City Council - Regular Meeting

like to call the May 11th city council meeting to order and we'll ask for all to rise for the invocation and pledge of allegiance. Good evening everyone. Let's pray. Dear heavenly father, thank you so much for this day and thank you for your many blessings on our community. I pray for our mayor and council members as they make decisions for our community. And I pray for the staff members who are making presentations tonight. In your name we pray. Amen. Amen. Amen. Would you join me in the pledge of allegiance? I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all.

Thank you. During the uh during pre-aggenda, we moved item B to the regular agenda. Uh are there any additional uh changes to the agenda? If not, do we have a motion to approve the amended agenda? So moved. Second. We have a motion and a second. All in favor say I. I.

Any opposed? Motion carries unanimously. Um as always um the we have the 2026 code of ethics and the front and center strategic plan. Uh council strives to follow the code of eth ethics and strategic plan. Um today we have two presentations. Uh and first will be the ALS awareness month proclamation and I ask Mr. Wilson to come to the podium. Okay. This uh proclamation is uh in recognition of ALS awareness month. Whereas amopropic uh lateral sclerosis ALS commonly known as Lou Garri's disease is a progressive and fatal neurodeenerative disorder that affects nerve cells in the brain and spinal cord gradually robbing individuals of their ability to move, speak, swallow, and eventually breathe. And whereas approximately 5,000 individuals in the United States are diagnosed with ALS each year, highlighting the urgent need for continued research and awareness. And whereas ALS affects individuals of all races, ages, genders, and backgrounds and currently has no known cause, effective treatment, or cure. And whereas individuals living with ALS along with their families and caregivers face significant physical, emotional, and physical financial challenges often requiring specialized medical equipment, home modifications, and full-time care that may exceed available insurance

coverage. And whereas increasing physical uh public awareness and community engagement are essential to advancing research, improving access to care and resources, and supporting those affected by ALS with compassion and dignity. And whereas ALS awareness month provides an opportunity to recognize the profound impact of this disease on individuals, families, and communities while also honoring ongoing efforts to find treatments and a cure. Now therefore, I, J. Douglas Hendricks, mayor of the city of Statesville, do hereby proclaim May 2026 as ALS aware awareness month. And the city of Statesville encourage all citizens to join in raising awareness, supporting those affected, and promoting efforts to eliminate this disease. I am Scott Bell and I have nothing prepared. Didn't know I'd be speaking to you guys this evening, but uh I truly appreciate the recognition and u spreading awareness for this disease. Um, I know this is probably not common, but um, can I see a show of hands of folks that know someone with ALS other than me? Um, thank you. Thank you for that. But

so I've been practicing engineering for about 30 years. It's only the about the past 10 years that I've been able to do something in my hometown and it feels good. But I want everyone here to know you have the best staff from fire department, planning, engineering. Um, does anybody know what makes the city special? It's communication.

Communication. I don't have to wait a week for a response. I get a call back immediately or an email back. Um but thank you. Thank you for um spreading the awareness.

Thank you. Okay. Our our second recognition tonight is National Police Week proclamation. So, um um Chief, you want to come up? You've already taken the picture. Whereas more than 800,000 law enforcement officers serve in communities across the United States, including the dedicated men and women of the Statesville Police Department. And whereas in 1962, the United States Congress and the President of the United States designated May 15th as Peace Officers Memorial Day in the week of which May 15th falls as National Police Week. And whereas the members of the Statesville Police Department are committed to serving the community by safeguarding life and property, protecting individuals against violence and disorder, and upholding the rights of all citizens. And whereas these officers provide a vital public service through their professionalism, dedication, and unwavering commitment to the safety and well-being of the community. Now, therefore, I, J. Douglas Hendrickx, mayor of the city of Statesville, do hereby proclaim the week of May 11 through May 16th, 2026 as police week in the city of Statesville. encourage all citizens to observe this week with appropriate ceremonies and

activities that honor the service and sacrifice of law enforcement officers past and present who have faithfully served their communities. And further, I do hereby proclaim May 15, 2026 as Peace Officers Memorial Day in the city of Statesville in honor of those law enforcement officers who have made the ultimate sacrifice or have been disabled in the line of duty. And I urge all citizens to remember and pay tribute to these heroes and to recognize the families and loved ones who carry on in their memory. Thank you, Chief. Okay. Next um next on the agenda is public comment. For public comment period, each person who signed up will have three minutes to speak on any topic. When you come to the podium, please state your name and address. Uh, first name on the list is Vanessa Davidson. Uh, I was born in Statesville at Arredel Memorial Hospital and I proudly am a celebrity cuz I was the first colored baby to be born there. 1954 when they integrated theos the hospital. So I claim that celebrity.

Okay. There were explosions that shook my house windows. Neighbors called me and I and asked me, "Was it me?" No, it was not me. I don't have any explosives. I called law enforcement. I found out that it was a new person that had moved into our community, a United States veteran. He was using Tannerite for target practice. When I looked at his target, it was positioned toward a neighbor's backyard. Another time, someone was disar discharging their firearm excessively. Neighbors call me and ask, "Is that you, Vanessa?" "No, I do not own a arsenal of weapons of mass destruction." Law enforcement said, "You live in the extrterritorial jurisdiction. Firearm discharge is allowed up until dark." I was at a grocery store and I saw a very young mother park in front of the entrance to the store. Come inside alone. I saw this while I was checking out. Out of that vehicle, I saw three very small children climb out of this SUV. They came inside and started to walk around the store. And I'm sure they were looking for their mother. She was able to check out quickly. She grabbed some of the children, proceeded to her vehicle parked at the entrance. I watched her as she began to assault these children, literally throwing them into the back seat. I asked the person in this store if they saw what I was seeing. They said

yes. I called law enforcement. I called the police. The officer that I got said he didn't he didn't really seem concerned. The store manager at this store could not provide any security video surveillance in in route home one night. I was terrified that a woman I saw jump in front of a vehicle. It avoided hitting her. My vehicle was behind that vehicle. And again, this woman jumped in front of my car. I too avoided hitting her. I called law enforcement. I called the police. I was able to park and watch as law enforcement arrived. By the time they got there, she was laying on the ground. Someone humanely dropped off two of the most beautiful bassid hound dogs in my community. My door, my neighbor and I did as much as we could to help them until she was able to contact a rescue for them. Other similar situations with defenseless dogs were treated the same. I call law enforcement. I call the police in my yard.

That's your three minutes. Thank you. Oh, well, I'm calling about nooes that were in my community. the same conduces that were found in Statesville with a man that was lynched in Statesville. It's on South Elm Street and I sent these letters to the council and I got crickets. So, can I give this out to each one of you? Certainly.

