City Council - Regular Meeting

Um, we do have our special budget presentation this evening, but you know, I I should have mentioned this. Um, as a special meeting, we probably ought to begin with the pledge of allegiance and our moment of silence anyway. So So why don't we do that? If all would please rise for the pledge. I pledge algiance to the flag of the United States of America and to the republic for which it stands one nation under God indivisible with liberty and justice for all.

Thank you. And if you all will just join us in a [clears throat] moment of silence that you can use for silent prayer, reflection or to prepare for the meeting. Thank you all very much. Well, we are glad you have joined us. Uh it is a requirement that by April 1st every year that the city manager and the the school system bring council a balanced budget. And so that is our discussion for the evening. It is our primary focus for the meeting. And with that, I won't say anything more. I'll turn the floor over to Todd Meredith. Todd, the floor is yours.

Thank you. Uh, Mayor Horton, Vice Mayor Galispy, and members of the city council, it's my pleasure to present to you the fiscal year 2027 uh proposed budget. Uh, it is balanced and uh uh it it you know, fiscal year 2026, I can start by talking a little bit about it. Uh I know that council had to make some tough decisions going into the current fiscal year. And you know, when I started here in July uh of 2025, I will say the first few months, things were really tight. Um I I have to say over the next few the last few months, two months or so, I'm seeing progress. Uh we're seeing a little bit of growth. Uh uh the city's financial position seems to have gotten just a little bit stronger over the last couple months. So, uh, overall, we're looking at an upward trend, uh, with the city's financial position with fiscal year 2026. So, with that being said, uh, I'd like to start talking about the or I'd like to inform you a little bit about the the fiscal year 2027 budget, uh, how it was created, uh, the methodologies used to create the budget, and what's in the budget. So, I'd like to start by talking about uh four core budget uh values that informed myself and staff and that we held near and dear to our hearts as we try to uh or as we put together the FY27 budget. And those core values were effectiveness, efficiency, financial sustainability, and maintaining independent city status. Those were our core values. and we kept those in mind as we created the revenues, the expenditures, and as we reviewed everything that the city puts its money toward. Uh effectiveness. Um when we talk about effectiveness, we're talking about continuing to provide the high-quality services that the residents in Rafford have become accustomed to. We

want to provide the best service possible, and the FY27 budget, I believe, sets us in a position where we can continue to do that. Uh efficiency. So, we want to we want to provide the best service possible, but we also want to do it at the cheapest cost possible. Do it the best you can at the cheapest cost. Um, we aim to provide those services at the lowest cost possible because we want to minimize the uh burden that we're placing on city residents. So, we've tried to minimize that in the FY27 budget. Financial sustain sustainability, that's a requirement. Uh, every municipality has to be financially uh solvent, financially sustainable. So we're looking at maintaining healthy financial position of the city so that we can make sure that we can meet the need bless you so that we can meet the needs of the community and uh and the city's obligations and of course really all of these really pour into that final core value of maintaining independent city status. We have to be operationally and financially uh uh in a position to provide for the needs of residents and to meet every obligation that the city faces. uh methodologies. I really want to zero in on two methodologies that were used to create the the the FY27 budget. Those are zerobased budgeting and revenue projections that are grounded in data. We wanted to improve the accuracy of our revenue projections. So I'll start with zerobased budgeting and just a little bit about what that is. A zerobased budget is created by zeroing out all the expenditure line items. You take everything and reset it to zero. And what we've asked of department heads is okay, take your department budget, start at zero, look at everything. Look at every contract, look at every expenditure, even if it's a recurring expenditure, take a look at it and make sure that it is needed. And if it's not,

get rid of it. And you may have heard that, you may another term to describe that is legacy spending. It's spending that uh can it can be in public budgets, private bud private sector budgets. It's spending that's there and no one really knows why, but it just continues on. It just lives on. So, we have tried to identify those and get rid of them and that's being efficient that satisfies that value of efficiency. So, we have found several several items. I'd like to identify two or highlight those. And I'd really like to thank Katie Woodyard, uh, our accounts payable clerk. She has worked very hard on this and Mel has worked with her on this second bullet that we have. So we ha, so those two staff members using zerobased budgeting strategies, we have already identified by eliminating unnecessary phone lines, cell phones, DSL accounts, the city already from what we have eliminated already will save $31,000. $31,60 to be exact. That's already been achieved. We will save that over the next 12 months. In my discussions with them, we believe that number could climb as high as 60,000 next year. And when you think about that in terms of the city's real estate tax, that's almost half a cent on the real estate tax savings from unnecessary spending. The third bullet there, it's a smaller number, but I put it in here to drive home the point that small numbers accumulate into larger numbers. So even finding small savings are significant. Katie, the same staff member, and and I want to give her credit for this. She found in one of our accounts where we were being charged sales tax. We shouldn't have been. She brought it to this vendor's attention and we are going to we're the city is going to receive $1,400 in a refund from from paying sales tax that we shouldn't have been paying. That was caught by looking at these things.

Going forward, it will save the city $545 annually. That may not sound like a large amount, but you multiply that time and time again, it compounds. It's a it's a compounding gain. So, the city and city staff are looking at large expenditures. We are looking at small expenditures. Um, you know, we haven't found everything, but every time we comb through this budget, through every iteration, the more we find, we keep sifting through it and getting rid of unnecessary cost, it will add up. It'll add up this year, it'll add up next year and years to come. So, so as we continue to find those, uh, we'll continue to report them to you, and, uh, we'll continue to, uh, do everything we can to to mitigate the expenditure side of the ledger. Um when we look at the revenue um side of the ledger for the city, it's really important to make sure that trend lines when we make a projection on revenue, we really don't have much margin for error, especially given the city's current financial position. Missing a revenue projection by a large number without a reduction in expenditures that can lead to a to a loss of fund balance. It could lead to to um tough cash flow issue or cash flow issues throughout the fiscal year. So we really want to hit those as accurately as we can. The methodology we used on most of our revenues is a trend line and those trend lines are based on 10 years of data actuals typically unless in some we trend values and then work backward to get the expected tax rate. But most for the most part it's trend lines of actuals. Um we have placed those within a 95% confidence interval using Excel. We didn't use any fancy software or anything like that. it's just Excel. Um, we we have come up with more accurate, dependable revenue projections. You're never going to hit them exact, but what using trend lines does is it reduces the margin of error

and it builds into the system as you go through every iteration or every year. If you hit it a little high, all those data points, the trend line will pull it back down. So, you don't just continue to overshoot. It will correct. Um, so you don't have these compounding errors that grow from $200,000 off to $500,000 off to a mil, you know, and so forth. It will correct itself. Um, I don't want to get too much into the the stat the the statistics of it, but creating the trend line, the the the function that we used in Excel, it is an exponential trend line. And the only reason I bring that up, it is more accurate, more sensitive to recent changes in data. A linear trend line assumes um um um symmetrical changes. It's a straight line. An exponential is more curved with the data. So, it's much more sensitive. When you look at sales tax, when you see the increase and these these variations at the end, it's going to be more sensitive to that. That's that's an advantage over using a linear trend line. So, that's that's all I'll say about the difference between the two. But, it is it is a more accurate way to make these projections. I will say with sales tax our what we put in the budget our projection or our forecast is $1,844,000 38. We recently received a report from the state where the state put a projection on the city's sales tax after we had done this and the and the state uh their projection was 1,880,000 uh approximately uh within a few thousand dollars. So that tells me, you know, one thing, our trend lines are probably pretty accurate using this data. Um we're only 35 $40,000 off the state projection in a $1.8 million um account there. So that that that that's added to to my confidence that as long as we have good data, uh we can make good projections and they can be more accurate.

Just one more example, hotel motel room tax. Uh we use the same method here. What you can see here is there's there's more there there's there's more rapid growth within the past few years. Uh using this method that can get a little tough to make a projection. Once again, grounding it in the data uh lets us make uh a more a more confident projection of what next year will be. We're projecting $594,000 $594 uh,488 uh in the uh hotel and motel room tax. So, we feel we feel confident in our projections.

Before you go off this slide, this is a good time, I think, to talk about your confidence interval, maybe. Um, why wouldn't you be up closer toward the 700,000 or down closer to the 465? What what is giving you that specific target that you're heading now?

So, what you're speaking to uh really gets into the art of budgeting and making projections. So we have data points and within a 95% confidence interval using that as the standard for Excel you'll have a high of 723,000 and a low of 465. So Excel is saying you know for the most part it's about 95% certain that the next data point the next year's projection will be between those numbers. So, we took the middle ground and the reason we did that and once again that's um once again that's that's sort of the art of of trying to figure out what your projection is going to be. So, you have to if if we had another hotel or a large business coming in, we would probably start to increase and go up toward the $723,000 number or if we had a major business that was leaving town uh or leaving the city, we would start to go down toward that 465. Um so so somewhere in that window we'd make a projection. Um it really depends. You you have to pay attention to what's actually happening in the city.

And I I think that's incredibly important because you know there's some folks who would say well let's just aim low on everything like 465 or whatever that lowest number is. But that brings its own set of challenges and then others that would say hey we could potentially have 600 700,000. Why don't we aim much higher and we don't have to have additional revenues or additional cuts. So, I wanted to get to that because that's central to everything you've put together for this um I believe with each of the areas of looking at our revenues so that you can best understand why we need whatever increases or cuts or things along that line. So, I just wanted to get to that before we got too deep into the presentation, but thank you very much.

Yeah. And just to speak to that, you know, the danger and the consequence if we were to aim too high and we and we did that and and we did that on enough revenue projections or missed it by enough. So the consequence is you overspend and you'll spend your fund balance down because the revenue is not there to match the expenditures. Um if we go too low, uh we the city would have to make very draconian cuts um or pull or go up on the tax rates. Somehow you have to make that balance. So yes, absolutely.

Uh the fiscal year 2027 budget. So overall it's 79,179,179,87. You can see the general fund is 35.3 million of that. Streets 3.2 million. Transit 3.8 million water wastewater 7.3 million. Electric 27.4 4 million solid waste 1.7 million and internal services 967,000. I'd like to make a point about two of these. Uh internal services um we may have some people that have questions about that. Internal services is not included in that total because internal services that's like our garage, gas, things that we pay ourselves for. We we operate the garage but we still bill out departments. So each department pays if there's a vehicle that has to be repaired, it goes to the garage. That department is build by the garage for the amount. So So it it operates internally um um in in that way. So we don't include that in the total. Um and the transit and Melissa, not to put you on the spot, but transit, I just do I want to make the point the city 3.8 million um how roughly how much of that 3.8 8 is grant funded estimate roughly

the city's portion is at approximately $250,000 that includes capital and operating.

