City Council - workshop

Stella right there. Stella behind you. Stella right there.

Good afternoon. Mr. City Manager, are we ready to proceed? Yes, sir. All right. So a couple of questions before we get started. Are we going to be audit code in here? Are we going to be?

That's right, Mr. Mayor.

I'm just wondering. I just need to know whether I need to go get iced tea or hot chocolate.

You'll probably need hot chocolate now and iced tea in about an hour or so. The room's going to be full, so it'll warm up. But we'll also be adjusting it as we go along.

I just need to know. I just need to be prepared. All right, ladies and gentlemen, we'll go ahead and begin. Thank you all so much. We call this workshop of the Savannah City Council to order. Alderman Leggett, if you would, please lead us in the word of prayer.

Let's pray. Heavenly and gracious Father, we come to you today. Lord, we ask you, Father, to be the head of protection around each and every one of us. Most of all, Father, around each and every person in this room, I ask you, Father, to Help us as we navigate the work of the city. But right now, Father, Father, we need you to be with those, Father, that are less fortunate than us. Most of all, God, I just ask you, Father, to be with the minds and the spirits of the police officers that had to do hard work this week. Be with the families, Father, as they help them to navigate throughout this fall. In Jesus' name we pray, amen. Amen.

Thank you very much, and I want to ask your prayers for our friends in Venezuela. It is looking like an extreme devastation event, and they're expecting aftershocks as well. So today, we're starting a little bit early because we have a lot to dive into. We have a presentation for Visit Savannah, and then we're going to look at our budget and financial update, as we do every single year. opportunity to see how we're doing and city manager and team to report to us about how we're managing. We know we're getting into our village rate season and city manager, I was talking a little while ago about municipalities around the state and other entities. facing budget shortfalls. So we look forward to hearing from the city manager and team about how Team Savannah is doing. So without further ado, Mr. Manager, we want to present Visit Savannah. MR. Yes, sir.

Thank you, Mayor. We do have a guest with us today, Visit Savannah, who, as a part of the Chamber of Commerce, is the city's contracted destination marketing organization. And they use hotel-motel tax dollars to market Savannah as a visitor destination. And they're going to present to us on their annual strategies, who they are, what they do and why they do it, and for council to be able to ask Visit Savannah questions about our destination marketing strategy and what that means for the city and for the visitation economy, which is a big pillar of our economy, obviously, in the city of Savannah. And after that, We'll get into three really important financial discussions. One is our mid-year financial update, where we are with expenses and revenues and how that's looking. We'll hear from our independent auditor, Malden and Jenkins, about our annual comprehensive financial audit report, as well as our single audit report, which is for our federal grant programs. And then we will discuss our millage rate that we need to set by the end of the summer. And we'll start public hearings on that at the next council meeting July 9th. So we want to give council some information on that. So without further ado, let's welcome Joe Marinelli and his team from Visit Savannah for their presentation. Thank you, Joe.

Good morning.

Good morning. Good.

Have some fun today. First of all, thank you very much, Mr. Mayor. Thank you, Mr. City Manager and City Council for the opportunity to be here with you today. It's been a while. When Jay called a couple of weeks ago to invite me to come in and make this presentation, he said, you know, Joe, I don't think you've done this since I've been in Savannah. And in fact, that's the case. So I look forward to giving you an update. I remember doing this once for Mayor Otis Johnson during his term. I did it once for Mayor Edna Jackson during her term, and Mr. Mayor, it's nice to be here with you today, so thank you for that. On behalf of our Board of Directors and our staff, and I'll talk about both of those in a minute, we appreciate all of you being here today and hearing our presentation. I want to acknowledge a number of folks that are here with me today. So if you'll bear with me, Bert Brantley is the CEO of our Chamber of Commerce. Sitting next to him is Kelvin Moore. He's a Visit Savannah board member. And of course, everybody knows Kelvin manages the Savannah Convention Center. Next to Kelvin is Supriya Christopher. She's our Director of Public Relations for Visit Savannah. Of course, the rock star in the room is Erica Backus. If I have to introduce Erica to anybody in this room, Erica serves in a very important capacity with the Chamber and Visit Savannah, helping us manage our local public relations. Angela Westerfield is going to be my wing person today. She's our Chief Marketing Officer, and Carrie Ferrara over to her right is our current board chair. So thank you all for being here. So we have a lot to talk about with you today, so let's get into it. As Jay said, with any good presentation, I'm gonna tell you who we are, what we do, how we do it, and why it matters. So let's talk about who we are. For many years, organizations like ours were called tourism bureaus, convention bureaus, CVBs. When I came to this role 20 years ago, we were known as the CVB, although most people didn't know what CVB stood for. So we went through an exercise to change the name from the Savannah Area Convention and Visitors Bureau to visit savannah because in fact that's what our job is is to get folks to visit savannah we are structured and governed by georgia state laws and all of that is under the guidance of dca the department of community affairs so 50 years ago when our organization was founded actually FEBRUARY OF 1976, 50 YEARS AGO, THE ORGANIZATION WAS STRUCTURED UNDER GEORGIA STATE LAW, AND WE FALL UNDER THAT STRUCTURE TODAY. SO LET'S TALK ABOUT WHO WE ARE. I MENTIONED BERT BRANTLEY. OUR UMBRELLA ORGANIZATION, AS JAY SAID, IS THE SAVANNAH AREA CHAMBER OF COMMERCE. BELOW THE SAVANNAH CHAMBER IS OUR ORGANIZATION, VISIT SAVANNAH, AND THEN FALLING UNDER Our responsibilities at Visit Savannah, we also do the tourism marketing for Tybee Island. You're all familiar with the Savannah Sports Council. The Savannah Sports Council has produced the bridge run and the hockey classic and the women's half marathon over the many years. And then we have five visitor centers located all around town. So that gives you an idea of sort of the structure. Here is our organization chart. There's a lot of names and titles here, and it's a little bit hard for you to read on the screen, but suffice it to say, we're an organization that is built on A VERY STRONG MARKETING EFFORT AS WELL AS A VERY STRONG SALES EFFORT. WE HAVE 42 FULL TIME EMPLOYEES. WE HAVE 15 OR 16 PART TIME EMPLOYEES. ALL OF OUR PART TIME EMPLOYEES WORK AT OUR VISITOR CENTERS. WE HAVE VISITOR CENTERS LOCATED AROUND THE CITY. ONE ON Martin Luther King Boulevard, one here just below us on River Street, another at City Market, another on Tybee, and the Georgia Welcome Center out on I-95. So when I look at this screen, the left side, the purple boxes, is our marketing team. And 20 years ago, when I came to this role, marketing a destination really kind of boiled down to, do we do a full page ad or a half page ad in magazines? Wasn't much more complicated than that. Today, marketing a destination like ours is a true art form and I'll dig into that in a few minutes. On the right side of the screen is our sales team. And again, 20 years ago, our sales team was basically chasing state, state associations, Georgia Municipal Association, the County Commissioners Association, Georgia Police Chiefs Association. Today, with the expanded convention center and the growing hotel product, we're chasing lots of national conventions, and we'll talk about that in a few minutes. This slide is our current Board of Directors. Carrie is our Board Chair. You'll recognize all of the names on this list. It's a real diverse group, hoteliers, attractions, restaurants, and a number of our partners that are key partners for us. Our friend Monsello from the Black Chambers on our board, Julie Musselman from the Waterfront, Darrell Naylor Johnson from SCAD, Greg Kelly at the airport, Monty Jones from End Market, Nora from the Coastal Heritage Society, all representatives of different tourism entities around the community. Of course, our two city representatives are Alderman Miller-Blakely and the city manager, as well as Chairman Ellis from Chatham County. So when we dig into how Visit Savannah is funded, this council voted in September of 2023 to raise the hotel motel tax or the bed tax from 6% to 8%. And you can see how that that allotment is broken down. So the city of Savannah essentially gets just over 50% of that going to the city's general fund and the tourism product development fund. Visit Savannah gets the next size chunk to do the sales and marketing efforts that we do. And then a portion of it still goes to the Savannah Convention Center for the bonds that were used to build that building. So let's take a second and talk a little bit about who we are and who we're not. As we've said a couple of times, Visit Savannah is the largest business unit under the Chamber of Commerce. We have our visitor centers, our sports council, and Visit Tybee. But a lot of people get confused about what we do, how we do it, and how do we connect with other organizations. We are not the Tourism Leadership Council. We are not Savannah's Waterfront. We are not the DBA and the other organizations. Now the reality of it is we work and intertwine with these folks every single day as we make the tourism machine and the visitor economy happen in this community. But it's important for you to understand that Visit Savannah is a sales and marketing organization driven by promoting this destination, Savannah, Chatham County, Tybee Island, and then we work with the other organizations that you see listed here. Okay, I wanna make sure that we allow plenty of time for Q&A at the end, but let's dig a little bit into what we do and how we do it. So here's our mission statement, and I'm not gonna read every slide to you, but I'm gonna read a couple of them, and I'm gonna take a moment to read this one to you. Visit Savannah is the official destination marketing organization for Savannah and Chatham County. We inspire the world to discover our unique culture, heritage, and experiences, elevating the overall regional economy, enriching our community, and driving a prosperous future. When I got here 20 years ago, we made the decision that every five years, we would take a look at our mission statement, refresh it accordingly based on what's going on in the world today, the economy, what's happening in the community. The last time we refreshed this mission statement was about a year ago under Kerry's leadership. The time before that was about five years ago when our friend Vaunette Goodwalker was our chair at the time. A couple of years ago, this council asked Jay to renegotiate the agreement between Visit Savannah and the City of Savannah. And in doing so, asked for us to ensure that we had language in our business plan and our agreement that spoke to DEI initiatives. We worked hard to do that under the leadership of Erica Backus and working with the Chamber side, we created that language for our agreement. Frankly, today I think the term social inclusion is generally what folks use versus DEI, but we are extremely mindful of our inclusion in everything we do. FROM OUR HIRING PRACTICES, WHICH WE DO IN COLLABORATION WITH THE CHAMBER, OUR BOARD DEVELOPMENT, YOU JUST SAW THAT LIST AND WHAT THAT LOOKS LIKE, AND MOST IMPORTANTLY, OUR MARKETING. WHETHER WE'RE MARKETING TO OUR REGIONAL CUSTOMERS, OUR NATIONAL CUSTOMERS, OR OUR INTERNATIONAL CUSTOMERS, WE WANT EVERYBODY TO UNDERSTAND THAT SAVANNAH AND CHATHAM COUNTY IS A WELCOMING DESTINATION TO ALL. So when we think about social inclusion, we think about people with disabilities. We think about different races. We think about people from the LGBTQ community and so forth. You know, the strength of our organization is clearly our people. And you just saw a slide a couple of minutes ago that paint the picture of how our organization is built. But beyond the strength of the organization and the people is a very solid business plan. And our business plan is built on these five pillars. And again, I'm going to touch on these very quickly, but accelerating growth in the markets that we market to in terms of visitation, delivering year-round marketing campaign that is driving business to our community throughout the year, making smart decisions and spending our money wisely based on data-driven information and smart analytics, working hard with our community members and partners in developing our relationships and driving an exceptional frontline service standard throughout the community. So each year we produce an annual business plan. And our business plan is not a five-year strategic plan like a lot of organizations. Our business plan is built as a one-year business plan that's designed to set up the next two years. So what are we doing in 2026 to set up 27 and 28? That's important when you think about the recent expansion of the convention center. What was the work that we were doing in 2024 and 25 to set up bringing bigger and larger conventions to town. Same applies with the new Signia Hotel going on and so forth. So every year we produce a business plan. At the beginning of the year, I roll that business plan out to our board of directors and I send it to the city manager and the county manager and make sure that they are informed of our program of work and our plan of how we will spend those bed tax dollars for the year ahead. At the middle part of the year, generally July, August, we produce a mid-year report. Here's an update on, this is what we told you we were gonna do this year. Here's where we are so far year to date and whatever successes we're having. And then at the end of the year, we produce a year-end report of our results. We told you we were going to do this. Either we accomplished those objectives and what was the result, If we didn't accomplish an objective, why we didn't, and so forth. I'll tell you, I've been very fortunate in my career to sit on a lot of boards of directors, and there have not been many organizations, and especially nonprofits, that I've been a part of in the past that has been so thorough in terms of telling you what our plans are and keeping you up to date along the way. Okay, now let's dig into sort of how we do what we do. So as it relates to the dollars that come to Visit Savannah, you can see here with this pie chart how those dollars are broken up in terms of what we use that money for. OVER 90% OF OUR BUDGET IS GOING TO SALES, PROMOTIONS, MARKETING, AND THE PERSONNEL TO DELIVER THOSE RESULTS. AND I'M VERY, VERY PROUD OF THAT. IN FACT, WHAT THIS COUNCIL SHOULD RECOGNIZE WITH THIS SLIDE IS THE MONEY THAT YOU ENTRUST US WITH IS BEING USED APPROPRIATELY WITH OUR SALES AND MARKETING EFFORTS. We'll keep going. So when we are marketing and selling this destination, we want what every city in the country wants, that ideal visitor. So what's the definition of an ideal visitor? Well, that's a visitor that's going to stay longer, spend more, come back again in the future, and hopefully tell their friends and family, maybe even their enemies about us, doesn't matter. So as we do what we do, attracting leisure travelers, meetings and conventions, international visitors, Sports tourism is rising every single day with the addition of the expanded convention center, the new end market arena, new facilities that Chatham County is developing, the new pavilion in Port Wentworth. These are all tools that will help us to attract larger events and sports tourism type events. So throughout our efforts, everything we're doing is geared towards driving new business to our city. And when we talk about new business to our city, we have to understand that that business is not just in the historic district. We're driving business throughout the community and filling hotels and restaurant seats and so forth around the community. This slide has a lot of information in it. I'm just going to point out a couple of things. You know, when I first came here, when I interviewed for this job in fall of 2020, I'm sorry, fall of 2006, I asked the question, tell me what the tourism season looks like in Savannah. And in 2006, the answer sounded something like this. Well, nothing really happens here until St. Patrick's Day. And then we started getting busy till Memorial Day. You know, it's really hot here in the summertime. Nobody comes in the summer. We get busy mid-September through Halloween and then it kind of falls off. Today, the statistic on the left shows you that the distribution of our visitation is almost equal throughout the year with 24, 25, 26% of the visitors coming in each of the four quarters in the year. That's especially important when we think about jobs. Again, 20 years ago, employees in the hospitality industry would get laid off for the summer months because we just didn't have the business at that time of the year. 20 years ago, employees in the hospitality industry would get laid off before Christmas time because we didn't have the business in November and December. Today, we keep those folks working all year long. Up in the right hand corner, you see another statistic. Approximately 13 million visitors visited our community in 2025. And in turn, they generated over $4 billion in visitor spending. An average day tripper spends about $100 when they're here. An average overnight traveler spends almost $300 while they're in the city. Where do our visitors come from? Well, it's pretty easy to guess, right? We really concentrate on two types of visitors. The drive market visitors, those are folks that are generally driving in from around Georgia, Florida, and the Carolinas. A lot of our marketing goes to those drive markets, if you will. But we're also concentrating our efforts on nonstop cities, cities that fly nonstop to Savannah, cities like New York and Boston and Washington. We have all of the major airlines that we need to service a destination like this. We have the three big legacy carriers, Delta, American, and United. We have that mid-tier carrier, Southwest, and JetBlue, and Allegiant. And then the budget carriers like Breeze and Sun Country and Avello. These nine airlines are really servicing visitors to Savannah through nonstop service, which is critical. To be able to tell somebody in my hometown of Cleveland, Ohio, you can be in Savannah, Georgia, enjoying a margarita, in about an hour and 10 minute flight is a big, big deal. So that's what we do and how we do it. The demographics of our visitor generally averages around 50-50 male, female. Sometimes that fluctuates a little bit, but not a whole bunch. And then in terms of sort of the demographics of our visitor, Another statistic that I'm very, very proud of, and I can't read that number, but when I first came to town 20 years ago, the estimated percentage of African American visitors to Savannah generally ranged between 10 and 12%. Today, that number is more than double that, and we see that on the streets every day. Next slide. So let's dig into how we do what we do. Earlier I said that marketing is truly an art form today. And the next couple of slides will give you a sense of how we do that. Whether it's marketing to leisure visitors, as you see on the left, different ways we do that through social media, through digital marketing. or whether we're talking to meeting planners and sports event planners. So imagine this. You're a soccer mom in Dayton, Ohio, and you want to get away for the weekend. Maybe it's with your husband. Maybe it's with your family. Maybe it's a girls' getaway weekend. And you go online and you start looking at destinations like Charleston or New Orleans or Nashville. We have ways that we can identify those prospective visitors. And when we see them looking at other cities, we jump on them and we suffocate them with Savannah ads. The same thing with meeting planners. So everybody in this room has been on Amazon or online shopping for a new pair of shoes or a new tennis racket or something like that. And then all of a sudden the next couple of days you're inundated in your social media with shoe ads and tennis racket ads and so forth. It's a little creepy. We do that every day. We are those creepsters that are chasing folks in that way. Next slide. Again, 20 years ago, print advertising was the workhorse for how we did everything we do. Today, really, we spend more money on digital advertising than print advertising. But we're still very, very aggressive. Print advertising is a very important layer of how we do what we do. We're still ever-present in terms of leisure travelers with high-profile publications like Condé Nast, Travel and Leisure, Southern Living. And then with meeting and event planner magazines like meetings and conventions magazine, black meetings and tourism, special events and sports event magazine. So print advertising is as important as ever. And then next, public relations. Supriya leads up our public relations effort, and she and her team are crisscrossing the country, talking with editors and chiefs, travel editors, lifestyle editors, culinary editors, about everything that's going on in our market. The big picture on the left is when we had Good Morning America in last summer showcasing the Girl Scouts and all that they were doing. But public relations, again, is a very big part of what we do. And then we've all heard the term content is king and content is what drives us. And we are so very, very fortunate to live in a destination that has plenty of content in terms of telling our story. Storytelling is the backbone of everything we do in how we market Savannah and Chatham County. Whether we're talking about the activities related to America's 250th, talking about Juneteenth, or just showcasing the beautiful azaleas in the springtime. That's the kind of content that we're collecting every day and pumping out to the world. And partnerships are key to our experiential marketing. For the last couple of years, in fact, for the last five and a half years, we've taken the show on the road. A number of years, the top left-hand corner there, we took the Savannah story to major markets like New York City and Chicago and Boston. In the bottom right-hand corner, you'll see a mobile tour. In the last two years, we've traveled to 18 different cities, taking the Savannah experience to fairs and festivals all around the country in places like Philadelphia and Cleveland and Miami and Tampa. Again, going to cities that offer nonstop flight service to Savannah. The top right hand picture is a partnership that we did with Saks Fifth Avenue a couple of years ago. And one of the crowning pieces of that partnership was having Savannah decorated windows at the flagship store of Saks Fifth Avenue in Midtown Manhattan was a terrific, terrific promotion for us. us. And then working together is so important. You know, whether it's our tourism partners, whether it's chamber members, or bringing along our elected officials with us. Chairman Ellis has traveled with us on a couple of occasions. The mayor's traveled with us numerous times. Jay and Michael Kegler at the county have all been with us, and we appreciate that. When we're out there showcasing our destination, people love meeting with the leadership of our community and talking with them. And by the way, if you've ever seen Mayor Johnson sell and promote Savannah in his hometown, New York City, he's quite a celebrity when he does that. Okay, as we wrap up, let's talk about why it matters. So far, one of the things that I preach in our organization is, We can all understand the what, but it's the why that matters the most. And everything I've shared with you so far is the what. Now I'm going to tell you why it matters. So, The tourism and visitor economy drives $4.1 billion in spending. And when I say in our community, it's important to point out this is in our community. This is throughout Savannah and Chatham County. It's not just the historic district. It's not just for the hotels. And it's not just for tourism. When visitors come to our city, they shop in our grocery stores and in our restaurants. in our drug stores. They get gas at our local gas stations. They utilize our dry cleaners and our florists and our hairdressers when they come in. They are spending money throughout the city and not just in tourism products like restaurants and hotels. Thank you, Marty Johnson. That was just about running out of gas. Those 13 million visitors spending $4 billion in our community support over 27,000 jobs. That number comes to us from our friend, Professor Mike Thoma at Georgia Southern. And at the end of the day, let's face it, it's all about jobs. As I shared with you a few minutes ago, 20 years ago, we had very distinct peaks and valleys in our tourism season. Today, we keep people working all year long, and that's what it's all about. And at the end of the day, what you all care about the most is what are the taxes that are being generated. And in 2025, over $500 million in state and local taxes were generated through the $4.1 billion spent in our community. But let's drill that down one more layer, and that's this number. And I'm just gonna let you absorb this number for a moment. Every household in Chatham County would pay an additional almost $4,200 to replace the taxes that visitors generate in our community. That's a big deal. That's your constituency. Those are the people that are voting for you. So if you take anything away from this presentation today, Please understand that tourism does drive economic prosperity in many different ways for you, for me, and for all of us. So as I get ready to wrap up, let's talk about what's next. And what's next is a city and a community that continues to grow. Our population gets larger, and as a result of that, our visitor experience continues to expand. We have more hotel rooms, coming into the market. Not quite as many in the historic district as in the past, but a lot of growth around the community. Many new restaurant offerings throughout the area. Many new attractions. I think about the Starland District, Plant Riverside, Eastern Wharf, even the new marina across on Hutchinson Island. I think about the new Pirates Museum at City Market, the expansion happening at the Mighty Eighth Museum, all of the great work that the Coastal Heritage Society is doing over at their campus. And of course, I can't miss opportunities like the End Market Arena and what that has done for our community and the expansion of the Savannah Convention Center and how that's all helping us grow. So, our latest research tells us that 80% of the visitors to our community are satisfied with their visit. But frankly, we're not satisfied with 80%. That's just not strong enough. We need that number to be higher. We all have to strive for a better visitor experience whenever they come to town, because the same experiences that visitors get are the same experience that our residents get. And there's a lot of things on this list that we, the tourism and hospitality industry, have to focus on. But I called out the items in the red box because that's your responsibility. Safety, security, and cleanliness. These two items didn't even rank five years ago on this list. And today they are ever present in terms of what visitors are looking for when they visit a city. Looking forward and talking about the why expanding economic vitality is a big part of our business, supporting local area businesses, large and small, showcasing the historic landmark district, which is the golden goose here in our community, but also recognizing that areas around the community and Tybee Island are important. Working with partners like CETA and RISE in terms of workforce development and leveraging Savannah's world-class reputation as a visitor destination. And as I bring my presentation to a close, I have to point to important items to this group. Think about the tourism management plan that was developed in 2018. Think about the city's current strategic plan with Savannah GPS, and most recently the mayor's letter to TAC. These are areas that our organization are tapped into in multiple different ways. In terms of a collaborative effort through the Chamber, through TLC, through the Tourism Advisory Council, in terms of how we manage tourism. Again, using data-driven information to help us drive our spending. and then working collaboratively in the community in terms of the advocacy for our city and our destination. And then looking at what the priorities are that you all have outlined in those tools. Historic preservation is at the forefront of everything we do, working with the city, working with the Historic Savannah Foundation and the Chamber and so forth. As it relates to safety, supporting the efforts that everybody is working on in this city as it relates to homelessness and so forth. Being sensitive to balance as we work collaboratively through the Tourism Advisory Council in terms of balancing the visitor experience with the resident experience. And then developing a workforce that not only builds jobs, but also builds careers for the folks in our community. So to close, I would say that we recognize that growth all starts with a visit, and the visit begins with us. And if we build a place where people want to visit, we'll have a place that people want to live. And if we have a place that people want to live, we'll have a place that people want to work. And if we have a place that people want to work, we'll have a place that business will want to be a part of. And if we have a place that people want to be a part of, businesses want to be a part of, we'll also have a place that people want to visit. So that's the cycle of life in our world, and we focus on that every day. And finally, our team has developed a four-part video series to talk about what the visitor economy does for our community. I'm just gonna show you one very quick recap video as I wrap up.