Um, it's it's more extensive. There's more to it, but I I don't have more than three minutes. tried to send this out electronically, but it didn't work. Well, you're welcome to drop the drop anything off here at city hall uh at the manager's office, which is just down the hall. Well, I sent it electronically. Thank you. Thank you for

Thank you. Next on the list is Kelly and I cannot read the last name. 137 Mount Bridgeway. Okay. Thank you. Hey, my name is Kelly Standish. I'm a resident 137 Mountain Bridgeway. I know uh I kind of spoke to some people off the record uh some of the council members last last week about LAR homes and how they're building our houses. But one of the things that's came to light as of recently is um the uh certificate of occupancy that was issued on my house. Um so there's a lot of issues that with my roof and um my trusses are broken and um the sheathing under underneath my my my shingles. Sawyer, come here. Please hold your brother. Um the sheathing is isn't properly bonded. All of which is with outside of code, but somehow it passed the city inspection with uh um for the certificate of occupancy, which was also issued to my VA uh to the VA under my loan. Now, the VA is threatening to withdraw its backing on my loan for a fraudulent certificate of occup occupancy issu uh issuance. Um, I don't know who's accountable, who holds the the um the city inspectors accountable because when I made contact with these with the with the city inspector, he said they're not allowed to climb on roofs. They have to inspect the roofs from from the ground with binoculars uh because it's a liability issue. But how do they how how do they sign off saying this is this is built within compliance within code and you know I've

got photo evidence and everything from the tear off where LAR actually after two and a half months of fighting them did a reinstall of the shingles but it still is not up to standard and still failed the compliancy uh of to the shingle company. So um it's again no longer within code. There's no ICE backing. There's there's u um nail misplacements, overdriven nails. There's uh um there's no bonding strips between the the plywood on the sheathing. Um I mean just multiple failure after failure after failure that any one of them would have failed the certificate of occupancy. But it somehow passed according to our county inspe or city inspector. Sorry, it's not county. This is our city of Statesville. Um, so I don't know who holds accountability here or how how do I address this because they're telling me, "Sorry, we can't climb on roofs." And that's that's that's policy. Um, and now I'm about to lose my VA backing on my loan and I'm in a house that's falling apart because it didn't pass co it shouldn't should not have passed uh the inspection. Um, now that being said, also I spoke on um um the the new development that y'all are going to vote on in a little bit and uh and the traffic um study that y'all were going to do. The very next day after um after we was the last meeting, there was a three car car pileup pulling out of the school parking lot in which they had to bring in three ambulances to to bring people into the hospital. So again, there's an issue here. This is a four-way stop sign, but nobody's paying attention to it. Thank you.

Well, thank you for your comment. Do we need to say anything about it? You're great. Yeah, if you I'm going to ask um town manager to address the um the inspection or the certificate of occupancy. Just for clarification, Mr. Standish, when you misspoke, you are actually speaking correctly. It is county the the city inspectors or we don't have city inspectors. We have zoning, but then it all goes to Ired County for bu the actual home inspection.

They can p it off, but we don't have a building inspections department. Yes, sir. Yes. Thanks, sir. Thank you. Um, Mr. Snider, did you want to speak under public comment or just on the um during the public hearing? If you'll just state your name and address, please.

Good evening. My name is Tom Snyder. I live at 237 Sundance Circle in Statesville up off Jennings Road. I am out of the city limits and a lot of times we get involved in things or have things come on our doorstep that are in the city limits that we have no say in the matter. Well, about a month month and a half ago, I was coming down Turnersburg Highway and I saw three zoning signs and I said, "Oh Lord, I see 600 rooftops going on this property." I called the planning board and I spoke with the gentleman and Mr. Campbell and he was very helpful and he explained to me what was going on with the property and thankfully he told me it's not going to be rooftops cuz we know what rooftops are doing to this county. They're not costing the city money but they're costing the county money when they got to build schools and provide services. But I'm happy to see that it's commercial development which will bring some revenue in tax revenue for everybody. So, I just wanted to get up and say thank you for making the decision, letting this commercial development, which should be on that property, come through, and I fully support it. And a lot of neighbors up in my neighborhood, up in our end of the northern part of the county, appreciate it that the right thing is going on that property, not that it's going to be a bunch of rooftops. Thank you. Thank you, Mr. Sner. Okay, moving forward, uh we're going to uh handle the consent agenda. Uh all the items are considered to be routine by city council and be will be enacted by one motion. Uh item A is consider approving the April 9th, 2026 workshop and pre-aggenda meeting minutes and the April 13th regular uh meeting minutes. Uh item B has been removed and moved to the um moved to the main agenda. Uh item C is consider approving the second

ordinance to de second ordinance to demolish 409 Monroe Street as unsafe and dangerous condition. Item D is consider approving the second reading of an ordinance to demolish the dwelling at 1115 Old Charlotte Road is unsafe and in dangerous condition. Item E is consider approving the second reading of the reszoning request ZZ uh 2608 Killington Reserve Apartments to reszone from CUB5 conditional zoning district to R5MF CZ conditional zoning district. Item F is consider passing the second reading of the reszoning request ZC 2607 James Farm Road, Ochre Hill Apartments to reszone from B5CZ conditional zoning district to R5 MFCZ conditional zoning district. Uh item G is consider passing a resolution directing the city clerk to investigate a petition of annexation AX26-046 Wall Street filed by Mr. Garrison Davis of True North Homes LLC for the parcel located at 10006 Wall Street. receive city clerk's certificate of sufficiency and consider passing a resolution fixing a date of June 1st, 2026 for a public hearing for the petition for annexation. Item H is consider passing a resolution directing the city clerk to investigate a petition of annexation AX26-07. That's 237 Third Creek Road filed by Mr. Robert Helms of Husky Homes and Land LLC for the parcel located at 237 Third Creek Road received city clerk certification of certification of sufficiency and consider passing a resolution fixing a date of June 1st,

2026 for a public hearing for the petition for annexation. Item I is consider a request to demolish the north elevation drive-thru canopy at 122 North Trad Street. Item J is consider setting the date of June 15, 2026 to hold a public hearing on an amended system development fee schedule per state statutes. Item K is consider approving a hanger lease with GO consultants. Item L is consider approving budget amendment uh number 2026-22 to move funds to support newly established firefighter positions. And item M is consider approving the proposal RFP for a new home funds administrator. Are there any items on the consent agenda that need to be moved to the regular agenda?

Hearing none, is there a motion to approve the consent agenda? So moved. Do I have a second? Second. Second. Thank you, Amy. Um, any discussion on the motion? All in favor say I. Any opposed? Motion carries unanimously. Thank you. Okay. The regular agenda. Moving to the regular agenda. Uh item nine is conduct a public hearing for text amendment uh 02 TA2602 and consider approving the first reading of the ordinance with the batch one text changes to the unified development code and Miss Martin. Thank you mayor.

Oh let me open the public hearing please. Thank you.

Thank you. Batch one includes eight text amendments that reflect the leadership and vision of the city council in advancing a more resilient, adaptable, and inclusive development framework. Through council's feedback, staff is pleased to present amendments that include missing middle housing provisions, support existing businesses and institutions, encourage greater public participation, and provide thoughtful flexibility. The first six amendments revise existing language while the last three provide a path forward for infill sites and creative development proposals. The first text change revises adult and/or childhome daycare standards by aligning locally established capacity limits with applicable state regulations set by the North Carolina Department of Health and Human Resources. In an earlier version of the pack of the packet, there was um some amendments proposed for public facilities signage. Those have been removed from the ordinance before you this evening to allow for further review. Next, we have a text amendment that revises the separation requirement for public training facilities from 100 ft from residential property lines to 100 ft from residential structures. The fourth text amendment shifts certain uses from special use permits to conditional zoning, transitioning from an evidentiary process to a friendly legislative process that incorporates community meetings, planning board input, and allows for council communication to enhance public participation. The board of adjustment will handle special use permits. Two uses shifting from special use permits to conditional zoning are town homes and apartments in residential

districts. Additionally, the amendment clarifies and simplifies standards for town homes and apartments by resolving conflicting requirements and clarifying density allowances. The next amendment creates a new byright smallcale mixeduse development option intended to support walkable neighborhood scale development that requires B1 commercial uses on the ground floor with residential units above. The standards limit projects to maximum size of one disturbed acre. Reduces setback requirements to encourage a more compact urban form. decreases commercial parking requirements by 50% to better align with mixeduse demand practices and removes landscaping buffer and open space requirements for maximum flexibility. The seventh change creates a new byite smallcale attached multifamily housing option intended to support missing middle housing types within existing higher density residential areas. The standards limit projects to maximum size of one acre on lots of record and allow up to four attached dwelling units per lot while maintaining the underlining zoning district setbacks to preserve neighborhood character. Additional driveway location and parking design requirements are included. The amendment eliminates landscape buffer and open space requirements for these small sites. The final amendment within this batch proposes an innovation and flexibility district to establish a new floating zoning district intended to encourage creative and high quality development through the conditional reszoning process. The district allows for a wide variety of uses and provides flexibility in some development standards such as parking, landscaping, building form, and setbacks

to support innovative site and building design. The amendment also clearly identifies standards that cannot be modified, such as storm water and the fire code. All proposals within the district must demonstrate consistency with the city's comprehensive plan or other adopted plan. To conclude, batch one text amendments work towards modifying the unified development code and reinforcing the city's commitment to balanced, responsive, and high quality development. Before you this evening is an updated document um that provides a clean copy of the ordinance with signage removed and it also updates the language re regarding smallcale attached multifamily. Staff and the planning board recommend approval. Thank you, mayor.

