Planning Commission - Regular Meeting

call this meeting to order of the Wilmington City Council. Going to do our budget retreat today. And at this time, I'm going to ask our city clerk to please do the roll call for us. Yes, sir. Thank you, Mr. Mayor. Good morning. Um, roll call. Mayor Pro Tim Spears, are you on? Yeah, I guess you can call it there. Thank you, sir. Appreciate you. Council member Joiner here. Council member Celelet Andrews here. Council member JC Lau. Council members Cassidy here. Uh, council member Tea and my mayor, Bill Sappo. Thank you. Yes, sir. Mr. Everybody's here and accounted for. Yes, sir. Okay, turn it over to Miss Hawk. Miss Hawk,

thank you, Mr. Mayor, Mayor Prom, members of council, and staff members. Appreciate everybody coming together this morning for our third budget work session. We anticipate this to be our final work session before we gear up for the official budget presentation at the beginning of May. Uh we do have a lot of meaty information to get through with you this morning. Some of these slides are kind of dense. Um so we may spend um a little bit of time on each of them, but um certainly stop, ask questions. Um we want to make sure that folks understand. Um we we spend some time looking at some historical trends to kind of help uh set the stage for sort of where we are, what we're anticipating for next year. certainly make sure that council members who have not been through a full budget cycle with us before um understand some of these things that sort of shape our numbers and uh what some of these driving issues are that um give us challenges or opportunities and um and then kind of where we are with the requests that we've received and the associated tax rate implications of those. Um so with that I'll go ahead and get started maybe there we go. Um so the budget development special schedule schedule just a reminder um that uh again our third work session the presentation will be on the 5th of May. The budget public hearing is then scheduled for May 19th and uh we will continue to have budget work sessions throughout that process with an expected budget adoption either June 2nd or June 16th depending on council's readiness to move forward. Statutoily we need a budget adopted by June 30th. Um so we do have additional opportunities for other meetings uh if council feels like it's warranted.

Oh, we do it at city hall and as well as at um uh Star News and the media and social media. Do you have anything else? My office sends it to all media outlets. We literally send them an email announce. Um we have a calendar on the city website. Can we add this to the calendar? Sure. because I candidly last night I was trying to make sure I got here on time today and it wasn't on the city calendar. So, okay, we will we will make sure to do that. Thank you for bringing that to our attention. I thought it started at 8. So, we're good. We were here early.

All right. So, um again, just trying to lay some groundwork and understanding. Um we wanted to spend some time talking about natural revenue growth and then sort of ongoing operational pressures. Um and so um as council works through the policy decisions of where you ultimately want to put your money, there are a lot of competing pressures on those decisions. Um we are of course dealing with rising costs. We are in a situation where we have slowed natural revenue growth which we'll talk about more in some of the upcoming slides. We of course need to make sure that we remain financially sustainable as we look not just to next year but for future years. And then desired service levels always come into this conversation. What are we trying to deliver to our community? What are their expectations? And then what is a realistic look at what it costs in order to truly do that? Um if you squeeze and squeeze and squeeze ultimately it ends up impacting service. And sometimes that's okay. Um but making sure that these are intentional uh known decisions and uh conversations that we're having to understand the impacts of the decisions that we make. So what is natural revenue growth? It's a it's a term that we throw around quite a bit. Um but what it actually means is um it's that typical annual natural increase that you get through natural growth or through increased buying or even when there's inflation. If things cost more then the tax that is assessed on those items generates more revenue. And so um when you are in a period in a community of sort of explosive growth like we're seeing across the bridge that natural revenue growth often more than covers your needs for the next year. You essentially have more money coming in

