind of a second reason of why that 4% got slid in there.

So Robin, the tough question, what is 1%?

Give me a moment.

Huh?

Give me a moment.

The square root of 9 is 3.

There's so many things I try to forecast.

I'm just saying, if we say 4, we look at 3, I mean, is it $10,000? Is it $15,000?

That'll just take me a couple minutes.

Yeah, that's fine. That's all I'm saying. I mean, for the initial budget here, I don't have a problem using 4%. We're not tightening the bolts yet. We're looking at a lot of other things going on.

My reaction is probably just a little lower than that. Not that I just used two different AIs maybe than you did. My AI and I are becoming best friends on many subjects. The year inflation as of June is 3.5. And just looking at, I just think we've seen that the GDP in the United States and Minnesota is not performing as well this year as last year. So the context of where we're operating is not as strong as it was last year. But then the inflation rate is anticipated to go down, whether it does or not. And the estimates for Social Security that I came up with are a little lighter than what you have there. But if it's 3.7 or 3.8, That assumes inflation is going to be a little higher for the next three months because we need three more months for that number to be calculated. And we have better information to adjust it, but I land more to the 3.5 to 3.7 range than the 4.

But that's why I'm asking, Rob, what's 1%? If you're going to knock it down by 0.5%, how are we looking at? $2,000 or $5,000.

Right. Separate topic. I, I think a few years ago you gave us a little bit of a chart showing our total compensation expense and the growth over a few years.

Yeah, I, I put that, I put that together and it somehow didn't make it a packet. I will, one, I'll get that posted to the packet here tomorrow morning. Um, I'll say, I, I'll ask staff that know how to work the website to post the packet and I will also, get that emailed to you guys, because yes, I did put together that graph that I know you're talking about.

Yeah, I have admitted many times I have challenges with just how salaries are done in municipalities, and it seems like a self-fulfilling prophecy when you mention that you're checking with other communities, which, yeah, somebody says four, somebody says five, so then we go four and a half, and it's like, well, Now we go four and a half. Now they're going to go four and a half and five, and it's just like ratchets up. Yep. But I think we have to take care of ourselves and kind of follow our own discipline as much as we can. And we may be out of the ballpark sometimes, but as long as we're fair, at least how we're approaching it, try to be consistent. Yep.

Have we killed enough time, Robin?

I'm just doing the final one.

Final calculations here. No pressure. Understand. Feels like eternity, right?

Don't worry. Josh isn't breaking any records.

So the World Cup didn't go as anybody wanted it. Well, who did want it? How do you know? I might have made a million bucks on it. Maybe Rick is a fan of the Spaniards.

You know what? A million bucks, Rick would be sitting there.

No, I'm that type of guy that would. I'd come in just to tell you. Yeah, just to show.

So quick math, calculating FICA, PERA, paid family medical leave percents, all of those, it's $68,770.

For the general fund for 1%?

For general fund, correct, to make the change from 1% to 4%. So basically 1% of the left.

It's about 1% of the levy.

Yes.

Because our levy is 1% is like $63,000. Yes.

But it also affects EDA utilities. Correct, yeah. Which isn't in that number.

No, that number would just be general fund.

That would be just general fund, yeah. So that's something to think about, too. I mean, if we go 3.5%, you're going to save $34,000.

Well, it compounds, so I think small numbers.

No, no, I'm not doubting that.

I used to work at a bank. Oh, Lord, don't get me going.

Was there any other initial comments on that?

No, I think initially let's keep it at four, and then when we start getting into the nuts and bolts, I think we know what it is. that half percent is 34, which is half percent of the levy and that stuff. And if, if, if the goal is to get the levy to a certain number or as low as possible, at least we can, uh, we can, we know what's in our toolbox.

Okay.

Well, I hate to say it, but cause I do every year, but I think the cost of living should be a total amount. If let's say for use your number 4% and then it's divvied up equally amongst all employees. not based on salary.

What do you guys think? I wouldn't argue that. I wouldn't argue that.

I mean, I understand it, but when you work for companies, is that how they work?

Yeah, and profit sharing.

That's not profit sharing. It's different.

Well, it's similar.

But if you give employees, your employees, you're all going to get 3% COLA. The guy who makes more money is getting more money than the guy

Yeah, I think that's wrong when it's COLA. He already has his base pay and he has his steps or her.

Right. But I'm just saying in private industry, it doesn't work that way.

No, but it's in certain businesses, if there's some type of windfall, it often is spread out equally. Hey, everybody like at Delta, let's use Delta Airlines. Everybody's getting $10,000 because we made a billion last year. They divide that billion. And everybody gets a check. I don't think it's based on. But that's also a bonus structure. Right.

Which we don't have. That's not the cost of living.