In Savannah, the visitor economy helps local life thrive.

We wouldn't be able to do the level of programming that we have today for our local residents if we didn't have the support of the visitor economy.

Tourism is so huge in Savannah, probably 25,000 jobs related to tourism.

When someone purchases a ticket for a show, a cultural event, a festival, you are supporting the Savannah community.

Discover the real stories behind the impact at VisitSavannah.com slash Savannah's Visitor Economy.

Thank you for the opportunity to be here today.

Thank you. Thank you, Joe. Thank you, ladies and gentlemen. So, Joe, thank you for the presentation and thank you for the work. I think I've had the opportunity to be directly involved and adjacent to the work that you all do and continually impressed by it. I have a couple of questions. So go back, because I think the... Go back a little bit. Back. Yeah, go back to your life cycle, because ours is a little different. Go one more. Forward. Hang on.

There you go.

See, for us, we build a place where people want to live. and then a place they want to work. We start with the lived experience. Because if it's a place people want to live, people want to visit. People want to visit, people want to build business here. But I mean, I get the point. We couldn't agree with you more. OK. Well, anybody have questions, and then I'll come? Go ahead.

Mr. Mayor, Joe, Mr. Marinelli, thank you so much for your presentation. Always a pleasure. And you guys are fantastic and phenomenal at what you do. Thank you. And the questions that I have related to it really aren't. It's in the presentation a little bit, but an area where I'm just genuinely confused and want to understand better. And I really want to understand better the governance structure and the policy making. Because what you do, what Visit Savannah does, is an incredibly powerful and profound tool at shaping our economy, the experience that we have, and the policies that we have to pass. And many of them are outlined in the presentation, expanding hotel inventory and accommodation options, expanding the convention center, expanding districts beyond the historic core. Visit Savannah through this presentation is making policy. Where's the governance and accountability come from from our end? How do we fit into that structure? If you can help us understand.

Yeah, thank you for the question. First of all, we're actually not making policy, right? Our job is to take the product that is presented to us and sell and market and promote that, right? So our involvement is through working with the Chamber and the initiatives that the Chamber's leading. Our involvement is working through the Tourism Advisory Committee and being a part and a voice in that work. Our involvement is when Bert and the Chamber Board is developing initiatives to impact homelessness and so forth in town. So our involvement is to be a part of those discussions, be a part of the leadership of this community, make sure that when people walk in the room, they see that the tourism community is part of those discussions. But as it relates to Visit Savannah and Visit Tybee, we are not a policy-driven organization. We are entirely focused on sales and marketing. So I want to be careful here to not make it sound like it's not our job. But in some ways, it's not our job. Our job is to take what you present to us, what the developers build in our community, the direction that the community wants to go and market that accordingly. But we're not driving policy.

Well, thank you for the clarification. I think that we all need a better delineation of those responsibilities and a better sense of understanding of how that happens because how we market versus the number of visitors that we get, how long they stay, the destinations that they have, whether they're in town, out of town, does shape the number of hotels that we will see in the community, the expansion of these districts. So somewhere those decisions are being made, and we're having to play catch-up as representatives of this community. We received the complaints. We do. The marathons, the hotel proliferation and expansion, it is something that we are having to remedy and recognize right now that are very painful to talk about tourism sustainability. And at least at this table, it's not a four-letter word to talk about how we're going to balance. And I appreciate seeing how we're going to protect the golden goose. I just want to better understand from this discussion either at the table or beyond, if we needed to do a sidebar, to understand where is that policy being made? How do I better understand it? And then how do we structure our GPS, our strategic alignment, to make sure that we are leading for this community that's here and shaping that policy and our projection forward? And what's the budget for it?