Yeah. Yeah. So transit it does have a $3.8 million budget there but it's a couple hundred,000 that the city the city funded portion. The rest is is through grants. So I I did want to draw that to everyone's attention. Uh budgeted transfers to reserves. So um if if we look at the general fund the current budget there is no growth in the fund balance there there's no transfer to reserves the general fund is just balanced um water wastewater and I'm in this second column here water wastewater it will grow by 209,000 with the proposed budget electric by 865,000 and solid wa should say solid waste not waster I apologize solid waste uh $32,000 so it's It's a um a break even budget. If I may for a few m moments, I would like to talk about columns three and four though. Uh columns three and four are what are recommended for these fund balances and where they should be. Um the general fund should be about 10% of its total budget. That would be $ 8.5 million. That's that's where it should be to be healthy. And that that is actually part of Radford's um financial policy. uh it is supposed to be at 10%. Um water wastewater should be at 1.8 or 25%. Now that's not set by policy. That's just more good practice. And um electric should be at 35% 9.6 million and um the solid waste should be at about 439,000. Those are the balances we really want to aim for with each of these accounts. Now that can't happen overnight and we we all know that you can't get there overnight. But incremental increases, incremental momentum, you know, this even if it's gentle, persistent pressure and moving in that direction, just keeping the

arrow trend in those directions, I think is a win for the city. So those are the goals. They can't happen overnight, but that's that's that's that's where we we really need to be. Um so so over the next you know um several uh budget cycles that's the goal. Um please note that the general fund that does include the city's portion the funding for Rapford City Public Schools. Uh just to drill down a little bit into the general fund. Uh the general fund when we look at when we look at it and break it up by by how it's funded. Where's the money coming from for the general the $35 million? How are we getting there? And you can see I have a pie chart on the right. Uh most of it's general property taxes, other local taxes. The other local taxes taxes are things like meals tax, sales tax, transient occupancy. General property is going to be your real estate, your personal property. Um of course, we have state federal funding, but I do want to draw everyone's attention to the to the slice that is in red. Uh transfers. transfers in this year's budget equates to $4.9 million to balance the general. Uh the reason I want to draw everyone's attention to that that that's probably well it's not probably it is larger than it needs to be. That transfer slice really needs to be smaller as we move forward and we try to establish these fund balances. Shrinking that slice needs to be a a major goal for the city moving forward. There's a couple reasons for that. Those transfers are coming from enterprise funds and the enterprise funds as we know from the uh losing the foundry at the commerce park when you lo when demand for those services goes down it can really impact it it significantly impacts the general fund if it's dependent on those. So it makes it more difficult to balance whe when you have

times of of turbulence in your enterprise funds or if you have a reduction, it can really impact the general fund. Um that slice if if you know if I were to just kind of throw a percentage out there, it probably should look more like that purple slice next to it, the federal. You're always going to have some form of a transfer. That's always going to happen. Um, but it it it it shouldn't be we we really need to work toward it not being annual and it not being that large that will stabilize the general fund. And if we drill down further into that slice, that red slice, the the the transfers. So this is where those are coming from. 78% of that transfer is from the electric department. 3.7 million in FY27. Water wastewater. the transfer is 898,000 and solid waste is 138,000. So so those transfers are being made this year to balance the general um you know 78% um the the electric has has you know for years and I certainly understand um for years the electric has really carried that. I I would say if we had pie charts going back years, it's probably going to look very similar. But uh just wanted to um um drill down into that and show everyone where where those transfers were coming from. And you know it I can take a second um and pause. Does anyone have any questions or comments at this point?

I have a quick question. Sure. So, when we're looking at transfers from water, wastewater, solid waste, um that going into the general fund, what concerns me is are we not funding these particular categories for updates and things that we're needing because we know we have older infrastructure. So, are we taking that money and needing it for the general fund opposed to, you know, utilizing it within that department for needs?

Yes, that is true. And that's that's the other negative side to having that large slice of transfer. Each enterprise fund, water, wastewater, uh electric, all of them require investment in infrastructure. And when we make those transfers out, it leaves minimal to no money to invest in that. Things like vehicles, trucks, equipment, um re repairing electric infrastructure, the lines, um water lines that we may not see them. they're underground, but water lines that are aging, sewer lines that are aging, um the the um water treatment plant, and I'm going to drill down into some of that in a couple slides, but that that is absolutely what typically what happens when we transfer that out. It doesn't leave money to invest in the infrastructure of each of each of those enterprise funds.

None at all. It does. Right now, we don't have any the fiscal year 26 budget had had no capital projects budgeted in there. So, nothing this year. In the upcoming budget, we do have a $500,000 project in the electric to replace some uh electric poles that have been damaged by woodpeckers. I know that sounds kind of um weird, but it can cause very expensive damage. and they are nearing um a point where it's it's it's a have to not a want to. Um go ahead.

I was going to say I think that a have to not a want to across several several different areas that as we move forward we are going to have to be pretty selective and pretty targeted in a lot of our infrastructure costs. And I think we did a good job last year with some of the CBDG funds were able to I think down on Stockton Street and looking at ways for that because I agree. I mean I think that we have several pressing infrastructure needs that it's not if it's when um and you know it is being so reliant on those transfers is a little worrisome.

Yeah. Yeah. Agreed. And you know, um, just to drill into that a little bit further, when we look at our our water plant, certainly I've had many conversations with Wade, but the city has five steel tanks, four glass tanks. I have that number correct. Those steel tanks are approximately 75 years old. Um, they're old. Um, it's my understanding that the city and and through conversations with Wade, it's my understanding the city has not with there has been no preventative maintenance on those for 25 years. Preventative maintenance on water on water storage tanks that includes like caulking, cleaning, painting if needed, um um getting them inspected to see are are there any points of failure or potential points of failure. an annual program or at least semiannual getting them on a schedule for preventative maintenance. Caulking is very important. Um I've learned that from Wade. Caulking is very important for these storage tanks. And you know the the danger is or the consequence is failing to do that. you if if we have a water tank that maybe we could get 20 more years out of, but because we we don't have the the the capital money to invest in it in preventative maintenance, maybe it lasts 5 years or seven years instead of 20. So that's that's the concern with with not putting the money into capital is your assets, you know, they can reach the end of their useful life much quicker. One quick question, a lot of things seem to be kind of coming to a head as far as these upcoming costs. At the same time, do we have kind of an updated capital project of priority list that we could kind of go through and a reasonable time? We know we can't tackle it all this year, but maybe the next 5, 10 years. Um, have we been able to look at that, update that, kind of prioritize where the most um emergent situations are? So staff, we can certainly get together with staff and start to

prioritize. No one knows our systems better than our department directors. Um, it would also assist our department directors. In some cases, we have capital improvement plans. Some places we need capital improvement plans. I have made an application for grant funding to get a capital improvement plan on the water system. Um, I'm still waiting to hear back. I'm very optimistic that we may get it. That would be $60,000 uh to get a uh to get a um capital improvement plan there. I think once we get the capital improvement plan, we'll have to look through it because once when we get it, it's going to it's going to put us on a schedule and it's going to tell us, you know, in fiscal year 28, here are the items that must be attended to or highly recommended fiscal year 29 and so forth. But I think in areas where we don't have a capital improvement plan, certainly we can try to obtain grant funding to to get those. But but I also trust, you know, our department directors and what they have to say. I think they they have a few projects in mind that that truly are a top priority.

Well, even with some of the grants, they expect some participation financially from from us. So, am I reading this correctly? Saying that this year we we are transferring all of these monies out of these accounts into the general fund. We're still at the situation we're needing to do that.

We're not transferring all the money. the three proprietary accounts are going to grow a little. There's some being left there, which is good. So, that gets a little progress toward toward the capital. We are still transferring a tremendous amount out. And the general um you know, as I said earlier, it's it's really balanced from those transfers. But, but this this year in the in the proposed budget, those fund balances would start to regain some of their some of their um strength back. And I know it's not going to happen overnight, but I was just curious that, you know, since we're identifying this as a serious concern sooner rather than later. And just in case of the event one of those things you've mentioned happens and we're not prepared.

Absolutely. Uh just one more point to drive it home with water. Uh the the water treatment plant, from my understanding, it has not had any renovation or any significant renovation uh for about 30 years. And the life cycle of a water treatment plant is 30 to 40 years. So, uh um it's uh I know Wade has managed it very well and done an excellent job in getting every bit of life he can get out of it, but just keep that in mind. Some of the a infrastructure is reaching a point where it's expected to start to age out. So, I had I had one question, Todd. Yes.

So, I completely agree. Our department heads definitely know uh the systems better than than we do for sure. Um and I know you said that there had not been really any plan or maintenance for um for Oh, I just lost my train of thought. Preventative maintenance. Um cocking you said was one thing that was really important. Is there are we working toward kind of implementing some some small checks here and there, monthly checks, quarterly checks to make sure that we're we're checking to make sure that we don't have some major emergency happen.

What that looks like it typically you're going to have an outside agency. They'll be on a maintenance schedule with um I know there are certain companies, I don't want to name them, but there are companies that specialize in this. We don't have the equipment to they'll they often they'll put like a remote in the tank and it kind of goes around the tank. It's not internal. Now I'm I'm certain Wade, you know, Wade, you I'm I'm certain you you put eyes on the infrastructure and to the best of of your ability, you're watching it, but uh but a lot of the everything we can internally to make sure we're checking everything. Yeah. Okay. Yes. Okay. Thank you. Yep. ask one

one more quick question back on um where we were talking about let me turn my pages here the fiscal year uh 2027 budget was the the headline on that sheet when we were talking about transit we have the 3,800 listed as an expense but our actual expense is 250 are We are is the grant money coming in in another another slide under revenue.

I don't have that broken out. I just wanted to make a make a point that it's only a couple hundred,000 that the city funds. The rest of it is grant. Well, it's university and federal money. Yes. Comes in. Yes. that part. But I'm saying there's a total at the bottom of 79 million which includes the 3,894, but our actual expense is 250. I I think I understand the question. So the reason that number is in there is because we receive the money. So whether it's coming from Rafford University or the federal government, it comes into the city's coffers. So we have to show it as revenue. Okay.

And then we expend it into the transit program. So it goes out as expenditure. So it it looks like the entire 3.8 is locally funded and coming internally. It's not. We just received that money. So we we show it on both sides of the lake. Okay. So we're just including that as revenue and then it's it's coming out. Okay. But totally dedicated revenue that can't be used anywhere else. Right. Gotcha. All right. Thank you. [snorts]

I'd like to take a few minutes to talk about pilot. That's a payment in lie of taxes and our transfers um from our enterprise accounts over to the general. I hope everyone can see this. I I was having trouble formatting it, but but payment in lee of taxes. I'd like to take a second to identify that and talk about what it is. Um pilot this payment is is made from these enterprise funds to the general fund. The reason that happens and that is normal. It is healthy and it and it should happen. Payment in le of taxes from the electric department and from the uh uh water department and solid waste. That is what the city's general fund would collect in personal property taxes, machinery and tools taxes. any of the taxes that if they were operating as a private business, the general fund would receive in revenue through those uh real estate and personal and and other local taxes. So those funds transfer that money to the general as if they were a business. It stays internal to the city, but they do make that transfer. And as I said, that's healthy. That that that that's that's not an issue that we see in the budget. Um, the transfers themselves, that was that red slice that we looked at a couple couple slides ago. That's the one we really want to work on, making sure that if we can reduce the size of that, then those enterprise funds can start to really fund themselves a lot better and we can build up re the fund balances to to stay ahead of capital needs and so forth. the um with regards to the to the uh uh pilot um calculation, you may be wondering. So the first the first chart on the left is fiscal year 26. The middle chart is fiscal year 27 and then it's the it's the increase um in the final chart there's quite a significant increase in pilot and I wanted to talk a little bit

about that and why that may be. Uh if anyone looks at that and and is like, well, why did that go up so much in in such a short period? Well, the reason it went up so much, there hasn't been an adjustment to the pilot calculation since 2019. So, and pilot was reduced in 2024, which which brought it down even lower for fiscal year 2027. Trish and our finance department, they have restored it to its proper calculation. So the calculation you see for fiscal year 2027 it's accurate. That is what they would be paying um were they a private industry. So so the number is accurate this year. So I just wanted to draw everyone's attention to that. Um there is a note here 37 cents on the tax rate. That's to get rid of the transfer. Um just wanted to kind of put that in perspective. Um, and uh, you know, like I said, you can't get there overnight, but it it just helps, I think, putting it in perspective and helping us all understand the the size of the transfers that are being made and what's going on with them. Uh, fiscal year 27, that number grows. Uh, it grows from 37 cent to 40 cent. So, it's something we want to keep our eye on and it's certainly something we want to, as we move forward, we want to be tending to.