It doesn't cost the street guy less money to buy things that go up than it does Josh. It's milk and eggs and gas and They're billed the same. That's what a cost of living increase is. And what I'm saying is, is that why should the top six take the majority chunk of it and then the bottom don't get anywhere near the cost of living that these guys do? Cost of living is for goods and services that we're fighting for, right?

Or that we're using. Most people live, they don't say, hey, I'm going to get, A bigger cost. So their percentage cost of living would be higher then.

I don't see it that way.

Well, no.

When Josh goes to the store, he doesn't pay, you know, he pays the same as anybody else on the street department.

But Josh makes more money, so he has a bigger mortgage.

His expenses are higher. The cost of living, though, that's taken care of with his salary and with his steps. Right. What I'm saying is that for one person to get $5,000 for cost of living and someone else get $1,500 when it's really meant for, like I said, eggs and gas and whatever else, electricity.

I totally agree with you. I agree with you. It's a socialist way of looking at it.

I don't want to go that way. Go ahead. One one thing to note we did just spend a lot of money on a salary study that we approved about a little less than a year ago, so That I just wanted to make that point that we did just approve a study that kind of stuck with the system And people are at a market rate Yeah

That's not what I'm saying, though. No, I know what you're exactly saying, but... Yeah, apparently Rick agrees with me.

But he also said...

I'm kind of curious what Megan and Bruce think, if that's the fair way to do it. That's a socialist way of doing it. I'd say let's use a Democrat way.

Well, no, I don't... Don't tag me with that donkey bullshit.

Then that's the latter effect. So now we've given the cost of living, and now they've jumped much higher than the other... uh, workers. I mean, we're trying to be fair to all the workers, right? I mean, isn't that kind of our goal?

Well, my, our goal is should to be that they're paid equitable to their job. That's, that's would be my goal.

Okay. Well, I disagree with you. I think that cost of living should be shared equally amongst all of the employees so that they all get the same amount because, so is that what they did at your jobs for?

We never, you never got a cost of living.

Never. I mean, I'd get a raise, but maybe a merit raise. Not every year.

But you're a salesman. A dime. I remember getting a dime. Administration. Didn't they do a cost of living?

No. We never got just, we weren't guaranteed, oh, inflation was 3%, and then they'd give us 3%. I might go two years without getting any type of raise. And then if I did.

Most business I work, we always would budget, okay, we're going to give 3%. And then. Now, obviously, not everyone was guaranteed to get that. After the review, they say, oh, you're only getting 2% in this sort of thing.

Right. But when the construction went down and there was no rebar, or your company wasn't selling any rebar, that doesn't, 3% might not work. But that's not what I'm talking about here. What I'm talking about, we just did a compensation study. So we know that we're right in line with everybody else or the 20 other cities that was on that list. I'm just saying for the cost of living, and I've argued it every year, and we never get to an answer of it. And I just think it's not right for the top six that are jumping up and getting I'll just throw out a number $4,000 and somebody else in the street department's getting 1500 where this is to cover cost of living increases, which everybody pays equally, that those dollar figures should be aggregated and then divided.

Everybody doesn't pay equally. It's their choice of what they want to spend their money on.

And I don't, to me, I don't like coal. I'd rather say merit. I'd rather say we're going to give a 4% merit. Now, if someone doesn't do their job, you're only going to get 2%. Cost of living is, that's an arbitrary number.

And I agree with you on that one, too.

I don't agree on the cost of living. We never use that terminology.

I mean, that happens in Social Security, right?

Yeah.

Which I always did not.

But our history at the city is that we haven't followed it directly. Our history doesn't show that. So we have done more market-based adjustments, and that's how I look at it. But if you would follow through the way you're thinking about it, Sean, just the lower quartile of staff is going to be over the similar positions in other communities fairly quickly. You'd be overpaying the positions. I'm not talking about the quality of people, but it'd be over their market rate over quickly. Right? Well, you need to say be higher than, than someone in other communities.

And then when you do a comp study, we've never turned people back, but we'd have to, we'd have to do that.

Well, maybe it isn't a percentage that maybe it's just, we don't look at it as percentage. We just, everybody in January from the last year gets it, but that still might cause the, that still might cause the same problem.

That next time we do a comp study, this person is now making, 10% over his market value, are you willing to tell that guy, you're not going to be making $20 anymore, you're going to be making $15? I don't know if you want to do that, but that's what would happen when you have what you're saying.

We might actually see benefits out of it. We might, if that were the case, and let's say we did the market study and And the difference was between we're paying someone $20, and the rest of the cities are paying $15. We might say, you know what? There is no steps this year. There is no increase this year. We're going to get you guys caught up. And then it comes off the levy.

CHRIS JERRAM, JR.: Right, but you're willing to tell someone face to face that you're not going to get anything for five years.