You know, I think a great example of that is for 10 years we had the Savannah Rock and Roll Marathon here. It was a terrific event. Brought thousands of people and hundreds of thousands of dollars into the community. But a couple of years ago, working with Faye DeMossimo and so forth, we realized that Savannah is no longer a city that can accommodate a marathon event. And we're really better suited for either those 5K or half marathon events. So we work with Faye in her office to develop sort of a checklist and in terms of, hey, if you want to do that type of an event in town, even like think about the SEC Volley, Women's Volleyball Championship that we hosted last November. and will host at least for the next two Novembers. We sat down with Fay in her office and said, okay, let's go through this and make sure that these types of events, are hitting the marks that are important to the city first. And when Fay signs off and says, yep, we're in line, they're in line, we've got a winning formula. And so the fallout from that particular example is now there is in the fall something called the Savannah Southern Half Marathon event. They met with Fay, they went through it, They said, this is what you have to do if you want to operate this event. They said, this is what we'll do. Everybody signed off and so forth. So that's a great example of that type of collaboration. Visit Savannah wasn't setting that policy, but we were bringing that potential event opportunity to the city and saying, let's work together. So I think it's a great point. Thank you.

To this point, the council said that we weren't going to do it no more. It wasn't a thing. It was council. It was not working for us anymore. When it worked really well for us, it did uh they changed from who they were and although it was still i think a a fair a pretty good money-making event i mean we we prioritize our residents and really disruption um and as a result uh asked to pivot um to something i think you know i don't think we'll have any large marathons like that i think we've really determined that we could you know a city like savannah that's um so compact and dense could do better with um 5ks and and halves and so i think that's kind of the the result of that but um i'm sorry did you no no all right yes ma'am thank you mr mayor mr marinelli thank you so much for

all the years that you have been doing this work and deliberately and intentionally for the city of Savannah. Along with your staff, we really and truly appreciate it. Along with the Savannah Chamber of Commerce, we really and truly appreciate what you all do. Thank you. And taking our city and presenting it to the world Thank you all so much. With the mission, I'm going to read this. Visit Savannah is the official destination marketing organization for Savannah and Chatham County. We inspire the world to discover our unique culture, heritage, and experience, elevating the overall regional economics, economy, enriching our community and driving a prosperous future. Five years, about every five years or so, we go through this process of SPLOS. And one of the things that I've learned in being on city council is that we realize that a lot of the money that we do raise in for our work that we need to have, the money that we need to have to get the work done for our constituents and our community, I've come to learn, and now in this document, and I just wanted to amplify this so that we can understand even more how important of the work that you all do when it comes to the work that we must do for our citizens. So when we talk about with SPLOST that 40% of the money that we raise for SPLOST comes from our visitors. You got it right here. And I just want to thank you all so much for putting this Coming here, like you said, through different administrations, we're glad you showed up today to remind us how money comes into our city and how we don't have to raise all of the money that we need, that the visitors that come and spend the money, how they spend the money, everybody just don't know what you all do. It took me a little while, but I got it now. But I just want to point that out.

Now the last thing I want to say is... Can I just say, my mom still has no idea what I do. So you're ahead of my mom. She thinks I'm a restaurant manager. So I appreciate that.

And the last thing I want to do is, in reference to one of the slides that you have, And you broke down the percentages of the visitor demographics and race. And since I've been on city council, when I got here, the number of African Americans, because it became an issue, at one time with the chamber and with visit Savannah. And I do believe it was during the Mr. Mayor was here with me too. So it was dealing with during mayor in the Jackson's administration, I believe that we really kind of, kind of zeroed in on this. that the number of African Americans that were visiting from the work of UL Marketing to the world was less than 25%. So with this, I'm glad that you all are, the number is the percentage of African American visitors along with the other race have increased so with and the reason why I read out this mission statement is that I would like for you all to continue to have the numbers to increase of our demographics and coming to our wonderful city because there is history and herstory that the world needs to see in our city. So thank you all so much for your work. Thank you, Mr. Mayor.

Thank you, Aubrey. Thank you, Mr. Mayor. How you doing, Joe? Hi. How does transportation primarily public transit play a role in advertising outside and attract people to come to Atlanta?

Well, I think there's two ways. First of all, younger visitors will rely more on public transportation than people with a little gray in their sideburns, right? Younger visitors, when they travel to bigger cities, enjoy public transportation more so today than ever before. And so I think public transportation should be at the forefront of everything that's discussed in this community. And I know that our friends at CAT are dealing with that. And the other way is with the ferry service back and forth across the river. You know, folks look at the ferries and assume that they're just there for tourists or they're just there for convention attendees, but when you drill into the folks that ride those ferries back and forth. There are people that live on that side of the river that work on this side, and there are people that work on this side of the river that live on this side and work on that side. So I think when we think about transportation in this community, we have to think about improved public transportation because younger visitors are going to use that. I think as we watch what's happening with World Cup visitors around the country, They're using the subway system. They're using the T system in Boston. They're utilizing that public transportation. So it's gotta be a big thing in our community. And the ferry service is, listen, as we're bringing larger conventions to town, um those conventions are going to rely on that transportation but so are the employees that work on on both sides to rely in that very service so those are two examples that i would point out to you thank you so much that's all i am all right let me let me go back uh joe and i want to thank you you know when i got elected and took office in january um 2020 um

I became mayor of tourism soon after, and I make no secret that I'm the biggest ambassador for the city. You call, we go, and we take over. And I've been very impressed of you and your team, particularly when I see you around your your colleagues and your contemporaries. They know who we are, they respect us, and in some cases involving cities with C's and next state, they fear us. And that's what I want, I want them to fear us. Yeah, fear us. I want them to fear us.

You ain't God.

No, I want them to fear us. He understands. It's all in marketing. What is your annual budget?

If you take Visit Savannah, Visit Tybee, and the Sports Council, which is our operating budget, it's just a tad over $19 million.

So, you know, I mean, great things on the horizon. We went to New York to the Meatpacking District. We took over New York. We recently went to Chicago, took over Chicago. There is a play. Midnight in the Garden of Good and Evil, which is freaking hilarious. Especially those of us who live in Savannah, it's just so Savannah that hopefully might make Broadway that creates those opportunities. And so I'm appreciative of that. And go back to Mayor Johnson, and you remember the day that you came here and we saw some of the advertisements. and council had a fit because you would have thought that, you know, black folks were like Aunt Jemima's around here. I mean, you know, it was not as representative of the community. I think you all took that lesson really well, took the feedback really well, and your marketing has now reflected that. And I hope that we can do that a little more because Savannah is a diverse community. A very diverse city, and I think not as diverse as sometimes we portray it. And when people come in, they're surprised. They're like, oh, I didn't know Savannah was as diverse. And it really is. And I'm hoping that we can find ways of being able to do that. We have a proud Gullah Geechee heritage. I think that is an opportunity that we can latch onto. Because if we don't, someone else will try to do it for us. To that end, we have to be, we have, as part of our GPS, this commitment to equity. And a burning question for me is that you would not necessarily be marketing toward me. I'm a non-sophisticated traveler who might stay shorter don't want to spend a whole lot of money because the way my paycheck is set up. How do we make sure that we are also making sure that Savannah's not just for the rich and famous and the well-to-do? Because, I mean, you said who you're looking for. Good question. And so that is my, you know, the challenge I have is that I go around the country and I meet people who want to come to Savannah. Fraternity sororities, church groups, They want to come, but they can't afford it. They just can't afford it. And I know that at the end of the day, you're charged. Your job is to get the highest bang for our buck. But the reality is, on our end of it, we have to make sure that whether I'm the exclusive traveler that has a yacht that's across the river, Or I'm just a person. You know what? I got one paycheck and I'm just coming here to blow it in Savannah that I can come and still find a pleasant, affordable experience. And I mean, that's what I struggle with. Because if you look at it, you would think that, well, we just, you know, we want that high-end traveler. And I just, you know, I want those family reunions. I want those church conferences here. I want fraternities and sororities and Masonic and organizations to be able to come here and not say, well, I can't come to Savannah because it just costs too much. You understand what I'm saying? I do. And I don't want to be critical of that, but the fact is is that if, you know, you wouldn't be marketing toward me because I'm cheap and I'm broke. So how do you market it that people like me, not like some of them, but me, would say, you know what? Savannah's the place for me to go.

Well, thank you for that. A couple of thoughts. First of all, and I'm going to give you a chance to jump in here in a second. First of all, under Angela's leadership, our team just did an audit on the cities that we compete with for visitors and conventions, right? We did a deep dive into how they do their marketing, what do their ads look like in in print what do their ads look like on in digital format what's their social media look like and and i'm very proud and i'm happy to share this information with you in a different time and place and anybody's interested but but i'm very very proud to tell you that the work that we do in terms of marketing a welcoming, inclusive destination. When you think about the cities that we compete with most directly for visitors, we outshine them head and tails over it. And we can demonstrate that to you. I think the best answer to your question is is I look over at my friend, Calvin Moore, who's managing a much larger convention center today than we've ever had before, and that new hotel that's going up next to it. The fact of the matter is we're going to have to, and we do this every day, but we're gonna have to find more opportunities to bring those kinds of events those family reunions and so forth that in the past couldn't afford Savannah. But with the larger convention space, with the with the larger hotel inventory, there will be room for those kinds of events. And I'll tell you, my sales team is entirely incented on finding a business that fits the holes in our calendar. We don't chase conventions that are gonna book on Thursday, Friday, Saturday nights, the highest price time of the week and month. We are chasing conventions that are going to come on Sunday, Monday, Tuesday, which are the more affordable times of the week. So we have more capacity than ever before to welcome those kinds of events. And I can tell you, Angela, you want to jump in here and talk about that audit that we just did?

Yeah, I just wanted to say that when we talk about this, the sophisticated traveler, it's interest-based. So we're not, when we're targeting our marketing, we're not discriminating based on gender or race or even household income. We're going after you if you are interested in black history, in arts and culture, in culinary. So if you have an interest to be here, to love the city as much as we do, that's how we're targeting. So I just wanted to make sure to address that.

That's what sophisticated means. I'm not sophisticated. It's your interest. The other thing is you've done really a good job, and I don't know how it's happened. We've become really big for girls trips. I've been told that we're second in the country behind Nashville. But I don't know what y'all have done, but I mean, this is like the place for girls. I mean, you know, girls just come and they just hang out and have a good time.

I think that's the perception of safety and why I called that out on that earlier slide. It's the perception that Savannah is a safe place to visit.

Well, that's the reality. It's not the perception.

I understand, but for an outside visitor looking at, are we going to go to Nashville, Nashville, or are we going to go to other cities? The perception of Savannah is that it's a safe city, which is why we all have to work together to lift that up. But I think that's a big issue.

Well, my final point, so that gives you a challenge.

Go back to that. There was a slide that had the two parts about safety and security.

There it is. So, and Joe, I would love Joe and Bird and everybody. We used to have ambassadors that helped with those two things. I would love it. And y'all sit on a bunch of money for Hotel Motel. I think we can create an opportunity somewhere because the ambassadors played a huge role not only eyes on the ground, but also being able to address things in real time. Jay, I think there's some way we can create a situation that we can work together to create an ambassador program of individuals with eyes and ears on this problem to help keep people safe, but then also to address issues of of safety, security, cleanliness. Sometimes, you know, I just think we can do that, and I think we both benefit by that experience. They have a terrific program in Atlanta. Marty Johnson yells in my ears. She still has her raincoat that's too big for her to wear. from the ambassador days. But you all know, I mean, I see them in some cities. You see them in Atlanta. They're very good for wayfinding. They're very good for, you know, again, adding eyes and ears. And they can be trained in a variety of things, medical and things, and be able to provide some assistance. So, you know, let's have some conversation to see whether we can up that into the 70, 80-degree range. Alderman Young.

Yes, Scott. Question. You all are the destination marketing organization in Chatham County? Yes, ma'am. Is that by state statute that there could only be one destination marketing organization?

No, I don't think there can only be one.

Bert, can you shed any light on that? than Channel County or Tybee or so. We're not designated for the entire county by state law. It's up to each jurisdiction.

But what a part of our Savannah, part of the hotel motel tax was that Business Savannah would be the DMO. I believe that was part of it. So it's each jurisdiction. Yeah, so I think in accepting the 8% on the hotel motel, it was stipulated in there that Business Savannah would have to be the DMO, correct?

So DMOs are funded through the bed tax, hotel motel taxes. Hotel motel taxes are distributed by the state to the locality, the municipality in which that hotel tax was generated. So for the city of Savannah, we get sales tax dollars that are generated here and they come to the city. And we splice those hotel motel sales tax up dollars based on the 8% authorization from the state that Joe showed earlier with the city getting just over 50% of that. Unincorporated Chatham County, same deal. So the hotels that are in unincorporated Chatham County, they receive hotel motel tax rate. Chatham County is able to designate a destination marketing organization and fund that there. Their destination marketing organization is the same as ours. Tybee Island, the same thing. It's the city of Tybee. They collect sales tax from hotel motel taxes. It goes to destination marketing. Port Wentworth is the same thing. They have a different destination marketing organization. Their destination marketing organization is the Black Area Chamber. And so you can have different destination marketing organizations in the same region. It's based on the jurisdiction that the sales tax dollars are coming from.

Got it. And I'm trying to understand it. So if we had another destination marketing organization in the city of Savannah, those funds could not be shared. They would have to go to Visit Savannah.

