Commission - Special Meeting

ordered and then we'll get going here. Also, we lost I went to Taco Bell. We literally fed you. We're having a chat after this. We're having a chat after this. What did you have? Me and Fred Ber went to Taco Bell, too. He just commissioner that had a meeting to come to that's having a chat after this, Mitch. After tonight's meeting, we're having a chat. I haven't had a chance to chat with you since uh since trivia was canceled. So, maybe it's time runs to try and get it done before. No,

they don't let you walk through a drive. Be home. Disappear for four hours to go. Don't get happy. Did you have a marathon? Well, we got Yeah, we we always violin in here. More enjoyable if you have somebody I've got a group of like five Karen beat you. I feel like she was at Taco Bell. Apparently should have moved from Taco Bell. If it's just me training by myself.

All right, I'm going to call this city commission special meeting and study session to order for today, uh, Monday, May 11th. All please rise for the pledge of 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.

We begin as always by acknowledging the land on which we gather as the territory of the Ottawa and Chipua peoples who have stewarded this land through the generations. Thank you for your strength and resilience in upholding or protecting this land and uh inspiring us to uphold our responsibilities to do the same. So with that we are going to have our um roll call please for Sarah. Commissioner Shaw here. Commissioner Bmer here. Commissioner Anderson here. Commissioner Funk here. Mayor Promnes here. Commissioner Treadwell here. Mayor

here. And I just wanted to say real quick before we jump into announcements. We did just have a special study session as well before where we adopted our shared agreements which are as they were in the packet but you can check those out and it's a um foundation on which we're all building. So, I'm very proud of our commission for working together to do that. So, thank you all. And with that, we'll start on our next order of business here with announcements from the city manager. I don't have any. Thank you. Okay. Well, city clerk. Yeah, I'm going to skip also. Oh, okay. Because we're all very excited for the recognition of our 2026 city academy graduates. So, I'm going to have Colleen Pavllio come up and uh introduce all of our new Minted City Academy graduates.

Yes. Thank you so much. I My name is Colleen Pavllio. I am the director of communications and strategic initiatives. Getting used to that longer title. Um Ben does have an acronym for it, CSI. We'll see if it sticks. But thank you so much um for having us here tonight to honor the class of 2026 for City Academy. We'll give Laura. Does it feel like a year? Yes. Yes. I bet it does. I bet it does. Um well, as many of you know, we kicked off City Academy a few years ago. This is actually the fourth year that we have done this program. And um the goal of the program is these three items. So, knowledge, community relations, and involvement. I'm grateful that I've been able to build a relationship with all these individuals that they could build a relationship with staff as well as um build relationships with one another. I mean, that's really what it's all about, right? I know that my um I say my graduates because I feel like I own them, but um our graduates from last year, you know, they're still gathering quarterly for for some um beverages here and there. And so, yeah, that makes me happy to see that everybody is still engaging as community members. Um before we get started about the program, I do want to thank the city manager for supporting this program as well as you, city commission. This is um a program that is put into the budget that you will discuss tonight. And so we really appreciate your support of this program and um we think that it the the ROI has been great for these um for these citizens of Traverse City. So um the class this year represented several neighborhoods uh Central Slabtown, Traverse Heights, Fernwood, Oldtown, and the Commons. Thank you so much to David. I like to say he represented the east side all by himself. Um so thank you. Big big uh big representation there. Um, we did shrink

the class size down a little this year just to kind of open up the opportunity to have more dialogue. Um, just for me it seemed 15 was too much. So, we shrunk it down a bit. Um, and it was and it worked out really well. I think we had had some good dialogue. The program is five weeks and it's eight sessions. We did add a little bonus session this year, a lunch and learn with Trevor City Light Empower. So, that was a great opportunity. But, um, we did learn about city government, public safety. Here's some great pictures of these guys. Some of them were on a beta bus for the first time, which was great to get them on a beta bus. Um the water tr uh the water treatment plant, the wastewater treatment plant, city garage. We planted trees at Hickory Hills. We did a downtown walking tour, learned about planning and public art, DDA, and our favorite subject, parking. Um they got to get in a piston bully. Um one of those.

So, you know, big opportunities here. Look at that. who doesn't want to do that? And then we just had a session um just before coming in here where um these individuals were able to learn from two people in our community who have sat on a lot of boards as well as city commission just what it takes to sit on a board um the time commitment of that and how to kind of build relationships with all of you and each other even more. So um I'm grateful for all of them. It's been a great five weeks. Um, and I hope to see you in the future participating in city government. Um, with that said, um, we're going to we have a certificate here and then every year, uh, we go to our farmers market and get some basil. So, I hope that, you know, we broke bread for five weeks and you'll continue to break bread with some I like to say caprese, but that's because I'm Italian. Um, but you know, whatever you choose with your basil. So, um, if you can come up and you will get your certificate and grab your basil. First, we have, uh, Chris Deo. I have to say, Chris does participate on some local boards, Parks and Rock, and then you're also on Hickory Meadows, Hickory Forest Advisory Committee.

Yes. So, thank you for all your work. Thank you. Congratulations. Oh, sorry. Yeah. Yes. Thank you. Okay. Next, we have Michael Hughes. Hi. Hi. Oh, I'm spelled right here.

Congratulations. Enjoy the day. All right. Nice. Next, we have Billy McMullen. Billy. Thank you, Billy. Billy works remote. We're really glad that we could have him and have this, you know, social interaction with him. Here he is. All right, next we have David Richardson. Congratulations, David. Thank you so much. Yep. Don't forget your basil.

Next, we have Thomas Scott. Congratulations. Thank you so much for everything. Yeah. All right, Wifred Scott. No, Wifred. No, SIMPSON. Thank you so much. And Winnie also participates on the joint um common joint planning commission. Oh, nice. Yes. Thank you, Winnie. Okay, we have Jill Sterling.

All right, next we have Emily Tap House. Thank you so much. All right. And lastly, we have um we have Rick Benner. A million fans, Rick. Thank you so much, Rick. Did a great job.

All right. Okay. All right. That's really it. I just am so grateful for all of you and the support again. And um applications will be available February 1st, 2027, everyone. Thank you. Thank you, Colleen.

Thank you, Colleen, for always organizing that for us. And thank you for everybody who participates and gives up your time to learn more about city government. Once you've taken that switch treatment plant tour, you'll never go back from not caring anymore. Um, and we see what happens when people graduate from it on all our boards and even up here. So, we look forward to seeing you up on the DAS soon. I know. No pressure. No pressure. So, with that, we'll go ahead and get into our um agenda, which I know you will all be sitting here actively waiting for now that you're all engaged as we discuss our I'm going to get it wrong all the time. CDBG funding. I got the acronym right this time, so I'll have you take that off.

Thank you. Yes. Uh Leslie Sterermanman's uh our deputy planner and sustainability coordinator and she'll provide a brief overview of uh what is included in the draft plan that is uh recommended for your adoption and this is the second of two public hearings and uh with that uh I would like to turn it over to Leslie.

Sure. Thank you. Um so this is our third year uh of our five-year um consolidated plan. Uh this third year represents um uh 370,000 and change in spending. And um similar to prior years, it's split between housing goals, community and economic development whole goals, homelessness, and some program administration. The biggest project called for this year is a sidewalk project which is a stretch of sidewalk along Garfield Avenue that is the um west side of the street opposite the stretch that's being paid for with other funding uh so we can have sidewalk on both sides of that street. We were encouraged by our HUD representatives to look for projects like that in the short term to get us through uh our program administration and to get um more projects funded more quickly. But we have other um other things in the works that we're trying to also fund. Uh this also represents um the uh includes a some public service um spending that is limited to 15% of our total budget. Uh so that's as in the past some staffing but also uh may include um some rental assistance.

Uh so anyway, there's a full document. It's been up and available for the public to review for the last 30 days or yes, last 30 days plus. And we also did uh have some sessions and input with um some of the stakeholders that uh uh that are are subreients and also service providers who help to inform this plan. So happy to answer any questions. Do we have questions from the commission? Go ahead Jackie.

Thank you so much for your work on this. Um, I wondered if you could talk us through a little bit of the decision to um allocate the the largest chunk of funding to the sidewalk project as opposed to um rental assistance, for instance.

So, rental assistance is one of those things that is capped. So, we can only spend so much on rental assistance. um you know, it's a little bit hard to find the right combination of projects that fit the HUD guidelines that also uh can be funded and meet our needs. So, uh we we have a few ideas for things that might require a little bit more groundwork before we can get them up and running. Uh but this was a a project that seemed to fit the bill for this year. Thank you. Other questions? Go ahead, Heather. Uh, no questions. Um, should I make the motion?

I have to do the public hearing before the motion. I know it's a tricky This is a weird one like that. So, um, no further questions. Okay. Thank you, Leslie. And with that, I will now open our second public hearing. Uh, this is following a 30-day comment period. So, with that, at this time, is would anybody like to speak at the public hearing about the CDBG funding? Going once? Seeing none, I will close the public hearing and now I will hand it over to Heather. Okay. Well, I actually thought this was a good balance between homelessness issues, housing, and the uh quality of life for the Traverse Heights neighborhood. So,

the the motion is incredibly short. It says, "Following the public hearing, I move that that we approve the 2026 2027 annual action plan." Support.

All right. Thank you, Commissioner Shaw and Mayor Pro. Nes, any other comment on this? Seeing none, any public comment on this? Seeing none, I'll bring it back. All in favor? I opposed. Motion passes. Thank you all for that. And I agree, Heather. It's a nice ballot. So, appreciate you making that comment for us. All right. Next, we have our rubric for our legal services. We did um go ahead and and put out the RFP, but we wanted to clarify the rubric a little bit more. So, we have this before us. Um so, I'll open this up. Uh Lauren, did you want to say anything on it or

Um No, I just tried to kind of capture Oh, I'm sorry. I tried to capture um the uh the request for a little bit more clarification on the minimum qualifications um and put that as an asterisk. Um and then uh like I said before, I didn't assign any um points or anything like that. That's really more up to the city commission. If you want to even use points, you don't have to. um you can use it just as you know a note takingaking uh tool as well to to help you gather your thoughts as you go through the the proposals. So I don't have anything else. Go ahead, Ken.