MIKE BOYLE, JR.: You might not get a raise this year, yeah, because we're showing that you're already getting paid above the average with this, with your And how do you think they're going to feel? I would still think they're still getting, they know they're above the market rate. Why wouldn't they feel good about that? If everybody else in this industry is making 15 and he's making 20, I'd feel pretty good about that, right? And if next year they jump up to 16 or 18, and again, we say you're still above market rate, you know.

Well, I think we'd run into problems with the state.

I was just going to say the law. Law come knocking on your door. Well, we don't necessarily know that.

I mean, and if we did, there's an easy fix for it. That's why we do that study. And it's really not a penalty. I mean, let's say it showed that 13% of people that work here were not being paid equitably, that they need to be at this level or they need this. We would just go back. We'd cut them a check. Now they're all caught up. I mean, that's why we do the equity study. It's not a... it's not necessarily a bad thing if we didn't pass one year because we would make it up very quickly. I mean, we, as a matter of fact, we know that we're doing the right thing.

So, but, all right, well, you guys, well, that's, that number is not going to change. 4% your strategy or ours is still the same total compensation. Right? Yeah. Yeah. So for the budget purposes, you know, we can argue this till we're blue in the face, but for budget purposes, it's not going to change.

I understand. Unless we change it. Yeah. That's why I brought it up.

No, no. I mean, cause you're going to say, we don't need to discuss it tonight.

You're right.

I mean, 4% for everyone is going to be a pot. I don't know what that number is. Yeah, that pot. You're saying I'll give everyone an equal amount of that pot. Right. Right. That pot's not going to change is all I'm saying.

If we keep it at four, right?

I mean, whatever, three or whatever.

We might think that $2,000 a person is a good deal for, you know, and it might be 3% or it could be 2.5%. I don't hear a percent, but the pot isn't going to change. The pot isn't going to change. For a budget person, this is... Whatever we were to budget for the COLA increase, the big pot, yes.

The only thing is how it's... You're looking at how to distribute that pot. But for budget purposes, we need to go forward on this and that. But I understand what you're saying. So I guess we're going to stay with the 4%. We know that, you know, once we start tightening the bolts and all that stuff, we know that 1% is $68,000.

It'll get us about 1%.

You know, on the levy. And so we can... You know, if we're getting down to nickels and dimes and where we want to... Is that right on 4% then?

There's not 4.1 or anything? Right now it's at 4%. 4%.

So I'm just going through department by department. Do we have an aggregate of everything, what the total full-time wages are going to be? Because almost every department is well over 4%. Yes. I mean, what you're seeing...

I'm just looking at... Yeah, what you're seeing right there is a combination of the... uh, market adjustment as well as a step included with, with the comp study. Um, we added to the number of steps and so we don't have people popping out like you had before. And so that's why you're seeing that adjustment on there.

So if I read this right, let's just use, uh, well, I'm looking at it at public works. So wages full time, what is a 8% change? Page 19. Oh, that's municipal band. That's not a good one. Band wages are not going. Engineering, 7%.

Right. And that's a common wage. Here goes your wages, Ken. You can cut.

Yeah, so. Yeah, that engineering is actually planning. You really want to give 8% raises? I mean, if we're in a tight budget and we're trying to soften blows and we're at 8, the best we can do is 8.16 right now. That's what I'm saying. an 8% increase, I mean, when you put it in that, it seems like nobody's going to get just 4%.

Well, I don't know what the percentage now is. What are we, how many, are we at like 30% of the staff are stepped out?

Now? Yeah. We're at zero. Did we have a couple of? So, I mean, but as of right now. Oh, we had retirements. We're at zero. But yes, with the 2027, there'll be a couple utilities people that are top. Before we did the comp study, I think we had a third of staff were topped out. And now, yeah, with that adjustment, we now have none as of today.

So looking out five years?

Looking out five years, yeah, we're going to start. The people that were topped out, look out five years, they'll start running back into that top.

So we'll get up to like 10% or 20% fairly quickly. I would assume so, yeah. But to me, that's, as I said before, I don't want to be a broken record, but it's hard to manage compensation or different, much different than I'm used to. But that is one of the ways we have to kind of think about is that you don't want to hurt anybody, but we have to kind of take advantage of people stepping out to otherwise, how do we manage overall cost as a percentage of our... structure of a city. I was more thinking of, as I've said before, reducing the steps and increasing the annual schedule. That would actually add cost, though.

What is the aggregate? You must have that information in there. It didn't make the packet, but based on the 4%.

Just full-time wages of all departments, of everybody. Well, what's the dollar figure for it?

Not the, I'm just looking for the percent change.

Oh, the percent change across the entire board? Whatever, $68,000. Well, that's, she's including everything. Total wage change in the budget. Well, that's a benefit, though.

Yeah, I'm just, yeah, that was the $68,000. I don't know what percentage that is.