I have a question for you. You know, I think most localities have a water and a solid waste fund. Our electric's a little bit of a unique situation. So, it's essentially a tax. So, what do you have any idea what that would if we were to look at that? What would that equate to on our tax rate for revenue? Because I think that if you look at it that way, what would that jump up? Do you have any idea of how many cent that that would be? So, like like the the payment in lie of taxes, what does that equate to in real estate tax? Yes. Uh I don't have that number with me tonight, but I will get it for you. Okay, awesome. Thank you.

Good question. Anything else? All right. Uh, general fund expenditures by function. Uh, when we look at it by function, um, you can see public safety, education, that's where the city of Rford puts most of its money. Uh, we put it in public safety and education. That's that's fairly normal. You're going to see that in most municipalities. And I think if you were to poll most people, that's probably where they want to see the most of their funding go. Um, so, you know, there's there's nothing in this slide other than I wanted to draw everyone's attention that yes, um, we are putting money into those two areas. Of course, we are funding other other functions, judicial administration, public works, health, human services, um, parks and recreation, and community development. Um we do have those but uh just wanted to to um shed a little light on this and uh

could you give us some examples of of the uh community development? Uh community development um those community development are things like um economic development. Um they can be things and I actually have a list here. Um well and I think I saw it on the next slide. I was just main question I was asking if that that's not infrastructure is it? Uh no. Okay. Okay. That was uh you're looking at things like planning, tourism, community development, zoning, economic development, um etc. You're looking at those types of functions. Yeah. Thank you.

But uh it is important because growing our way out of this is another part of the puzzle. We we have to grow Radford. We need to attract businesses. Uh we need to I know Kim's worked hard on the West Commerce Park project. um when that when that's finished, it will attract a large industry or business. That's going to be a game changer for Radford, attracting other businesses. Um that's a that's a major component. Uh not just getting efficient with what you're spending and, you know, working the revenue and and getting good at what we're doing, but we have to Rafford has to grow and uh and that's a that's a large part of that. I have people frequently ask about some of the bigger numbers up there and why we can't make adjustments to some things. Things like judicial administration, health and human services, some of those elements. Many of those are out of our control. Correct. That they come to us as a number that someone else has generated and said this is a must spend that it's not something that is even much of a negotiation. Is that accurate?

That's correct. Yes. uh you're looking at things uh constitutional officers uh the services they provide um things that are mandated uh mandated expenditures those are large large portions of those and I want to say that health and human services number just in the time you've served went from about a million to four million is that accurate it is and that's something that you know we we don't control it just depends on how many atrisisk youth we get in our in our community and the services we have to provide for And that's yeah,

we kind of will. It's hard to even budget for that because you you really simply don't know. You could get a couple large families and I can tell you every month it varies, but it doesn't take but you know, one or two larger scenarios to really have that number

escalate quickly. And I just bring that up because when we talk 35 million or when you get to the overall budget of 79 million, that seems like such a big number that four or $5 million you could just find. Um, and that's the challenge when you start breaking it down out of the 35 million. There's only a handful of things that you could even trim if you wanted to. uh and you were really making an effort to and and that's important for folks to understand because we're not overbudgeting in areas specifically when they tell us from outside sources this has to be at this level. That's correct. Yes. Can you give some examples of the non-departmental category there?

Yes. Uh non-EP departmental looking at transfers, debt service, those types of things. non-EP departmental so interest payments thing just miscellaneous expenses sort sort of yes

all right uh if we look at it if we kind of slice it another way and we look at it by object uh we have personnel contractual services internal services uh um material material supplies, capital outlays, that those are capital projects, transfers, um debt service, that's that other that we were just talking about. The largest expenditure we have is personnel. Um and I know that looks large. That that's that's typical. Um personnel is is typically going to be one of your largest expenditures that you're going to have. Uh that's in any municipality. Um the thing I would like to you know and it sort of it it it builds on what we were talking about earlier the capital outlay that bar should be larger. Uh we should be we should be investing more in capital and right now it's one of our smallest. So I I wanted to I want to draw everyone's attention to that. Our total capital outlay is $500,000 and most of that is in one project in the electric department. Um there's about $70,000 left for capital. So So you know, as we were talking earlier about water, waste water, sewer lines, water lines, um there there's there's no bud there's no budget for those at this point. There's no no recommended budget for them, but we need to be thinking about them and they need to be on our radar and we need to be developing a plan of attack to get those things addressed. Can you talk a little more about the personnel line because that's been a a subject for a lot of conversation. I know we're down about 28 to 30 positions in the budget uh contract equaling about a million or so dollars. Uh can you talk a little bit about how that's developed and and what some of the challenges are when we start looking at that number if we were to make adjustments to it?

Yes. Uh so the FY27 budget, we've carried forward 25 frozen positions. So, we're not going to fill those. Um, we are adding we we have went as high as 34 employees that we have pulled back this year. Uh, some of those we have to add back in. Some we have to add back in due to state funding and requirements to make sure that we have employees working towards state funded uh projects. Um, we have a couple positions we budgeted for in fiscal year 27. Uh, one police officer. Uh we're budgeting in the electric department for a customer service tech for line location. Uh so that we're not so that Tim's Tim's department isn't pulling uh line texts or ground techs to go find um power lines. Um which frees them up for electric work um on the lines. Uh tree cutting is one where I know that's been an issue and a concern. Um limited staff there. We've pulled back uh where I believe there are four line techs left in the department. We have two line tech ones, two line tech twos. Do I have that number correct?

Yep.

Yeah. Yep. Yeah. We've hired in a few uh new new people as ground techs and and brought them in, but but it takes a while to build their capacity up. But, um, you know, cutting trees has been a challenge. And one thing Tim and I have talked about next year, uh, you know, with with reduced staffing, we still have to get these things accomplished. If we can get them done in house, we're going to we're going to do our best, but we may have to hire a few contractors to come in and help with that work. But, but, but we p we can Yes. Go ahead.

One quick question just while you were we were on the personnel, and I know at one time I had talked to you that it was tracking for this fiscal year from the hiring freeze about a $2 million savings in the budget. Are we still seeing those kind of numbers? And what would it take for us to make up for that had we not had that? I mean, it if we're as far as, you know, on on real estate or whatever, it'd be pretty significant, wouldn't it?

Yes. Uh, so at 30, if we're over 30 to 34 employees, we're looking at about two to$2.5 million savings in the budget. uh at 25 I think a safe estimate I you know I don't have it in front of me probably one and a half million to two million with 25 uh employees. So what that would look like um to to fund that back back you know we've went through the budget um you know just to put it in terms of real estate to balance things back out you get about $118,000 per penny so it would take quite a few pennies to get that back in the budget and I will speaking to personnel the city and we can learn to operate at these levels um we may have to make a few adjustments But I'm going to talk in if in you know in a little bit later in the presentation the city can learn and and we can we can adapt and learn to operate at reduced levels. Um I think had had the city not made the cuts it made in in fiscal year 26. The fact of the matter is the the city wouldn't have made it financially um we we had to make those cuts. Um otherwise we you know you can run out of money before the end of the year. Um, but I know that we planned for those as well. We had planned to pull back and and we had put that on the revenue side of the ledger in fiscal year 26. In fiscal year 27, it's showing up on the expenditure and reduced personnel costs. And I'll talk a little bit more about staffing levels and our plan our plan to move forward with that. Um,

can you talk about other charges just a little bit too since that's our second largest number up there? Yeah. Um, other charges. So, let me I apologize. Um, I just want to make sure I get everything right. Other charges, we're looking at utilities, postage, telecommunications, internet, cable, etc. Th those types of things, lent, uh, uh, lease and rent of equipment, um, DSS service, some of those things that we're we're cutting out of the budget, uh, criminal justice academy, conferences, education, um, um, dues and memberships, insurance, shity bonds. Um so

so a lot the reason I bring that up is again that's another big number where folks say is there two million three million that could be cut out of that and you feel like we're as about as lean as we can be in those areas that we we've looked and found efficiencies but we have to have some of those things to be able to operate. You have to have them and we have found some you know the example with the cell phones that's part of those charges. Now are we going to find you know a million dollars there? uh probably not at least not the first year or two. But as we continue to comb through it and comb through it and and every time every iteration when we go through that we find we find unnecessary spending we're going to get rid of it. So we're going to get as lean as we can get. But to answer your question a lot of those you have to have internet, you have to have phones. Um you know you have to have some of these things. I think the key is to make sure we're not spending money in areas where it's not needed. um which you know like the unused phones or you know make sure we're not overpaying um try to get as as much efficiency as we can get there.

Thank you.

Uh the budget drivers for the fiscal year 2027 budget. These are things that really had an impact on balancing the budget for the next fiscal year. Uh this budget does assume it's uh that there would it's balanced with a 5-cent increase to real estate. That would go from 82 cent to 87. The water rate by $1 per thousand gallons. Uh what that looks like on a minimum charge, our minimum bill is 4,000 gallons. That would go from $24.32 to $28.32. Uh the electric rate would increase by 5%. And I will say the electric rate uh our consultant GDS has worked with us to they have they have done the analysis the city it's there's not much room to move there in order to keep the electric department solvent and to be able to make that transfer to the general 5% is about what it's going to need. Um, we do preserve 25 frozen positions and uh, and as I said, you know, preserving those frozen positions, if we didn't keep those frozen and we filled them, we're looking at trying to make up well over a million dollars, maybe approaching two million. Um, loss of approximately $1.3 million in the electric revenue due to Radford University switching to their own cogen uh, power source. and uh the loss of approximately $200,000 due to Pasky County not honoring the revenue sharing agreement. Uh we did not budget for those. Those had to be pulled out of next year's budget. So that was a hit. Um um and we have to make that up somewhere. Um we you know red preserving the the frozen positions and and the 5% the electric. That's how we that's how we make up some of those some of those losses. Can we talk about that electric a little bit because I know that's been a source of a lot of questions that

folks have had knowing that this is coming for about four years. Um the 1.3 million if I'm correct is the profit that we would make as or the ex revenue above expense that the city would make on the electric that Radford University has been buying that will not be uh sold to them anymore once coging comes online. And we have accounted for the additional electric purchase that would not take place as part of that as well because I think the whole thing was around four or$4 and a half million dollars. Was that about right Tim? I mean, right.