Um I I kind of thought that like establishing some sort of point or ranking our our number one choice and possibly want to interview from all the potential applicants. So, I thought possibly putting in some sort of scoring just to if seven apply one through seven in all the different categories and then potentially and then add all those up and interview the top three and I'm just throwing out ideas right now. Sure. I like I like that. Um other ideas before I start summarizing. Yeah.

Well, I think uh I would do you know like a clue game, you know, I'm I'm gonna do my own scoring. Can't everybody do their own scoring and then we come back and say, "Well, these are my top three."

I am not committed to any sort of particular process with this. I kind of like that. Maybe we all kind of find our top three and then see if there's consensus among that. So with that and and just to clarify with you both, are we thinking that these would be presented to us in like the packets in an email or where we have it at a study session and or a meeting? I just want to figure out how you want to do that and then move on to a public, you know, would it be we get the criteria, see how it matches up, all of us rank and send it into, you know, the clerk and then from there pick the top three based on that that rubric or would you like to more have more discussion? Discussion.

Yeah, go ahead, Jackie. Um, one suggestion might be to ask for some administrative help in filling in the blanks here if these are in if there's agreement that these are the decision factors that we want to consider and I don't know what is a realistic number of responses that we may get to the RFP. But if there's 20 and it makes not much sense to me to have each of us, you know, scoring 20 of them times seven, um, I would I would suggest that we have some sort of um a factual gathering stage before it gets turned over to us. I Okay, sorry. Go ahead. Go ahead.

Um we certainly can kind of fill these in so you don't have to hand pack, you know, through each of the um and pull out the information and fill in the rubric for you with the with the factual information. Um and then we can send you that as a packet with all of with all of them for those who want to read the whole proposal. And that's where I was just like I was going to say this is where I would say much like an RF fee that comes with city to have the city staff do that and then come to us since this is ultimately our decision. I don't want to have them have too much of a finger on or a thumb on the scale. Just making sure that the eyes are dotted and tees are crossed basically and then from there it is kind of our process. Laura and then Heather.

Yeah, I was going to make a similar comment. I think, you know, the administrative part um clearly could be done just to kind of relieve us of sifting through each of those proposals, but I'd like to see those those blanks filled in. And then any firms that didn't meet the minimum qualifications, um that should be noted so that we're aware of that. Um, and then it makes sense to, if that's sent out in a packet, giving each of us the opportunity to do that kind of rank choice voting ahead of the public meeting would make more sense, I think, than us doing it all together if the group's comfortable with that. is that

I I wanted a process that would respect the timeline that that Lauren had kind of put into place so that we can maintain that because I do think that's going to be important as whoever we select that they have that time to get some you know we were shooting for two weeks two week that two weeks of facetime and uh kind of handing over the reigns. So Heather you had had your hand up. Sorry then I just want to clarify this is all objective not subjective. This is like hourly rate ethics. So just to make it totally clear to everyone that correct that that you're not filling in blanks with your own right.

No, we would just pull out those those uh items from the proposal. Yep. So, one question I had and it was kind of addressed in here and it was brought up at during the agenda review was um you know we have on here three asterisks seemingly for one column

um which is the five years of experience practicing attorney um the attorney assigned to work on the tribunal has a certain amount of experience and labor has a certain amount um what I wanted to ask for clarification on for which to me is where I would say is if a firm applies and doesn't have labor and tax to me that makes them not qualified, right? We're looking for somebody who's going to have the complete package because I if not we're getting into peacemealing out again and the the kind of the point of this is to take us through and so that I'm clarifying if that's what everybody else is looking at and also if that is what we're looking at are those and I know Lauren you did look at this are there other you know knowing we've kind of talked about this when we hire a firm there might be one who is our primary but they might bring in these specialists so the person that's our primary might not be the tax tribunal expert but that they have a tax tribunal person on roster. And so, um, I guess that's where I want some clarific clarification. Or are we just going to mark it like there's five possible points for your bench, but if you're missing two of them, we might only give you three points versus the full five. uh Jackie and then Heather

just to clarify I don't know that I had an expectation that we would not be using any outside specialized uh council. You know I know for instance there's a an oil and gas specialist that we aren't likely to be able to replicate within uh a municipal law firm. So, um, I I was envisioning something more flexible. Um, but but I'd love to hear from everyone else and see what their thoughts were. Heather, were were you going to comment on that, too? Or go ahead. You're next up and then we can go.

I think that all of these things are whoever is working with us with the city, even if they're from a firm, they have to have the tax, they have to have the labor, and they have to have the municipal experience, too. We can just have someone who's coming from it says other government experience. Well, I think municipal experiences. Okay.

Yeah. And that's and to clarify, Jackie, and this might be where we just leave it open on the rubric, but I would be looking for somebody who has a deep bench so that we're not then going back and scrambling around and figuring out, okay, well, we still have a contract with this person. We've established through many conversations, and I know you're laughing about it too, Jackie, oil and gas is oil and gas, and they are an entity all on their own. We can't if we found a unicorn that had that probably would score off the charts. But um as far as everything else because we will be talking about zoning and we will be talking about some other things along the way that I don't think we want to get into having to I I I would rank higher if we don't have to get into peacemealing that out a ton. Go ahead, Lance. Yeah. And I just want to address it as well. Um

whenever you hire something like this, if you if that person now has to go hire somebody else, your contractors are subcontracting and now you've got a fee on top of a fee. on top of a fee with a percentage of an increase in fee. And so it's just kind of like we're spending a lot of money extra unless but I think we'll be able to find somebody who's got a deep bench hopefully if they need to go out. Yeah. If they need to go out and find like you know oil and gas for example like there's the one lawyer in Michigan. We have our oil and gas. He's ours. Just kidding. We have ours. He's ours. Yeah. So Mitch, go ahead.

Yeah. To that point, we are specifically hiring a firm as a placeholder. We are not saying we are hiring you as a specific individual attorney to be in the office uh for the next 10 years. I am seeing this as hopefully we can get a firm that has enough in-house experience that they're able to handle even if it's not in one person all the various aspects of law that are needed by this. But it also will provide some framework um for a longer term vision about uh what we do want in one person

and or is it we do we still want one person because we might find that no our present company here in all due respect that putting all of that on one person in the future isn't realistic for what the load case load that we have here and maybe it's a hybrid maybe it's a firm only maybe it's one person again but that's part of I think the the exploratory process we'll be while we we look at this. Um I think but to clarify what you just said and I just want to make it clear we we've all talked about this but the charter says that we have to have a main point though. So we might have

you know Jane Doe as our primary but John Smith might come in as our labor attorney. Yeah. Or a tax person. So I just wanted that to be clear if people start seeing the same person and somebody looks it up and says well they're municipal but they're not tax or something. we this is how our bench works. Um and so with that a clarifying point and then there was one I had and I literally just forgot in the middle of my sentence. So if anybody else would like to speak, please feel free or not. Um

I I would I would like to see all of the applicants laid out on this. I wouldn't want to just exclude somebody because they didn't meet the minimum qualifications because as we talked about, they might be strong enough in one place with other great attributes that I wouldn't want to exclude them. So I really I really want to go ahead. Uh what I would do is I would put every single applicant on the chart and then I would know under practice areas whether they had all of them or not so that you would have that information in front of you. Okay.

Um the other thing I would say is we've done interviews for city manager and other positions over the years and and some of our boards here. Application processes have to be conf or can be confidential until we get to the finalist interviews. That is not the case for this, right? No, because it's an RFP.

And I was just say because it's RFP, it's public. And I say that to say we've had some comments about public engagement and people in our community who are engaged at all points when as this becomes public, people are always welcome to reach out for public comment or emails or anything like that. This is a decision that we're making as a body, but just like any decision we make as a body, there is always public input is allowed throughout the process. So that is still part of this process. So, we will do the RFP process. We'll have the initial gradings that'll go that'll be public. We'll have our interview process. All of that will be done publicly just like when we're doing job applicants. It's just even more transparent actually because we don't have to protect people who might be like, well, if I'm not a finalist, don't let my boss know I'm looking. But, um, but that's just a clarification on the process for the public and ourselves. So,

anything else that we want added to this process andor the rubric while we're having this discussion right now? All right. And we don't have a motion for this, right? Because we've already got it out. So, you've got clear instructions. Yep. Right to fantastic. All right. Check check that one off the list. And now lastly, we'll go to amending the pay scale for the ACT ahead of our budget here. And I'll let you take that, Benjamin.

Yes. Thank you. uh Deputy City Manager Deb All Allen uh who I respect tremendously and has been an amazing partner uh with me uh and for the entire organization has announced that she's going to retire as of Friday, June 12th. And I'm happy for her. I genuinely am. I'm sad for us, but uh Deb and I will always uh have a a connection with each other. Uh with that um we have an ACT or administrative confidential technical employee pay scale that's approved by the city commission. Presently it has 11 grades. Uh I asked our human resources director to take a a look at that and make a recommendation with which I concur to add a pay scale a grade 12 which will help us with uh competitive market positioning, recruitment and retention. and I am waiting to begin recruitment for the critical role of deputy city manager until this is approved so we can maximize our ability to attract the best candidates. And so it is my recommendation that you approve the motion in the packet which would add a grade 12 to that ACT pay scale.

Do we have any questions on this first or a motion? Go ahead, Ken. Uh just just a question about the the scale that assigns the points that helps people fall into grades is where do you find that? What is what where does it come from? Is it

Sure. So that was based on a uh it's a framework a compensation uh framework that was prepared by professional uh compensation consultants. uh and it takes a look at 10 different factors uh that range from things like education to opportunity for impact negative and positive. uh the span of influence they have, the expertise that's needed, the number of employees that under their control, um complexity, uh there's a number of factors. And then what happens when we have a uh position is there's uh an analysis that's done that rates that job description, that role in each of those 10 factor areas. And then based on the total uh because those all have a score with them uh it determines what pay grade ultimately that position properly rests within.

Gotcha. And this is a system used by like the state and even unions and others to kind of create a a scale that's equitable and that everybody is frankly it's more transparent than just individual. I I I greatly appreciate it. I think it I just wanted to Yeah. I want to get my hands on it and I want to like put some thought into it. It really helps as we're kind of evaluating like even something like a wreck authority administrator. It's very helpful for a tool like that to actually have it to look at it for for scoring someone instead of just saying I think they kind of do something like this. So, I really appreciate it. Sure, Jackie. And then,

right, and we always score the position and not the person, right? Yes. But I'd be happy to share that with you if you'd like, you know, especially for your work with the Wreck Authority. Yeah, I'd love that.