Thank you, Miss Martin. Uh are there any questions for Miss Martin? Yeah, Mr. U Miss Martin, we've made a few changes of this since we went over this in our pre-aggenda meeting. Can you go over those quickly with the council just so everybody knows about those and is on board? Thank you.

Yes. So the changes since the uh agenda briefing were removal of the R10 district from the small scale um attached multifamily and also removal of the um signage for electronic signage and the requirement that the small scale attached multifamily be attached units so not ADUs.

Thank you. Any other questions? Okay. Um, no one signed up for uh to speak on this matter, so I'm going to call us out of public hearing. Um, are there any additional questions? Council, is there a motion? Uh, is there a motion on this batch of text amendments? Mr. Mayor, I move to approve the batch one text amendments. Second. We have a motion and second. Is there any discussion with the modifications?

With the modifications. So, the batch one text amendments as presented by staff. Thank you.

And there's a consistency statement um for you to read, please. So I uh the proposed text amendments are well that's is we recommend to approve the proposed text amendments as presented as they are consistent with the city's 2045 comprehensive land use plan. Specifically, the plan encourages new development opportunities that set the city on a more resilient path for the future. Furthermore, batch one text amendments are reasonable and in the public interest because they provide greater variety of housing types, offer flexibility, and support the business community. Thank you. So, we have a motion and a second. Any for any further discussion? All in favor say I.

I. Any opposed? Motion carries unanimously. Thank you. Okay. Um, item 10 is conduct a public hearing for text amendments, text amendment 03, TA2603, and consider approving the first reading of the ordinance with the batch 2 text changes to the unified development code. Once again, Miss Martin. Thank you.

Thank you, Mayor. Batch 2 text amendments reflect city's council's vision to support attainable and practical development standards by introducing a workforce attainable housing incentive and allowing carports. Current regulations only allow carports in rear and side yards, though many have been placed in front yards in practice. Therefore, the proposed amendment would formally allow front yard carports with reduced setbacks, a maximum size of 400 square ft, and limit the height to match the principal structure. The second amendment within this batch is the proposed build statesville home incentive which creates a buyight smallcale single family developments with reduced lot sizes and setbacks in exchange for long-term affordability commitments. Under the incentive, such developments would be limited to sites of less than 1 acre disturbed, a maximum of eight homes with at least 50% deed restricted as affordable housing, and no requirement for open space. Text amendments may be used by anyone, but Mr. Doug Johnson built these homes shown on your screen under similar provisions in Mortisville. If the text amendment is adopted this evening, the city will need to develop housing agreements and restrictive covenants outside the unified development code. Together, these updates promote housing affordability and provide reasonable flexibility for homeowners and developers. Before you this evening is also an updated document of the amended text and a clean copy of the ordinance which incorporates feedback, post agenda briefing, specifically removing the R10 um district for the housing incentive

and um placing additional regulations for carports. Both the planning board and staff recommend the amendments. Thank you, mayor.

Thank you. Are there any questions for Miss Martin? Okay, we will move into the public hearing portion. Um, no one has signed up to speak at for the public hearing. Is there anyone that would like to speak? Hearing none, I close the public hearing. Are there any additional questions from council? Is there a motion uh to proceed with on this batch of text amendments?

Mr. Mayor, I move to approve the the text amendments as presented by staff with the uh changes since they were previously presented. The proposed text amendments as presented are spec are consistent with the city's 2045 comprehensive land use plan. Specifically, the amendments support development patterns and housing opportunities that help the city grow in a more resilient, inclusive, and sustainable manner. Therefore, the proposed changes are reasonable and in the public interest because they provide flexibility and help address the community's need for attainable residential options. Second motion and a second. Any more discussion? All in favor say I.

I. Any opposed? Motion carries unanimously. Thank you. Item 11 is conduct a public hearing for conditional reasonzoning request ZC26-06 Turnersburg Highway. That's quick trip to reszone from Irale County GB conditional use district and Iddardell County HB uh conditional use district to the city of Statesville B4 conditional zoning district. Um Mr. Campbell, let me open the public hearing. Thank you, Mr. Mayor. Good evening, council. Tonight, our applicant, Thomas Danton, on behalf of Quicktrip Corporation is requesting a reszoning for six parcels, approximately 24.1 acres at the intersection of US Highway 21 and I77. Requesting to reszone from Arredell County General Business, Highway Business, Conditional Use District to City of Statesville B4, Highway Business, Conditional Zoning District. On your screen is an aerial map of the parcels highlighted in orange. One of the parcels has an existing fast food establishment located at 829 Turnersburg Highway. The leftover parcels are a undeveloped mostly wooded five parcels. Another site photo. So when we look at the resonance, we do look at the surrounding zoning districts. There's Arredell County residential, residential agriculture, um highway business conditional use, and there is some city of Statesville light industrial in the area as well. There are three parts to this proposal. On your screen, you can see those.

Number one included in the reszoning is 829 Turnersburg Highway which is the existing Arby's and it is planned to remain and be unchanged. Number two is a proposed convenience store/fueling station. It is a 7,300 ft store that will stub to future development during the construction document phase and it is approximately 8 acre proposed site. And in the shaded area to the far right is a future proposed development. This portion of the property will be developed later compatible with the highway business zone in district and will have other restricted uses. This site will be approximately 15 acres. On your screen, the applicant has provided an illustrated rendering on what the proposed convenience store would look like. The 2045 land development plan does call for this area to be activity corridor. It is in a tier 2 growth area. Electric services will be provided by Duke Power. Water will be serviced by the Ardell Water Corporation and City of Statesville sewer will be available in January of 2027. With conditional reszonings, applicants are required to have a community meeting. They hosted this meeting on the 9th of March. There were seven attendees. Um there were no concerns raised. Most of the attendant attendees were just requiring about sewer in the area. This project has also been reviewed by the technical review committee and have been confirmed to meet the minimum requirements. The applicant has agreed to six proposed conditions that you see on the screen. Well, the first three, I apologize. Number four, and number five, and then number six, I'm not going to

touch on it because it is a little bit large, but the applicant has agreed to exclude these particular uses from the future development. So with the 2045 land development plan supporting these parcels being reszoned as it does call for this area to be activity corridor and it is in a tier 2 growth area. However, some services cannot be efficiently provided. Staff and planning board recommend option one, approval of this request contingent upon agreeing to the conditions listed on the concept plan. And the applicant is in attendance if there is any questions for the applicant. And I'm happy to answer any questions as well.

With the water and sewage, is that a would the residents have an option to stay or they have to be a part of the city? Water and sewage. I believe they would have. Sorry, there's no residents there. No, not on the current side. They're just in my imaginary man. I'm just thinking, but I'm good. Well, with the expansion, it's just bringing sewer to the area, but I I don't Yeah, the proposal here is just a commercial use. Both sites, um the 8 acre parcel and the 15acre parcel, they'll both be commercial properties.

Okay. My misunderstanding. Thank you. Thank you. Any That That was a nice presentation, Mr. Campbell. Thank you. Um any further questions for Mr. Campbell? Okay. Uh no one Well, Mr. Snyder, you had signed up to speak here. You spoke during public hearing. I mean during public comments. Are you okay? Okay. Wonderful. Thank you. Wonderful. So, uh, I'm going to call us out of public hearing. And, uh, are there any additional questions from council?