Right. So, that's and what we're doing is being conservative essentially by pulling that out and saying that it could be a number that won't be as large as that, which would be a a bonus for us with this budget. Uh, and again, money that could be put aside or toward capital improvements. But also, I think there's still parts of that agreement that haven't been concluded yet. So, we don't know what all that revenue picture looks like. Correct. And I just wanted to bring that up because that's a giant question mark right now and we haven't really gotten all the answers to be able to figure that out to know. It's a challenge for us without a doubt, especially since we've transferred so much from the electric department historically. But that's a number we need to continue to talk about so that folks can understand that. I think you've made the right choice by maximizing what we think that loss will be and then we'll see hopefully we come in less than that and then that provides additional support for the budget for for unexpected expenses and hopefully reserves or capital projects or whatever that looks like. And then um can we talk a little bit more about the electric rate increase or are you going to get to that a little bit later?

I'm I'm going to get to that. Yes, that's fine. Let me let me ask you a quick question. Um, how many frozen positions did you say we have now? Is it 34? Right now we've pulled back. We're over 30. You know, that number is right around 30. Do you know roughly where we're at right now? 3032. Okay.

Okay. I know we're talking about um still having the 25 frozen and you'd mentioned we needed another uh police officer. Have there been other positions that are pretty critical that we've not filled because it's there's we're we're obviously not freezing the same amount that we currently have frozen and you were just saying we might be able to continue and adapt to this current level other than the one officer. So I was just curious where the additional number was.

Yeah. Well, you know, so where we're at currently, there's only a few that we have added back in. the one police officer, uh, of course the ser customer service tech, a mechanic. Um, we're down, we had four mechanics. We have budgeted for one mechanic to go back into the public works department. And it's my understanding where where they're struggling at two. You have a lead mechanic, which is sort of the manager that's scheduling work. You know, yes, they're working on vehicles, but they're also doing a little bit of the admin side. And it they're struggling with just two in the shop to to do both. So there's there's a third one that we feel is needed there. Um so that the the the lead mechanic can have time to schedule work, order supplies, um really kind of conduct the the the administrative part of that. And um I do want to I do want to brag on our department directors and and and all of their staff because when we pull back, it it does require significant change. Um um it requires it does require more work, but it also requires a lot of heavy lifting of going back and thinking, okay, how do you rework the workflow or the process map? How do you how do you map this out? What is in there that we can get rid of and still accomplish what what we need to get done? And that requires a lot of thought. And and you know, the the FY27 budget, it I'll talk about in a few minutes, but it sets the stage for being able to do those things. But I want to brag on them because um they're here. They're serving the residents of Radford. They care. Um clearly they're dedicated. Um they've taken on the work. So um it's a benefit to work with them. I think we have great staff and uh I just want to give them credit. Um because because pulling back does require reworking those those departments and and changing their workflows. sir,

and and our department.

That is a great point and we're so thankful to all the folks who work for the city and I think we're going to talk about that a little bit later in your presentation about some the next step for that because what we've done is is that reduction part that saves a little bit of money and refocuses and all that, but then there's work that has to be done following that to really get where we need to be. And we'll talk about that in a little while, right? Yes, we need So once you make the cut, then you've got to you got to take a look at it and you've got to rework your operational capacity and and yes, we'll talk about that. Uh when we look at the proposed water rate comparison, uh the minimum bill in Radford would go to $28.32. Uh Blackburg right now and and u u these are the latest numbers that I have. Blackburg is at $37.40 40 cent at the same cons at the same level 40 4,000 gallons. Christiansburg is at $52. Dublin is $59.16. Town of Palaski is $50.72 and Palaski County is $45.50. Now clearly I understand that every every operation works differently. So you're not always comparing apples to apples and I understand that. But it does put it into context of where we're at with with other municipalities within the New River Valley. um at least these select ones and I'd like to take a second to talk about what's in parenthesis here, this target user rate. So I know there's been some conversation around so where does our rate need to be to be able to qualify for grants if we do a large project and that can benefit the Radford residents because you're not paying as much in a loan if you can get the grant. So there is savings there there's there's this this um this point of equilibrium where where it benefits. Todd, I think the the point that we need to make is right now we do not qualify for grants because our rates are so low.

That's correct. Is that correct? That's correct. So, we can't apply for them.

Yes. Right now, $28.32 is r is approximately 59% of where we need to be. That target user rate is where we need to be to qualify for most of those. That's what a lot of these funding agencies use. That target target user rate. It's calculated by taking 1% of the median household income dividing by tw or multiplying by 1% divide that number by 12. And when we do that for the city of Radford, median household income is $57,348. Multiply that by 1%, divide by 12, our target user rate is $47.79, which interesting enough puts us, we're still in the lower lower the lower half of these other municipalities around us. Um, that would put us above Blackburg and Palaski, but below Christiansburg, Dublin, and Palaski, the town of Palaski.

And I just wanted to point out something to your your point, Jesse. We brought this up a couple years ago. We hadn't really talked about water rate in in comparison to infrastructure investment. And uh Christensburg, our our friends over in Christensenburg did a massive 2.5 million $2.2 million waterline replacement. Actually, I think the total ended up being about $4.4 million with uh 2.2 million funded through grants. As an example of that, having to fund that because we don't qualify for the grant and still needing to do projects like that. uh spreading that that multi-million dollars on the residents would be as much or more potentially than that additional uh rate increase because a few dollars equals a a couple hundred,000. Uh so that that's one of the challenges to being able to do that. And I I think that's hard for us because we hadn't really talked about it in those terms previously that we were actually missing money as a locality and and setting ourselves up for future infrastructure expenses by charging so little. Again, that affects everybody's bottom line and we get that, but that's a that's a big surprise for a lot of us to look at and go, "Oh, we're significantly lower." And that's not always a great thing because it limits what we can do for some of this needed infrastructure we're talking about.

It is. And you know, one example where that could come into play, let's take the water treatment plant. Um, if it were to reach the end of its life and it required a major renovation or a complete rebuild, something along those lines, you're looking at tens of millions of dollars, um, it's going to climb really high. uh when you look at at at and I couldn't put numbers on this and I couldn't guarantee it, but that is a scenario where if if the rate is not high enough to qualify for the grants, the rates may have to go higher than they otherwise would have doing that project with the grants. So yes, it there there are situations where not being able to qualify would run the rate up higher than than if we met that target user rate. If we had a large project, it could affect it. Yes. So when you have on here the it's proposed water rate is the rate that we're proposing now 2832 that's the new rate

that would be the minimum right and so here's what you have to keep in mind too just for our viewers that would be our 2026 2027 rate but the rates that we're comparing against that we still fall very low behind our last year's rates for the communities around us. This is not their new rates. This is their old rate. So, our new rate still has us very far below what everyone else is able to function on.

Every every municipality is doing the exact same thing we're doing right now. They're looking at their rates. They're going to be making adjustments. So, yes, that's that's very true. These numbers are always a moving target and they may be again this year. These numbers may change within a matter of weeks or a couple months. Have you applied that calculation to our neighbors to see if they are within the standards of being able to qualify for grants and things? Are they are they applying, you know, the I'm just curious. It sounds like Christiansburg has Yes, I'm asking about the other ones, not just Christiansburg. It's It's a good question. I But we have not done that, but that would be interesting. We could pull the data if if they are, you know,

making sure they're staying able to be able to fund some infrastructure. It sounds like, you know, we're going to be in need in the next hopefully 10 years. Um, but maybe less than that. We could pull that from census data and find the median household income. That would be we could get that done pretty quick. Yeah. Yeah. Yeah. Probably. Thank you. Yes.

Any any more questions? All right. Uh, real estate. So, we're proposing to go from 82 cent to 87 cent. That is a 5% increase. Just wanted to put that in context. Um the city of Galax and once again to Jesse's point, this is a moving target. I don't know what their FY27 number is, but they're at 92 cent. City of Salem's $118. Um just wanted to put at least another city in there and a city that has an electric plant and they do have a university um in the uh Ron College. Um so I wanted to put them in there for that reason. Town of Blackburg and McGomery County. Um, when we look at these, if you look at the righth hand column, those are respective to the left column. And what I mean by that is the 26 cent is town of Blackburg, 76 is McGomery County. So, I thought it would be uh uh uh good for us to take a look at for a resident that lives in the town of Blackburg, their real estate tax is a$12. A resident in Christensenburg, when you count the town and county tax is at 90 cent. Town of Palaski and Palaski County combined. So a resident in the town of Palaski A$110. Town of Dublin and Pilaski County together. So someone living in the town of Dublin it's 98 cent. Uh in the town of Parisburg in Giles County uh which I have some familiarity with. Uh Parisburg it's a$12. Um and the town of Narrows and Giles County is a$136. So, just wanted to put that in perspective and just put it in context of where we where we sat with some some other municipalities.

Well, and with Christiansburg, they have the sales tax that we don't have. So, they're able to buffer it through other means. Yes. Uh Christiansburg, uh they they get well more in meals tax than any of the other municipalities in in the New Yorker Valley. Um when people go out to eat, they go to Christiansburg. Um, so use it like we do our electric a little bit too as a buffer. Yeah.

Uh, so what does this look like at at various values? And I put home value in the left column. That should actually say real estate or property. Uh, I apologize for that. Um, but the real estate tax uh at the 200,000, 300,000, 400, and 500,000 levels, this is what it looks like. Second column is current rate, what the charge would be annually. Third column is the proposed uh rate at 87 cent. And then on the right, that's the the annual increase for a property owner at those valuations. At $200,000, it's $100 annually. At 300,000, it's 150 annually. $400,000 value, $200 annually. And at the $500,000 uh dollar value level, it's 250. So, uh, every h 100,000 it's about $50 annually. Um, w with the 5% increase. Electric. I do want to take a little time here with electric. We've talked about a 5% increase there. So, I want to start by these are these are three charts we have up here. The one on the left is our current rate. The one in the middle is 5%. If our customer charge goes to $7.96 from $72. Now that is the charge every account holder pays whether they use electricity or not. That is the bare that is the minimum charge that they'll have to pay. The far right column achieves 5% increase in revenue but it works those numbers a little differently. So I'd like to walk through these just for a few minutes. um on the left. So, our customer charge um or or the customer charge that we have, that's the bare minimum, as I said earlier, that anyone's going to pay. It's $72. The energy charge at a 1000 kilowatt

hour level would be $100.95. That's where we're currently at. the fuel at um at the B and the the new rate at 1,00 kilwatt hours residential would be $107.97. Um the fuel cost WPCA, which I do want to talk about WPCA a little bit. That is a pass through. Uh the city collects it. We don't keep it. It's a pass through. Um that's not a revenue source for the city of Radford. That is something we have to collect and pass on. And that anagram stands for wholesale power cost adjustment. Correct. Yes. Yes. Just so people know because that's on their bills and people wonder that all the time.