I'm just wondering if there were alternatives to achieving any of your uh recruitment and retention objectives other than addition of a a grade 12 um step. Any any alternatives that were considered? uh not alternatives that were considered but additional items to attract including promotion of our flexible workplace policy uh and that I uh uh that's something that I'll encourage the deputy city manager to embrace and model uh because that's a recruitment tool and retention tool that we have uh as well as uh opportunities for professional development and the opportunity to have an impact on some statewide committees once they get their uh feet under them here

and we have a pretty good benefit. Yes, an excellent benefits package, Mitch. And then, oh, sorry, Lance, first. No, Mitch, if you have a question for uh I'm not expecting anybody to have the number just right off the top of my head, even though we do have the chart at the bottom, but considering that we also have the budget discussion um for future times when we have uh a change in the ORG chart before us, I would like um a rough estimate for the implication to overall uh labor and benefits uh costs. Okay, understood. Yeah, I mean

if somebody has the number about what this impacts that would be great, but I don't think they do. No. And part of it also depends. I mean, it would be a minimum or maximum impact is what I'd present because it depends on where they fall on the is once a pay scale is established, they can be placed at any step within that pay scale as determined appropriate. Lance, yes. Uh, let me get back to this. I move that the city commission approve the addition of grade 12. Sorry, that was Heather. Um, any further comment on this?

One of the Oh, I was just real quick. Um, one of the one of the things that we've recognized over time is that it's it's really a crazy concept, but it makes a lot of sense is if in order to move up your employees at the bottom, you have to move up the top, too. And it's something that I've I've seen it done. I recognized it and I understood the process behind it. So, this makes sense. even though it doesn't feel right. Let's pay the people at the top when we really rely on the people at the bottom the most, but to make room for the people at the bottom to move up, you have to push the top up. Yep. So, I I think it makes sense. And acknowledging the expertise and knowledge of the people that have moved up.

Oh, yeah. They're they're great. And and also the fact that we are one of the most expensive cities to live in in the state of Michigan. Absolutely. Um any public comment on this item? Seeing none, I'll bring it back. All in favor? I opposed. Motion passes. Yeah. Wonderful. Getting the business humming along here. All right. So, uh, we have special meeting public comment. Any public comment on well, I guess anything anything under the sun?

Seeing none, then I will close the the special meeting. And now I will open our study session uh for today, May 11th, and that is going to focus solely on the budget. And so I will hand that off to you, Ben.

Yes, thank you. Uh of course, at your meeting on May 4th, uh the city commission took action to schedule a public hearing for May 18th. That's on the uh proposed budget for the city for Traverse City, Light and Power, and the downtown development authority as well as the uh related uh tax levies. Of course, Light and Power uh is not part of that mix. uh uh but the city commission can adopt uh the budgets as soon as next Monday, May 18th, which is the public hearing. Uh but no later than Monday, June 1st. Uh and that's according to the city charter. And so, uh we've got Brandy Ekran, the Traverse City Light and Power Executive Director here, as well as chief financial officer for TCLP, Carla Myers Bean, uh to present the Traverse City Light and Power proposed budget. and then they'll be followed by DDA executive director Harry Burkholder and they're each planning on roughly a 15-minute presentation uh plus Q&A and of course the presentations are in your packet and then I'll be last for the uh city budget and so with that I'd like to turn it over to Miss Ekran.

Welcome.

Thank you. Um, in the interest of efficiency, Carla's actually going to go through the presentation and then I'll be able to help with questions, right? All right. I just want to start out and thank you for the opportunity to present Travis Light Powers 2627 uh budget. As Brandy mentioned, I'm Carla Myers Beman, chief financial officer. Uh so tonight we'll walk through the proposed budget uh discuss the strategic priorities driving the recommendations review impacts to rates and highlight how this budget positions TCLP to maintain reliability, strengthen infrastructure, manage risk responsibly, and continuing advancing our long-term community goals. So before we begin, um I'd like to recognize the governance and leadership teams that help guide TLP strategic direct direction and oversight. This includes our board members, uh cities commissioners, uh Commissioner Nes and Commissioner Bmer and city leadership, Ben Marat on our board. Their collaboration and guidance continue to support responsible utility operations, long-term planning, and strong stewardship of public resources. Next, I would just like to touch on our budget approach. Um, we utilize this budget approach each year. Uh, for stable operational costs, we develop using historical budgeting methods. While new initiatives and discretionary spending, uh, we evaluate using zerobased budgeting principles. So, basically starting uh, from zero. We also incorporate riskbased prioritization to focus on investments in infrastructure reliability, cyber security, and operational resiliency. Uh finally, the budget reflects strategic investments aligned with our strategic plan uh with long-term utility

objectives, including reliability, clean energy goals, customer programs, and fiber expansion. Um overall this approach balanced fiscal responsibility with the need to continue investing in critical utility services and future system needs. So a real high level what changed why and what does it mean for rates and risk? Um first we are proposing several strategically aligned positions to support initiatives adopted through this uh strategic plan. These additions are focused on long-term organizational sustainability and operation support and there was inclusion of six positions. Second, we are budgeting purchase power conservatively due to continued volatility in the regional energy market. Um, this is created by weather conditions. I'm not sure if you remember the January storm, but energy uh increased to $1,000 per megawatt hour when it's usually around $30 to $50.

U transition to energy resources. I mean, we all see the coal plants decommissioning and battery storage. um increasing and then significant new load additions where data centers are popping up across the nation. Uh this budget also includes funding for demand response program which aligns both with system reliability objectives and the climate action plan that was issued in 2023. In addition, we continue to comply with state of Michigan energy optimization requirements. And with that, we're investing in expanded customer education and outreach efforts. We also continue to strengthen operation resiliency through investments in software system monitoring tools, insurance coverage and preventive maintenance programs. Um we are with this budget we are proposing a 5% base rate increase um to address utility financial needs. Although it doesn't close the small current deficit that's shown in the budget, it does help to near-term affordability with a plan um that you'll see in the cash flow of future incremental adjustments in future years. Um we do a cost of service study every five years uh to help us plan those rates increases. Uh we look at those each year and kind of true those up with the next cost a year uh excuse me cost of service study in 2728. We are looking at doing multi-year adjustments um so we can come to you um and let you know the rate increases for possibly over the next two years and this will help for better planning for especially our commercial industrial rate class. So we'll move into operating revenues. Uh this is a slide that I show every year. It shows our uh utility sales on top and our purchase power costs. We have a rate which is the power service cost recovery rate. So when our wholesale costs increase, we pass that on to the customer. If our wholesale costs decrease, we pass that on to our customer. So you should see our utility sales and purchase power costs be

parallel with each other, which this graph shows. On the right hand side is our average PCR rate. It is just a component of our total rate. Um you can see it's increasing uh based on what I kind of just touched on that's happening in the energy industry that we're budgeting conservatively for. So in 2526 we actually budgeted the average PCR rate to 017 uh and uh it would reflected a conservative budget. So you see an increase in 2627 of 002. I don't think we'll reach that but we do take a conservative approach with our purchase power costs. Um so even with uh proposed 5% rate adjustments, TLP's projected average rate remains below the 2024 Michigan average for municipal cooperative investor own utilities which is 14 cents. So this chart um you can get off the internet from the US Department um energy information administration and it shows all the utilities within Michigan and their average rate overall. Um right now in 2024 we were the ninth lowest and then with the 2026 27 increase uh we would move farther down the chart but this is still based on the other utilities 2024 uh rate. So kind of breaking down our kilowatt hour charge uh we have the power supply costs um at 8.46 cents and then our capital operating costs at 4.45 cents. So the 4.45 cents um includes distribution infrastructure, information systems, customer service, administration, public service functions and capital investment. So this really illustrates that a significant portion of the rate is driven by the external power supply costs while the remainder supports the local utility services and infrastructure customers rely on every day.

Uh this is our fiber operating revenue. uh in 2627 you can see a growth in revenue that is directly tied to the phase 2 expansion. Uh we expect to customer growth to continually steadily increase across residential and commercial segments. Uh this next chart just reflects the number of customers we're expecting subscribe. Uh we expect a 40% take rate into the late fall early winter of 2027. Moving on to operating expenses, uh the light and power board earlier this year approved a decarbonization policy. So we are um our goal is 60% clean energy by 2035 and 100% by 2040. So we're well on our way. Uh in the 2627 fiscal year, we have 31% of our portfolio is solar energy. you'll see several pot um projects uh through MPPA and then we have some uh direct contracts u the M72 solar as an example and then our wind energy represents 10% of our purchase power portfolio. Uh the next slide shows our thermal resources over renewable. Um so our renewable uh portion increases to 44.7. We also have some landfill which makes up the solar and wind. Um a couple items of note are the Bell River coal plant that we participate in. Uh they have there was uh two plants. Uh the first plant converted to a natural gas peaker in September 2025 and the second plant is expected uh to convert to a gas peaker plant in September 2026. And then during this budget year, we will have the heart solar um come online in September of 2026. Um oops, excuse me.

Uh electric operating expenses. Um overall you can see we're we remain relatively stable from the uh over the three past years. uh distribution expense and 2425 relates to a sustainable campus feasibility study which was included in our capital plan. Our generation cost which is the third bar over that increases slightly over the years just to reallocation of personnel costs. Um customer service which is the fourth bar that increase relating to the expansion of Hall Street along with the customer experience study. And then we are um the absorption of the utilization of credit card fees that continues to grow.