Okay. Is there a motion on this resoning request? The council member making the motion needs to read the consistency statement for item 11. Mayor, I make a motion to approve. I don't have the consistency statement in front of me. Um, thank you. But I I move to approve. The consistency statement, it's page 198 of the agenda.

Okay. The zoning amendment is approved with the agreed upon conditions and is consistent with the city's comprehensive land use plan as a 20 as a 2045 land development plan designates this area as an activity corridor sporting mixed use mixed commercial uses. The proposal is also reasonable and in the public interest as it brings commercial services to a gateway corridor. So, Mr. Mayor, I move to approve. Thank you. Do I have a second? Doris second. Thank you. Any more discussion? Everyone in in favor of the motion, please say I. I. I. Are there any opposed? Motion carries unanimously.

Okay. Item 12, conduct a public hearing and consider passing the first reading of an ordinance of annexation petition AX26-06 Turnersburg Highway Quick Trip filed by Thomas Dton on behalf of Quicktrip Corporation for the parcels located at the intersection of Turnersburg Highway, US Highway 21 and Interstate 77. Um, I will open the public hearing. Mr. Campbell again.

Thank you, Mr. Mayor. So, we do also have an annexation request running concurrently with this reszoning request. Again, for reference, these are six parcels at the intersection of US Highway 21, Turnersburg Highway and Interstate 77. Uh, the six parcels amount to approximately 24.1 acres and the property owners are James and Sandra Fall. These six parcels would be considered a non-ontiguous annexation and it is adjacent to ward 4. When we do the annexations, we do reach out to all city departments and request feedback. Uh statesville public power um you can see the red star on there uh has told us that this site is in Duke Energy's territory and will be serviced by Duke. Water and sewer. Again, water will be supplied by the IRA Water Corporation and sewer connection will not be available until January 2027. Public utilities have allocated 4,800 gallons per day for the convenience store use. Uh, Storm Water reported that they had no concerns at this time. Fire came back and said once operational, it would be served serviced by fire station 5. However, it will be outside of their preferred 4-minute response time. Uh, since fire station 5 is not currently operational, I went ahead and put the next closest station, which is number four, just so there's no confusion. And police stated there was no concerns at this time as well. So staff have reviewed the request and determined that the site meets the statutory requirements for annexation. Services can be provided by the city or other utility providers. However, it is in a tier 2 growth area and some services cannot be efficiently provided. Sorry. Can I add one thing to that? Um,

I will mention that this property is basically 100 yards. I don't know. It's on the other side of the interstate from Ebenezer Volunteer Fire Department and we would have an automatic aid with them. So, they're there would be very close to coverage. I was going to ask that. Thank you. Any other questions for staff? No one has signed up. So, uh, to speak. Did anybody want to speak on this? Having seen none, I call us out of public hearing. May I move we approve first reading? Second. We have a first and second. Are there any more discussion? All in favor say I. I. I.

Any opposed? Motion carries unanimously. Thank you. Thank you. Item 13 is consider approving a modification to the reimbursement agreement between the city of Statesville and Prestige Land and Site Works LLC for the Third Creek Sewer Extension Project. Uh Dr. Vaughn, Dr. Vaughn will provide an overview of the reimbursement agreement. Okay, good evening everyone. Evening.

Um, for background, about a year and a half ago, November 2024, this council approved the initial reimbursement agreement for this project. Since that time, additional information has become available. Specifically, all the design has been done for the for the construction of the project. and there were concerns about the opinion of probable costs for that. So, uh, folks got back in gear. They have identified some possible other sources of public funds for this project. The initial public funds identified by the general assembly were $3 million after the state fee. That's 2.955 million that would have been available. The balance of that project from the developer would been through the reimbursement agreement. Got a little nervous about what the cost might be with all the expenses. So they went back and they pursued other funds. Funds have been identified as I said. So that led us to revise the agreement to acknowledge that those funds are going to be there or will be there or anticipated to be there to basically diminish the cost of the reimbursement that the developer may possibly have to provide for the construction project. They're already responsible for easement acquisitions, the design and all those things. The reason the city's involved in construction, which is not normally what we do for developer donated project, is because of the state funds. Therefore, by statute, we have to be the construction contract administrator and go through our procurement process. The other thing that we were concerned about was if something had happened in the process and the fund and the developer did not cover the cost per the agreement, we requested that a payment bond or a letter of credit be established in the reimbursement agreement to to safeguard the city and reduce our risk. and that is in the current agreement. The uh bid opening for this project is this Friday 2 p.m. And then we will go through all the review of that. The state will review the bids. We'll go through the A&E firm reviewing the specifications and the

submitt validate the bids and then it will be back in front of you in July for acceptance of the apparent low bidder. When that happens, then it will go back to the state for a pretty quick turnaround, two to three weeks maybe. So, we could possibly be seeing construction start on this project in August of this year if everything works out. Subject to your questions. So, basically, we're funding the project with the anticipation of the state reimbursing us.

Yes, ma'am. Good question. uh we have in our capital improvement plan if you approve the budget the way it's built this month or next month enough CIP funds to front the funds so that we can make the award because we cannot make the award unless the funds are available and then we will be reimbursed on a periodic basis to cover that balance. So at the end of the whole thing the construction cost to the city is net sum zero. We just delay a couple of starts on our projects to start the project. And I guess my concern is, and I'mma say this on the record, is they can't even pass the budget. So, we're going to put this we're we when this initially first started, the state awarded

$3 million. $3 million. Yes, ma'am.

So, now here we are 300 plus days into going into another year. The state has not finalized their budget for 25 26 and we're about to go into another season, but we're going to fund this project. And I guess my thing is we are still waiting to approve our budget. I'm just I'm just I have a lot of questions with that and I wish I I I knew this and I don't want to to halt the project, but that's my concern. if we jump out here and do this, how are we going to get reimbursed? And I'm just saying I don't have faith in this state right now. Um, I just don't and and I'm not trying to be I want them to be able to get their water and sugar because I know they need it. But that's that's a big ass for us because I think we're looking at what $3 million and now we're going up to what 10 11 million

depending on what the bids look like come Friday. And the way I understand it, Mr. Smith's been intimate with other discussions. There are some other public funds that should be available because of another project that is not going to happen possibly. Sir,

the so the m that is a great question. Um so the money as I understand it is going to be pulled from another project. Actually it's you know it's one that the county was working on. So that mo that money is going to be redirected to partly to this project, partly to um another project in the in the county. I think it's associated with the sheriff's office. Um the the secure the shurities that we've put in place for this project does do protect us. So if if y'all do agree to this reimbursement agreement tonight, I think we we're not we don't have any liability. Uh I don't think because of that because ultimately Prestige who is the a the party that we're agreeing to they're they're signing this to say that we're going to cover the entire cost of this project whether they get the money or not. So I think we're protected in that. Um we'll know better when the bids come in uh on Friday um because then if they're the estimate that we've been hearing is $10.5 million. we have six so you know right now allocated toward this and so who knows if that's going to cover it but if you go forward with this agreement this does set us up to move it along uh and this is ultimately an economic development project that would uh that's meant to serve Origin Foods you know that's what it's intended to to really take care of to allow them for an expansion project we can't do anything without this agreement though

I got a couple questions plans we don't we don't have it um not in in hand. Um the negotiations, the city's never been the one going after the money. And I want to be clear about that. That this has all been between uh Representative McNeely and the legislature to ultimately benefit, you know, again, it was identified as economic development, but really meant for going toward Origin Foods. That I got a couple questions. Go ahead, David. and and you clarified the first part of it. Number one, the city never asked for these funds. Correct. That's correct.