Yes. Uh the um so the total bill right now uh for someone would be $1732 with a 5% rate increase and if we keep the customer charge at $7.96 um we can work through the same numbers at 1,000 kilo kilowatt hour but essentially if we leave the customer charge at 796 with minimal increase there the monthly bill at 1,000 kilowatt hours would be $18161. 1 cent. That's roughly an $859 increase. Uh at the thousand kilowatt hour, what we are proposing is the far right column. The customer charge, that minimum that a customer would pay whether they're using electricity or not would be $20. But that drives down the energy charge. And how that works through the math and through the thousand kilowatt hour level. um when we when we when we push it through that filter, it's actually a lower rate increase at that level. It's $180.30, which you can see is slightly lower. It's not 5%, it's 4.2. Now, you know, you have different consumption levels throughout Radford. The rest would be made up through that that energy charge through higher people that are consuming more electricity, more power. Um couple reasons we're recommending this. Number one, it does seem to be at the lower consumption levels, it may it may put less of a burden on people that are using less electricity. The second thing is that customer charge. Um, we do have we do have accounts in the city um and it is it's solar people that have implemented solar power in the residents. They may only be using no they may be using no electricity from the city of Rafford during some months at $7 when you when you calculate and

I've talked to Tim and Tim thank you for the information when you c when you start to think about the meter installing the meter maintenance of the meter reading the meter and then on these accounts it's my understanding that it has to be entered by hand at this point the the the the salary we're paying staff and the time they're spending manually ally entering that we're losing money at $7. The city is losing money on those accounts at $7.96. At $20, we get closer to recouping those costs, at least break even, um not lose money. Um so that that's what you know, Tim and I have talked quite a bit quite extensively about it and and Trish as well, but we feel that right column is best for the city of Radford and that's what we're recommending. I just want to give you kudos for for looking into that. That's that's getting creative and um really digging into it. So that's that's really well done with you and Tim. Thank you.

And I'd like you to talk a little bit more about why in addition to certainly we need more revenue, but why a rate increase at this level anyway because we had our consultants take a look at it. They made recommendations. What would happen if we didn't increase the rate? if we don't increase the rate. Uh so, so first of all, our consultants took into account cogen, they took into account market rates. We're getting ready to make a major change to our electric, the way we procure power for wholesale. They have taken that into account um and they've taken into account our operating costs, those shift. So, all of those are are included or baked into that that calculus that they've given us. If we pull back and and and we don't implement these rate increases, uh it's going to become more difficult to operate the electric department. Um the electric department, we we have clearly infrastructure projects we need to get completed. Um we're trying to keep the electric department solvent and and not only solvent, but keeping it in a position where it can continue to function. Um because it's not just about balancing the electric budget, it's also about making sure they have the equipment and they've got what they need to to make sure that the power actually that it works. Um so it would eat into our ability to fund those things.

Well, and I think that's an important distinction to make that you know the electric world has changed significantly in the 20 years that we had the contract, but the last five years it's like a completely different world. Um, and that's one of the things that has made it so challenging because I've had a lot of folks say, "My bill is higher than it's ever been. I can't believe Radford's having any kind of challenge with its revenue." But our margin has been significantly challenged with all these changes. Is that accurate? That is accurate, Tim. Would you agree?

And so, we have to do something or else it doesn't make sense. Now, what does this do to us? Let's say we go with the far right column in our comparison to our neighbors that use maybe uh AE or like Virginia Tech where they have or Blackburg where they have some Virginia Tech electricity. How is are we going to be competitive in those areas? That's a good question. I don't have the answer. Tim, do you you don't have that with you, do you? Absolutely. Actually, if you want to step to the podium and talk about [laughter] what you have Absolutely.

Okay. Um, again, uh, Jesse, this is old information because this is as of July of last year. Uh, Virginia Tech was $179.33. City of Salem $157.14. Um, let's see. Town of Bedford 15402, Danville 141. City of Martinsville 173, Town of Richlands $190. So is that their base rate? Because when I'm looking at the the WPCA transfer and those those numbers drive it up. Is that what

this this is just an average. So you're I'm comparing the total highlighted value to the numbers that I've given you. Well, and that's one of the challenges we face because we used to be able to do six to eight to 12 million transfers with a lower rate because we had more margin and that margin has just evaporated on us which is why we've had to charge what we charge. We're not making the level margin we used to make but um we have that and I I had asked that question about Salem before. They have several large heavy electric users. Is that correct? And that changes their ability to to offer what they offer. Correct.

Correct. And I've got 32 utilities here in the state with customer charges. We're number one for the lowest. It goes from $72 for Rafford up to $40 for a co-op. So, so you know, there there's a lot of challenges with all of this. Uh, do we know what a's rate is right now? I think they were right at 179 180 last year when we were at that rate or 175. Correct. They've had a reduction this past year. Uh I think they're about ready to have a a slight increase.

Okay. So we're competitive but it's not like it used to be where we were 20 or 30 or 40% below. We had massive margin and we're able to transfer so much over. And I think that's a really important distinction for folks to understand. A lot of this is out of our hands. That you know the cost to us is what it is. uh the way it's structured where we've been able to transfer these revenues all these years. We either decide to not transfer them and that could either we save that for capital projects or the rates lower and that means property taxes have to go up or things along that line or we charge more and I just wanted to get that across because I think that's tough for all of us to understand and I appreciate you helping us with that.

Let me let me add one more point. you know, the the higher the fixed cost is here helps our cash flows as well because in the shorter months where we're not purchasing or selling as much energy, you know, those those cash is a little bit high. And one last piece on this that's not really part of the budget, but it's something we have to consider. We've had several of our uh solar customers talk about the annual net meter metering versus monthly net metering. We've had to sort this out before we can even begin to address that again. Is that correct?

Correct. Well, and I I wanted people to know we've not ignored those concerns of folks who have attempted to bring solar power on and to deal with that. But this is such a complicated piece with us moving from our wholesale power contract that's been in place to market purchase to being able to make these different things to go. This rate study has been what about a year? the call service value.

Okay. So, it's several years worth of of data. So, it's just a lot to try to consume as a locality to figure out where we need to be. And Todd, you feel like that far right recommendation is is the best outcome we could possibly have at this point in time.

I do. And I want to thank Tim because he's been so helpful and productive with that and helping us sift through all this data. But yes, absolutely. The far right column One last thing with the solar customers. Um, you know, there's a lot of conversation about trying to grandfather in our current um, solar users, not for that base rate, but for their carryover energy. Have we have we done that? So, they they at least the plan that they were under when they invested in solar, we're honoring that and not changing it midstream. So that is on our mind and we've had conversations. We've taken no action on it. But now that we have this, we can certainly digest it and come up with a with a plan of action for that. So that'll be forthcoming

because that'll be a line item we have to consider. Essentially, that'll be a budget item we have to take into account. And I think this was a I don't want to say a moving target, but it was an unknown target of where we needed to be before we could make that net metering decision and go from there. I agree. It's a big challenge as people have made investments based on where we were, but just like we were saying a minute ago, where we were is not where we are because the market has shifted so much with us. Just trying to figure out where we needed to be was such a big challenge.

Yeah. Yes. And and you know, this was the first piece that had to fall into place before we could really start to take a look at that. Now that we have it, I just want to clarify, we'll have a recommendation forthcoming. We're going to have to look into a lot of things with it, but now that we have this, we can have a recommendation for council on that. Uh, so we'll work on developing that. Uh, I'm sorry, I didn't mean to just go on. Um, were there any more um questions or comments with regard to the electric rate? Okay. Um, things that the budget does not accomplish. I wanted to talk about those a little bit. just a I think we have to um look at the budget and all of its all from all angles. Uh you know, we we went through our non-governmental agencies. We did not include those in this budget. So, I just want to make clear um Trish, did we add any back in? Were there any required that we had to add back in? Not to put you on the spot, but

I don't think we added any more.

Okay. Okay. So, we haven't made any additions there. Uh we've talked about capital. I'm not going to go back through that again, but clearly um capital is still an area of concern and and and not funded to the level that it really needs to be. Um we're not significantly growing fund balances. FY27 takes an incremental step with some of the with the current proposed budget with the enterprise funds. There's no growth to the general. Um, I think, you know, when we look at when we look at Rafford's recent history, a recent financial history, I do think we're making some progress, uh, there are no loans needed to balance this budget. Um, there there's um, this budget is balanced with its own revenue and that may be a step. There are, you know, we saw in that that one slide, there are some small incremental gains in three of our enterprise funds and those can add up. And, you know, as I said earlier, we can't get to the levels we need to be overnight. But I do think this budget, it's my opinion that this budget uh it does take an incremental step. It keeps the arrow pointed in the right direction and it is taking a small step uh uh toward where we need to be. Um we it uh it does not reduce the general fund's dependency on transfers. Actually that's increased a little bit this year. So uh just keep that in mind. Um we're not reducing its dependency on transfers. And you know this kind of goes handinhand with capital but and and the growth of fund balances. But thinking about stabilization funds uh when you have things like COVID hit or a hurricane or you know infrastructure could fail and it be very expensive those are unaccounted for. uh events that can happen, they could happen in FY27. FY27 does not create significant funds to deal with those. So, just keep that

in mind if something u significant were to happen that cost millions of dollars. The city could still look could still need require loan to address them. But uh so the stabilization funds that kind of comes with growing your fund balances and and also reducing your risk through investment preventative maintenance and proactive maintenance of infrastructure. So I just wanted to take a realistic look at the at the budget and I wanted to be honest with everyone about the budget. It does have its limits. Um so uh the fiscal year proposed budget does accomplish the following 2% cola for employees that is in there. Uh it fully funds the schools. Uh it fully funds the local required effort and the local required match in the total amount of 5,994,000 and uh $5,994,142. Um so that so it's fully funded u LR LRM. Uh it prevents the erosion of fund balances. Looking at the other side of that coin, we're making an incremental gain. It's preventing erosion. And that's a step for Radford. I think that's a positive step. Um, it invests approximately $90,000 and I want to talk about this last bullet a little bit, but the budget does have built into it approximately $90,000 to reorganize and create a continuous improvement lean management program. And I'm talking about implementing a very spec specific methodology, lean six sigma. One person can't implement that in a in an operation as large as Radford. What I'm asking for is to at least get three green belts trained up. They can serve as project. We want continuous improvement projects. So improvement projects are where we learn to live at these staffing levels we're at. We take a look at work processes. We process map. What is going on from beginning to end with our operations and getting down into the weeds of how do we do our work?

Is there anything in our work that's unnecessary that we can get out? that helps us operate with with reduced levels and it saves sta it saves staff time and eventually it does show up on your financial books. It shows up on the ledger. So if I can I'd like to take a minute or two to talk about this. So when I you know I've mentioned it several times when I talk about lean and continuous improvement with regards to Radford and just just conversationally it literally means working every day to make city services better. That is continuous improvement. You're always looking for a way to make it better, large, small. It's always keeping the arrow pointed in that direction and it's never done. So continuous improvement doesn't mean you reach perfection. You never reach perfection. It's that you're setting standards and you're trying to achieve them. And when you get a certain workflow or certain work process achieving at a level that you want it uh to to be working at, you maintain it and you watch it and you monitor it because all systems once you get them improved, they naturally go back out of control again. So you're always tending to it and that needs to be the city of Radford's comfort zone that we are always tending to quality and lean and efficiency. It's ongoing. it's not done. Um that we make services better, faster, simpler. We need to simplify some of the processes we have because simplifying it will improve the quality. Uh we need to focus on what residents need most. Um that that has an entire methodology. What do our residents really need in Radford? We need to focus on that. Uh it the principles are or are really in a nutshell it means fix problems, keep moving. Don't stop. You fix one problem, don't sit back and say, "Well, you know, fix that and well, we're done for three months." No, fix a problem and keep moving. Go to the next one. Not just once, but you're always doing it. Do it all the time. It's your culture. It's how you think of what you do. And we

already have people that do that. Um we have great staff. We have staff that already thinks along these lines. We just need to build up our capacity to implement it. Uh remove steps that don't add value. Anything that we are doing or it could be in a workflow, an expenditure, the cell phones, it could be something we're doing in a in a workflow process. If it's not needed, don't do it. Get we're we're using resources. We're using time. We're using effort. Get rid of those things. Uh that leads to the next bullet. use time and taxpayer money wisely and efficiently. We need to make sure that every especially, you know, the condition we've been in and that we currently continue to be in. Every financial expenditure needs to be spent very wisely and very targeted and high impact. It needs to be as high impact as we can make it. Uh we need to listen to employees and residents. You know, there are a lot of issues in the city. I I'm not aware of them. City council may not be aware of them. even department directors, but the person out there fixing the potholes may see it. They see things that we don't see. And finding a way to capture that knowledge, the knowledge of residents. How do we get they residents have a lot of knowledge about what's going on in their neighborhoods? What's wrong with it? How do we gain information from them? We need to get better at that. And I we we do it, but we can get better and we need to focus on that. and we can target our operations and what we're doing and what we're spending money on in ways that are high impact and are wanted by the residents of the city of Radford and by the by by the city council. Bottom line, do the right work the right way with less waste so Radford residents can get better service. That's the bottom line. Um just want to look when I talk about waste and I'm not going to spend a lot of time on this. I just want to outline when you look at at an organization through the lens of lean management, six sigma, there are eight wastes. They

plague public agencies, private agencies, NOS's, pretty much any organization that that has any kind of complex operation whatsoever. You're going to find these eight wastes. Defects, overprouction, waiting, non-utilized talent, transportation, inventory, motion, extra processing. So that is a perfect place because I think we're waiting with baited breath to hear more about that. Can we take a five minute break and then come back to that to finish up? Absolutely. Would that be good? We're going to take a 5m minute break. We'll see you in uh about 7:03 7:04.