I understood that to be the

set to move that bird do you remember that was the that was the agreement that was reached uh when we went to eight percent and that agreement is between whom the it's the city and the the chamber the businesses is samantha and the state it's a three it's coded it's in the statute okay thank you for that i understand a little better um

often say when we're looking at different subject matters there's a clash of two visions there's a classic clash of two visions i represent the first district we know the demographics of the first district um we love tourism because we love for people to come here to see what our ancestors built we love for people to come here but based on our history we do know that there From where I'm sitting, my point of view, this is an area where there is a lot of discrepancies and inequity. And it's based on our history. We understand that you all are very busy. You accomplish your goals. You all, you know, you're getting, you're hitting your numbers. However, the weeping time. We have the heritage plantation. We have what Eli Whitney was supposed to have invented, the cotton gin, I don't know where it's at. Although, I know it's not in the city of Savannah city limits, but I'm talking about opportunities for destinations, opportunities for people to come to Savannah, to stay here, to spend money, to see what it is that Savannah's all about. So we've got so many un... engaged opportunities. We know that, we all know that. But when people like me get to this table and bring those forward, we don't get the support we need to get to get the Whippentine property where 429 people were sold. Almost 400 people buried under Whitfield Square. We want to put up a little marker like it's not important enough to get our ancestors out of the ground there. We have an opportunity here to do so much more. How do you all work with the Black Chamber?

closely, uh, Moncello is on our board of directors and, uh, you know, we, we support, uh, the work that he does a number of different ways. Um, as he has built that organization, literally from the ground up, um, he has relied on. a partnership with Visit Savannah and the Chamber to build the structure of the organization that he runs every day. And so we see him three, four, five times a month in our offices talking about the work that he's doing and how are the lessons that we've learned in Visit Savannah that can help him do what he does. So we think it's a terrific relationship. I'm proud to have him on our board. It's fun to have him come in the office and tell us about his world travel, but we work closely with him.

That's good. I'm glad to hear that. He's doing some great work, but there's a lot of other people in the city that does great work. We need to be a little bit more inclusive. In equity, we... went from 10% to 12% of African-American visitation, and we've doubled that. And for a city that's a majority African-American city with a history of plantations that people are so interested in hearing about history and how people have overcome and the resilience, White people are traveling a lot, spending a lot of money. Charleston, to the museum over there, to DC, can't wait to go to Chicago. Everybody's talking about it, putting on their list, getting to Chicago to see the Obama Museum. And so many opportunities. Savannah has those type of assets. And we need to leverage those, of course. We got work to do. But we have to support that. And this organization cannot represent the Gullah Geechee community. You could advertise. You could partner with the people that represent us Geechee's, the Gullah Geechee community. And that should be a good thing. You should do that. But we do not want to have the appearance of this cultural vulturism because what's happening is people are benefiting from this valuable African American history here, and it's not the African American people. And we need to watch out for that. Again, we love the tourism. We want to make sure that we have, going forward, an opportunity, Joe, to work with the state. I've written letters to them. I've been in contact about getting recognition for our assets here that we can leverage. So we need to work more in terms of that. And I'm sure Visit Savannah can help us with that too. Inclusivity. So I think you're moving in the right direction based on what you have presented here today. But I think there's just so many more opportunities that we are ignoring and that we have to do a better job at making sure we do this because it's going to benefit all of Savannah. if we do that, and that's where we are right now. That's all I have right now. Thank you. Thank you. Yes, ma'am.

I think she was next. Go ahead. Talking about the hotel, first of all, Joe, thank you so much for the presentation. Thank you. Thank you, Erica. Thank y'all. for all that you all do with the chamber, with Visit Savannah and what have you. And you know, when I came to the meetings, I was always talking about tourism as far as African American people were concerned. And when you mentioned that the hotel, motel tax, bed tax funds could only go to Visit Savannah, how does the black chamber get funding, do they have to get it directly from whatever it is that's given to them by our hotel, motel? Because, hold one second, let me finish. The last time I heard that they got anything, it was $50,000, and that was a couple of years ago. Is it something in place where they get money on a continuous basis from Visit Savannah?

from the city it's from the city okay so that's just separate because you said other entities get it so they get black chamber get and yeah i mean explain that it's a good question so uh the black chamber is the destination marketing organization for the city of port wentworth so very similar to the savannah area chamber of commerce they have a visit for um choose port wentworth

So the black chamber, the one that Moncello, he's a marketing.

He's the destination marketing organization for the city of Port Wentworth. So the hotel motel tax dollars that Port Wentworth receives from the hotels that are in their jurisdiction, the city contracts with the black chamber to head up their destination marketing organization, which I believe they call Choose Port Wentworth or Stay Port Wentworth. I was talking to Monticello about it two nights ago. The city's partnership with the Black Chamber has been an annual $50,000 grant for a number of activities, including workforce readiness, including helping connect Black businesses to our economic development department and shepherding them through some of the permitting issues. working with us to, you know, kind of train trainers and entrepreneurs. And so I can send you that scope of work, but that's the city's official relationship with the black chamber. The city, you know, the only, like we don't have, we don't give the Savannah area chamber a grant. um, to do any work in that regard. We do do that with the Savannah area black chamber, but they do get the hotel motel tax from Portland. Uh, no, no, no.

I'm talking about, that's right.

The Savannah chamber doing business as business. Savannah is the city of Savannah's destination marketing organization and has been so since that one. Um, uh, so that's, that is who the city's destiny, the city of Savannah's destination marketing organization. And so that's who receives that 33.8% of the generated hotel motel sacks dollars that's goes to, um, sales and marketing. And all of that is state law. So when we raise the hotel motel tax from six to 8% and our 6%, um, authorization was very, very similar. Um, Um, uh, but this, the state authorization says that the city general fund gets 37 and a half percent that the city gets 14.7% of what's called tourism product development. Those are capital dollars. So the dollars we're spending for the waterworks building West side connectivity, river street tied to town. Um, the, uh, the pearly Smith school museum, um, and the, um, Bay street, um, beautification, Those are dollars that come out of that. And then the 14% bucket is for the convention center operations. And I think that they use the majority of that, at least from the city of Savannah, to pay down bond debt that was generated for the expansion. So that's how they're using those dollars.

So in essence, we're just being generous to the black chamber as the city of Savannah by giving them this grant that we have been giving them for how many years?

think we're on our second or third year. I don't know that it's generosity. It's a business relationship. It's an important partnership that we have with them.

They're communicating with what Wentworth if they're working for a different part of them. So we're paying them to

Work for Savannah. They're also helping to register MWBEs. So this is a partnership based on some of the things that came out of the real Savannah report regarding engaging and growing black businesses. The fact is we didn't have the wherewithal within the team to be able to do that. So the accelerator, the force multiplier was the Black Chamber to help us to reach some of those points. What they do on the other side of their business is that they do destination marketing. Matter of fact, when we got into it with them doing this, they weren't doing destination marketing. They're doing it now.

And I think it's an incredible success story over the last several years, the way that they've grown their membership, grown their business, diversified their business model. And I'll send council a report on our grants and the activities that they do there. I communicate with them.

And most of their businesses are in the new businesses. The growth has been in Savannah. So this is people who are, yeah, I mean, these are people who are helping to buy business licenses here. I know there have been some that expanded, Bernetta, to your point, of really helping to market the places and things that historically we have not really lifted up in terms of tours and tourism and storytelling for all of those things. You know, that growth has helped to spur that.

No, not questioning them at all, but for us to do that type of work with them, and they're only getting $50,000. I think we need to give them more, but we'll talk about that at a later time.

So that would be a great part of the budget discussion.

I mean, Joe, I'm sorry. Thank you for this presentation, and I will see you at our next meeting, okay? Yes.

We look forward to it. Promise?

Oh, I will be there. All right.

All right, last question, and we'll move on. Yes. Go ahead, Linda.

I don't have a question, Joe. I'm just... so enthused about everything that you do. You've got the second best job, because the first one is being an alderman with the city of Savannah.

When I first came, so I travel a lot, too.

And so, like Van, as an ambassador, we talk, and one of the things that a lot of people talk about, public education is a draw, too. But I'm a grandparent, and I have my children during the summer. I would like to see more leaning in for activities for children. There are a lot of things that they can do. But like Atlanta, my kids, they live in Atlanta. They have the aquarium and the puppetry and the high resins and stuff like that. And while we have things like that in Savannah, I would like to see if you could personally, and from the people that I talk to who have children, They want to come to a city that has family friendly things too. You're doing an excellent job. I appreciate you, right? And Pat Monahan saved you because I thought that I could shoot out emails. I kind of push back, right? But I was trying to catch up with you because you'll be shooting those emails out. And we was living through you vicariously and seeing all the wonderful things. So thank you for bringing that to Savannah. The other thing is I would like to thank Bert and Michael Brown and Nick and our Chatham delegation for making Hotel Motel work. And Edna Jackson for being a proponent and a catalyst for making that happen. It's just so amazing things happen. And I appreciate Connie and Erica, everybody knows Erica and Davenport and Bird and Tripp. You have to make relationships with people. And so how much money did you say we were generating from people visiting here?

$4,199. Yeah, okay.

But the other zeros behind that. But what I want to press upon you is one of the main things, issues that I have come in with is the housing, right, and child care. There are too many hotels. I believe having a conversation with Mr. Kessler and some other hotel people, we should really have an area where people who work in the service industry have a concerted place where they can have their children. You have empty rooms. You have spaces where somebody would love to be able to have a daycare in one of these areas. Happy people are happy employees. And most of the money that the people, our constituents, the single mothers, they work in your industry. And so we've got to take better care of them. And so I just want to thank you for what you do for Visit Savannah and what you do with Savannah. kind of work on that stuff for those kids right we want to make sure that everybody that comes to savannah have a full effect and nobody makes uh people happier than grandkids and young parents and they are tomorrow's visitors so yeah so we want those visitors to keep coming back and experience when they were children so they could bring their children thank you for everything that you do thank you bert and connie and everybody who's over there is doing an amazing job i appreciate y'all

So we are discussing and entertaining and planning for hotels in the Canal District. We may have a couple, a few. We don't know. We know that's the work that we're doing right now. So I'm sure we're talking about how we could reinvest. and different tools we've been talking about this with economic development amongst ourselves about making sure that you know we could be the best um we don't know we want to tag out the tax allocation district or something that's that's the conversation we're talking about it i just wanted to bring it up here because we are going to be in the hotel this is a little bit more and just we just want to make sure that it benefit the area and benefit the district

Joe, let me thank you again. I don't know if you had closing comments, but let me thank you. This weekend, starting tomorrow, we'll host the Georgia Municipal Association here, as we do every year for our summer conference, our annual conference. This weekend stands to be the largest GMA conference in GMA's history. We did not have one in January in Atlanta. So everybody's coming to Savannah. And for us, I think it's a great honor to show our home to our colleagues. And they get to go back and be jealous they don't live in Savannah. Next year, next summer, next July, the National Association of Counties will be having their annual conference here in Savannah. I'll be going to New Orleans soon about that. But again, huge to have you know, all of the nation's counties coming to Savannah, Chatham County, so be cool for you. And one of my enduring legacies when I become president of the National League of Cities is ultimately for us to have the National League of Cities one day here in Savannah. Yes, sir. We're growing into that, and so I think, you know, again, for us, you know, we're getting to that place where it's also affordable for elected officials who are traveling on the government dime to be able to come and spend that time here. Joe, I want to thank you for that work. Again, I know that was over some time and a lot of work, so thank you for that.

Thank you. Thank you, Joe and Business Savannah team. As we close, just some things for council to consider. One, I want to you know, uh, thank Alderman Palumbo for prompting me to have this conversation with council. It really was due for us to check in with our destination marketing organization and need to do that more as we go along. But a few things that I want council to consider tourism is a big part of our economy, but it's not the only part of our economy. And the reason that as important as we've, we've intentionally worked with our partners to make our economy more diverse and complex. So we have more advanced manufacturing. We have a huge military sector. We've got, of course, logistics that is driven by the port, food processing and production, and of course, a growing local services industry that's serving local needs as well. So think about that. I know Joe used the term golden goose. It really is. But I think a more important thing to know is that we're not a one trick town, and not a one trick region. And that's really important work that a lot of partners have played. But of course, the city council as well in their leadership, we talked through the benefits of this big pillar of our economic engine, jobs, the discount local residents get on SPLOST, Lost, eSPLOST, general fund contributions from hotel, motel tax, and tourism product development, which was 100% paid for by tourism, all those other sales tax dollars, a huge discount at 60%. Of course, we see our digest, which we'll talk, increase because of some of the larger developments that have taken place, commercial developments. And of course, for arts, culture and cuisine options that punch above our weight from a population standpoint. So those are some of the benefits. But let's talk about, I think, three areas of places where we need to continue to work. The economics there. Tourism sustainability has been a topic that this council has brought to me often and things that we work through for the TAC. I know the mayor sent a letter and the TAC has been working on some of those sustainability things. And what we mean by sustainability isn't that There are paper straws in restaurants. But how much tourism can our city and our region hold reasonably so that that product isn't degraded. Two, what's really important is the access, diversity, and participation in the prosperity that this economic driver brings to our city. So I think that's going to be key for the city as we continue to work with the tourism industry about who's participating in the prosperity and how are we creating more assets that are more diverse, that local folks can be a part of. And not just that there's access, but the next part of that is that there's participation in that at a greater level. From the community and governance standpoint, along with sustainability, there's that balance approach too. And Mayor, something you said and you pointed out earlier that we want to be a good place to live first and a great place to travel after that. And so that's our job, know that Visit Savannah's job is to think through the visitor experience, and our job is to think through the living and working experience, but I think that we can be more intentional with aligning our strategies and policies around being a great place to live first. The inclusion and connection is a big part of that. I will say that, you know, we had a discussion about port width first at DMO. I think a strategy too that Visit Savannah could think about is as you're maximizing and optimizing sales and marketing to places where people are coming to visit, as a Savannah resident, you have to go to Chicago or New York or Washington DC or Cleveland to see those ads. And those ads can sometimes build a lot of pride because they're assets that we have in our city and to think about how is there a component of that that's a little bit of local marketing. and participation about what's included in our region i think is important and then a closer more deliberate approach to policy alignment with sales and marketing and what city council is doing from the policy end i also want to note that there's a huge operational impact Right. When we talk about what's marketable here, the parks, the squares, the streets, the architecture that's been protected by historic preservation and zoning by the city, all of that takes local tax dollars in order to maintain and propel. And so we have to think about that as, you know, what's our return on investment here? We want our industries to be working for us as much as we're working for them. Right. Public safety is a huge part of that. We've talked about that, but that's a big expense, and we're gonna talk about that in our mid-year report. And think about that kind of expanded responsibility, especially to growing areas like Hutchinson Island, where 20 years ago, we didn't have to think about Hutchinson Island too much from a public safety point of view, but as that part, as more and more is developed on Hutchinson Island, we've gotta think about public safety facilities and how to bring those Um, there as well. Um, and how are these opportunities either expanding into existing parts of the community, like the first district where the older woman said, or where we're protecting that expansion from encroaching on communities like city council passing the, um, hotel, um, overlay prohibition, um, in, um, areas of the second and fourth district. So. Those are the considerations I think we should continue to think through and be more deliberate about as we move forward. And that's just what kind of my observation for the conversation. We just want to end by thanking Joe and the entire Visit Savannah team for responding to this request so quickly.