The city never asked for the second port of these funds. That's correct. Okay. The development agreement is between the city and developer prestige. Yes. But it does not have origin foods in the development agreement at all. Is that correct? That's correct. Or both. Are they Are they even mentioned in both agreements? I don't think there is a development agreement. We've got the reimbursement agreement. That That's the one not mentioned in that agreement.

I don't know. There I don't know that there is a development agreement. We do have We have the the only thing that we really have, Bill, correct me if I'm wrong, is the reimbursement agreement that you have in front of you. origin is not part of that that agreement because uh the money is coming to the city which is pretty standard practice when it's coming from the state. They can't just give it to a private entity and then we're contracting with Prestige to actually have them or to to facilitate the develop the the construction of the line. Just if you to answer your question, if you look at the map that's up there now, we went through and did a areawide needs. This is one of our master plan sewer projects. The gray area is the area that specifically affects your question. Origin Foods falls into that as one of the commercial businesses in that area. So, the project is sized to accommodate economic development in that entire area. The uh the first real need for this, of course, was Brierwood. They needed to put in a sewer line to service their development. Uh, Origin Foods is in a in a mix because their package plant was destroyed in a storm. We are currently, the city is in a pump and haul agreement with them now for 12 months, maybe a little more if necessary, depending on construction time to take their milk process waste at our sewer plant. when they can eventually then hook into this project, they'll have to meet the pre-treatment standards required of this industry to meet our standards in the statute. So, I would say they're a beneficiary of this agreement because they're right next door to the Brierwood project and will be able to tap in and meet their sewer need and come off of the pump and haul agreement with us, which allows them to continue their expansion for economic development, which of course is a great boon to the county and the state in general because the way I understand it, when they get running over there, they'll take every gallon of milk between here and Richmond, Virginia, and probably have

several hundred jobs. So this whole thing is mixed up into one large economic development concept. Bill, will you clarify for me? I think I'm right on this. This project actually started with Origin and the the Brierwood development was being talked about at the time, but it wasn't I don't think it had been approved. And we put two evolutions of Brierwood. There was a previous one that dropped and it came back, did it not? Yes. So So Origin was kind of in the middle of that. So, it just it was a boon to them that they showed up because Origin needed this sewer service one way or the other.

I understand the importance of this uh development going to. So, you I hope I'm hearing this correctly. We have 6 million. Ryan, is that what you're saying? We have 6 million and they need 10. We have 6 million. Do they're going to need more money. And then if they need more money, are we going to be responsible for getting that money? and and if they need more than the 10 million, are we going to be held liable for that or we going to come back to council? Cuz you don't never know what's going to happen. I just want to know who's going to be responsible for what.

The city there there's $6 million associated with the project. If it's more than 6 million, that is not a city problem. That is a that is an origin or Brierwood prestige problem to to fill that gap. And and that's the whole point of the reimbursement agreement. The reimbursement agreement sets forth those details that explains um who is liable for any overage beyond the state funds. Dr. Sir,

have there been plans established in the event that Prestige does not decide to move forward, we can use the $6 million on a different project? Is there any way to provide sewer capacity out there for Origin Food with these funds?

That's a good question. And here's a possible answer. The uh the data center project is pursuing a sewer line that will lift to a pump station where you see that little blue circle there on US70 and they're going to have a force main they're planning that will come up by the airport and tie into our sewer line at the circle there on airport road. So these funds were specifically designated in the original bill for economic development. It did not say for use for origin food economic development. So you could redirect those funds in any way that we need to make even accommodate that. We could coordinate with the data center to have a sewer line possibly run through the middle of that property because back creek the upper end of the back creek where that line is going is also in our sewer master plan. So we would have a recovery concept. Yes sir. To answer your question.

Thank you. Thank you.

Thank you. Any any further questions for staff? We need to have we need to have the funds available when we actually make the award in in July when you accept the bids and make the award funds have to be obligated to the project in the bank. Right now the plan is that's going to be our CIP funds subject to reimbursement. We have the 3 million already designated. The balance we know about and then whatever that little difference is, however it turns out from the bids with this reimbursement agreement, Prestige is on the hook. So, in essence, because of the payment bond and the letter of credit, we will be made whole. So, we we have the money in the in the bank either way.

Guess that's my issue. Why is it that everybody else can't do what we do and then we we are depending on the state of North Carolina to reimburse us for something and we're paying it like I can't go buy a car without giving you a damn payment. But I'm just But hey, if y'all want to go I mean I'm fine. Like I said, I'm not trying to keep anything from Origin Food. It's just scary to me that we are depending on the state of North Carolina to pay us some money back.

I just understand how Well, he's been I can say this. He's been running the business without water and sewer. So, I can say and this is since 2024. I can honestly say that. So, I think my concern is not so much on his end. It's just my concern is more or less the state of North Carolina giving my money back, giving our money back and us being able to do future projects. You know, it's almost like we're we're loaning you a money with the county's approval and we already know the county depends on the state whereas we a lot of times we are the loan man out but we make provisions and plan for things but you want us to give you a whole lump sum to do a sewer project

which to to maybe calm that concern. I I think there is they would put a bond down or or prestige would put a bond down so that if anything went wrong that that bond would fund the completion of the project which would not be city of statesville money. Is that correct? That's what this reimbursement agreement does. So that's what we're trying to accomplish is so that we don't pay for it is that the bond even if the state of North Carolina just go ahead and if they got bond money to do that why don't you just go ahead and upfront well the bond is more like an insurance policy. So if something goes wrong then they would get that payout that would be used to complete the project. So the the I I'm partially asking and partially saying, but it's it covers us regardless of what the state of North Carolina does or does not do.

We added that from the last time realizing we needed to make the city's risk never completely zero, but essentially zero. In this case, we will be made whole no matter what happens with the project between the state funds that have been allocated, seem to be allocated, and what the balance is on the reimbursement agreement. this project will be built. The only reason we're having to manage it is because it's public money and we have to be the construction agent. Right. Because I'm likewise massively concerned about beneficial for the city to receive the money because if the project fails or doesn't go forward, we can reallocate it as the city de the the the language was economic development. It did not specify for whom. Okay.

Leah, in your opinion, is this adequately protect the city of Statesville? Yes, I think it does. um the amended agreement with the bond and the letter of credit protects the city and provides that insurance policy that if for some reason they don't get the state money or for some reason the state money is not enough to cover the full price and prestige pulls out, this covers it. So the city is protected here. It is my recommendation to approve this amended reimbursement agreement remembering that we've already signed a reimbursement agreement. This agreement provides us that additional protection that we need. Thank you, Mayor. Ready to make a motion?

What? I have something to say. We don't know what the economy is going to do and we've seen companies belly up and then they'll file bankruptcy. I'm just trying to make sure that these are the ifs out here and we taking a big risk and and and voting for this because we believe in good faith that everything is going to go through and prestige is going to come up and do what they need to do. I don't know what they what they rating is with other businesses, but you dealing with staceful and I just want to make sure that that you know we going to do our part. We we in a hopeful situation because it's a needed situation and I want to commend you guys for us for doing and going out on this limb to better for the greater good of the city of Statesville. But I did had that if in there bankruptcy, you know what I'm saying,

Mr. Jones? I'd like to make a motion. I'm glad we brought this to the uh regular agenda. So everybody could voice their concerns. Yes. Uh in public. So I'd like to make a motion to approve the modification to the reimbursement agreement between the city of Statesville and Prestige Land Site Works LLC for the Third Creek Sewward Extension Project. I second. We have a motion and second. Any further discussion? All in favor say I. I. Any opposed? Motion carries unanimously. Thank you, Miss Dr. Vaughn.