than you have direct costs. It is a time of prosperity. You don't have to have tough conversations about tax rates and you're able to kind of continue doing what you want to do. Um but whether it is um in communities that have slowed growth or in communities that are largely built out. So there's just not a lot of opportunity for growth or in periods of reduced buying or even recessions. These natural growth numbers then are constricted and um in some cases they even end up um in the negative. Um but um they're they're something less than ideal as far as just that natural cost of doing business. those natural rises and costs are not covered by the new revenue that comes in without having to look at the rates that you're charging for things. Um and so um uh a modest or incremental has been uh the typical history for Wilmington about two 2% a year has been fairly typical. Um but as we look to FY27, it is clear that the cost pressures that we are experiencing are not keeping up with the natural growth that we are expecting for next year. And uh just a few of the examples are of course the wage pressures that we've been talking about about what does it mean to um pay an employee what we need to to um keep them with our organization or attract them. uh significant healthcare cost escalations that will talk about retirement contributions that um are set by the state. The state retirement plan sets those percentages for us and that is to keep the plan at a healthy funding level to be able to meet its obligations and so we have to absorb those and then a number of contracts that is very typical that we sign for multi-year contracts. it's a 2% or a 3% or a 5year

or 5% escalation annually in those rates that we need to find the money to pay to continue to have that service and meet that contractual obligation. So, um, we we spent some time, um, pulling together historical data because we felt like it painted just some some good pictures for council to understand sort of where we are today, how we got here, and then what we are looking at for FY27. And so, the chart that you have in front of you goes back to 2018. We have had three revaluations during that time. And um the blue bars are the assessed value. So that was sort of the value of all of the real property in the community. The yellow line with the little uh stars or uh squares, diamonds in in each of them, that was the levy. So that was the amount of revenue that the city received based on the tax rate that it was charging. Um and um and as you can see um we have had notable upticks in valuation both in 2022 and then 2026 uh within relatively modest growth in the actual revenue that we are receiving as a result. Um, so just as an example, back in 2018, we were receiving $72 million in revenue off of valuation in the city of 14.9 billion. In FY26, that valuation has increased to 35.3 billion and we are receiving 99 million in tax revenue. So what does that mean for next year? um we have gotten some numbers back from the county and it would be safe to say

that growth that natural growth is expected to um significantly slow next year. So taking everything into account the natural growth in tax revenue from real property is expected to only be 79% next year. um that is largely due to the revaluation appeals. When somebody gets their new property value, they have the opportunity to challenge it. There's a formal process that the county handles in order to see if there is merit to that challenge and if so, a new valuation is set. Um and then um we receive less tax revenue than anticipated from that original property valuation. Um and so we we just take that as it comes. There is a certain percentage that is built into projections. We um we anticipate in a certain level of what we call appeal loss as we look at the expected revenues for both FY26 and 27. Um but what we are seeing is outpacing that. We've got some questions out to the county as far as just just the exact percentages that they anticipated versus what we are realizing. Um but um if you look at the second row of of numbers that I know there's a lot of data on here, but that that property base for total property value is the one to really pay attention to here. And what's that what that is saying is that um from FY26 to FY27 the property base um which is the real property not motor vehicles uh in Wilmington is expected to only go up by $50 million next year. That feels really low when we think about the development and all of that. There's a few factors with that one. They look at what was coming out of the ground on January 1st. So if there is um additional development

that happens in a given year, it can take a little while for the revenue to catch up with or the valuation to catch up with what's happening. Um but that $50 million is essentially the the net new. So it took um all of the new development that we had minus the appeal loss and then the $50 million is what we are expecting to have. And so, um, that's where you're really getting the significant impact on the slow natural growth that we have. It's because of the net result of the appeal loss that we're experiencing that is essentially gobbling up any of the benefit that we might have seen from the new development that has in fact come online. Um and that is just something that um that we we're not alone in that but it is something that we are having to take into account as we look at our uh property tax rate and our costs. So question.

Yes. And this may be on a topic side. What is the what is the anticipated growth for the sorry what is the Thank you. Uh what is the anticipated growth for the ongoing service costs? What's more than 79%. But do you do you have a a range at least?