Uh the fifth bar which is public service that continues to grow due to increased energy optimization and electrification initiatives. Um information systems which is the dark gray that increase due to increased staffing for cyber security and resilience within that department. And the last one, uh the Y, uh sorry, second to last, general administration. Um we added accounting and finance staff to centralize procurement and support expanding fiber, uh operations. And then the city fee is directly tied to how much revenue uh we earn each year. Moving on to TLP fiber operating expenses. Um this continues to increase uh relating to phase two. Um we have a larger FTE allocation to make sure uh we can operate and maintain appropriately and then there was additional efforts in marketing communications uh for customer subscriptions. Moving on to the electric budget comparison from 2526 to 2627. Um some key drivers we have additional FTEES and distribution supporting operation excellence and system reliability. uh public service investments are aligning with sustainability initiatives uh by state law in the climate action plan. Uh software investments uh we actually saved on that. We looked historically at our software costs and our future needs and then administrative staffing um increased for excuse me for general administration. And then we're also conducting a comprehensive wage study and emphasizing professional development to support workforce sustainability. uh fiber budget comparison from 2526 to 2627 uh continue to expand marketing communication efforts and contract professional sales services. Um these uh investments are specifically designed to support sustainable fiber growth within that business.

Moving on to capital. Uh this slide highlights TLEP's historical capital investments as well as projected future capital expenditures through fiscal year 2032. Uh the long-term capital plan reflects continued investment in electric infrastructure, modernization, reliability improvements, system resiliency, and strategic utility initiatives. The largest capital plan is the sustainable innovation campus uh with a significant cost in fiscal year 2829 and 2930. So, this plan is really structured to balance operational needs, financial sustainability, and long-term community benefit. Lastly, um this is the TLP fiber buildout. Uh this provides an update on the progress to date. The color codes provide when the additional phases will be completed and ready for subscription by our customers. Uh we are focused on delivering communitywide connectivity and long-term value to our customers. Hopefully uh with this budget presentation um you learned that we are continuing to maintain system reliability, advance our strategic plan, uh proactively manage energy market risk, strengthen cyber security and operation resilience, expand fiber services, uh support workforce sustainability, and keep rates below state averages. Um as a team, it really reflects careful planning, conservative forecasting, and long-term financial stewardship. Thank you. And we'd be happy to answer any questions.

I had one quick one. Well, two quick ones actually. So, one, by the map, I'm looking at the fiber buildout forecasted by the end of summer is what I'm seeing for uh the all the neighborhoods on here are either in green, which is May, yellow in June, or red by the end of summer. Just to clarify that for I get that as the question asked a lot. So, just wanted to show everybody the maps there. It's in in the packet. It's publicly out there. We're rolling along and it's really exciting. So, yep, that is accurate. We're trying to underpromise and overd deliver. Yeah. No, perfect.

And then I did have another question really quick. Bell River, um there was at one point, I think about a year ago or last I heard of it, there was some federal fighting of us closing down or switching over some of the plants. Has that eased off? Um and and that I saw that the projection is by September of 2026. So that is still on on pace to be switching from coal only. Um I'm not sure about I think you're talking about Campo. Uh President Oh, you're right. I was thinking about Campell. Sorry. Is that still under discussion? Um so there is a DOE order and it's continuing operating. Um so it operates for every 90 days. Okay. Um so it's continuing to operate.

Okay. appreciate that that's out of your hands, but thank you for the update. Other questions? Go ahead, Heather. I I had one in advance and it was about I I misdated it the first time. I thought I wrote that rates were tripling, but it's actually the cost of energy that's tripling over the next three years. So, could you talk about I mean, you gave us that amazing um statement that during the uh March snowstorm rates went from $30 to a thousand dollars. Oh my goodness. But if you could just talk about why you are proposing that you think this was going to happen. Yeah. So uh

I think I understand. Um so that PCR is actually just a component. So we have a base rate of $64.80 within our rate structure. So that's just the amount that's above it. It's not the rate though. I'm talking about cost of energy.

Yeah. Sorry. So that's the cost of power. So um whatever. But it's built into our rate. um the power service cost recovery rates like $65. So when the cost of power goes above that, that's the incremental increase. Um so actually our rate increase went from or excuse me, the cost of power this year is expected to be like $74.81. Next year is supposed to be $85. And really that's a portion to our contracts. There's um inflationary increases every year. And then with the kind of volatile energy market, we are a little bit exposed to the market. And so with that, the market rates are um increasing or expected to be higher than this year.

So it's inflation, market volatility, and weather. Yeah. Yeah. It there's maybe a better um explanation, escalators in our contracts each year. Yep. Thank you. Other questions? Go ahead, Ken. On page uh it was the fourth slide I listed as page four, but there was um six or or seven different items. It's a habit now. So, did not do it. Kids, um we understand.

Um there was there was a few items listed as what and why in regard to the rate increases and one of them was creation of new positions strategically aligned with adopted strategic plan initiatives that support long-term organizational objectives. That was the first one on the our left. Um, I probably asked this a few times tonight, but um, my understanding was the completion or successful implementation of the strategic plan objectives would be highly dependent on budget constraints constraints and current staff capacities and capabilities. So I I've seen the strategic pillars in a lot of our budget presentations and I know that those are important priorities for us but it was one of the things that we talked about was that it's going to be within the things that we can afford. So if we are adding a lot of positions and achieve trying to go after some of these goals aggressively, it's going to cost a lot more and it is obviously contributing to this rate increase. I don't think that this is unreasonable. This this is important that we speak to this because our community is going to say we're we're paying more, but we're not we're not bringing home more. So it's important to speak to this in that aspect and I wanted to bring that kind of back to the discussion that we had that you know the strategic initiatives were goals but they would be constrained to you know financial capabilities.

So I just kind of wanted to bring that up. Is there things in here that we could go without that that could pre prevent that 5% rate increase? And just real quick, I'll just mention that of course the the city has our strategic action plan that is governing or not it's serving as a north star for city operations and then Traverse City Light and Power has its own strategic plan that they they did actually they were ahead of us. They were in 2023. Yes. So yeah. And then also just for clarity, the TCOP board has not actually considered

the rate adjustment that we're looking at. We just like in the interest of transparency let you know what we're looking at planning wise. But one of the things that we prioritize when it comes to rate adjustments is we do look at affordability the energy burden on the customers and then we benchmark where we are not only with our rates but basically what our customers can afford. So that also factored into our goals. So when we set strategic goals a few years ago all of that took into account a robust stakeholder engagement as well as affordability. What you're seeing is that over the past few years, we've been slowly stepping up that as opposed to just jumping up. So, it's probably the reason why you're seeing that now. Yeah. I mean, I

I I will fight increases forever to the death for the for our residents. So, I I wanted to talk to it and I'm I I didn't think it was just a a number slapped on a on a post or a presentation. So, I thank you for speaking to it. Um, I guess we did kind of mention the fiber. I I hope that this will be the last budget presentation where we talk about the implementation of fiber because it's been rolled out. It'll just be that it's I I really I really hope that we get it wrapped up this time because it's it's a it's a big project.

I know it's a big project and we we I remember the conversation. It's was something that we had to do. something that as part of the smart grid that we needed to do. I just hope that we can put a bow on that thing and um yeah, this is the last one. It's exciting. Mitch, go ahead.

Yeah. Um I'm going to push back against some of what Commissioner Fun said and said that yes, 5% um is an increase. It's a proposed increase. It hasn't been uh cooked in yet, but not Yes, it is an increase. Yes, it is a bit above the rate of inflation currently, but not only are our current rates lower than the state average, that is a lower increase than I have heard from most other utilities that have been, especially if they found themselves uh a little more liable for some of the risks of the weather events that we have seen the last 15 months. Uh are looking at double digit rate increases. Um right now Presc and Electric has a 20 $30 sir charge on every single bill every single month and that's uh just because they have an frankly unsustainable debt load from the ice storm damage. Uh yes, there is state and federal money that will help defay those costs for the utilities and that will also help uh TC Lane Power to be more resilient and um our electrical partners. But I see this as a win for Traverse City that uh you're able to keep um the increase that small. Yeah,

I'll make certain that when the TCOP board does consider the rate adjustment, we factor in what's going on with the other utilities. That's a good fact point.

Other questions or comments right now? Go ahead, Jackie. Um I would I was interested to note where where Traverse City Light and Power falls on the the rate comparison slide and um I know that the data that you're using here is is from 2024, so there's a a lag period. Um, am I recalling correctly that in last year's budget presentation, we were a bit um like number three in the state for for uh low rates as opposed to number nine or have I have have we shifted that much? And

um if so um what do you expect coming coming forward? Um yes, we were third at one time. You have to understand and like those, you know, those top 10, there's not much difference between us. So, we did um migrate to nine. Um to be honest, I think we'll probably stay right where we are u when the 2026 data comes out. I think we'll probably, you know, the blue line is where we are on the 2024 data and then we're ninth from the top as I mentioned um earlier, but I think we'll probably stay right in that range to be honest because all utilities um are having the same impacts as we are. Thank you. Any other Well, you're still you still have the floor, Jackie. Go ahead.

Oh, great. Well, another another rate question then. Um I I wondered if you could um relay a request when uh rate increases are under consideration if it's possible to look at those through the the lens of um specifically our our fixed income and our um lower income uh rate payers if if they um I'm I'm starting to get some feedback that um particularly for those on fixed income that some of the um uh time of day, time of use rates have perhaps been um um impacting that that portion of our rate payers uh more significantly than than those who are still in their in their work outside the home years. So um if that could be part of the analysis, I I would be really grateful for that.

Yes. So, uh, last year in our budget and this year we have what is called a customer cares program. It's been a little bit, um, difficult to get it launched, but we're going to launch it very soon. And so, that will help address those people that are on fixed income, um, where we can, um, you know, help them supplement um, their funds to be used towards their electric bills. That's where our plans for the future.

Yeah. And that's one of those strategic initiatives that adds value. So, that's what we're funding and we're investing in. The other thing that we do do and just as just as a refresher um because I feel like we go through this almost every year, Carla does an excellent job of also communicating what the average bill impact is when we get to that point for the TCO board consideration. And then we are continuously observing and monitoring where customers are, not only on their ability to pay the bills, but also what their points are, what they're struggling. So if there is an opportunity to provide some referrals whether they fit with some particular program we do do that on I'm going to say even on a daily basis. So we do have that lens but I'll make certain that we clarify that we do do that when we do our presentation.

Thank you. Anything else Mitch?