That's what we do. Okay. Um, now, uh, Mr. Smith will provide a budget overview for the 2026, 2022 recommended budget. Uh, set the public hearing for the budget on June 1st, 2026 at 6 p.m. and set the budget workshop session on May 14th, uh, 2025 at 3:30 p.m. Mr. Smith. Thank you, Mr. Mayor. City Council, it's the day you all have been waiting for, right? Yes.

Yeah. Me and Gina, too. And uh and Michael can get this to you all and off our desk. Uh so, uh I wanted to start uh the budget message tonight by focusing on some accomplishments. I try and do this every year uh because the money that the city council allows us to administer and the projects that you all approve, they really mean something and I want and I try and showcase uh showcase that whenever possible. This is just a small list of of the things that we've been doing, but I thought that they were notable. So, the first is the adoption of the African-American Historic District. There wasn't a lot of money associated with this, but there was a lot of uh a lot of time, staff time, um elected officials time, uh and and those that have volunteered as well. So, that's a that's a really big deal. Um we completed the airport terminal, um cut the ribbon there, opened fire or opening fire station 5, that's going to be in July. And so this was I always want to give Chief Kury's credit because um the the way in which we've done this is saving the c the city literally millions of dollars by renovating this house and hopefully we can operate out of that for quite some time. Started construction of the park the parking deck and the police department expansion. Uh this is the second or the first two pieces of a three-step uh development process. The third being the uh the apartments that are to come later this year. Uh we're more than halfway through the waterline spline project. Um we've got to get that done by the end of the year. We're going to get it done a lot quicker than that, but we have to get it done because the ARPA funds uh will run out and that's the deadline. And finally, they they may not seem like the biggest improvements in the world, but they touch a lot of people and that's improvements to our parks. Uh the

MLK Jr., which is I did get pictures of that one up at the top. Uh we put in four pickle ball courts, a shelter, and a parking lot. Uh Kimbro Park, we put in a new uh playground, shelter, and walking trails. In Newtonville, that's almost there. Um but more pickle ball, um uh playground, and parking going there as well. Hopefully a disc golf course as well. So every year we we officially kick off our budget process when we go through the budget retreat. And so this year it was a little more intensive because we had five brand new elected officials. And so I will say I thought it was one of the best retreats that we've ever had. The guidance that we received was clear um actionable and and we were able to put a lot of that into this budget. If you remember, we focused a lot on the front and center strategic plan. We tried to tie a lot of the uh initiatives of this budget to to that document and a lot of your conversation and input was based on that document as well. What we heard was that employees were the top priority that we were going to build the new firefighters funding into the into the budget without a tax increase. We're going to add more to the street paving funds. We added 200,000 in this year and we are going up to 500 in this coming year. Uh wanted to move forward on the the Mach or the municipal operations center next phase. Wastewater treatment planning. That's a huge discussion and that's going to be something that travels with all of you as elected officials for some time now. It's it's a big one. And then this year we're going to refine the street strategic plan even more and really take a look at a a lot of our plans that we have to make sure that they are updated. So as far as the budget goes, I'm going to start with the general fund. And you

all know this is this is the hardest fund for us to uh to solve because this is the one that's that is uh funded by property taxes, sales taxes, and some others. And whereas the other funds, the enterprise funds, we treat them as a business and they're basically fee feebased. So of in the general fund there are three the three main revenues are the advalorum taxes that come in that's about 46% of the overall um general fund. Unrestricted governmental that's sales and use tax and other related taxes that's 25%. And then reimbursements, which is about 10%. That's more or less a static number. That reimbursements are is money that we get into the general fund from all of the enterprise funds because the general fund, the people that do work for the enterprise funds support those funds. So, it's a it's a legal way to be reimbursed for the time that general fund employees put into uh into the enterprise funds. So those three make up 81% of the general fund revenues. So those are the ones we watch, but especially those first two. So I wanted to show you kind of what those u what those top two the avalorum and the sales and use or unrestricted intergovernmental what they're doing. So the gray columns that you have on this on this graph here show the growth that we've seen. Um this is 20 FY25 FY26 FY27. So you can see in Adalorum this blue column was our um reval year. So we had a big year 10% increase and then we've been fairly stable the last couple years

4.8 and 4.6% growth in Avalorum. That's a that's a good growth number for us. I remember when I first came here we were in the ones so you know very slow and that's it's hard to do a budget with no natural growth so unrestricted intergovernmental which is mainly the sales local sales tax that's grown by 2.3% you can see this has been pretty volatile of that 4.4% of the in unrestricted intergovernmental is sales tax and that's growing by 4.4% 4%. That's not bad. That's not bad. I'm not I'm not really worried about that number as long as it's stays there and is growing. So, overall, our tax base grew by 153 million this last year or that's what we're projecting. Uh real property growth, that's the um that's your land, houses, and structures, the things that don't move on property, 3.5%. And personal property growth is lower. That's 1.1%. That's everything that can move. Cars, boats, RVs, uh machinery for industrial, that type of thing. So, slower growth there. So, I won't spend a ton of time on this one, but these are the other general fund revenues. Um, so a couple things I'll point out. Um, permits and fees and services. Uh Gina Lawrence, our CFO, has been very thoughtful in making sure that our revenues are right. And so what what we found, and even though this isn't a huge part of the budget, what we found is that we were projecting a little too high in some areas. So she's she has stabilized that a good bit. Investment earnings, um interest rates remain higher than a lot of people really want to see them, but on on the reciprocal side, we are getting more interest on

our investments. So those are holding stable. Uh we're not proposing any new debt this year. So you're not going to see that as a revenue because this is general fund revenues. Um financing sources is where you see that. So blue again, this is FY25. We had uh a lot of debt coming in. We had a a borrowing that year. So we have to show the debt or the amount of money coming in as a revenue and then we spend it out. We don't have any for FY26 or FY27 fund balance appropriation. That's solely for one-time capital investments. We try to be uh judicious in using our fund balance and we really do try to adhere to these are big capital improvements that we're making with that money. Because in my way of thinking is you under spend your budget each year to build your fund balance to build the savings account to take on additions to the mock roofs or at Bentley Center or this building or what have you. Okay. So for the general fund uh major expenditures and changes, this is really the area that you that you want to pay attention to. Uh so we do have some fee schedule changes. There's there's really not a lot uh to really um talk about. They're in the back you they will be in the back of your budget book highlighted in red. So you'll be able to see those changes. Nothing substantial. Credit card and postage cost passroughs. We've talked about that um how we are the city is taking on credit card uh convenience fees for our for our customers and it's getting to be I want to say it's roughly $800,000 a year and we're looking to turn that around and add that on to your to customers bills. Additionally, uh we took that guidance from you and kind of took it another

step. uh stamps are going up to right around a dollar now and we send out about 200 to 250,000 utility bills every year. So you can do the math on that. So we are proposing to add $1 to your utility bill or your your utility costs uh to cover that. So getting to the uh the the people side that I mentioned earlier, we I've proposed a 3% cost of living increase for uh the staff. Uh implementing the market study that we talked about at the retreat. U there is a mandated u local government employees retirement system increase that's been going up systematically for years. I think we're in the 15% uh 15% of an employes salary that the city contributes. It used to it used to be six. So you can just see I mean it's it's to keep it solvent. They have to keep it moving up. Uh that's not something that we're going to pass along to employees. Um health insurance costs increase small increase this year. We've been fortunate the last couple years we haven't really seen an increase. So, we're we're going to take that one on with not passing that along. Um, I mentioned the 15 firefighters. We've built those in. We've also built in four additional full-time additions. Um, and one part-time uh for the full-time, our city attorney, uh, but that's basically a wash because we had a legal budget anyway, a police officer, and two positions in finance. Um, we've had budget woes and finance woes for the last probably five years. I think this is an investment in this city staff to add this one of these in particular. It's a senior accountant position to help us kind of get through uh when we have those issues moving forward.