And ambassadors. And ambassadors. Yes, sir. I wrote that down.

Thank you, Joe. We appreciate it. Thank you for being here. Thank you all. Thank you all. So we are going to transition now. I know we'll lose a few folks in the audience. Not going to stay? I wish they would. So we really have three important presentations. Three important presentations and then papas. So we're going to move into our mid-year financial review, of which there are three parts. One, we are going to hear from Malden and Jenkins, from Trey Scott, who is our third-party auditor, to present the auditing results from our annual comprehensive financial audit report. Clean. It's clean. Thank you very much. So we'll hear from that. That's really important for us. Two, we're going to talk through our mid-year fiscal year. We're midway through our fiscal year. Where are we seeing trends in terms of our revenues and our expenses? And then finally, moving into our millage rate setting discussion for the year. City Council has to finalize our millage by the end of the summer. We'll talk through the process for that. And of course, we base next year's budget on that millage rate. And so having that mid-year report and understanding a little bit of the trends should inform council's decisions and deliberations around how we're setting millage rate for this year and building the budget for next year. So with that, let me welcome Trace Scott from Malden and Jenkins to hopefully give us just a few words on how clean and unqualified our audits were.

Sure. Well, thanks, Mr. City Manager, Mr. Mayor. Thank you. Alderwomen. Certainly happy to be here. Again, my name's Trey Scott. I would have said Aldermen, but yeah, they're outside, I guess. In any case, again, my name's Trey Scott. I was the partner who oversaw the audit of the city's 2025 financial statements and certainly happy to be here with you all to discuss the results of that audit. Really quickly why I'm here, give you a quick overview of Malden and Jenkins. Of course, our audit opinion. some highlights of your financial statements, some auditor-required communications, and then just a few other matters. But really quickly about Malden and Jenkins, we've grown a little bit since I spoke with you last. We added five additional offices, four in Louisiana and one in Texas. We merged in a firm called the Laporte CPAs, effective December 1st. So we've grown pretty significantly, added about 180 additional employees. That is something that's a little different than what you've seen in the past from this slide. But enough about us. I thought it might be important or good to talk about kind of what an audit is or does versus what an audit, and when you're talking about an audit, a financial statement audit, which is what we perform, what it does not do. And really what we do is provide you with independent assurance that your financial statements present fairly in accordance with generally accepted accounting principles. It focuses on those areas of high risk, high financial risk. But what an audit doesn't do is evaluate your day-to-day operations. It doesn't evaluate the finance department or other departments. We don't test every transaction. We don't guarantee that we're going to find fraud or that it will be detected. And it certainly is not designed to catch every error. So I just wanted to kind of clear that up as to what we're doing in that financial statement audit. But I think of particular importance as the mayor brought up as, as I was walking up is, is the audit opinion itself. You know, I think the, you all know the act for, uh, is the responsibility of the city's management. It's our responsibility to express an opinion, as I just mentioned. Uh, and we do that by following generally accepted auditing standards and government auditing standards. Uh, and I am pleased to report that we were able to issue the city a clean opinion. It's what we call an unmodified opinion. And what that, again, basically means is that your financial statements present fairly the financial results, the financial position of the city as of 12-31-25. And that's what you're looking for, right? I just want you to clap for that.

I think, let me just say, I mean, you don't appreciate it until you don't have one. That's right. And so there are some cities who don't. Sure. So I just want to make sure that we emphasize the importance of what you just said.

Also, the compliance report or your single audit report, you all spend a pretty significant amount of federal grant monies, about almost $18 million in 2025. And that sparks us to have to do a single audit of your major grant programs. Those accounted for about $4 million of the total. And we issued you an unmodified or clean opinion as it relates to compliance with your federal grant programs. So that's certainly a good thing as well. I also want to take this kind of opportunity to point out we also had no audit findings this year. I think that's a testament to the hard work. That's another one. Clean opinions are pretty common. Not having findings is far less common. And preparing your own ACFER, your finance department prepares that document.

Hold that. Is that the former CAFR?

Used to be CAFR, now AFR. Okay, AFR. I would say of our 750, over 750 governments that we audit, probably less than 10% prepare their own set of financial statements. So that, again, is something that you all should be very proud of, that you have staff. in that department that are capable of doing that. So a lot of times, us as the auditor take the information from the finance department and prepare it. But we don't have to do that with you all. So again, certainly something you all should be proud of. Thank you. I just talked a little bit about the ACFER. You all have gotten that award from the GFOA, I believe, since the beginning of the award, going all the way back to 1984. So I also don't know of too many governments that can say that as well. It seems like I'm patting the finance department on the back, but these are all great things that I don't get to say everywhere I go when I'm presenting to councils or commissioners or boards. Really quickly about the financial statements themselves, though, you have two sets of financial statements in that ACFER. One is your government-wide set of financial statements. That's the big picture view, all your funds kind of rolled up into one column. Certainly always want to see assets exceed your liabilities, and they definitely do that by about $2.3 billion. And revenues exceeded expenses, again, across all of your funds by about $137 million. So those are good, positive things to see from a kind of a 40,000-foot view. One of the more common questions I get is, how healthy are we as a government? And an audit's not designed to tell you how healthy you are, but there are certain places you can look to gauge that health. And one of the places I like to look is, is the city reinvesting in itself? Are we allowing our capital assets to kind of age? And you can certainly see over the course of the last seven years, pretty tremendous growth, almost almost a billion, probably about 900 million-ish or so growth in your depreciable assets. So that's really good reinvestment. And you can see the growth in that blue column or that blue bar is much more significant than the orange. And that's certainly what we want to see as well. Moving on from the government-wide to fund level, and we're going to talk a little bit about the general fund and the water and sewer fund because those are pretty much your most significant funds. Again, here we see assets exceeding liabilities by about $71 million. That's your total fund balance. $64.7 of that is unassigned. And then revenues exceeded expenditures in the general fund as well by about $7 million. So, again, good positive things to see from the general fund. And here's looking at your revenues and expenditures over the course of the last seven years. Again, good growth. If we'll think about what happened in 2020, there's a reason why expenditures exceeded revenues. That was the pandemic or COVID year. Mr. Mayor, I think you took office that year, didn't you? What a tough year. I'm still triggered by it. So in any case, good, healthy looking graph as it relates to revenues, expenditures for the general fund. So we looked at the Water and Sewer Fund as well. Again, significant number of assets that you can see exceed your liabilities by about $701 million. And also the Water and Sewer Fund, pretty healthy increase to that net position, so your revenues exceeded your expenses by about 53 million there. The proprietary funds are to be operated kind of like a private sector business, so they present a statement of cash flows as well. And the Water and Sewer Fund generated about 28 million from operations, which is great. We would want to see the cash generated from operations. That should be what's driving that business. We did have a little bit of a decrease in cash, but you can see where that cash went and it went into the reinvestment back into the water system and that's what we would want to see as well. The final or your pension and OPEB or the final funds I wanted to talk about pension and OPEB, really the points I want to make here is you're pretty well funded in the pension and definitely well-funded in your OPEB. I'm not sure I've seen an OPEB plan that is that funded in any governments that we audit. But your pension is in a healthy place, too, with its funding level. So I have no real concerns as it relates to those. And here's just a look at the funding status kind of graphically. I'm really kind of looking at the last three years. You can see that growth. OPEB's kind of stayed, eh, it's grown a little bit, too. So in any case.

What's that acronym called?

OPEP, other post-employment benefits. Kind of like health care and those kinds of things. And then just some things that I'm required to communicate to you all, your financial statement footnotes, your judgments and estimates, all of those things that are in there. I just want to make sure you're aware those are very integral parts of that act and are the responsibility of management. We had no auditor proposed adjustments. And to put that into perspective, I certainly can't say that everywhere I go. When you were presented the numbers throughout the year, You can take solace in the fact that those numbers are correct, that your auditor's not having to come in at the end of the year and post a bunch of correcting, adjusting entries. So that's certainly, again, something I think you all should be pretty proud of and the finance department be commended for. And then finally, the last thing, just want to make sure you're aware that we're independent of the city in accordance with all the applicable standards of our profession. And then finally, probably the most exciting slide here, all the new governmental accounting standards board statements that are going to be effective over the next three years. Next year, that first one is going to have a pretty significant impact on your ACTFR, but we're already working with the finance department on the best course of implementation for that standard. And then the other two shouldn't have that much of an impact, but again, The finance department's always in touch with us on how they plan to implement these new standards. So that's pretty refreshing from our standpoint as your auditors that we're not having to do a lot of assistance as it relates to those implementations. And then finally, just want to make sure you're aware we provide newsletters periodically on governmental topics to the finance department and all of our clients, as well as free continuing education as well. So that pretty much concludes what I wanted to report to you all today. Certainly it's been a pleasure to serve the city, and we look forward to serving you in the future if you have to answer any questions.

Well, as long as you come with good news, you can come whenever you want to.

It is a lot easier to present that than bad.

Yeah, so just a quick question about your statement of qualifications. You indicated that you all serve 750 municipal and county governments?

And special purpose.

What's the largest?

Atlanta. City of Atlanta.

So this is 750 in Georgia?

No, it's across the United States. We serve clients from Iowa, Texas, down to the Keys in Florida, and all the way up into North Carolina.

So in your opinion, I guess in words, Savannah is close to some of the other ones that you serve. Pardon? Your opinion of Savannah. My opinion of Savannah? As it relates to the financial health, as it relates to the other... or our statements as it relates to the other.

You guys are routinely at the top.

Thank you.

Yes, ma'am. Thank you for your presentation. Did I hear you say that we present you all with the information from our finance department and you all look over it and say, You did a good job, pretty much, right?

That's a fair statement.

Okay, I have an issue with that, because I've been on this council now for six years, and the six years that you all have been here, and I do believe you all were the people that, how long have you been with the city?

My firm has been with the city for seven years, but we merged in a firm that had been with the city prior to that.

Okay, and for those six years, It has always been a stellar report. Now, I know we great and we fantastic and phenomenal and all that good stuff, but you're telling me that there's no hiccups in our financial situation in the city at all in the last six years that everything has been pristine. Is that what y'all are saying?

Because if that's the case, then... Yeah, I don't think you're understanding what his purpose is. Explain it to me.

So...

I mean, a clean, unmodified audit doesn't mean that we didn't have financial challenges or that, you know, we didn't spend more money on something that we thought we were going to spend. It means that our accounting fairly and accurately reports that. Right? So that the way that we're accounting for all of our funds is fair and accurate. And it's clean. There's no money that's missing. And it's unqualified, meaning that the auditor didn't have to find or make any adjustments to make those financial statements fair and accurate.

In other words, we got the receipts.

Yeah, so it's not, it's kind of like, did you keep your, you know, when you, we used to have a checkbook and you'd get your deposits and, you know, you'd have to write. So that's essentially what our accounting and financial services is. They're accounting for all of our inputs and outputs. Are they in the correct funds? Are we correctly and fairly showing where money is going? coming and from and where money is going and malden johnson malden and jenkins as our auditor verifies um or officers an opinion on our financial statements okay let me ask you this how much are we paying your company to do this do y'all have that information readily available you know what the contract is 150 000 146 000 this year 146 okay Thank you. Yeah. But of course, auditors are bound by licensure. And just like fiduciary agents or doctors or others, they're not paid to give a clean audit. They're paid to give a professional opinion, and their license qualification depends on that. But we do have to pay for their services.

All right. Yes, ma'am.

Sure. You can pull up slide nine. Which one is that?

It's the seven year old facility for the general fund.

Got it. I don't know. Let's kind of look at that a little bit. I know we all know what happened there. Looking at Our revenues were really up after all of that stagnation in 2020. We were still stagnant then. And our expenditures were about the same, maybe a little bit less than 2020. So we spent a little less, 21, 22. We spent a little more. Revenue went up. but pretty good gap we didn't we were pretty conservative because you gotta look at there 23 even more so in relation to revenue a little bit more 24 wow we got good revenue came in 24 we stopped spending a little bit of that gap between revenue and expenses look about the same as 23 and 24 so we kind of held the ground there 25 We've got more revenue. I was looking at that in particular. So from 24, I'm trying to think back, 24 to 25, that's last year. We spent a whole bunch of more.

Those stuff cost more.

We are going to get through some of those years too, but also a phenomenon we're going to see when we get to our mid-financial report is we really couldn't project a high enough sales tax revenue in 22, 23, and 24. we the local economy went real gangbusters and we really like we were projecting conservatively and increasing that every year. And the revenues just continued to grow at a pretty unprecedented pace. We started to see that plateau in 20 in early 2025. And we're going to see that softening continue when we talk about mid year 2026. So some of that is playing into that. The Now, we always want to spend less than we get in revenues, but we also don't want to have huge surpluses at the end of the year where we're either not programming enough of what we're raising or we're slow to get the money out the door or we're not doing the right things in terms of our budget expenditure. So I think there's a few things that you're seeing in that chart as it relates to the the delta between expenditures and revenues for 22, 20, 23, and where you see that kind of tighten up in 25.

And on our unassigned fund balance, explain that to me.

So if you were yeah, if you recall, every year we ask our auditors, what could we do more like what we could do we do? And it's and the answer has been continue to grow that fund balance. And we're going to talk about that as well in our millage rate discussion. So our general fund reserve levels since 2022 have grown from 19.5% of total reserves as a percent of total expenditures and transfers out now to 24.9% and 25. So we've been taking that direction from council to increase our fund reserves as well. So our fund reserves have grown more than 5% as a percentage of our total input and output.

About 90 days now, right?

Yeah, we're very we're getting very, very close to to that 80 days.