Bobby's grabbing that. Yeah. And can we get a copy of the total? I mean, the, not just wages, but I mean, um, uh, maybe as, I don't know what the word I'm looking for. Assumption of benefits, wages and benefits. Oops. Wages and benefits. And, um, just, uh, even pair of FICA health insurance.

That's all your benefits. Yeah. That's basically wages and benefits.

Where would we get, um, Did we get our insurance thing back yet?

We're anticipating 19%. Um, that was our rate cap and our new insurance consultants were just at a meeting last week. And as of right now, very preliminary without actual bids coming back. They think we could probably meet the cap this year, but we'll know more here in August. So we'll be meeting with them and, um, bring some different tiered plans still under the same provider and the same insurance pool. So, Um, I have wages and benefits. I can separate out wages, but wages and benefits is 6.58%. So, okay.

Thank you. Yeah. Okay. And the final piece you want to talk tonight is CIP.

I just CIP. It does kind of come up every year. So, um, this year I did kind of put a comparison in your packet for what 2027 looked like last year in 2026, as well as what it does look like this year. Um, so as you can see, Um, so you can see kind of see the work of staff starts out going, okay, well what can we do to, um, what can we make work? What, what needs to get replaced? That sort of thing. Um, various things like building inspections, pushing off a vehicle replacement for the year. Um, uh, removing the, uh, kind of the building improvements, uh, for government buildings that we'd always been talking about the last few years. Um, the parks department, uh, skipping on a truck, streets department skipping on a few vehicles, including a new street sweeper, um, that sort of thing. So, uh, we have done a significant amount of whittling I guess already for 2027 and I just wanted to highlight that is as the case kind of in this. Um, but of note, looking at the equipment fund, as you guys remember, we started that a few years ago. The, the, the audited balance here at the end of the year, just grab that, for our equipment fund was $160,924 is what we had remaining in the equipment fund. Our assumed balance here at the end of 2026, once we take into account the stuff that we purchased, as well as I think a couple of the items we've been able to save a couple thousand dollars here and there, we're assuming a balance of $202,000 left in that in 2026. The planned expenditures in our CIP that is strictly for vehicles and equipment is $347,000. Does that include the fire department PD?

The what? Does that includes the fire department and the PD? Correct. 347. Uh,

So the fire truck ain't in there. We are not to fire truck status yet. No, they pushed that out. Yeah, talking to Steve, he said we can get a few more years out of it. I mean, it's like I said, one of those things that we're checking yearly, trying to make sure that we get our value out of it. So yeah, 347 is the planned expenses that are in your packet. The revenue that I've put on your sheet would be 262,540. And so assuming everything comes in exactly as we have budgeted, that would leave a balance of about 117, um, in the equipment fund at the end of the year. And so I guess my big question is, is that equipment fund something we want to continue to try to maintain and massage a little bit. I know within that longterm financial planning meeting, we talked about trying to get off of the reliance on the LGA. Um, And so I know that Abdo is kind of looking into that and especially our equipment fund as the ability for, Hey, if we can get the city to a point where the LGA fully just dumps into the equipment fund, that kind of removes your reliance per se year to year on that LGA and then really kind of locks in. We have money for the equipment here. If it doesn't meet the budget, obviously then you would have to move stuff around. But, um, it is continuing to kind of work on this equipment fund, um, to try to reduce future spikes, knowing we've got something like a fire truck coming up that is going to cost significant dollars. This is the sort of fund that we would use to try to pull the money aside each year. So that way we don't suddenly have to come up with $600,000 for it.

Yeah. Fire trucks would be over a million. Well, we split it with rural cutting in half.

Yeah, we sure talked about that fire truck a lot. It's a pig in a python kind of thing. It's a big lump. And that's where I'm thinking, if you can kind of think creatively, if there's a way to use that 20, 2029 extra debt service levy, short-term milk for a year, and then pay it off through that. Yeah. I mean, there's, obviously we can do a tax anticipation certificate or something like that. Yep. Not like a bond. That is an excellent idea. I mean, if our, if our, people can think about that. Are they going to be helping us with our debt service projections?

Yes, they're going to be doing that. We actually, yeah, we just had that meeting here last Thursday or Friday with them kind of talking exactly that, the debt service projections and that sort of thing.

I hope that they can think about those other things creatively and then think about what's the best way to maintain a, that service over the next five or ten years, that's not jumping up and down. Yep.

Was there any other comments and or questions about the CIP as it's in here? Okay. Well, that's all I got then, unless there's other questions that you may have.

All right. Okay. Thank you. Any other discussion of items not on the agenda? All right.

Move to adjourn.

All right.

Move to adjourn.

Jumping the gun, Rick. I will second that. Take our adjournment and say aye. Aye. Any opposition? We're adjourned. Thank you, everyone.

I don't like when you get away with that.