We did good. That was a five minute, five minute break. Outstanding. That's progress. Yes. So, uh if it if it pleases council, I'll continue to finish uh this slide up.

Why don't you start over since we had to break you here, why don't you go back and and and do uh the description of what you're talking about? Sure. Uh so when we talk about trying to implement continuous improvement and the continuous improvement culture and set the knowledge and and and to learn how to use there are very specific tools that that can be used for this but we have to have the capacity to know how to use them, how to implement them and then how to make corrections that actually do improve work processes. Now the danger is if you try to implement some of these tools and you do it wrong, you can you could damage an organization. So you could actually make things worse. So that's why I'm asking for very specific training, some very specific investment uh in continuous improvement. And I think you know when we talk about achieving savings and and reducing the cost and and and the the the um the demand from the taxpayer uh to reduce things by 25 employees. This is how we invest in that. If we're going to save, you know, 1.5 million to 2 million on personnel, well, we need to invest a little, maybe 90,000 back into, okay, we're at these staffing levels. We may be able to hold them long term, but how do we do that? And getting the knowhow to do that? Investing 90,000 back into that uh uh can help us achieve long-term savings. So, so uh it helps us learn to operate effectively at those levels. not just survive at those levels, but how to do it well at those levels. And uh just to start over, so the whole the whole premise of of what we're looking at doing is having a system and a culture that is able to identify not just and I'm focusing on waste, but there's a quality component to it as well. But to focus on waste, uh when you look at an organization through the lens of lean six sigma, there's eight wastes that are in there. And I I'll just repeat them, go back through

them. defects, overp production, waiting, non-utilized talent, transportation, inventory or backlog of work or paperwork, motion, extra processing or overprocessing something. Uh what these look like in operations uh would be, you know, defects. Whenever you do something wrong, you have to go back and you have to rework it. You have to do it again or fix it. Well, that's time, effort, and often money. You may have to scrap the the resources you used to begin with or it's a cost to time. You may have to pay overtime for an employee to go back and rework something that if it was done right the first time, you you don't have to do that. It it saves cost. Overp production, that's producing something too early or in greater quantity than is needed, which can create backlogs and problems. Uh if you were to think about storage, uh it can create issues there. uh waiting idle time uh when work is delayed. Um and also using idle time effectively uh sometimes when we're waiting to complete a task, another task can be completed. Uh being efficient with time, it's not just standby time. Um but idle time when work is delayed waiting or it could be something as simple as you know um well the crews assembled and they're ready to mow Bisset Park. I'm just making this up. They're ready to mow Bisset Park. They're waiting on the mowers. where are the mowers? Um things like that. Um um non-utilized talent. Uh that goes back to, you know, the the street level public servant or or even frontline supervisors. They have a tremendous amount of knowledge that um senior level managers, department directors, the city manager, even council may not be aware of. Um so we almost take the if we can push the initiative out to the street

level uh we can get more effective at addressing problems because when we push the initiative out and decisions can start to be made at that level. You know the pothole doesn't have to wait on clearance from the supervisor or the department director ultimately the city manager. We we know what we want the roads to look like. We know we want the pothole fixed. Well fix it. you know, cut cut out the waste that's in that. Just get it fixed. It will reduce time getting that fixed. And we already have people that do that. I don't want to uh uh make it sound like we don't. We have we have employees and servants. They're doing that. Um we just want to we just want to entrench it and make it part of our culture uh as we move forward. Um and non-utilized talent. We have we we have uh people here um that to be quite honest they're capable of a lot more than we're asking of them decision-m wise planning wise strategic uh vision for how to address issues they have a lot of knowledge so we need to utilize that transportation a necessary movement of materials or information uh that could be in an office setting paperwork um paperwork it it you know going from one end of the building to the other maybe it's being walked there uh when you can move these things closer together, reduce that time um out, you know, with public works or or or staff. And and I'm certainly not picking on mowing. I'm not. It's just on my brain this evening. But, you know, movement of materials if it um if we mow, you know, a piece of property on the west end of town, and we know we have others in that area, but instead of mowing those, we go over to the eastern part of town. And I don't know that we're doing that. This is completely hypothetical, but if you go all the way across town, well, you've had to move equipment and people. That's two of the waste. And you're losing time in transport. You're paying extra in fuel. Um just reorganizing simple things like that. Making taking care of things that are close together. If we're on a property and um just to continue and

then I'm going to get off the mowing. Um um but uh you know if we're if we mow a property and just making sure that it's finished before going to the next one um rather than sort of batching this work or or keeping um maybe um make sure it's mowed and weed eat it. Don't mow it, leave, go to the next one and then plan to come back to weed eat. Just get it done and then go to the next one. So um things like that. Um and and please we have a great mowing crew. I I want to say that. Um I'm certainly not um that that's a hypothetical and uh I just wanted to use that. But um inventory accumulation of work not yet completed. I struggle with that one myself. It's bottlenecking. That's another word for it. It's when work starts to accumulate. It starts to accumulate until it affects your capacity and it can paralyze certain sections of an organization when you get too much bottlenecking. So figuring out ways there are tools that we can use to to get eliminate those bottlenecks. But uh but we've got to learn how to use them and we've got to have the infrastructure in place to do them. But um but preventing bottlenecks. Um motion that's that's the same as um as uh transportation except it's with people and uh making sure that we don't have any unnecessary movement of people. That can be across the city, across a building, running stuff back and forth between a building, those types of things. Trying to find and identify those things, get rid of them. and extra processing or overprocessing doing more steps than is actually required to meet the need. Um um that that's a form of waste because you're using time uh effort and often money. It ends up being money. So um I just wanted to speak about waste a little bit because we talk about a lot. I've never really went into the weeds of it or or the detail of it, but just want to take a minute to talk about that and what we're what we're really targeting to get rid of. When we talk about lean and cutting, um, you know, we pulled back on staff, but this is really what we're talking about when we say lean out. Lean out a process, lean out, uh, you know, what's going on.

Um, this is really what we're talking about. Um, and this is how you how you operate at those levels. Well, and I think this is so important and we need to have this discussion and and we'll have more on this as we move over the next few weeks and months because having the employees that we do have in the right positions with the right training, with the right titles, with the right responsibilities is what we've needed to do for a number of years. Um, eliminating people uh positions, not people, but eliminating those expenses is fantastic. that helps us get further in the budget, but it doesn't necessarily position us because where we eliminate, we may not have folks targeted in the right places for what needs to happen. And so, this is really a crucial part of this entire piece, not just the cost savings part, but really getting to the most optimized and efficient version of the Radford City government that we could possibly be. So, I'm I'm very excited. I know just a little behind the scenes when we were interviewing and looking for city managers. This was one of the things that was really special about Todd in addition to some of the things he showed you with the budget tonight in terms of how he practiced his budget revenue projections. Uh talking about the six sigma, talking about uh how to work with optimizing what we have as a council. At least I'll I'll speak for myself and everybody else can chime in if if they want to. This was exciting for us because this is something we had been wanting for our community for years and years to say, can we be the very best version of Radford that we can be and we saw Todd as a person who could potentially do that. Now, you're seeing that come into play as a budget line item to allow us to have the tools to then help the folks that work here to be in those spots to for success and to position that. So, it's really exciting

to see all this come into play just a little less than a year after we brought you on board and and and to go from there. But, I I don't know, council. I mean, that was something that was exciting when we were talking about the interviews, and I think this is an incredibly important part of your your budget for next year, even though it's not the largest line item. Thank you.

I'll just tie in and say I agree, Todd. I think that to this for you to be when when we were interviewing you, it really struck me one how how efficient you were with being able to compile data and putting it in a userfriendly this is what it is. And I think that you've done an excellent job and this is just, you know, a fraction of what you show us behind the scenes. And you've really done a really good job of of streamlining this and not only just I think to David's point eliminating cost but maximizing things too. I think that and I know that you were very very adamant about investment in our in our people and I I know that we all are too and to be able to find a a cola and start building that back. So I thought that this was a good representation of of what you've been working on and I know you've been working hard and you did a you did a great job tonight on your presentation. So absolutely.

Yeah. Thank you. Have we thought about um and maybe you've already covered this, but I know the commissioner of revenue um and our treasurer, they're new and at through conversation, they're looking at their processes and procedures and they're so vital to the citizens in the community. Are we going to make this available, the SIG Sigma training available to them if it's something that they'd like to also take part in? So I haven't included it in the budget, but I think it's a it's a good idea or a good conversation to have. Okay. If they're interested.

Yeah. I think if they're interested and you know they they are tasked with creating these new processes and procedures and I think this might be beneficial if something they're interested in. The other um thing that I have a question on and you're probably waiting for me to ask it. Um, the other department that I don't see us really comparing our rates on is the trash collection. Have we looked at that? Do we know where we are in comparison to other communities? I don't have a comparison to other communities tonight, but I'll have it I can have it by Monday. Okay, that'd be great. Thank you, Todd. Have we gone out for u RFP for the garbage?

We have not. Uh, but that's on our radar. Okay. Yes, I had one more thing that I wanted to bring up and we do have some conversations prior to these presentations uh as the budget's being developed. Can you talk a little bit about how we're not changing the rate for personal property, but we're expecting some slightly different outcomes. Can you share some of that a little bit?