If my math is right. Maybe this year we can get to 90 days.

I think you increased it a couple of three or four days over the prior year. So certainly moving in the right direction. If it weren't, we'd probably be having a different conversation. But you also have some seasonality of revenues as well that a lot of cities don't. And we heard a lot about that before I came up here today.

Any other questions? Well, I mean, we're really appreciative, again, the goal of this is to make sure we have the receipts and we just had a conversation last night jay of of making sure that our documents are the way they should be it's important to have someone in uh independent independently uh and someone that's experienced to be able to identify that so we appreciate your relationship uh jay i would love the Your finance team to stand, I mean, sure. You're stealing my thunder here.

Oh, well, let me be quiet. Jay? Thank you, Mayor and Councilman. So I would like to recognize David Maxwell, who is our Senior Director of Financial Services and our Chief Financial Officer and his entire team. We talk about the confidence. Stand up, baby. Thank you. When we hear about the competence of our accounting, that really comes from David and his team and the expertise that he brings to this work. We do a lot of things well. We do accounting extraordinarily well. And that's, I think, one thing that's a strength for us. It doesn't have anything to do with how much revenue we're getting or how much y'all decide to spend. But we account for that and present what we think are prudent and responsible recommendations to council about where our financial position is. And we know what our financial position is just because we have really, really talented accounting practices and expertise at David and his team's level. So that's a really big and thank you. But they should get applause again. The other piece of this, and something that Trey hit on, is council plays a big part in our financial health. So the directions that council has given to increase our fund balance, we've seen that. But also when we talk about our depreciable assets and the amount of money we're reinvesting in that, let's look at what our largest assets, which is our water and sewer infrastructure. City Council setting responsible rates in our water and sewer infrastructure allows us to reinvest in those assets and allows us to have strong financials and have a strong system in place. So that's action that this City Council takes to improve that. Linda.

Yeah. Thank you so much for your presentation. Just have one question and thank Mr. Maxwell and his team. So we evidently must be doing something right before you get those receipts there in line with what you. So I just wanted to ask, you know, we we spend like over $100,000 to make sure that there is the integrity there and people know that there's no corruption or anything that's not in line with what we're supposed to be doing. But to get that amount of money, Can you just, is there a recommendation? We're not so perfect that you don't have an offer or recommendation where we can do something better.

I think all, and I hate to give you the same one every year, but I continue to grow your general fund fund balance. I think one of the questions was, what do kind of rating agencies look at when you're getting rated for debt issuance and that kind of thing? And one of the big factors is how many days or how many months do you have in your unassigned fund balance in the general fund? And you will be in a 1231 year in, you know, your property taxes typically have rolled in by the end of that fiscal year. So you should be kind of at the heaviest you are. But again, I don't think they take into account seasonality of some of your revenues as well, which is why. you can be a little bit more lean at 1231 versus other December year-end governments.

And the diversity of our funding sources. I mean, we have, as Jay was saying, we have a pretty unique and diverse economy. We have money coming from everywhere.

Yeah, well, again, thank you, and thank you for our finance department, Mr. Maxwell.

Thank you, ma'am. Thank you, sir.

I think we'll move now to our mid-year financial report and we'll welcome our senior director for management and budget, Ms. Melissa Carter, who will give an update on where we are mid-year.

Good morning.

Good afternoon. Oh, is it good afternoon yet?

Oh, it is good afternoon. Well, this presentation of our mid-year financial update supports our council's strategic priority to always be a high-performing government. And it directly aligns with Council's direction to ensure that every dollar of public funds are spent wisely, transparently, and to the maximum benefit of our community. And so the discussion today that we've heard so far is how our economy is diverse, but also where we have ended our 2025 fiscal operating year And now we're at where are we so far through this budget season, just five months of business. We want to go over with that mid-year financial update, but also discuss not just our general operating fund, which is our most flexible fund, but also our business type activities and enterprises and end with the millage rate discussion because that's coming up in a few weeks. So as a reminder, this council adopted our baseline budget at $646 million across all of our funds with a general fund appropriation just a little bit over half of that at $300 million to support a workforce size of 2,687 FTEs that incorporated both a cost of living adjustment for our labor pool that was effectuated in January to be followed by a general wage increase this coming July as well, and I would like to say we are on target to meet those directions. Council also appropriated significant investments in our capital improvement program from a variety of funding streams, including the utilization of our SPLOST dollars. that were recently approved by voters. Now, this spending plan was established and adopted with a budgeted mill rate of 11.749 mills, which is unchanged from the prior year with no draw on general fund reserves. And you've heard our auditor talk about where our reserve levels are. In fact, those general fund reserves are growing, as the manager mentioned, and we ended the year in a positive net financial position. That meant we started this year's budget with a positive net financial position. So five months of business activity, where are we so far? Let's walk through a few of our income and expenditure trends since that time. And so we often ask at mid-year, what is the state of our budget? I'm here to tell you that the state of our budget is cautionary. So we have several attributes that we're seeing through five months of business activity that we'll walk through in this presentation. But just as many families and their households are experiencing the situation of uncertainty and caution. They're being cautious. Income is still coming in. However, families are prioritizing necessities in terms of their discretionary spending and non-essential purchases. So are we at the city. The city is seeing a similar dynamic. So believe it or not, those same inflationary pressures that we are all affected by in our households are affecting, as the mayor mentioned, not only our local governments in our region, but also local governments across the countries. So construction costs, contractual service costs, employee benefits, et cetera, and public safety costs have all increased, making it important for us to continue to monitor these economic conditions closely. So as we look at our most flexible fund and compare these five months of business activity through 2026, through those first five months of business activities over the last five years, we do see that our Year-over-year revenues are continuing to exceed our pre-pandemic levels. Expenditure growth, however, is outpacing that revenue growth, creating that narrowing margin that warrants heightened monitoring and prudent fiscal management. That's something that Alderwoman Lanier just pointed out in the auditor's presentation in looking at that five-year snapshot showing that year-over-year narrowing margin. Here in this graph, the blue bars represent that revenue collection through the first five months of each of those years, representing a gain over that five-year period of about 44%. The strongest growth phases did occur within 21, 22, and 23, which were us rebounding from COVID-19 and also receiving the ARPA funding. The gold bars in this chart represent the corresponding expenditure growth over the first five months of business in each of those years for the same period that grew at a rate of 59%, which is slightly outpacing our year-over-year revenue growth trend. What does this tell us? This tells us that there are economic pressures influencing local spending patterns and certain economically sensitive revenue streams. It also does remind me that revenue growth is not guaranteed. And we should not assume that that historical spending growth that we just saw in the auditor's presentation will continue. In fact, we should assume that we're expecting those growth rates to start normalizing. And so it reinforces our financial policy that one-time revenues should not be relied upon to support reoccurring expenses. That would be like me taking my one-time tax refund and using that one-time tax refund that I received to fund an ongoing recurring car note for my new car. I don't have a new car, and I certainly didn't get a tax refund, but that's an example I think everybody could relate to. But in and of itself, when looking at these revenues and expenditures through May year over year in this snapshot, it's important to understand that they do not occur on the same timeline. So many of the city's expenditures will occur steadily throughout the year at a steady pace, such as payroll rate, benefits, utility, Etc while certain revenues are going to be received at specific periods of time throughout the year So if you can imagine two runners running in a race Alright, so we'll have our expenditures one runner moves at a fairly steady pace throughout the year the other runner our revenues in this example sprint and it's going to slow down also depending on when revenues are being collected and Looking at one point in that race, though, doesn't tell us who wins at the finish line. But it does help us understand how the race is unfolding. And so that's what we are saying here, is that through this year, the first five months, we want to continue to be cautionary, but also observing that we have some trends that are starting to realize. From an income perspective for our general fund, Revenue collections by category are also showing certain insights. In this table, you can kind of see that we have certain time periods that we have our revenues are coming in. Through that variance column, everything that shows a red figure means we're collecting less revenue in the first five months of business in this year than we did last year in the first five months. And so in that, I would like to focus you on the bottom line figure though, which is the total. Because there's always ebbs and flows throughout those revenue streams and expenditure trends. And sometimes there's just some way things fall in that timing. But you'll see that our sales tax collections are about $1 million less in our first five months of business than they were last year. That total at the bottom through May 2026 is $97.1 million compared to our total revenue collections in the general fund through May of 2025 at $91 million, shows a variance, a positive variance of $6 million, which is a good thing. We love to see that. But when we look further into the data, we notice that that mere $6 million variance is totally being absorbed by a primary driver, and that's our Rockingham Farm payment in lieu of taxes collection that has come in above our normal activity we received last year. It's showing in that other grant revenues line, and I have an arrow pointing to it. So we've lost a little bit less than sales tax than we had last year, but it's more than being made up by that one pilot. which is positive. Now, so that's our current revenue profile, but let's take a look at the other side of the coin, operating costs. So primarily, experience trends are being driven by personnel, cost growth, overtime, and temp labor utilization, including employee benefit costs and contractual services amidst these inflationary pressures, same pressures that we're seeing in other areas. While these increases do not necessarily indicate that our departments will exceed their budget appropriations, they do speak to a pattern and they underscore our state of caution that we should maintain that posture until we see additional data throughout the operating year. So I do believe though that this expenditure growth that we're seeing in the first five months of business is very manageable. The trend underscores the importance of ensuring that our revenue growth, expenditure growth, and our long-term commitments that we've already made and will continue to make through the rest of this year remain in balance. So we're going to focus on two primary strategies to maintain internal controls and the long-term fiscal sustainability. And that will be to first evaluate discretionary spending and new recurring expenditure policies. needs as we go through the operating year. While doing so, we will adhere to our financial policies that are already in place while seeking to balance those community benefit requirements, long-term operating impacts, as well as how can we maintain that strong financial position that our auditor has touted for us. Over the last three fiscal years, though, we've observed a gradual increase in our percentage of budget expended through the first five months of the year, which is also telling. We expended 39% of our budget in 2024, 40%. in 2025 and 42% in the current year during the first 5 months of business. While this increase appears modest, it does reflect a consistent trend of expenses growing faster and being incurred earlier in our budget cycle which reveals that departments are utilizing their budget resources more quickly. More quickly. So when expenditures are occurring more rapidly earlier in the year, there is less flexibility in the fiscal year to absorb other fiscal pressures due to emergency expenses, economic slowdowns, and other unanticipated operating needs. But before I transition to our most business-type enterprises, I want to make sure that the takeaway here, that the main insight is that I would like to leave you with regarding our most flexible operating fund is that we are in a state of caution, not a state of alarm. I want to be clear on that. Staff is not suggesting that the city of Savannah is facing a budget crisis. Rather, these indicators that we're talking about in terms of our revenues and our expenditures growing at two different paces, they just support that more cautious budget outlook and reinforce the importance of active, continuous monitoring and spending controls to maintain the city's strong financial position as reflected in what you've heard basically throughout today. So with that, I would also like to then transition to our more private business type activities that we call our proprietary funds or enterprises. I'd like to provide a high level overview of where they are standing as of the first five months. So through May, our proprietary funds in total have collected $78.6 million, or $1.8 million more revenue than the prior year's first five months of business. In comparison to the 2.4% increased revenue trend amongst these proprietary funds, operating costs for these funds have also increased, primarily attributed to those cost inflationary pressures associated with outside contractual services, as well as temp labor reliance, as these front-facing business units strive to meet service demands in alignment with our Savannah GPS objectives. For the five-month period ending May 2026, the Water and Sewer Fund reflects a total revenue position of $41.7 million against total expenditures of 34.9. And while this fund remains operationally positive, year-over-year comparisons are revealing emerging cost pressures and consumption trends that warrant monitoring as we move into the second half of this fiscal year. You may recall we had an incremental rate increase of 7% regarding this particular service account. However, our consumption basis has only grown by 8%, so it's a mere 1% difference. So we're watching that indicator, and we'll be able to come back to you at a later date if there's any additional impact that we need to, or absorption that we need to build in. But right now, the Water and Sewer Fund is tracking in a positive net position. Now, with water and sewer, there is also our industrial and domestic fund that is coupled with our water and sewer fund. And it also reflects a positive net position. It grew $6.3 million through the first five months of this year, which is basically an increase of about $2 million from last year. And so we also have about $2.8 million in growth for our expenditures compared to 2024. Overall, the fund's revenue position is materially stronger than in prior years despite losing one commercial customer with IP going off the rolls last year. Again, nothing to be cautious about related to the IND Water and Sewer Fund, but we want to continue to monitor those in this climate. For our sanitation utility, Through the first five months of the year, they have a net $1.1 million positive variance in revenues from January through May 2025 to January through May 2026. And this is attributed to multiple revenue streams. Primarily our inter-fund disposal fees are up. Our residential refuse fee collections are also up, as well as our commercial collection fees have also shown a slight increase. due to that 5% incremental increase approved by council in the city budget. And as we go through our parking and mobility enterprise, the parking fund is also showing, as you can see here, a net favorable position through the first five months of business. I think they're doing a great job in controlling their operating costs amidst these inflationary pressures. Our last proprietary fund I'd like to highlight would be our Civic Center Fund. That enterprise, if you've never lived in a home while you're undergoing a renovation, you can appreciate that experience, but that is what the staff over there are doing and they're doing a yeoman's job. We are also seeing, however, some additional chiller rental costs and repair costs for that chiller rental during this renovation. That will likely cause us to do maybe a future budget amendment and bring that back to council. However, right now, we are monitoring it closely to ensure that we mitigate any additional overages to end the year in a positive direction. City Manager, that concludes the presentation for the Mid-Year Financial Update. Are there any questions before we transition? Thank you.