Yes. uh on a forward-looking perspective uh you did point to the volatility that we have seen dramatically increase over the last year but there's been volatility in the energy sector for decades. Um do you feel that we have seen uh in the short term volatility uh in notably oil and gas but throughout all thermal fuels. Um but the tariffs that have been on off for years have had significant impacts on wind and solar installations. So has the transition from uh more thermal fuels to more renewables uh either protected us or made us more susceptible to that volatility. I'll definitely let Carla fill in some details where I may miss the point, but I do believe our renewable portfolio investment was something that actually, I would say, insulated us from some of this market volatility. So, there's value there. The other piece just to keep in mind is when you hear about tariffs and other things that are happening politically within the market, there is a little bit of a lag before it eventually hits the rate base. So, one of the things that we definitely do with that PCR, it's just something to keep in mind. Carla talked about the pass through, but it's a 12-month rolling average pass through. So, we smooth those impacts for the customer over the year to allow it so that they're not spiking as much as we may see that happening in the market. But to the direct answer to your question, I believe that our renewable portfolio actually like worked in our favor.

Good to hear.

Oh, good. I was And actually to that point, Brandy, thank you because I was gonna save as everybody's kind of asked their questions that first um I want to thank Lance and Laura, the current board, Brandy and and both of you and the whole team because I remember when we passed the 2040 goal about what was it eight years ago that everybody said you guys are never going to be able to do that. That's not where anything's nothing's there. We did that as a leap of faith of technologies advancing. uh you know the the demand is is changing and to see you all kind of completing that portfolio and and pushing it forward is amazing to see. But I also was going to say I appreciate you bringing that up that part of the reason when we were investing in the alternative energies. Well, this is the conversation we had of this makes us less reliant on some of the volatil volatile markets. And so unfortunately we're seeing it bear out right now for everyone and all the energy costs. But I just want to thank you both for um you know, Brandy, you've led very well and Carla, you've been behind the numbers for as long as I've been on the Lane Power board and the whole team. So, including our current representatives in our past for um putting us in a much better position than we could be right now and for having that vision that's kind of becoming realized that we weren't 100% sure would be. So, thank you for that.

Thank you. Thank you. Anything else, anybody? All right. Thank you so much. We'll keep rolling her on to the DDA then.

Good evening. Harry Burkeolder, executive director of the DDA and we're going to follow the same track for efficiency and kind of do the same presentation. I'm just going to say a few words and I'm going to turn it over to Lauren. There she is. Who's going to go through the budget? Um but very excited to be here and talk about upcoming projects for this year. Um as you know we are governed by a nine-member board which you appoint. Uh the mayor sits on that board and we have a really great mixture of people who live in downtown own property in downtown or have businesses in downtown but we also have members on our board that live in the city and in the neighborhood. So we have a really good dynamic and good perspective about how downtown fits with itself but also within the greater context of the community. Um, in terms of what we look at as part of our budget considerations, um, really it's what the DDA does. It's two main things. The first one is implement uh, and contribute to physical public infrastructure projects in partnership with the city. As I always mention in these presentations, we are component unit. We can't do any projects without your approval. Um, and so we're very much in collaboration with the city on those physical improvements. The other thing that DDA really focuses on is providing uh programs and services to help maintain and advance downtown for the future. Um all the clean and green programs and the beautifification and streetscaping are all part of those services along with trash removal and the service agreement that we have with the city that Lauren will talk about, those are all designed to really make downtown function uh on a day-to-day basis and then also into the future. And then we've been part of the conversations with city staff and city leadership for quite some time. um uh as part of the city's capital improvement planning process. Um but also looking at the recently approved city strategic action plans and the OKRs that you're working with. Um as I mentioned before, we have a series of financial obligations and services every year um that are part of our considerations. One of the biggest one is the service agreement with the city that provides services from city staff into the

downtown district. Um we do have um our own capital improvement and service priorities that we've been talking about as a DDA for the last couple years and those are evidenced by some of the projects that we've been working on. Uh the one that was recently improved was the farmers market biblot B that was one of the the leading um capital improvements that we've been discussing as a DDA for the last several years. And then the guiding principles which you see here on the screen were developed as part of the moving downtown forward planning process back in 2022 which is a very large collaborative community engagement process to talk about the future and the vision for downtown. Those are our guiding principles. So the work that we're doing should fit in one at least one if not all five of those guiding principles along with the other actions that are identified in your strategic plan. With that I'm going to turn it over to Mike. Hi everyone, Lauren Bohack, deputy director at the Downtown Development Authority. I want to apologize up front if my voice starts to fade. I'm coming over a cold and this is the strongest my voice has sounded in a week. So, I'm going to try to make it brief for both of us. Um, just a quick overview um about our budgets and the uh presentation. The DDA actually has three funds. The DDA general fund, the TIF 97 fund, and the Oldtown TIFF fund. So, we have three budgets that we need to review with you all. Um, the revenue for all of those budgets are projections from the city's treasur's office that are um, you know, come together with the same methods as, uh, the city budget uses. Um, we currently are in the, uh, first full fiscal year of the DDA using the same accounting and budget tools that the city uses. Um, so, previously the, uh, DDA board was used to seeing our budget presented more in a spreadsheet format. So, I've sort of merged the two in the images here to uh to try to uh fit them together for both of you or for both of our boards to understand. Um and then the DDA also

manages the arts commission budget um because I am the staff leazison with Heather being our commissioner on that. So, we'll go over that budget as well. So first the three funds um the DDA general fund or the administrative fund as sometimes called um this is funded by a 2 mill levy and that tax is paid only by property owners in the DDA district. Um then there is the tiff 97 fund. This is not a tax. This is captured from the growth in taxable property value within the tiff 97 district. It only captures from the tiff 97 district and it can only be spent on public infrastructure and services in the tiff 97 district. Same goes for the Oldtown TIFF fund. Um it's captured the same way, captured only in that district and can only be spent in that district. The map shows um the Tiff 97 district and the Oldtown TIF district and those make up the DDA district entirely. There's no DDA part outside of those districts. This is just our uh overview of the general fund with the overview on the left and then the um revenue in the green and the expenditures in the red. Um and this the pie chart shows the way that you all are used to seeing the city budget in the city system. Um so uh grants make up the majority of the general funds revenue with um more the next biggest revenue source being from the TIFF 97 um and OldTown TIFF administrative fees as well as a reimbursement from the downtown Trevor City Association which is the downtown merchant association nonprofit that we partner with. Um the 2 mill levy brings in just over $125,000. It's uh projected this year. Um, so just 5% of the DDA general fund. Um, we also collect booth fees and uh food assistance program reimbursements for the Sarah Hardy Farmers Market that counts as revenue in the general fund

budget. So uh zooming in on those grants that make up the majority of this budget. We have three grants that we are um awarded at the moment. Um the first is from the National Oceanic and Atmospheric Association. um that is actually um a grant that was awarded to the tribe and we are a subreient of it for restoration of the Borgman Ottawa River. That's a multi-year grant. So, it's expected that work will continue over the course of several years. We're currently in year one and work has begun. So, we have been um working with uh partners on that and uh started spending down that grant. We've also received a local grant from Rotary Charities. That was a $1 million total grant to support the development of Rotary Square, which all of you have learned a lot about in the uh process. Um we have more than the $258,000 um that is budgeted um still available of that million-dollar grant. It's just not budgeted in the in the next fiscal year. And then lastly, we have the um Michigan Department of Environment, Great Lakes, and Energy grant that was awarded uh several years ago for cleanup of the West End for the environmental um damage that is um on those properties. Um that grant is actually going to be expiring soon. And now that there has been movement on the West End um to make progress on those properties, we have been working with the state about a potential extension so that we're able to use that grant. Just a note about those grants. So, all three of them are reimbursement grants, meaning the DDA does not receive a lump sum amount to spend that we can just take in and sit on. Um the grant revenue does not come in until we've already made the expenditures. So, you'll see in the budget the numbers line up exactly because um the it creates a a net zero uh representing the reimbursement there. So, um that can kind of skew the numbers of the general fund and make it difficult to uh understand. So a clearer

picture of the general fund can be created if you uh exclude the grant dollars. So you'll see at the bottom there with the exclusion um the revenue is just over a million dollars without the grants and the expenditures is actually under a million dollars. So the DDA general fund expenditures um the again the grants make up the majority of the expenditures and the rest mainly just covers overhead is what the general fund is used for. at staff, IT, accounting, audits, um reviews, legal, office supplies, and then our uh reimbursements for the um food assistance programs are also administered via the DDA general fund before they get paid out to the Sarah Hardy Farmers Market vendors. Moving on to the TIFF 97 and Oldtown TIF budgets, these budgets are structured the same exact way. Okay. The only differences really are in the dollars amount and the uh district specific projects or needs. Um the Oldtown TIFF collects or captures significantly less. So you'll see that those numbers are different. Um we organize these budgets in sort of three different or sorry four different categories. Running downtown, building and maintaining downtown, transforming downtown, and activating downtown and growing business. This colorful sheet that you see here on this page is how we organize um and sort of break down each of those for the DDA board. It's on page 50 of the packet if you want to take a closer look at that or reference it throughout this. The first category is running downtown. We have TIFF 97 on the left and Oldtown TIFF on the right. These are just all the administrative costs um that come with running the DDA um and running downtown. Um so that consists of uh transfers from both funds um to the general fund for administration. There's transfers from both funds to the city for our service agreement. Um and that also includes utilities. So the DDA pays

for the lamps and the light posts, the street lights downtown um to make sure that downtown is lit at night and we have holiday lights. So those meters uh come to us and that's through the general fund. Activating downtown and growing business is the next category. This is everything that it takes to get people downtown and shopping and spending money and um spending time in our beautiful downtown. Um so that would be marketing and advertising for events. Um communication and uh promotion of those events, partnership with the downtown Trevor City Association, um and our Travers Connect membership. You can see from the pie chart there that this is a very small portion of our budget, less than 2% of each of the tiff budgets. Building and maintaining downtown. This is the largest category um that we spend on. This is the essential infrastructures and services. Sort of the basics that we talk about um that includes general maintenance and repair um district specific repairs and we'll talk a little bit more about what those are this year. our contracted services, which includes the trash pickup, our clean and green teams that clean up downtown, the holiday lights, um our public service or our public restroom program, um and district specific services as well. So, the ser uh farmers market as an example. Um we also have a line in this uh section that is a contribution to city infrastructure projects. We know that inevitably there will always be projects that come up throughout the year that are unexpected. um that and some of them will be in the tip districts. And so um we put money aside in advance to be prepared for when those projects come up and the city comes to us needing additional funds that we have the money ready and available. Transforming downtown is the next category. This is the transformational infrastructure and services that transform the look and feel of downtown. That would include our mobility