Uh, sure. So, I can talk a little bit about the projection for personal property and and the data and how we worked with it. So, when we made a projection on personal property, we did use a trend line. And I'll very quickly I I don't want to get too much into the weeds of it, but very quickly when we're when we're trending personal property, what we did, we actually trended instead of the actual amount, the total levies. So, you trend the total levies, come up with your next data point for the levy, and then from there, we looked at uh the current tax rate, and then you start looking at um I'm not going to call it a collection rate, but what we took were the actual amounts that Munus showed that we were bringing in. So we took the levy the actual amounts that Munis shows come bringing in and going back 10 years it looked like Munus would show in that that revenue line item roughly 60% of the levy 63% 65 and for the past uh uh for the past uh three years it has went and and please forgive me it was lower 70s for two of the data points these are the last three years two of the data points were low 70% and then the latest data point was upper 70s and if you look at a trend which which you really can't trend three data points but if you if you look at it it's pointing toward about 80%. So right now the budget for just personal property not none of the other items in there but just personal property the current budget assumes about 80% but we'll have to we'll certainly have to monitor that. Um there's a lot of new moving pieces and we'll have to watch that going forward. Well, first of all, I want to say thank you so much to our new commissioner of revenue and our new treasurer because I know the co cooperation with staff has been just absolutely amazing and we're so appreciative of that because that that's an important part of us uh figuring some of this out. But I I think the other part to that is um there's really two parts to anything we do from a revenue perspective. There's the rate that we set so we have this anticipated amount

and then there's what we actually realize. And if that's going to be 60% of what's, you know, projected or 70% or 80%, we have to kind of know that to be able to say, okay, yes, this might technically generate a million dollars, but it may really only be 800,000 or 600,000 or whatever that is. Can you talk a little bit anecdotally, I know you didn't do a big study about this, about what you've experienced when you were in Parisburg, for example, on on that rate? So Parisburg we used uh of c you know Edmonds financial management software or or enterprise um software but uh uh in Parisburg which it's a town and you know operates a little bit differently but typically when I would budget for personal property or somewhere it it'd be 90% 95% somewhere in that range is what we would look for and typically bring in off of that. I know um uh in Parisburg we used a very robust um DMV stop program and for anyone that doesn't know what that is um someone doesn't pay their personal property tax on their vehicle they can't renew their tax. So you put a DMV stop now they may not come in that month maybe there's 11 months before they have to renew but once they hit that they cannot renew their um their their tags for their vehicle. Um it can it can be very effective. Uh I I I do not know much about the the DMV stop program in Radford. I just I can't speak to that.

Well, and you know, just to that point, I look at it, I'm excited because that's opportunity for improvement. Just like we've been talking about this continuous improvement, but it also shows that perhaps there has been some unrealized revenue in the past that maybe maybe an opportunity, but also can explain why we've had some periods where revenues haven't been as robust. You know, one of the things we we've talked about is the challenges in producing enough revenue that when you see these expenses in our budget, how do you get there? How do you produce that revenue and and trying to find things like that? So, kudos to you and and to our commissioner and to our treasurer for helping us figure out where maybe we weren't optimizing the the realizing of revenues and things. And there's more to that story as we move forward that I think we can get into as we move throughout the year. But that's a really important piece and it's exciting to see that we're not maxed out on everything. We're not at 98% on every single point and yet we're still not meeting the mark with some of the revenues we need. There's room where we could potentially be there and it's not necessarily charging those that are currently paying those things more. And and I think that's a real important piece to bring up. Um, you know, thank you so much for all the things that you've done. I I wanted to get to several of these points. The creative thought about the electric trying to say it's not just a rate increase. We do need to do something because our consultants have said this is where you better be so that you can actually be solvent and move forward, but finding a way to do it that minimizes that burden on our our consumers. Uh, you know, thank you for figuring out, yes, we've made these reductions in staff. Now, how do we help those folks be the best version of what they're doing now and how we're doing things differently? I think that's so important and and thank you to the staff for all the hard work done. One of the things that you don't see is a lot of the behind-the-scenes work. We don't even see that as council members. We hear it,

but we're not in the trenches. We've had folks who have had to rebuild an awful lot of things within our finance department uh within the um entire budgeting structure of the city and that's happened and it's really exciting to see that result in we're not doing this two weeks from now. We managed to meet the April 1 deadline which is fantastic and we have time to have some more discussion on this. But you know thank you Todd. I I'll I'll leave it at that. I know we've got a little more business to talk about before we finish up tonight, but does anybody other have any questions or comments they want to make?

Well, I just want to thank you also, Todd, for a good report. Um, a lot of stuff there to look at. So, thank you very much and thanks for the uh the rest of the team that's put input into this. So, thank you. And I know you'll probably and it was a team effort. Department directors, Trish, the finance team. Um it was a team effort and uh they've been wonderful. Yes. Couldn't have got it done without them, especially our new finance department. So, thank you. Thank you, guy. Real quick clarification. So, just so the public's aware, nothing none of these rates or anything like that are decided upon tonight for us to take home, digest, and then what are the next steps for us to to get across the finish line?

So, the decision that has to be made tonight, we have to advertise tomorrow, right? And what the way we advertise that is a rate not to exceed. So we'll we'll have to put the advertisement out. Now certainly you know we can't go above the advertised rate but there can be negotiation you know down from those rates. So so we do need to make a decision about what we about the rate we want to advertise not to exceed. Okay. Any questions or comments? So just to clarify on that, right now we're looking at five. Oh, Adam, did you have something you want to share?

On behalf of my board, I want to thank Todd for the meetings that we had with Miss Cox, Miss Newbie. A lot of the work you talked about behind the scenes. We did that on a on a pretty regular basis since Christmas. I think it meant a lot to this progress moving forward. So on behalf of my board, I'd like to thank Todd and his team and city council for the support of our kids and our Thank you, Mr. Superintendent. We appreciate that. And thank you to the school board and to everybody. Thank you Carrie. Is Carrie still? She had to step out. But thank you to Carrie because I know she does amazing work with everybody too. Um just to refresh everybody's memory, we have to think about this because we have to advertise it. So our water rate is 2832 is what we would advertise as the max. Correct.

That would be the minimum bill. Yes. Be the minimum bill and that's what we would advertise. 5 cents on the real estate tax. So from 82 to 87 cents would be advertised. And then the what ended up being if we go with this the 4.2% increase on electric with the new configuration or would you say make that 5% and then we have the ability to adjust between those? Five overall. Yeah. Five overall. Okay. So 5% overall. Have I missed anything that we need to consider for our rates?

So I I like the fact that Jesse mentioned that we have not really looked at our trash rates. Is that something that we would need to advertise to? Okay. So, we're not going to be able to do that because we don't have the information. Well, that's can't do it with this budget. Now, I if if city council wants to take a look at that rate, we can make that change later. Okay. So, that's one of the ones we can make later. Yeah. You're not limited to just this time of the year if that if you wanted to make that change. It it would require a public hearing and and you know it would require all this all the necessary steps but that could be done you know it could be done in October, it could be done in June, July. Um there's some changes that can only be made right now. It's primarily the taxes.

Yeah. Just wanted to be clear that there can be changes throughout the year except for taxes. That's correct. Okay. I just wanted to be clear on that. Thank you. Uh one second also solid waste. I'll confirm with Mike on solid waste. Okay. Thanks. Y any other questions or comments? The water rate can be changed. Does it have to be advertised? No, it has to be advertised. It does have to be advertised. But we can change it later on in the year if that's what I meant I was asking.

So maybe for clarity what what can we not change? What what after today can we change versus not change? Where where do we have future flexibility where we don't have to wait the year? So that I don't misstep, I'm going to ask the city attorney that question. Uh I just don't want to give you a bad answer. So I'll ask that makes it tough on us. Well, I think we're if we advertising does not lock you in.

We can advertise at a higher rate. Like if if the water rates a concern and we want to say we need flexibility here and it needs to be $29 or $30 or whatever that number is. We could advertise at that rate. We don't have to actually do that, but that gives us the flexibility. I think that's the question though that we're we're asking. I'm really concerned about not getting that grant money. I mean, I know from 24 to 47 is a

huge huge jump, but I I Yeah, I'm sorry. Uh I was talking about the uh the water rate going from 24 to that 47 that we would need to be eligible for grant money. And I know that's a huge increase uh and people aren't going to like it, but I I don't see how we can kept keep putting off being able to get that money. So, I think we really need to if if that needs to be advertised at 47 or whatever and then we can back off, then that's what we need to do for the advertisement.

So, when is the absolute final deadline for choosing what the advertise rates are? Is it tonight before we walk out of this building or is it tomorrow by noon or is it um it it'll be to it would require you all to decide tonight the meeting it'll require a motion from the council but you can go up on the rate from what we've recommended tonight. If you wanted to go $2 on the water and that would increase it. Um or if you want to go $3, you can make that decision tonight and we can advertise it. It'll change the numbers in the budget and we'll update those, but um but you can go higher.

The number that I that any of us I think may potentially propose greatly changes if I'm unable to change the rate later on in the year. So that that really affects my decision. So if we have to decide tonight, I'd really like an answer before I decide that amount. The advertised amount. No. whether we can change the water. Um like can we or the trash or

well the trash I think is is fine to change but the water is definitely a concern of mine for the same reasons that that guy has mentioned. Um you know we may be facing some very serious infrastructure issues in the very near future and if that's something that we're not going to be able to adjust later on down you know in a few months or the rest of this this fiscal year. I just want to know. Okay. One way or the other. Um can is Mike available? Okay. Thank you. We'll see if we can get an answer from Mike. Um I just don't want to give a bad answer. It's my understanding that yes, those adjustments can be made. I I appreciate that, but I want to make sure that I'm correct on that.

We do it once and we don't revisit it unless there's an emergency like with electric or something along that line. We may have an emergency. So, I want to know what my options are. So, and I agree the that water rate is something I have in my notes, but I guess and I know we're not going to be able to move mountains in one budget, but I'll be honest, the one area that I'm concerned about is natural disaster because right now with us not having any funds laid aside, what we're finding is we're not able to get grants to help us with that because we don't have our part that we'd have to uh cooperatively add. So,

I don't know how council feels, but I feel like if history is any indicator of the future, I feel like we have to address that in some way. It it can't be a flat line item. I feel like we need some money in there to address it. Yes, I agree. Uh

so, where what what do you propose? How do we get that? What's the most impactful, least intrusive way? And and just just to add on, the only thing I will add is with this five five cent increase, you know, that'll be 23 cent in three years. And I mean, we do have to account for that too. That's unfortunately it doesn't move the needle like we'd like it to, but that does affect people's living. But I mean, I agree. I mean, we all know that capital improvements are a must. And you know, unfortunately, when you have a massive thing to overcome like we are, it it's been challenging. But h how do we I mean, I think we we're taking baby steps here. I just don't want to push the needle too far one way other I mean we went up 13 cent last year which was I mean that

was big. Um but I understand everyone's point too to look at that. Um I have an idea that could be a possibility and I asked about this because I had asked about the water rate as well. Todd and I had talked about that pretty extensively if we go up an additional dollar per thousand gallons which is how the rate is based and then that results in our minimum charge of you know $28 for 4,000 gallons or so. Um it generates did you say 200 around 200,000 190 something like that

that's around 400,000 okay so it's even bigger so if we do this we can put that money just like we transfer it now if we decided to have additional charges on water that get us closer toward that uh minimum uh requirement for grants that money could be used for disasters for other things as needed in addition to infrastructure investment and things along that line. So, that could be a compromise because I don't disagree. I would hate to see us continue to go up on the real estate tax quickly. I think it's something that in a measured way has to happen over really the next five or 10 years as we build on that because clearly that has to be sustainable. But that might be an option for us because we can generate several hundred,000 with just a single uh dollar that translates to your $4 bill each month um for the water and it gets us closer to the point that's brought up about not meeting the grants but it provides us a little cushion for other things natural disasters and things that line. Does that make sense for everybody?