I think we've got one more slide, which is . budget process. So just letting you know, we're starting that process with council. So please, um, thanks to those who've responded to my office, setting up your, um, your budget priorities, number one meeting with me. But if you haven't, please do so we can get, um, budget priority meetings one-on-one with each council member, but you kind of see, um, where we're headed. Um, uh, we're taking the feedback we got last year and having a two day budget retreat. Um, and then we'll be releasing a proposed budget to you very early in November, giving council at least two weeks to digest that before we get to our budget retreats and then our public hearings and then hopefully an adoption for December 10th, 2025. So the takeaway really with the mid-year financials, and we can get into specific questions, Our revenues are underperforming slightly, our projections, and that's driven mostly by our sales tax numbers. So if you remember in 22, 23, and 25, we really couldn't project enough sales tax revenue. The economy was really, really running hot, but that has started to plateau. And even though we're still seeing growth, In revenues from sales tax, the growth is not nearly what it had been, and it's underperforming our projections slightly. On the expenses side, we're seeing expenses and cost rise for nearly everything. The majority of our expense pressure now is happening in personnel, which is the majority of our expenses here at the City of Savannah. and in overtime and uh fire as we've brought on the new police a new fire station out west police as they've had to continue to respond to increased first amendment demonstrations in the city and that takes overtime in addition to the overtime that we already use as well as in sanitation and park and tree as we try to execute on some of these gps so those are some things that we're going to have to manage Um, the last half of the year is our overtime usage, um, and really trying to dial in there, um, to get, um, that spending, um, back in balance with our revenues, but that's what we're seeing. So, um, as Melissa said, this isn't a red flag. This is just saying, okay, we're, we're not in a position where we were two or three years ago, where we, our revenues are really, really outpacing expenditures. That gap is starting to tighten. And so we need to tighten as well.

Well, we knew these days would come. There were days when it was good and plenty and everybody had everything that they wanted. Governments are really starting to feel the brunt of it now. Hence, good working results and good predictions. And so we're fortunate that we have know we we're in a position to be cautious because there's some folks who are really in alarm right now um i think we have to rethink that date the dates we'll talk about that offline yes sir um but um my concern is really as we get closer um there'll be a point at which the aspects of the big beautiful bill will start hitting, which significantly shifts responsibility from the federal government to states and local governments. And this is a cause for alarm that we try to create some way of being able to at least figure out what that means for us. We didn't expect to have to feed folk last year during the shutdown, but we did. I mean, these are things that we just, that historically local governments don't do. And this is gonna be a crisis in our social network, social service network that has not existed before. And we're gonna probably be expected as a necessity to fill in the gaps. So I'm just raising that flag for us to really start looking at it before because just nothing that you can really because we have not had to do that before. But I mean, for me, I'm very at least satisfied that we've done the requisite diligence in helping get us to the point of where we are. So I know you had a question.

I do. Thank you, Ms. Carter, for your presentation. Could you go back to slide number eight? Yeah, I think it is slide number eight. No, no, no, that's not it. It's the one that said general fund expense. Where are our primary cost drivers? I can't really read it on my copy that you gave us, but it says temp labor account has been incurring expenses at an accelerated rate. If this trend persists, the 130,000 risks will remain.

Okay. So basically we are seeing more temp labor utilization, um, amidst some, as staff is trying to ensure that they're meeting service delivery demands, um, and, and amidst that vacancy, uh, filling, filling their vacancies. And so what we are predicting now is that there is at risk about a hundred thousand dollars. We're going to continue to monitor that as we go through the year. We haven't sent, we haven't spent 130,000 in temp labor this year. However, we're always thinking, how are we utilizing the five months of business activity to predict where will we be at year end? And so for right now, based on what we're seeing, it may be $100,000 impact, but as vacancies are filled throughout operations in the general fund, we expect this to taper off.

Thank you. Mrs. City Manager, me and you done had conversations about temporary workers and full-time workers, especially within our sanitation department. We'll further those conversations.

Yes, ma'am. And we do have a budget every year for temp labor. And temp labor is an important tool to have when you just need temporary labor. And so we're seeing as we're doing more work um, that we're, that we're relying a little bit more on temp labor than we need to. Um, and so that's why we're flagging this as this is a pressure. So we're, we're seeing that in the, in the expenditures, right? Our departments are using more temp labor cause we're doing more work. Um, and we've, we want to do more work, but we also need to make sure that we're living within our budgets. Also helps on our unemployment and that workers comp, um,

So it gets heard, you know, along with us, so to speak. So it also creates some opportunities for some savings there as well.

I'm looking at the fact that just from talking to people in our sanitation department, and this is a conversation we can have away from this discussion because this is finances, but I'm going to say this part. I feel that if we... give a person a permanent position. They're going to appreciate it more. They're going to give you 100% as opposed to a temporary person who's just going to say, I'm only here for a little while and what have you. But we can talk offline in reference to this.

And you're absolutely correct. It's about do we have the money for a full-time employee there or not. Yeah.

Or do you create a temporary position only to get rid of it, you know, because it's a temporary opportunity. So, but a good conversation to have. Yes, ma'am. Yes, ma'am.

Thank you, Mr. Mayor. In reference to slide number six, which is the general fund revenue expenses 2021-2026, Thank you, Mrs. Carter, for always being so excellent when it comes to this work. You said a word, two words, economic pressures. Can you tell me what you mean by, give me some examples of the economic pressures you're talking about?

Just gave the analogy that just as households are experiencing economic pressures and with costs of groceries, utilities, housing, So are, you know, they're being more conservative with their consumer spending, but also the city itself is also experiencing those same cost inflationary pressures for contractual outside labor costs, outside service costs, but also with equipment, commodities, our own, like, office supplies. I mean, we're also experiencing some of that cost inflation that our households are experiencing.

The other question, thank you for that. The other question is from the next slide, general fund revenue January through May. My question is, how can we collect more money in reference to the items that's in the red color?

Let me take a stab at answering that, and I can let Melissa and David talk more. On the sales tax, that is directly tied to how much people are spending money in the city of Savannah. So that's, um, our, our residents, that's our visitors, that's our businesses, you know, how much money are they spending here? And that sales tax is being collected here in the county and, and, or directly in the city and being dispersed to us. So, you know, that is the sales tax is going to be very, very dependent, um, on, national economic and global economic trends. So that's where we're going to see like what we're seeing in the national economy, that's where we're going to see that hit first, is sales tax. If the economy's bad, people are going to start spending less. They're going to spend less on luxury goods or more growth. They're going to be shopping for cheaper groceries, et cetera, and they're going to be trying to spend less versus what we saw in 2022, 3, and 4, where where the economy was really hot and people were spending more. So that's what we see on that end. When we look at some of the other revenue lines, some of that is, for instance, where we're down is in, uh, you know, the fines and penalties, which is like our, uh, speed camera zones near schools. Um, we're looking into why that revenue is down, but, um, you know, one, one, uh, theory is that people are speeding less through, uh, and that's a really, That is a good thing. So not all revenue deficits mean that something bad is happening.

Exactly.

The other thing that I'll point out to you, Auderwoman, specifically, is where we've pointed out that insight with our other grant revenue, where the the rockingham farms which was action that you know members around the table took and that the the city continues to work on in terms of economic development has really outperformed its projections and we received a huge pilot a payment in lieu of taxes on rockingham farms this year which was very very very favorable and has really kind of kept our revenues in balance so when we think about the diversification of what we need to do in the city, thinking about those different investments that we're making and how sometimes they hit at different times, just like you and your homes and your own businesses, where the more diversified you are, the more resilient you are to some of these economic pressures, as Melissa called it. So those are the things that I would just point out in that chart, and I don't know if you'll have anything to add there.

I would just add that, remember the two runners on the race? We have a lot of things on this list that are going to come at a different time in the year. So as we continue to monitor, like property taxes, we're going to see where our property tax payments come in in July. We'll be able to continue that. So there's going to be ebbs and flows. We're continuously monitoring that, definitely because we are in a state of caution to see how our revenues will actually perform against budgets. But right now, it's still too early to come up with a detailed year-end projection. It's just caution.

Thank you. All right. Bernetta?

Thank you for the presentation. Good job. So inflation is up. Prices are up. People are spending less. Sales tax are down. Our pension is healthy and stable. At the rate we are going, and I know that depends a lot on the market. So are we... Are we nervous about our pension, or are we looking for that to stay secure, or are we just gonna watch the market on that?

You can let our pension vice chair and chair speak to that.

Yeah, happy to, and ultimately a great question. Really, it's the decades-long good planning, responsible leadership that are paying off right now in our city's pension fund. It's really the governance structure, because it's run by the city employees, And I'll tell anybody, I get to be the conscientious observer. And my job as a fiduciary is to come to you guys every year and make sure that we continue investing in it. We're in a much better place right now than a lot of other cities because, thanks to y'all and this council, Every year you've made the right investments, us, the right investments in the right place. So every time city staff have come by to say, and it's a generous contribution from the general fund, usually ranging around from $10 million-plus each year, city councils maintain that commitment so that we can be in a position where we're not having to worry about that sleeve of our portfolio. So a credit to council, and thank you for continuing to invest in it.

very good so although we are in a cautionary phase our pension is healthy and on the other slide we were talking about discussing on seven slide seven yes that same one so okay we understand property taxes are up um that and we understand what's going on with that with the valuations and everything military, however, property taxes up, sales taxes down. This is interesting because we have people that were advocating to get rid of the property tax for sales tax and had that been the case right now, we would be a little nervous about that movement with sales tax being down. 100%. Yes, sir. So license permits up, and congratulations to our, we made a concerted effort to make sure that we secure more grants and do more work in the grant field, and it's showing here, and those decisions, so I wanted to say congratulations to management and that area, and I'm sure we can continue to I don't know with this economy, but let's continue to look at what we can do to increase with the grants there, and I wanted to mention contribution for other funds. Jay, the in-market, that's not an enterprise fund.

It is an enterprise fund, yes, ma'am.

Did you see it?

It's in the it's included in the Civic Center.

It's in the Civic Center Fund Enterprise. And this is a general fund chart of the parking in the parking.

But I do think that it warrants we get a we get their financials every year as well. And we audit those. And I'll be bringing that to council, too, because I think it's important for us to look at the Civic Center Enterprise. We got to look at both the Civic Center and the end market, because we want to make sure that the that both are are performing as we would expect.

Got it. Okay, text is down. I saw where the leisure services fees, now those are up. If they were a little bit more balanced, I'm a little concerned about that. Is this because we have more activity? Because that would be a good thing. If we have more users.

Prices went up.

Prices went up. And see, that's a little concerning there because...

We did raise rates for non-resident, but I think that warrants a deep dive. And I'll send council a report on leisure services fees at the mid year to understand, like, is this a increased usage or is this or is and how are our rates competing?

Right. And we want to make sure that we were able to maintain the

the local experience on the backs of the non-residents so i think i think it's a couple of variables that have to be kind of probably joined i think we do need we'll look into it and i'll provide a report on that to council thank you for that and okay of course we know the interest and dividends that's driven by the market uh other user fees that's down did you say something about that why no you see less No.

No, this is basically it's not really a cautionary point right now. It's just different events happening different times of the year. So that's why we also always saying we fully expect this the right size itself. Again, this information, this data is from January through May. We have a lot of, you know, now kids are out for the summer. Families are vacationing, family reunions are happening, and we have other user fees that are coming in during the summer months. But this data, it just cuts it off right before we get there. So we really don't see this as a caution point.

And I think maybe, too, one thing that maybe something we can dive into at a workshop, too, is how our cash flow works through the year so you understand that. Because we don't have the same revenue pace every month, right? Like, we're flush at the end of the year after that second round of property taxes come through. So kind of understanding how we manage cash flow is important, too.

All right. Yes, sir. Quick question. Mr. Melver, you made mention, I kind of caught the end of it. Was it the school zone cameras or something that you said the revenue was down on those? Revenue's down. What's the revenue for the year on those?

I don't have that. That's another one. I, I personally wanted to look into, so I'll provide that to council as well.

Where does the money go? Police department, public safety, public safety, as it's directed to state law.

So, so far we've collected through the first five months, about $390,000 this year. However, that's compared to over a million last year, um, through the first five months. So again, Understanding that.

I was just asking because I saw the looking at the overtime. I mean, it can be used for anything in public safety from operational costs to equipment to public education programs. So I didn't know if that was just we don't really factor them. That might help offset some of that cost. So just thinking that. Okay. I knew y'all wouldn't get no money from me this year.

Me either. hit me for 150 twice.

So now we get to the recommendations. Yes, sir. So we want to now talk about millage rate. Okay. So have in your mind where we are kind of in the economic situation of the year. And now we're going to talk about, uh, we just got the digest from the County. We've have to set the millage rate. the final millage rate for this year, which we build next year's budget off of as well. So it's really kind of a two-year millage rate. So if you think about it in that way. So we'll hear from David Maxwell about kind of where we are with the digest.