improvements for pedestrians and cyclists, all of our green programs like our downtown composting program and our public transit partnership with Beta, as well as major district specific projects and studies. Um, this year we've included funding for a retail study to um study the effects of the changing dynamics of real estate and costs of um owning a business in uh expensive places to to uh own property. um and as well as a contribution to the city storm water study that the city will be leading. Um so breaking down the TIFF 97 infrastructure. Um this includes uh both the essential and transformational uh infrastructure makes up the capital outlay category that you'll see in the pie chart in or in clear gov. Um this also includes the Hardy parking deck bond payment. So you'll see that that is the majority of um the TIFF 97 budget. Uh zooming in on some of the more expensive or larger projects in the TIFF 97 um infrastructure budget. Um we have the storm water and green infrastructure line that is $110,000 to contribute to the larger city-led storm water repairs at LP B. That is funding that we'll be rolling over from our current year budget to next year's budget. and that was included in the motion that you all passed last week for lot B and the pavilion. Um there's also funding in the budget for the North Union Street Bridge repair. Again, that's a contribution to a larger city-led project for um repairs to the bridge. That funding will also be rolling over from this year's budget to next. There's also funding in the budget for the two-way pilot. Um this is enough funding to implement all of their recommended improvements to switch uh two-way on State Street to permanency. And that includes uh funding for the design of any of those changes that are necessary.

There's funding in this year's budget, excuse me, for Rotary Square. Um that funding will cover any design specifications and or construction documents in the new fiscal year. The plan at the moment is to uh go to bid in the fall of 2026 and start construction in spring of 2027, which would mean the total cost of building Rotary Square would overlap between the upcoming follow uh fiscal year and the following. There's funding in this budget for the farmers market pavilion. That is enough funding to cover the construction and construction management of the pavilion and to fully fund and build it in this upcoming fiscal year. Um there is approximately uh $2.7 million in our current year budget that will roll over um into next year's budget to go towards this project. So the majority of the funding um was already budgeted. This also was included in the motion that was passed by you all last week. And there is funding for the boardman restoration and infrastructure. Um this $400 $400,000 would be enough to um complete the construction documents for this project. So that would be the third of our major uh TIF 97 projects. Moving on to the Oldtown TIFF infrastructure. Again, just like the TIFF 97, the essential public infrastructure and the essential or the transformative public infrastructure makes up capital outlay in the budget and that is the majority of the Oldtown TIFF budget. Zooming in on some of the specifics, um we have money in this budget for the Carnegie building repairs. This is a contribution to larger city-led repairs. City came to us um and made us aware that um the cost to repair the Carnegie building will be um extensive and so we put an estimated amount of what um we believe could go towards that project. There was not a specific number asked. Um so we have $25,000. Um

additionally, the Union and Seventh intersection is in the Oldtown TIF budget. This is a contribution to a larger city-led project in spring of 2027. This is a major infra or this is a major investment from for Oldtown. Um that's more than half of the expected revenue for next year for Oldtown, $700,000. Um as we said, Oldtown TIF collects or captures significantly less than TIFF 97. And so the way that we get projects done in this tiff, it tends to be that we have to save up for several years in order to afford to um complete a major infrastructure project. There's also funding for the River's Edge Riverwalk in uh the budget. This is a contribution to a larger project um that's in partnership with Fish Pass. Um there that funding will be rolling over from a current year budget to next. And then these uh next few slides just go over the services that we've already talked about. The community police officer, trash removal, public restroom. It just shows the breakdown of how the services fall into the total budget for Oldtown TIFF as well as TIFF 97 here. And this slide is for the arts commission. As we said, I am the staff leazison for the arts commission. So we we also administer their budget. Um they have put together a comprehensive budget this year um that includes funding for the 2027 mural festival as well as um gateway sculpture for the North Boardman uh district. A new program that they're um developing that they're calling arts in the park which would be inerson um uh performance art in uh public parks. Um there's funding for the west front barrier or um traffic calming which you all took action on last year I believe

um to address um the westfront uh traffic calming um area um the pay it forward grant program the temporary exhibit space on the tart trail um as well as uh basic communications and maintenance cost for a request of city transfer for uh $80,000 total. That is all I have. We have questions.

Jackie, go ahead. I I waited for you to finish writing your notes. Thank you so much. Um I I appreciate that you've kind of sliced and diced so we have a lot of detail. Um, would it also be possible to just have a consolidated income and expense statement for your three major funds so that we can sort of get a an an executive level look at that. I think that would be really helpful. We are are we are in the budget book, right?

So that is that we already have that in the budget book. We just because we do a separate presentation and we zoom in a little bit on some of the projects that we know that you all have questions on. So when you see the total budget book, the DDA is in there in that way of all three funds having the total revenue and expenditures but it won't be in Heidi's presentation because we are doing our or whoever is presenting the next one um because we present separately. So that that is in the total budget book. Wonderful. And then I I was also interested in whether is there a um sort of an analysis of the fund balances for each of your three major funds that is also included in the budget book. Thank you. Other questions right now?

Did you have any Oh, raise my hand. Sorry. Did you have any thoughts about moving up the fish pass overlook at all? We kind of found ourselves in a situation where that there's a a real need for some infrastructure improvement after the ground hillside kind of swallowed parking lot K. So, I just it seemed like that was a would be a really easy reach that could be easily supported, but I just wondered was there any discussion on that when you were putting this together? The Army Corps is going to fix that. Really? Yeah. Nice. I think we've we've actually had conversations with Fish Pass folks about ways that we can collaborate with the city to maybe address that hillside

um before actually the Rotary Square project begins. um that again is not scheduled to start until the spring of next year. However, the maintenance of that parking lot as it exists today is very important and we also need it because we're going to once the pavilion starts, we're moving the farmers market to Rotary Square. So, the fix on that parking lot is going to be essential to making the summer work efficiently. So, I think there's opportunity for those conversations, but that's a conversation between the DDA, the city, and the fish commission. Yeah. Mhm. Additionally, I just wanted to add that the funding for the Riverwalk, so the one that I pointed out specifically as a partnership with Fish Pass, that is a separate project. That is not the same area. Um,

it's on the Is it in Oldtown? Because it's on the other side of the river. Yeah, that's what I thought. Okay. Um, just the only other thing, um, thanks for thinking about the Carnegie building. I know it's one of those discussions that we had about like how we contribute in different ways and I appreciate I I felt heard so when I saw that. So, thank you. Absolutely. Other questions. All right. Thank you.

All right. Heidi Shepy, our city treasurer finance director, is uh going to join uh me up here. Thank you, Heidi. Uh let me make sure this is working. It is awesome. Thanks, Sarah. Uh so I uh just want to say what an honor it is for me to present the first budget uh that uh I'm presenting as city manager for Traverse City. I want to thank Heidi Shepy, our city treasurer finance director, someone many of you don't see very often. He doesn't love attention, but Brian Postman is sitting out in the audience and he is uh a miraculous accounting professional and he serves as our financial analyst. And Brian, I greatly appreciate your partnership through this. I want to also thank Colleen Pavellio, our director of communications and strategic initiatives for her work in ensuring that we're moving forward with the OKRs and all of the department director leadership team. And so, uh, I also wanted to acknowledge that I, uh, received a number of questions, uh, from the city commissioners in writing, uh, 52 of them in total. Uh, and I submitted a memo electronically to the commission today, uh, with those responses. they are published. That memo is published on the city's website under that budget page so folks can see all those questions. And I just want to ground us in the fact that this budget uh reflects a continued uh commitment to transparency uh commitment to our strategic action plan. It's community centered and it aligns our financial resources with uh core services, infrastructure needs and community priorities. Uh and it also reflects a broader uh organizational focus this year and for the first time ever in Traverse City's history. It is informed uh substantially by the city's first ever strategic action plan which was developed based on robust community input. I believe we had over uh 1300 uh responses for instance to surveys that informed that strategic action plan. Uh and so with that, uh our budget

framework is designed to align financial resources as I said with core services, uh infrastructure, community priorities while balancing service delivery with long-term sustainability. And it's important to note this isn't a standalone document. It's integrated with a capital improvement plan, the objectives and key results work plan, and ongoing audit and financial review processes. And this structure uh which is on the screen uh ensures accountability and alignment across all areas of city operations and it supports uh the directly the implementation of the strategic action plan through measurable outcomes. This slide this slide rather highlights general fund expenditures as shown nearly 50% of the general fund expenditures are dedicated to public safety including police and fire. That is typical uh for municipal budgets. Uh this next slide uh identifies uh revenue and expenditure trends and it reflects the city's ongoing commitment to emergency response, community safety and essential service delivery which remains the foundation of our operations for uh just to drive it home the city's reason for existing is to provide for public health, safety and welfare. uh we have taken a conservative approach when budgeting revenues and departments have consistently uh done a strong job in managing expenditures within their approved budgets. Uh one important factor to note is that we are required to budget for all approved positions. However, there's usually some lag time in filling those. Uh so that uh has an impact uh as that lags normally uh historically a little bit behind and results in year-end savings and an increase in our fund balance. Uh also in this budget, we've taken a more proactive approach by quantifying anticipated savings and unfilled positions and incorporating that into our projections. Uh this goal is to better align our budget expenditures with spending uh actual spending I

should say and reduce structural growth in our fund balance. And it's also important to note that this budget reflects the planned hiring of fire personnel. Uh the goal is to have those positions. This is all for the ALS service that was approved by voters as a millillage in 2023. We expect to have all those positions filled within this fiscal year. Uh but this budget reflects all of them being filled by July 1st. So the those expenditures will come in below budget. I want to talk a little bit about personnel cost uh pressures. Uh personnel costs remain the largest expenditure across all funds totaling $30.5 million. It is very typical that uh personnel costs make up at least 80% of municipal budgets because we are service providers. Uh like many municipalities, we continue to face a highly competitive labor market along with recruitment and retention challenges and as uh Commissioner Bulmer uh referenced earlier. Of course, this is a very expensive community and area within which to live. Uh we're anticipating upcoming retirements uh which will require proactive workforce planning. You may have noticed on the goals page for the city managers department that I will be working on a strategy closely uh with our human resources director uh and all department directors on a organizationwide workforce uh retention and strategy for the fact that we need to uh plan for a significant amount of succession planning because roughly uh onethird of the city's workforce is eligible to retire within the next few years. uh in our public safety departments uh it's about a third uh that's substantial and something that we're going to work to plan for strategically and I intend on engaging a uh consultant to assist us with that work for instance to also take a look at our benefits that we're offering going forward to make sure they're strategic are they the benefits that today's workforce is really looking for in other words is it the best bang