It does. I I think I just want to address something that Seth was mentioning. So while I also we you know we raise taxes it impacts us too. So no one likes to raise taxes because my bill gets larger too. So who does that to themselves? Um but the reality is you know when we were advised several years that we could hold steady and so we did not raise rates as you see the other people who are actually addressing inflation around us were. So our citizens went several years with really you know a decent deal in comparison to the other localities around us because we were not raising truly at in hindsight at the rate that we needed to have raised all along. So our our folks have had a bit of a reprieve but we see what now you know now we know what we need to do and by not acting then you know then that lays on our shoulders because we may not like it but as Dr. Harbarker says math just maths and so we can't get away from that. The truth of the matter is we have to be able to provide the the the resources and the services that our citizens want us to provide and we can't simply do that with well-wishes. So I I agree with you, but the other way to look at it is we're still going to be the lowest in nearly every single category even with what we're proposing, which I think is is great. I'm concerned that it may not be enough to move the needle where we really need it to be for for solveny. Um, but I do think we've also enjoyed a a certain amount of reprieve that other localities haven't. It's just not sustainable to continue to do this and we know that. We see where we're at and it is a matter of revenue. We can clearly see by where we are in comparison to others. It's an it's an issue of of revenue.

Yeah. And I mean, but it is we've made up a lot of that in three years. I mean, these are big big increases, too. So, I do think that it's not that we haven't addressed it. It's just addressing all so quickly does put a burden on on households that we do have to mitigate. I mean, and I wish we had time to to take another 10 years to do that. But we see that we don't. So, I agree with you. I'm not disagreeing with you. I'm just the realist in me is is also at the end of the day, you we see what we're not covering. We're not even covering for a flood or a natural disaster, which is troublesome. So, we are we have a balanced budget, but we all know from sitting here that we're still behind in some pretty imperative areas.

We are. Yeah. And it's going to take a while when people paying $4 at the gas pump and at groceries and everything else. I mean, I'm mindful of that. It's it's it's hard and I just want to be measured and um yeah, I mean, did we get an answer? We do. Uh I So, I do feel better. Mike confirmed my my instinct. Yes, you can make changes to the water and sewer. those accounts you can make changes throughout the year. What it would require is a public hearing and most likely a well we'd have to do a budget amendment so to change the budget. So yes for calling boy Mike

I do want to make one more point about um I hate to use the word mismanaged but clearly things were not done in the best way pri in prior years. So the changes that we've made, the rate changes that we made, while of course I don't want to make any any more big rate changes, I feel like the changes we have made, we haven't been able to see the full benefit because we have are just now uncovering a whole lot of things that maybe were not done the best way. So, I think we're going to see more um benefit from the changes that we've made, from the taxes increases that we've made, but I do still think that, you know, sometimes Jesse calls it a, you know, a deal. Like, it's it's a very um we've got very nice rates compared to everybody else. Um and it and it isn't sustainable, but I do feel like we're going to be able to see more of the benefits of of what we've done the past couple of years. So, I see both sides and I'm very thankful we can have a little bit more flexibility with the water. Thank you guys for checking on that.

So, back to our point because we will need a motion on this. What would we like to advertise that water rate at? Do we want to keep it at the 2832 for now or would we rather say let's let's go one more step and we could say that would be um the 3232 which would be $2 on the base rate. that would translate into essentially another $4 dollar a month. What do you all want to do?

Well, I still think we need to talk seriously about getting it up to 47. So, I think but we don't have to put that as the in the uh announcement, right? Uh it you do um the rate not to exceed we can revisit it later. So like if in three months if we want to come back to it, we can revisit it in three months. I mean, you know, either what what's the maximum rate that somebody wants to propose?

And I know we had talked about this, too. I'm just curious because you did a very good um comparison on for the real estate tax, what it would look like on the household. What would a dollar rate generally um affect a a household? If you could get that as we go through this, I know you're not going to have that tonight, but just something to think through. we had kind of talked about, but we'll have it for Monday, right? We we do know a dollar will be an additional $4 minimum. If you use more than 4,000 gallons, it'll be proportional to that, and most people don't, right? Yeah. So, that 4,000gallon minimum covers the vast majority. We've looked at that in previous years, but I agree. It's nice to know for what a 10,000galon user is or something along that line. Sure.

And there's not many of those. I don't I don't believe we calculated was what, four or five maybe last year. Well, for the advertisement again, you know, it's my opinion to make it whatever it has to be for the grants. Is it 4750? Is it $48? Whatever it needs to be, that's what I'd like to do. And then when we have our work session and we discuss it, there we can decide to bring it back to And just for clarification, it's a $400,000 per dollar on that. Well, that would get you some reserves. Exactly. And we then we can apply for grants, too.

But I I want to caution everybody uh with moving too fast um on that because that's significant every month. That that's uh one of the the charges that people would see on the bottom line of their utility bill every month. And so that would be a a $20 increase per month. And and I'm not trying to propose that we necessarily do it, but I just want it to be there for our discussion. That's where it's capped at, I guess, is what you're what you're saying. We can go from there. We want to have as the advertised rate. I agree with that. Do we have a motion for that? Well, let's do this. Let's talk about all three rates. Any change to electric beyond the 5% overall that has been proposed? No. Any change to the five cents on the real estate tax that's been proposed?

No. So, the only change would be for water to be at 4779 advertised. Now again, I can't stress enough to the media and to those watching, we're not saying the water rate is going to $47.79. We're just saying that provides us the flexibility to have a discussion between 24 uh dollars where we are now. We're at 2432 and 4779. So don't panic that it's already set at 4779 and we can have that further discussion on that. And even at that rate, we're that we're basing it on everyone's last year's rates and we're still in the very ballpark. Yeah.

Well, we're low. We're still one of the lowest rates compared to what their rates were last year. So, we got to keep that in mind, too. Correct. So, do we have a motion for 5 cents real estate tax to be advertised, 5% on the electric rate to be advertised, uh, and 4779 on the water at 4,000 gallons to be advertised? So, move. We have a motion. Do we have a second? Second.

Motion and a second. Any discussion? All in favor, please respond by saying I. I. Any opposed? Okay. And again, those are the advertised rates. it does not mean that that's what those rates will be. I don't want there to be any confusion on that because that's a big jump and we'll we'll have that discussion. I don't disagree. Ultimately, that's where we need to be because we're losing potentially millions of dollars in outside revenue and you can't do that and function as a modern locality. It's just how you get there and and how quickly. And and I don't disagree too either about the natural disaster piece. We need a million dollars or so sitting there just in case we had a serious emergency. But I will point out a couple of things on this budget and Todd and Trish and everybody, thank you for the hard work to get us here. We could have been looking at um another, you know, 10 cents increase on the real estate tax. Uh we could be talking a minimum of the 4779 on water. We're not there. And and that's a positive. The one thing that I really want to point out to everybody, this is the first budget that we have had in my time on council that is actually balanced with the revenues generated. What we didn't know during some of those budgets was that even though revenue projections were there, when you looked at Todd's charts, they were so far off the charts, we likely never would have made those. And so there were significant transfer from fund balances that we were not anticipating when we did that. This is a huge step for the city because ultimately to get to sustainable, it's got to be the revenue generated in a year's time is what you're spending and saving just like for anybody's budget. So kudos on this. And I have to also say thank you to everybody that worked on the budget last year because that was a huge step forward to get us here when uh Mr. Meadows, Craig Meadows as our interim manager uncovered a lot of those

structural deficiencies that were un um unknown at that time and we made a lot of changes then it actually made it harder to get to balance because we pulled everything back and so what we've done in the last two years has just been tremendous to get us on track. Uh I also wanted to point out one other thing. You know, one of the knocks that we've had with the city uh before I ran for office, I know Jesse, when when you came when you ran and for all the other council members was that we had pushed so many investments down the road, not just the last two or three years, but just like Todd points out, for 25 years at least, there are significant capital investments that we haven't been able to really target. We hit some things over the last eight years. There were a number of roads and sidewalks and water line and sewer line improvements and things like that. So, we tackled some of those things as we thought we could and did the best we could to address some of that infrastructure investment. But I think that's a real story that has been such a challenge that things that could have happened over decades kind of got pushed and we're experiencing some of the end of life of those over the next five or 10 years as we go. It's not that people recently turned a blind eye. We've had to manage from crisis for a few years because we weren't where we needed to be. Uh but before that, we managed from convenience in a lot of ways because it was just easier not to deal with those things with higher rates while where we are now with the rates and everything along that line. I really do appreciate the honest discussion about that because I think the most important thing for us moving forward as a community is to not say absolutely we can be 40% cheaper than everybody else in the New River Valley or absolutely we can do it for a rate that is half of what everybody else charges. We have to be upfront with everybody to say this is what it costs if we're going to invest in

infrastructure, if we're going to invest in people, if we're going to invest in our community and build a sustainable Radford for the next 20, 40, 60, 80, 100 years. And I think that's what we've done. So, thank you, Todd. Thank you to Trish and the whole staff. Thank you to every single city employee because I know all of you have worked so hard that zerobased budgeting is huge because you go back through and you look what do we absolutely have to spend and why are we spending it and we're thankful there. It's an it's it makes me feel better that we've made this progress. We're not out of the woods. We're not where we want to be fully, but we've made such an investment on it over the last 24 months or so, last 18 months that we've moved a lot further down the road. I don't think anybody's ever happy when things increase, whether it's water rates, electric rates, uh tax rates, but you can see tonight we've questioned every expense for the most part. And we'll look through this budget and there'll be some questions about expenses. We're about as cheap as we can possibly be in most of the areas. There's very little area where we could cut back more. And I'm pleased that we are finally investing in our employees after three years of not being able to do what we've needed to do. uh because that's an important part of our team. I if we don't take care of our folks, they how can they take care of us? I'm very very happy and so thankful for our insurance folks to have gotten a good plan for the city so that it's not such a massive increase to the employees or to the city budget and and we're really fortunate on that. But to most folks out there in Radford, you know, this has been a extremely challenging time and I think everybody has worked hard. I know all members of council have worked a lot of different ideas, five different directions. Everybody has said, "What about this, what about that? How can we make this work?" Whether it's an additional revenue, additional cut, an additional concept. And all of our employees have stepped up by saying, "This is where I think we could do things differently. This is what we can improve." That's huge, and we're so

appreciative of that. So, it's been a big team effort. Um, we do have one more new piece of business. I don't think we have anything else we have to do budget-wise for tonight. Uh, but we do have new business for the regular audit contract. Correct. No, it's on the agenda. Is it on the agenda? Okay. Well, it was on my agenda. So, I just wanted to make sure. Uh, well, then we're done. Um, we do have a meeting scheduled for Monday. We don't have a time listed for that. What time are we meeting on Monday? 6 the 6. Is it 6 PM? 6 p.m. That was for discussion. Yeah, for discussion tonight. But I think six o'clock was what we agreed upon for all the other uh special meetings budget.

I just wanted to confirm six o'clock Monday. 6 o'clock Monday. It's a tenative meeting. We definitely want to have it. Correct. Yes. Okay. So, we will then adjourn for tonight and we will meet again at 6 PM on Monday. Unless anybody has anything else, we'll take a motion to adjurnn. So, moved. Do we have a second? Second. All in favor say goodbye. Goodbye.