As the city manager said earlier this morning, city council plays a major role in the financial health, especially in the city with the decisions that they make on a routine basis. And one of the biggest decisions that city council makes is what is the millage rate going to be? If you're like me over the last week or two, you probably got your annual assessment notice in the mail for your property and you opened it up and looked at it and you compared last year's value to this year's value. So that's one way that your property value can change. The other thing that can happen is you might add a new room onto your house or you might add a pool. So that could add value to your house. And so one of the things that the county does, the tax assessor's office, they take all of those individual assessment notices, put them together in what we call the digest. And they send that out to all the jurisdictions. And we take that information, gyrate it around to come up with how much tax money we think we're going to collect this year as the city of Savannah. So we're coming to you now with some information so that you guys can make a decision as to what taxpayers will pay within the city of Savannah. Essentially, what is the millage rate going to be? We have seen some softening in the tax digest this year compared to last year. We have been clocking double digit increases in growth over the last five years that averaged 10.1%. The growth from 2020 five to 26 was lower than that at 5.5%. And as I talked about just a second ago, there's two components to that growth. One is new growth. So you added a pool or you added a new room to your house or you built a house on a vacant land. That's new growth. And the laws within the state of Georgia allow the city of Savannah to enjoy the benefit of all of that additional tax revenue. as that doesn't go into the calculation of the rollback rate. But if you have the same house sitting on the same parcel and you haven't done anything to it, and your value is higher this year than it was last year, that's called a revaluation. And that's essentially the same thing as inflation. So your property is exactly the same, but they're valuing it more this year than they did last year. And that's where the rollback rate comes in. And so if we want to take advantage of any of that increase in the properties, we have to adopt something higher than the rollback rate. This isn't a discussion about how you do rollback or calculate it, but I just want to give you a little idea of what we're talking about there. So with our budget, as the city manager said, when we develop the budget, we just assume the same millage rate will roll from one year to the next. So last year's millage rate was 11.749 mils. We built the 2026 budget, assuming that that would be the millage rate, plus a 3% growth factor. Now, if you look at the chart there, you'll see 2026 had new growth of only 2.4%. Last year, you might remember, we were able to adopt the rollback rate. Remember that? Because we had 4.8%. new growth, and we only assumed 3%. So we had a surplus even with the rollback rate last year. But you can see from looking at that chart in that column titled new growth, 3% new growth is kind of unusual for us, isn't it? It's more in the 2% to 2.5% range, and we're seeing 2.4% this year. New growth will get you about $2.9 million in new tax revenues. That's about $243 million worth of new value coming onto the digest. And as I said, we assumed a 3% growth in the budget when we passed it, or when you guys passed it. And so that leaves us with 3.1% of that overall 5.5% growth being attributed to revaluations or inflation of existing properties. The rollback rate that the tax assessor calculated for us was 11.402 mils and that essentially keeps the tax collections the same from one year to the next and eliminates all of that growth in the tax digest that's due to revaluation or inflation. Okay. We'll flip to the next slide. So what have we done in past years? Well, as I said, last year, 2025, we adopted the rollback rate. But in prior years, we elected to keep the millage rate the same from one year to the next. And that a that allowed us to make some new investments during this budget year. So when you think about our budget, what's the one law that the state has about a budget must be gotta be balanced. So that's what we do, right? When we adopt the 2026 budget, The revenues and expenses are exactly equal.

You heard that, right?

So that's a, that's a zero sum game, isn't it? So if I want to spend another dollar, I've got to get another dollar from somewhere, right?

Right.

So as we go throughout the year, we now have an opportunity to make some additional investments during 2026, like we have done in 2022, where we invested additional money in public safety, about 4.275 million. That was an opportunity to increase starting salaries. We also implemented some lateral entry and bonus programs. In 2023, that was a year of drainage. I think that was one of the years where we were having a deluge of a summer and we were having all sorts of problems. And so one of the things that we decided to do or city council decided to do in 2023 was to use about $8 million worth of that additional new revenue due to the digest growth to address some of our drainage issues. 2024 was drainage, transportation, and public safety, about $7.1 million, different transportation projects. And then we also worked on the public safety comp plans and incentive pay as well. So a couple of things that we did there. As we move on, one of the things that we have also done in recent years is tried to increase our general fund reserves. And that's kind of what we can use for a rainy day fund. So if the economy is not performing well on the revenue side, we have a pot of money that we can draw from. Or if certain opportunities exist to maybe take advantage of market opportunities to use it to buy property in the past or do some additional investments, we have a savings account that we can go dip into maybe to buy something or launch a new program. One of the things that the city has tried to do is increase its bond rating. And one of the main ways that we can do that by looking at our peers and from what we hear from the rating agencies is to increase our reserves. So you can see from this chart over the last four years, we've gone from 19.5 total reserves as a percent of general fund expenditures and transfers out to almost 25%. So one of the things that city council can do is take an opportunity to increase those reserves with additional money. Now this is an interesting chart. I didn't put this chart together, the budget department did, but I started with the city in 2003. And I don't know, that's just a coincidence, I guess, but you can see that the tax rate, I think, if I remember correct, was about 3.25 or something like that. And you see it came down for several years, then the Great Recession hit, And we increased it at one time in 2010. We bebopped along over to 2018. You might remember we had set the millage rate anticipating the fire fee to be collected. Middle of the year, we decided not to collect that fire fee. And so at mid-year, we had to set a higher millage rate at, I think it was 13.48 or something like that. I can't remember exactly, but that was a one-year thing. to overcome the fact that the fire fee was repealed. And then it's been a steady decline down to 2025, where it was the 11.749. And that was the number that was included when we built the 2026 budget. So you see the dotted line there over to 2026. And I think, and I didn't look this up, but that's the lowest millage rate since the 70s?

1987, I've been saying. Yeah, mid-80s.

Mid-80s, okay.

Since I was 12.

So what we have done is put together a proposed millage rate adoption schedule that is based on the state of Georgia laws. And so I have here in the state of Georgia puts it out every year as a compliance guide that we have to follow in order to make sure that we properly adopt the millage rate, whatever it might be. There's two sets of steps here. One, if you adopt the rollback rate or something below that, or a second set of steps if you adopt something higher than the rollback rate. This lays out a scenario whereby we could adopt the millage rate higher than the rollback rate, which will require three public hearings and then two readings of the revenue ordinance to adopt the final millage rate, one of those public hearings has to start between six and seven in the evening. The other caveat is that if you have two of those public hearings on the same day, one of them has to start before 12 noon. And, uh, I apologize to the city manager because I didn't remember that until late last yesterday. And I had given them a completely different schedule. And so this schedule that I have laid out here won't work exactly. Oh, this will work. I think what we're doing is in consultation with the mayors, maybe proposing to move that July 9th, the first bullet over to the 13th of August. But the city manager is going to go over that when he wraps us up. So we have to have three public hearings. One has to start between 6 and 7. If you have two on the same day, one has to start prior to 12 noon. We have to have two readings of the ordinance to adopt that final millage rate. And then that allows city staff such as myself to go ahead and put into place or put into motion the steps to get those bills out to the public by the middle of September so that we can make sure that those revenues are recorded and on our books before the end of the year because that is our biggest revenue stream. I had something else I think I wanted to say about this, but I don't remember what it was. That's all I have, Mr. Mayor.

Let me finalize my slide here when we get to the discussion. So our recommendation, my recommendation to council is that we maintain our millage rate at 11.749. I am not recommending us to raise our millage rate. Even though we do see some budget pressures, I don't think we're in a place to raise our millage, nor would we want to do that to our taxpayers. You'll see in the chart where there's kind of three options, essentially. One is our recommended millage rate, which is the same as the current one at 11.749 mills. The rollback rate, which has been calculated for us at 11.402 mils, which would actually produce a deficit for us at over $900,000 for our annual budget. And then a moderated millage rate reduction that wouldn't require any cuts. So this is my kind of my consideration for city council are things I think that city council should consider as we move forward in the millage rate discussion is to remember that the city remains in a responsible financial position to meet current service plans. But we have to We don't remain in a financial responsible place by doing irresponsible things. So just remember that it takes responsible financial planning to remain there. And I do not recommend raising the millage rate. Two is to consider the current budgetary and economic environment. Melissa went over that. Our sales tax growth has softened. Service costs have increased. And economic uncertainty looms for the nation and for the world. If the rollback rate is adopted, council will have to answer the question and will certainly help in that is where should we cut more than $900,000 in appropriated spending for this for the rest of this year? So just know that we would have to cut $900,000 in appropriated spending. So the budget that you passed last year, we'd have to cut if the if the current mill rate is kept. then city council needs to decide how it wants to allocate that $2.3 million this year of captured growth. We shared what we've done in the past, namely public safety, stormwater, and Vision Zero efforts. I want to add to that list of consideration for this year a potential to increase our reserves even more than we have as we are kind of anticipating some rainy days ahead or that we may not have an answer for where we want to spend that revenue growth today but we might have that answer later in the year as new needs emerge. So I just want to put that out as a potential I would like city council to consider is adding that growth to our reserves as well. So that ends our presentation, and I hope gives an insight into our recommendations and why, and open it up, Mayor, to questions or discussion.

Thank you, Jay. Thank you, David. Let me just throw this out here to counsel, and then we can deal with it how you wish. I think we have imprinted our DNA on our team enough that they understand exactly where we are. We always want to decrease our military. I mean, that is a desire. If we can do it, if there's a way to do it, we always want to decrease it. If we can't decrease it, then we don't want to raise it. Right? I think we can agree with that, right? We don't want to do that. However, we also don't want to put ourselves in a position of short-term gain and long-term hurt. The worst thing you ever want to do is decrease a millage rate to have to be able to raise it again the next year. We have done very well relying on the advice of our team. in helping us to navigate this. Again, there are cities and other municipalities around who are having really, really hard times closing budget gaps that exist. And so I guess my only ask would be for us to remember the history. In this administration, we have cut taxes twice. We're at the lowest since 1987. We are living within our means. We're living within our growth. We've been able to give our employees raises at every budget opportunity while not doing on the backs of taxpayers. We will have some rainy days ahead. I spoke a little bit about the big, beautiful bill and what those implications will be for local governments. Our storm day is coming. Thank you. Well, I mean, you look around, it's happening around the country. And so, you know, when that rainy day comes that is more like a deluge, we want to be able to be prepared. And I do think that we can make a case to our taxpayers to say that when we've been able to bless you, We blessed you. When we needed to protect you, we protected you. So I'm just throwing that out there. I think that Jay's recommendation is solid. And, you know, again, I just think getting our reserves to where it needs to be to prepare. I mean, the worst thing you ever want to do is the day comes and you don't have it. I mean, as personally and as a government. So, I know you had something to share.

Yes, thank you. Thank you for your presentation. Now, looking at If we keep the military that we have now, July 9th, you would not have to have those meetings? Is that what this is saying?

I think the schedule now that we've thought, and sorry that we weren't able to put it on a slide, we're required to do three public hearings and two readings of the ordinance. So what we want to do is have hearing number, and there's You have to have one hearing between six and seven. And if you have two in one day, you have to have one before noon, which was the new wrinkle they threw in last year. So this is what we would propose that schedule be is that hearing number one take place on July 9th at 6 0 1 p.m.. So we would have our regularly scheduled council meeting at two. We would wait around or come back and have our first public hearing at 6 0 1 p.m.. We would also have the first hearing of the the revenue ordinance on that day as well. Then we have our council recess and our first meeting back is August 13th. We would do hearing number two at 11 a.m. on August 13th. So the same time as our workshop started, we would just simply start in chambers and open with a public hearing and then continue our workshop. then we would have hearing number three later that day at our regularly scheduled council meeting at two o'clock.

I got that part. So based on your recommendation, Um, you're saying keep it as it is. Yes, ma'am. Right. Then those meetings would be obsolete. No, we would have to still have to have those meetings.

Okay. We would still have to do the clicker. I mean, we'd still have to do the meetings because we're not, uh, we're not adopting the rollback.

Okay.

Remember last year when we dropped it, we didn't have to have the AB hearings. Right.

So if we did the rollback rate, which would be 11.402. then we would not have to do none of these meetings, but that would mess with... We would have to find $900,000 in court cuts. Okay, and leaving it at 11.749, we just do the meetings and we gain...

Right, we'll have about $2 million there.

Right, awesome, okay.

And so the thing I want to talk to, I'm going back to this chart because I think it's important, especially when you talk about reassessments. We have seen less total growth this year than in years past, but that's not always a bad thing. That reassessment valuation at 3.1%, which is the lowest it's been in five years, is signaling there's a cooling on the housing market, right? Which is the housing market was super hot. You saw in 22, 11.8%. revaluation 10% the next year 9.1% so you saw the housing market really grow now that's good if you own your home but it also has a cost on on your your tax bill but the 3.1 reassessment this year means that that that that growth in housing costs and valuation has softened which is I think a good sign for us has been in a super hot housing market today. So that doesn't impact our property taxpayers nearly as much as years past where it was triple, four times that amount.

Okay.

I would say, just to piggyback on what the city manager just said, under Stevens Day, if you have a homestead property in Savannah, the most your assessment could go up was 2.7%. which was CPI from 25 to 26. Now, if you had a non-homestead property, it could go up more than that, but a homestead property, the maximum it could go up was 2.7% under Stevens Day.

Now, we talked about payment in lieu of taxes, and what is it, Redgate? Rockies. Rockies, yeah. So they did something phenomenal, and it added to our budget. That's right. Now I'm getting ready to say something. And we need to really consider SCAD doing a payment in lieu of taxes in reference. That 900,000 wasn't nothing. That was a drop in the bucket. We need way more from them. when we talk about taxing. Okay? All right. Thank you.

I'm done. Well, we have another part of that grand process, and we'll be putting ourselves in that again. I mean, you know, you can't force people.

You defend those people so much that they're just doing some of everything, building and building, and they're paying no taxes. Well, the law says they don't have to.

Well, I mean, we need to change that law. Well, I mean... You have to go to the federal government and the state government for that to happen. We need to put legislators in place to make sure that... That's SCAD, that's colleges, that's churches, that's non-profits, and everybody else.

And I think it's important as you're talking about that is to also understand the steps that council has taken to diversify revenues in a way that creates more fairness to your regard impact fees, stormwater utility fee, which is coming in September. Don't forget, we voted you voted on that. You pass it. So they pay. They pay. So so, you know, everybody pays those fees. So that's so just I think think about that, too, because that's part of that discussion as well.

right so while we uh let's let's i mean let's if we're at a point of consensus where we can at least give the city manager some direction um about where we go as anybody that is absolutely saying to adopt the rollback rate i don't know how we can responsibly do that but if anybody feels that way if we could We would, if we could reduce, I'm sure we would. But I just don't see with all of this and this uncertainty that we could do anything to maintain what we have.

I'm supporting the city manager's recommendation. I am supporting the city manager's recommendation.

Ms. Manager, do you have what you need, sir?

Yes, sir, I do. Thank you so much.

We'll go ahead. We will notice the public hearings to do that. And I think, Mr. Manager, we did a much better job last year and the year before. We have to educate the public on not only what we're doing, but why we're doing it. We just don't want to be in a situation where we have to raise taxes next year.

All right, ladies and gentlemen, is there anything else, Mr. Manager? No, sir.

All right, we have to have a quick lunch. We were supposed to be starting a little earlier today because of America's 250 if we have some special things happening today. So I'm just going to ask that you don't enjoy your food as much. We don't need an exec, right? All right, so we'll go ahead and we will recess as soon as possible because we have some folks waiting on us. All right, thank you. We're going to have fun.