for our benefit buck uh and uh I also wanted to uh mention that A recent news media article uh articulated that uh in 2016 the city had 152 full-time employees and that there's now 198.5. Uh the reason for that largely is because we have 14 for instance employees and parking services that used to all be DDA employees. Those were absorbed into the city's budget. Uh and then also the voters approved in 2023 a millillage to provide for ALS services. So, a lot of those ads are because of ALS service providers. Uh, and then also our police department has uh added two social workers to the police department that are largely funded by grant dollars. And then the additional uh ads to the police department just brought us back to where we were right around 2007208. Uh, so uh that maybe sounded more dramatic than it really is with that context. And I wanted to provide that important context for the commission and the community. Um also, uh this next slide talks about financial discipline. Uh there are no new positions uh requested this year. I have reallocated some uh FTEES that uh have left or are leaving to other departments. For instance, there is one being uh repurposed to uh to go uh to the parks and recreation department uh and another that is going to the communications and strategic initiatives department. I will continue to look across the organization as we have attrition to see if we need to replace that FTE or reallocate it somewhere else or just not fill it. Uh that's something that we will continue to look at. Uh but again, there are no new positions recommended for this year and I've worked to reallocate existing FTE headcount uh in other places of the organization that's aligned with our strategic priorities. Uh we're also

making targeted use of our fund balance and this past or the fiscal year that we're in right now. Uh we're projecting a $1.6 million use of that which included a $1.2 $2 million pension contribution supporting the state's corrective action plan and a half a million dollar transfer to the budget stabilization fund. Uh and without these strategic investments, the budget would have been close to break even. Uh for this upcoming fiscal year, we're budgeting a $1.5 million use of the fund balance, including an additional $500,000 transfer to support cash reserves for cash flow purposes. Uh and looking ahead, the fund balance is projected to decline over time, but those projections are continuing to be refined. Of course, in September, the city commission will be establishing an ad hoc committee consisting of three members of the city commission, myself and the city treasurer to look at the city's fund balance policy, uh, uh, funding and fiscal pressures we're seeing on the horizon, including substantial facility needs, rising employment costs, and also our pension obligations. And so, we're going to look at that through a more holistic lens. And so, um, overall, we have a stable financial position with intentional investments. And I'm going to continue, we both are, Miss Shepy and I, to caution around long-term costs, particularly adding additional personnel because those are, you know, create legacy costs of course. Uh, so for financial governance and long-term planning, I already mentioned the ad hoc committee uh, and the focus of their work. uh and I will say initial uh observations that we're seeing and and and concluding uh initially indicate the need for a more uh defined and s sustainable financial framework and as we advance strategic action plan priorities and identify uh additional funding sources it'll be critical to balancing those operations. I do want to

highlight that I am taking a much more aggressive approach to building relationships with our federal uh congressional delegation and their staff as well as uh members of the state legislature and their staffs. And we're already starting to see uh some pretty substantial financial return on that. And I'm expecting that to go up by millions of dollars in the years to come. So we will continue to uh invest in those relationships and keep those communication channels alive. Uh and then when it comes to core services and infrastructure, this budget continues to prioritize core infrastructure and major infrastructure systems uh which are obligations we have to invest in to serve our residents and our environment and our climate. The uh millions, tens of millions of dollars that the city commission has authorized over the last few years in infrastructure are not uh you know real exciting investments because people don't really get to see them. But it's the unseen stuff that matters when things get rough. And on June 8th, we will have a study session celebrating the success of our infrastructure. And there are I can tell you that uh if we hadn't, for instance, uh removed the old Union Street Dam, our expert engineers have advised that there would have been hundreds of millions of dollars of damage to downtown Traverse City. We also will talk on June 8th about uh the infrastructure investments that kept hundreds of millions of dollars of sewage from overflowing into our bay. And so these are really important investments that we'll continue with. They include things like streets, utilities, storm water systems, and public safety. And they will ensure reliability, regulatory compliance, and uninterrupted service delivery. Uh a significant portion of funding is directed toward a transportation and mobility systems with key projects like North Union Street Bridge repair and wastewater system improvements. And underlying all this is a comprehensive asset management approach which allows

us to extend the life of our investments and protect that investment uh and reduce risk and avoid more costly repairs in the future. I'll talk briefly about strategic alignment. As I mentioned, this budget represents the first full implementation cycle of the strategic action plan and the objectives and key results and the OKR work plan which was adopted just in March of this year by the city commission. A central goal is to implement that plan through uh my work plan, the city manager's work plan and ensuring alignment across departments and measurable progress toward commission priorities. Uh we are going to be implementing a uh department director evaluation platform uh that will then also uh provide a framework for department level work plans where we will measure the progress of of uh of implementation and you will be seeing the first uh quarterly update on that in June by led by Miss Pavllio. Um and so the next pillar I want to talk or pillar one I should say is urban design and mobility. We have six pillars. So, I'll walk briefly through each of them and how this budget aligns with those. Uh, this focus is on managing urban design and mobility and key investments include complete streets funding, 1% of your general fund allocation for that, the Union and Seventh Street intersections, which include mobility improvements, seventh street design work, and the 16th and Cass Crossing, which is a project on the Brown Bridge trust fund project list. And these projects support safe, efficient mobility while integrating infrastructure projects and long-term planning. Pillar two is all about placemaking and neighborhood character. And investments include the new tennis and pickle ball courts at Slabtown Corners, Rotary Square and the Farmers Market, the East Side Placem makingaking project, the TC Vibes Council, and the Sidewalk Gap Infill on Garfield. And those projects support vibrant spaces

that reinforce community identity and quality of life. Pillar three emphasizes regional collaboration. This includes storm water compliance uh watershed coordination uh and I am uh meeting with the director of the watershed center to talk more about how the city can partner with the watershed center and I'm looking forward to that conversation. additional tools for implementation of the strategic action plan and OKRs in partnerships with regional and state agencies. And a key priority uh within this pillar is reinvigorating efforts to establish a storm water management process or framework which will be critical to long s long-term system sustainability and compliance. And these efforts reflect the importance of managing shared systems and advancing regional solutions. Pillar four is about creating a complete community and this includes housing and homelessness investments and the CDBG supported programs. Advancing the strategy for the coalition to end homelessness upon whose leadership team I serve is a key priority this year and we I have recommended uh for the first time a 1% general fund appropriation for homelessness efforts and we are going to work on a policy with experts that leverage that funding to hopefully bring more partners to the table and address that uh uh ongoing concern strategically. Uh and then uh uh next pillar is support environmental sustainability and also resilience and investments include storm water system improvements, composting programs, wastewater system modernization and green infrastructure integration. And these projects support water quality, climate adaptation, and strengthen long-term system resilience. And the last pillar, pillar six, is about building a thriving year-round economy. And this includes parking system improvements. Excuse me. Our partnership

with Travers Connect, downtown infrastructure investments, economic development partnerships, and marine enhancements. And these efforts support economic vitality, improve access, and strengthen year-round activity in the community. Some some key takeaways and next steps. This is my last slide. Uh in closing, the budget reflects in my professional opinion a balanced approach maintaining strong core services while advancing strategic investments. And while balanced to outcomes, it also requires use of the general fund fund balance. City remains in a stable financial position with intentional use as I had already said of the fund balance to support long-term priorities. Uh but as the same time at the same time I just want to reiterate that we uh are recognizing ongoing cost pressures will require continued discipline identification of funding sources and careful planning. And as we look ahead key next steps as we look toward process improvements and building in more time for strategic budgeting decisions. Uh we're going to revamp our internal process to include internal capital improvement plan discussions starting in June. So, several months sooner than that's ever been done before. Internal budget timing discussions in August and convening the city commission, city manager, and finance director uh ad hoc committee review in September. And the city will continue advancing key organizational priorities this year, including, as I had said, the development of a long range workforce strategy, evaluation frameworks for department directors, and continued organizational transformation focused on collaboration, accountability, and continuous improvement. And that's all that I've got. Thank you for listening.

All right, I'm happy to answer any questions. So, Miss Cheff, you'll probably be post best equipped for those. All right, go ahead. I have a great big question. All right.

Can we get more money to parks and wreck for maintenance? Uh Parks and Wreck gets 66,000 for maintenance and repair. And that's for all 1,687 acres of our parks, beaches, urban forests, facilities work, snow removal at multiple buildings, 26 parking lots, eight bridges, medians, the swailes like that are going in over in Slaptown and went in last year. As comparison, Brown Bridge, which is 1,310 acres, is much better protected as a uh dedicated with a dedicated maintenance system of $96,000 a year. Of course, um that comes from Brownbridge maintenance fund, which is funded through cell cell tower leases. Um which begs the question, where is parks and wreck getting its maintenance money? Well, they get $2,326,000 from the general fund, but less than 3% of that is going towards maintenance. It's it's almost it's a last year it was under the amount that was used for uh office supplies. This year it is a little bit higher than office supplies. um this year and for the next five years, project funds are coming from the Brown Bridge Trust Fund, which is a zero come coming from the general fund. A and those include shoreline stabilization, mountain bike trails, uh trail and trail head expansion, and lots more trash cans and picnic tables, etc., etc. But you can't keep building and adding more stuff without budgeting for additional maintenance. Parks is and wreck is already having trouble keeping up. they've been having trouble keeping up for a while. The department description that's in the um the actual big budget

uh document confirms that park staff are doing a very broad workload and expenses are rising. Better maintenance investment I think is good long-term planning. Therefore, I would like to propose a 1% allocation from the general fund for park maintenance. Clean, accessible parks are the beating heart of our healthy ecology, and that's for both the the uh environment and the humans. Our parks are builtin, readymade places we already have for placemaking. Not only do they deserve more attention, but that attention is critical to public perception that Trevor City is a wonderful place to live, work, and visit. We can afford this. We must

I realize as your eyes roll back in your head. I did not my eyes did not roll. Um and maybe this is you know I know that you can amend a budget at any time and this is not the time. Um, and maybe this is a discussion for September when we talk about the fund balance, but I really I've been battling this for three years now and I just want to get it out there so that everybody's aware that parks need more maintenance budget.