So, in total, it's about 1.5 million for employee moves and 1.5 million for the firefighters. So that's that's that's a big number uh to to to cover especially under the existing tax rate. So on the operating side uh the operating budgets have basically been kept flat. Uh if they are not flat there's marginal or minor increases. On the capital side I talked to the mayor today and I told him that budgets are generally the way I describe them. They're about people and stuff. You see the people on this side here's the stuff. Uh so on the capital side we're including morph paving funds. So half a million dollars there. IT infrastructure. This is the this is three projects that are in IT that basically are a necessity for us. Everything now is based on our IT platform. The early site package for the mock. We are trying to get the greenway connector under 21 completed but that's I don't know that's ever going to happen. Uh but we're trying. um a new sanitation truck and two Curado Curado cans, which are the front parts of your um automated trucks. That's where the actual garbage goes in. Um police vehicles, we're doing seven instead of 10, which is our normal. We're able to do three in this fiscal year additional that that we're able to take off of FY27. Um fire expenditures, just a various number of things. the Bentley Center roof replacement. That's that's something that we do need to do. That's 400,000 and overall it's it's over $5 million in capital capital capital costs. So on the enterprise funds, um people talk about government government running like a business. Well, we have five businesses and these indeed run like a business. They cannot outspend the money

that's coming in. And so the the five that you have are statesville public power, water and sewer, airport, storm water, the event center, and and really risk management. That's an internal service fund, but we treat it basically as an enterprise. And you can see the breakdown there. General fund is 38% of the overall, but public power and water and sewer in particular, they take up a good bit. Um but overall your enterprise funds are about 62% of our overall budget. So some of the revenue assumptions for our enterprises um our electric sales are growing as we grow. You know we're selling more electricity reciprocal reciprocally we are buying more uh in wholesale. On the water and sewer side, again, steady growth, a lot of investment that we're seeing, and the 12% rate increase that we've talked about is applied to rates in this year. So, this is the second year of a I believe it's a 10-year program where we're going up on rates to fund all of the needs that we have in water, sewer, airport, uh increase in hanger rentals. Um, we're also waiting to see, well, I'll get to that on the expenses. Um, storm water stable growth. We get a lot of, we're hoping for grants uh to cover some major projects in storm water, but even if we don't get them, I think we're going to try and do do the projects anyway. Storm water banks money each year. We we we plan to bring in more than what we're uh what we're spending so they can handle these two and $3 million projects on a pretty limited budget. And then the event center and occupancy tax uh rental revenues are going up. Uh we finally stabilized how we're building and our rates and that's that's set in and we've we've had a very good year this year. Uh

on the on the downside though is our occupancy tax which buoys the uh the operating fund of the of the event center. That's that's level too down. So that's you know that's a little bit concerning on the expense side. Uh public power is has got a very ambitious year uh in front of them. Uh and so uh major capital investments there. We're looking at the design of delivery one which is basically the replacement of a substation in south in South Statesville. We've basically outgrown it. Um undergrounding the 4KV to 23 KV conversion and just expansion in general. So I the public power has a major major lift this coming year from a from an expense standpoint as does water and sewer. But those are our two major utility funds and I would expect that they're having to do these types of projects to both expand and take care of what we actually have. Uh Fourth Creek is something we're going to talk a lot about in the next uh year. You know, that's probably going to be item one on most of our um you know, big big picture uh discussion agendas. From the airport perspective, we have concerns based on fuel. U you know, being uh being in a war right now and and gas prices the way they are, that has a direct impact on the airport. So, we're we're not looking at it. We're not being very optimistic about this coming year as far as people doing a lot of flying. U storm water again, covert replacements, emergency repair funds, and then we've got a couple of uh midsize projects, I'll call them, over at the event center. So without going through every number on this sheet, um the proposed budget this year is this column here. And I wanted to bring in we I usually don't show

three years. Uh but I wanted to bring in FY25 because this is a pretty big swing. So the general fund we're looking at a $63 million budget um or 634 uh up about $5.2 2 million over last year. As you can see in FY25, we were at 72 million. So that does fluctuate a lot based on transfers coming in, based on the amount of fund balance that you use, things of that nature. So it's a pretty large swing. Most of that is going to be in again capital and and people. Airport fund, we're looking at that going down. Hopefully it's not going to go down 27%. Uh but that's what we're projecting at least right now. Public power looking at about a $4 million increase. Uh 4.7 in water sewer. Storm water we're going down just a bit. That's basically project related. Um the event center we are also going down 3.9%. I'm sorry that should be a negative. And risk management there's really we're not looking at any change there. So I always want to look forward uh because you you you know we we're budgeting sometimes 18 months ahead um but we're also all looking two and three years ahead at the same time because you know what what we see coming is is generally going to be there. Uh so on the good side opportunities residential growth is still it's still moving along. Uh we're not seeing a lot coming in here. The entitlements are down. I don't see them getting back to the frenetic pace that they were in the last couple of years. Um, but as of the time I was working on this, I think this this month we have 1,700 units in our TRC review. So, there's there's still a lot going on. Um, commercial retail big projects. We've been trying to solve a uh a

problem with the the one on Broad Street today. Um, not we, me, but we, Leah, and some others. So, but the but the interest is there and the action is there. So, that's happening. And industrial, we're not seeing as a lot as many industrial projects, but the ones we're seeing are very high investment numbers. Um, and in some cases high job numbers. So, those are all very positive. Um, the next phase of the municipal operations center in this year's budget, we have the site package and and long lead procurement. So, that's 2 and a.5 million. But before we spend that money, we're gonna have a session with you to talk about what next. And what ne or what's next is the construction of the bigger project. That's when it gets that's when it gets a little harder to figure out, you know, how to solve it. You know, we're looking at a between a 30 and $40 million building. So, that's definitely a debt package and I want you all to go into that eyes wide open before we ever pull the trigger on the site package. So, we're going to have those conversations moving forward, even though it's an FY28 uh expenditure. Uh airport, we're level setting, as you all know, some of our major projects, our grant projects. Um finance, I mentioned earlier, adding positions for more structure and redundancy. And then a a very big one to me is the strength of our fund balance. Uh we have a strong fund balance. We have the ability to to maneuver with that fund balance. And I'll tell you how much just in a minute. Um, but you know that that that is a strength that the city has and that goes back to what you said, Councilwoman Pearson, you know, preparation over the years, uh, of being, you know, being smart with the city's money. So, things to be concerned about, uh, state legislative overreach. Um, I I I scratch my head every day. Uh, so

there's been a couple of, uh, bills proposed. um this week, well last week, I guess today's Monday. Um that we're going to have to come out and fight, you know, I think uh one has to do with data centers, you know, putting a moratorum on the ability to open a data center if it doesn't or permit that. Um and there's a deadline there that could impact ours or compass, you know, the one that's been approved here. uh but tax levy limitations uh a reappraisal moratorum um and local local issues are not state issues you cannot solve them from Raleigh. So and we're going to talk about one when we're done with this um cost escalation and inflation we still fight that uh fuel uh that hopefully is a temporary issue. Um flat operating budgets we can do that for a while we can't do it forever. So those those costs do go up and we have to figure out a way in which to to pay for them. Uh and we can't delay a lot of capital projects because eventually we have to pay for them. We and they're going to be more expensive. So we had to do a little bit of trading this year to get you know to get some of the budget to balance but I think we'll be okay. Water and sewer again Fourth Creek and then necessary improvements that we have to make that are necessitating the increases. Um, street conditions, I don't think $500,000 a year does it, but uh because the power bill uh funds are not going up. Uh we need more than that, but this is really all we can afford at this point. So, we need to be thinking that through. And then um con tax reappraisal in FY28. So, not this coming year, but the next. Some are going to look at that as a good thing, some are going to look at it as a bad thing. uh when you all have to figure out revenue neutral during that year, you're you're going to be, you know, that's a hard decision.