I appreciate the point you made and I do think it would be best for us to wait for that for the ad hoc in September, if you will. And then I also want to say that uh we're identifying that we have long built things and not budgeted as much as we should for asset management essentially. And so I hear you loud and clear and we will definitely be taking a look at that. Um but I for some context uh the budget that you see today I've already with the general fund budget alone which is about 27 million I've already shaved $5 million off of the requests uh just for some context. And so I totally hear you. I think it's an absolutely valid point and we need to develop a longer term strategy. More money than they spend on office.

Great. Yes. So we're to to Heather's point, are we um kind of adding that to the the ad hoc discussion even if it's not the main point that that will be something that will be brought back as part of that discussion as where that fits in the picture. Okay, great. I love that. Thank you, Heather.

Other questions, comments? Go ahead, Jackie. I I need to congratulate all of you for the progress made on aligning our budget and our strategic plan. I think that's a really exciting step forward. And um to that point, I wondered if it is possible to just give all of us some perspective on how much of our funding is being spent on core services and and you know the business of governing um compared to the projects that support the pillars.

That's uh something that I think we can provide for you relatively quickly. Not tonight. Uh but yes, definitely in time for budget adoption. Great. Thank you. Yes. Other questions right now or or requests? I have another big comment, but you want to hear me again? We love you, Heather. Go ahead. Don't hold back. Okay. Well, this one is about it's a comment and s suggesting s suggestion regarding the brief history of Traverse City that's on page seven. It is very brief.

And in particular, it's the sentence that ends an Perry Hannah is now widely regarded as the founding father of Trevor City.

So the indigenous Americans were here for thousands of years before Europeans arrived. And who's to say what the word founding means to the indigenous or what Traverse City meant to their history and culture? Um, the arrival of the Europeans was so incredibly devastating to the indigenous population that it it it blows my mind and I'm going to blow your mind, too. In the US, there were 4.5 million indigenous people. I mean this is obviously they didn't really know but this is 4.5 million indigenous people in 1500 and um by 1890 at the with the defeat of wounded knee there were only half a million

uh Mexico which is also part of the Americas that it was much worse and much faster. They had 21 million people in uh 1519 and 100 years later they had 1 million. That is a 95% reduction in population. 95% of the people were dead. Um here we have here there was an indigenous encampment at the mouth of the Boardman Odawa when board when Borman himself sailed into the bay. Was that a founding? Yeah. Uh and remember by that time 89% of their population was dead. Uh the French gave Traverse City its name. Is that a founding? Harry Hannah was pretty enlightened uh as far as industrialists and developers go. But what makes his contribution greater than these others that preceded him? I'm happy to acknowledge what's gone on here over the last 79 years. But Perry Hannah's role in the city's modern commercial development is just part of that history. So I find it actually disrespectful to elevate one relatively recent figure to founding father status in one in a place that has already been inhabited, named, traveled, remembered, and is culturally significant for thousands of years before European settlement settlement. We simply do not know the stories that were told about this place, what this bay and this river meant to the hundreds of generations of people who lived here before us. And that history deserves humility from us, not a declaration that the city somehow began only when Europeans arrived and industrialized it. Removing that phrase, and that's all I'm asking, just th that

phrase right at the end, does not diminish Perry Hannah or his contribution. It simply acknowledges that the history of this place is far older, deeper, and more complex than the traditional settler narrative allows. I I thank you for that, Heather. And I would add to that as well is to their context is we recently had a milestone anniversary for Trevor City Synagogue which is the longest continuously operating synagogue in the state of Michigan that is and establishes that as older than the foundation of the city of Trevor City itself too. So we do have a a deep history that Yes. consider your request done. Yes. Thank you very much. Thank you. Thank you Mitch. And then Laura.

Yeah. I'll actually push back on that and uh stand up for the legacy of Perry Hannah as it the name uh Traverse City was not given by the French. It was given by the US Postal Service on an application submitted by Albert Tracy Lei in n in 1854 um as a representative of the Hannah and Lei company in which Lei was second to Hannah. Hannah was the primary land owner of this area. Uh starting in 1951 when he bought out I mean 1851 when he bought out um Harry Borman's interests. It was uh Harry Hannah's development that got uh a permanent settlement at this location. Yes, people have lived here. We are sitting in a building that is at the exact location of prehistoric uh mounds built by Native Americans that had since been leveled and uh now here we are. Uh but it wasn't a city. This was actually in one of the smaller settlements along the Grand Travers Bay area, Old Mission, uh, Omina, Shabbytown area, um, Norwood, Northville, Elk Rapids were all larger settlements than what is now Traverse City. And it was not called Traverse City. It was called Wayong. If you want to go by the French, yes, the L grand traverse, but that refers to the mouths of the bay, not um here at the head. If it wasn't for uh the work of Perry Hannah, we wouldn't have had the industrial development um that resulted in yes, the lumbering of this land, but also the building of

uh Front Street as we know it today, the development of the first uh department store north of Grand Rapids, um the development of railroads to Northern Michigan that set Traverse City on its course to be um the largest city in northern Michigan since 1890. Also, he got the uh state hospital here, which for decades was the state's largest employer. Trevor City would not exist in name, size, or form without the legacy of Perry Hannah. He is unequivocally the founder of this town.

So, hold on. I don't I want

I have just one thing to say, please. Just read page seven. It totally acknowledges Perry Hannah and Harry Borman and all that happened here when the Europe Europeans arrived. It's just removing the founding father part there. Laura, you had next and then Ken. While I appreciate Commissioner Shaw and Commissioner Treadwell's reflections on our complex and very interesting history, I'm going to bring the conversation back to the budget. Um, so I'd also like to thank staff for their work on this multi-year budget and for aligning the budget with our strategic priorities. I think that's a really important and exciting step for the city. But first and foremost, what I appreciate about this budget is that we're not shying away from some very difficult conversations. And as Ben said, we need a defined and sustainable financial framework. In fact, this budget clearly acknowledges that as a city, we're entering a period of significant long-term challenges, and those are driven by structural gaps in our financial model, and those include continued personnel cost pressures and increasing pension obligations. I look forward to the city commission um starting this ad hoc committee. Um onethird of the workforce eligible for retirement in the next few years. That's a significant statistic. Our EMS ambulance service, we have operating gaps and facility needs that weren't included in u the 2023 millillage. We have major core infrastructure investments, some of which were deferred and capital demands. Those are exciting, but they're expensive. Um unknown future of TIFF 97 and what that means for our general fund. the policy approach to affect housing and homelessness here and

the strategic drawdown of our fund balance. So this transition budget I I feel like it's a transition budget um really requires us to have more transformational thinking, more proactive decision making and a more regional approach to solving these regional problems. We can't do this all as our little city. Um, what we cannot do is spend more money than we have. So, I look forward to staying focused on our history, but also on the numbers in front of us and on the governance and the policy framework that we need to guide the city through the next decade of financial and operational change while staying grounded in our obligation to be good stewards to our taxpayers. So, I I look forward to these ongoing conversations. I don't think it's going to be an easy next couple of years for the city given these structural deficits.

Ken, Benjamin, thank you for putting this together. Um, if you ask someone what their values are, um, a budget is representative of that. So, we you addressed a lot of the important things that we have all spoken individually about as commissioners while addressing the the core needs of the service of being in government. So, thank you for that. I'm you were the person that we picked to do this job and this looks fantastic and I'm really excited to see you put it to work. So, thank you. Thank you very much.

And I I'm going to join in the chorus of thank yous to the to you mentioned, but the staff for having the vision. I remember a few years ago we had interim uh city manager Nate Ginser who warned us about the coming retirement wave. We've had different trickles of it. these kind of convers I won't even say we haven't had conversations we had trickles of these things mentioned but they've never brought to the four and this budget is the first time I've seen these big conversations brought to the forefront as well as our obligations and our aspirations which I think are represented with our OKRs and our strategic planning. So um I'm very very happy and proud that we have this budget that we get to sit with. I think it's been mentioned, but this is a great start and the future, I'll be honest, we're lucky that this one doesn't have quite as many hard choices in it, but those choices are coming. We'll have the ad hoc working on that in the fall. Um, and I think that it's a it's a good way to position ourselves as we're not sitting here passing a budget and then tral lying into next year and facing the same financial squeezes and difficult conversations. It's an the start of a conversation that will fund us and get us through the next year. And I I I think it's a good position for us to be in. And as we do look out and to our regional neighbors, I think we've got the goal of working more cooperative with our regional neighbors, but also we've got our budget here that shows that we can't bear it all ourselves. We already help carry the millages that pass um in the county themselves that they operate off of. We and we pay our taxes to them. We need some some of that support back from our regional partners and we have now a good road map that shows where we're heading and what our goals are. And as you mentioned at one point in your presentation where we can bring others along with us and I think that's another key component too. So go ahead Heather.

I also run want to thank you. I I've seen a lot of budgets and this one was remember the ones that came on paper that Yes. Um this was the the easiest one for me to follow along and understand. And I also looked at the CIP. Um I don't think I've ever seen the projects rated before. Have I seen that rate? I thought that was great and and then I could reference it in the CIP and find out like why aren't we replacing the P AK P A RC you know those things in the parking lot you know why aren't we doing it and I could figure out why it wasn't happening this year it was great it really great work thank you

agreed other comments well that's great we'll have our uh public hearing next week on this and I believe that takes us through. So now we have public general public uh sorry study session public comment. Does anybody have any general public comment right now? All right. You did that good of a job everybody. Thank you. Yeah. All right. And then um any other comments from commissioners? All right. With that we have uh we're getting in at 9:00. We've had a very long night. So with that I will adjourn and we can all maybe get some daylight still. It's staying lighter later. That's about half an hour.

Yeah. Not enough time for me to hit the road.