So, finally, um approve the I would recommend that you approve the FY27 capital and operating budgets at $168,100,000 based on a tax rate of 51.7676 per $100 in valuation. Overall property tax base is uh estimated at 5.5 billion which is an increase of 152 million. No changes to the tax rate for the Woods Dam special assessment district or the municipal services district downtown. The general fund appropriation of just over 3.25 million is there for one-time investments in capital outlay projects. Uh, the estimated unassigned fund balance at the end of FY26 is 45.9% or 26.8 million. That I'm putting a little bit of an asterisk on that number because we do not have our audit as of yet. And and hopefully that doesn't change it materially, but it's probably going to change it some, but that's coming at your June 1 meeting more than likely. And then there is a utility fee increase being proposed in the water and sewer fund for at 12%. Next steps will be the public hearing on or well budget work session later this week and if we need to extend that meeting we will um public hearing on on June 1. We'll be ready to adopt the budget that night if we get through the 14th. Uh okay. But if not we'll move it to the to the alternate date of uh June 15th. And I want to thank our department heads staff, Scott and Sheres, our assistant city managers, the finance staff, Karen Amos, Michael Garrison, and especially Gina Lawrence. Gina has put in uh tons

of time on this. When when Gina first started, um she noride really realized what we had on our hands. And so doing a budget and an audit um in the same year as a new CFO has been has been quite a feat. So I want to thank you very much, Jim. So uh generally we don't have a lot of questions because you haven't seen the document, but I'd be glad to answer any questions that you have. I don't think so. We certainly appreciate all y'all's effort. And Gina Gina came in after uh we've had she's the fifth or sixth in just a few years. Lost count.

Yeah, we lost count. But thank you, Gina. And we've got you surrounded with Statesville's finest to make sure nothing happens to you. And just so you know, your budget books when we get when we get done tonight will be in the foyer between mine and Emily's office. I think that's where they ended up. So great. And did you want to talk about um House Bill 1119?

Yeah, just just real quickly. Um I sent you all an email today um about proposed legislation. This is House Bill 119. Um this is being proposed by uh Representative McNeely. Um it would only impact county. So, um, I will say this before I say what we talk about the bill. The mayor and I are going to meet with Representative McNeely on Friday and, uh, I'm trying to get some reinforcements from county and Morsville and Troutman to come in, but I don't know that anybody's taking me up on it yet. But basically, this is a uh, it's a bill that would limit annexations. And you know, I know annexations are not the most popular thing in the world, but you can't annex unless you're asking to be an or unless the property owner asks to be annexed. So, um, what what the bill does is it's basically saying that if the property has been in present use value, basically being a working farm and and taking part of the present use value um, rules under the tax laws, um, not contiguous to the city limits and outside the ETJ that in order to annex that the city would have to consult be a mandatory consultation with the board of commissioners. And if the schools are if if the development would push the schools over 100% capacity, then the board of commissioners would have to say yes or no as to whether or not the annexation could happen. If they say no, then the city would be on the hook to or the developer, I suppose, it's a pretty vague bill, um would be on the hook to pay for the improvements to make the capacity less than 100%. So there's a lot of holes in it in my opinion and you

know you can debate whether it's a good or bad um piece of legislation you know in the phil philosophical stand standpoint but to me it's another Raleigh stepping on statesville's toes and I can say that quite literally because it is just county um and I don't think that this is something that's good for statesville only because we don't in my opin opinion, the city doesn't h should not have to go to the entity that has to build the schools to request whether or not an annexation should happen or can happen. So, it's up to you. We have a proposed um resolution. I think Emily, did you pass that out? It's in front of you. We had to do it really quickly. Um, so it's not may not be in final form, but if you're in if you're in favor of us doing this, Doug and I can go talk to to Jeff on Friday, see how it goes, and if it doesn't go well, we can always, you know,

Well, I guess my thing is, Ron, why is it it's almost like you want us to put restraints on the city of Statesville because the county commissioners don't want to communicate with us. So, it's not a us issue, it's a they issue. And I feel like, and I'm gonna say this publicly on record, McNeely has taken it to the point whereas you can't get us to do what whatever it is that you want us to do. So here we are. Let's you're going to try to tie our hands with state legislator. Not not not a good look. So, me personally, I'm opposed to it because I think this is something that should have been uh we've been trying to work on for years to have some type of meeting with the commissioners in regard to the issues that they have with our annexation. We've always been open to meeting. Now,

I don't know. I I don't think that they're in lock step. Uh I I that would have been my assumption as well, but I did talk to the county manager uh and Representative McNeel. I don't know that they're not all but I'm sure it's a couple of them that's

I like to say in reference to the public they taking they have a choice in coming into our zone and it seem like to me they trying to take that away from from the owners of they having a right to be reszone and come to statesville. We have done fine with the residents and and when they want to come in and do what they need to do with the county or whatever they want to come in. So I am in agreement that you and uh the mayor will go and sit down with uh McNeely and let him know that where we stand with that and then if you need to we come back we come back and address it because um we're shifting in growth and we're not going to be backpelling for somebody else's purpose or ego whatever you want to call it because we stay for strong and we don't do that.

Thank you. Make sure that message get to him that we don't do that. I think you just did. We'll do that. You're here. Thank you, sir. So, mayor, I don't if if it's if it's okay with the the council I mean, if if I think it would take a vote to in order to to adopt a resolution to only execute if need be. Um, without Can I get a mo does would anybody like to make a motion? I do. So, move and a second. Okay, I move to table the motion until y'all had an opportunity to talk to Representative Mielli. I think we should probably discuss it with our partner governments before we start making resolutions. If we have to do a resolution right now, we need to do it right now.

Well, we would do we have to do it. I think Ron's suggestion was to approve the resolution and then when we after we meet with with Jeff if it is apparent that we need to oppose then it would be in place to get done immediately because they're voting soon. This is a this is an issue now. It's not Yeah, we we need So we have a we have a motion in a second. So or

can I have one thing because that is a good that is a good point. It's going to um I guess it's the a committee this week. Um Representative McNeely did say I'll hold off any other presentations until we talk, but it's got an effective date of July 1. So that tells me it's a pretty fast moving type of thing. If if it gets traction, who knows if it gets traction. Let's make do

I support Trey in his comment and and and I I wish it would have been in reverse. I wish the representative had made contact with the planning departments or the three different main municipalities to gain input. We didn't get any input. And I think it's extremely negative that yes, there's a bill being proposed for one county. Well, there's 99 other counties. That's right. So why not, you know, what's good for the goose is good for the ganders. I mean, it should be it's it's it's a terrible bill. It's poorly written. Yes. Um and it's received no input.

Just procedurally to comment. Um the motion um that was made to table it does take if there is a second, there is no debate to it. It requires a majority. It does take precedence over the main motion. So, I do believe that that as a point of order, if there is a second, that that must be addressed, but I don't know if there's a second. I haven't heard a second. I have not heard a second yet. Is there a second to Trey's motion to table the um no resolution? I'll second it. We have a motion and a second. Any more discussion? Requires a There's no discussion. You cannot debate it. It requires a majority vote.

Okay. All in favor say I. I the motion is to the table. The vote is to the table. Yeah, we're going to need to we'll need to see a a hand vote, please. All in favor, raise your right hand. Okay. All opposed. Okay. Motion carries. Motion. Was that motion fails? Motion. Yeah, motion fails. Motion fails. Six to two. So now you So now we can go back to the original motion. Thank you. made motion.

Yeah, I am so glad you're going to be here full time. Um the um so all in favor of the motion to uh allow Ron to uh send the resolution if needed say I. I. Any opposed? No. Okay, we have 74 one against motion carries. David, uh motion to adjurnn. So who who did that? Who who did that? You know we calling David name and he getting us all in trouble.