We've we've got um we've got some slides ahead that show what the the what we're calling the base budget increases are. and then um what the um requests are. So that's a few slides ahead that we can show those dollar values. Uh what what this is also doing if you then look at the onecent options on value that's essentially what does one penny on the tax rate generate for us in terms of revenue. And so for FY26 uh we were at $3.515 million per penny. So very modest increase based on the slow amount of natural growth. So we expect in FY27 that same penny will only generate 28,000 additional dollars than it does this year. Um and so it's a it's a very modest amount of increase that we're seeing for that same taxation. Um that same penny only generates a little bit more in FY27 and that is based on the slow amount of natural growth that we're seeing. So referenced it um on the previous slide, but sort of what what is driving this um this is information from New Hover County um and they provided this for all of the jurisdictions. Um but essentially this is looking at our total assessed value as part of FY26. We have thus far had 2548 parcels submit an appeal to the county. The total valuation of those appeals was 7.9 billion. An additional 69 parcels in the MSD did the same thing. Their um total valuation is worth 682 million. And the value loss of those all of those combined after the appeals um you're at about $1.9 billion in lost valuation.

that then impacts your amount of revenue that you'll be receiving because you are taxing a lower value on the overall property of the community. Um, is that normal? Yes. Okay. This is something that other communities see too.

Very much so. that it it's it's really sort of looking trying to look into a crystal ball if you're the county in terms of um making the projections of what the anticipated appeal loss is going to be. Um they try to pick a number that is um fairly aggressive in terms of then wanting to come out to the good, right? You don't want to underestimate what your appeal loss is going to be, but it it it's really a guess. And it looks like in this case they maybe um guesstimated a little bit less than the reality that we are then seeing. Um a great example of where this got really bad was like during the recession. So, a lot of communities had revaluations in 2008 and then the recession hit and um I know communities were needing to then refund dollars on top of the lower valuations to the tune of millions and millions of dollars that they had in the bank that they thought were theirs that they then had to send back to property owners. Um, so it it gets really messy. It gets uh very expensive. Again, we've we've got some questions out to the county as far as what those exact percentages were and now are and what they're fully projecting. We don't have that back yet, but we'll share that information with council once once we have it. Um but um they're not done. Um this is only partway through the process. So, we expect these numbers are going to go up from here, but this is what they have um they have logged in on today.

Question Hover County Fire District. Can you explain that? Yes. So, um there are certain parts of New Hmer County that are unincorporated that pay a special levy to be um protected by the fire departments in New Hmer County.

So, it's always been my understanding and maybe this is just your say that if they go up in the fire district tax, it pulls away from our sales tax revenue as to what we collect. Is that correct? So they could say, "We're not going to raise taxes." But if you raise the New Hover County Fire District tax, they still get a higher percentage of the sales tax revenue because right now they're getting 80. We're getting about 20 if that. We're probably below that. We're 26 though 26%. We're 26%. So we're getting 26 cents out of every dollar to spend. They're getting the rest of it. But if they go up on the fire district tax rate, then they get more of that.

That is correct. Con conversely, if we go up on our tax rate and they stay flat, then we do see But does it offset but does it offset because then you have a county fire district tax and I don't know what that number is right now, but if that goes up, let's just say a penny or two pennies for the fire protection incorporate areas, does it offset even if we go up, let's just say whatever it is, does it offset that?

It would offset it a little bit. Some Yeah, it would. There there's a there's a very fun convoluted spreadsheet that you can fill out that like finally gets you to that number, but it it's like 17 steps to to do the calculation to figure out what it is. It also lags by a year. So um so whatever happened last year is what we will anticipate for 27. Whatever we do in 27, we won't see the impacts of um of that on sales tax revenue until 28. Okay. So, um, as far as these appeals are going, when will we know? I mean, are the appeals still in progress? They haven't been decided yet, right? So,

and then and the idea is that entire value will likely not go to zero. Is that correct? Correct. Um so the um sometimes appeals are um denied and the value stays the same and then it it it's very property by property but no certainly something doesn't go to zero. Um but um uh we are seeing significant losses from that that is driving the 79% growth rate expected for next year. that the deadline to even file your appeal is is it May? I believe it's May.

Yeah. So, so there are still people who haven't even filed yet that still can. So it is a um it is a monthsl long process and so the number that we will have for FY27 will also be a projection because we won't know exactly how it it will land out. But we rely on the county to provide those projections to us based on what they're seeing in the county, how the appeals have gone so far, what that average loss is um to to try to narrow in on a dollar amount. And give you an example in FY22 when we had the reval it was the first time that it went up so significantly at 30% and it took us two years to come back to normal because of the appeals and the amount of appeals. But this time it's the same level of appeals. So it'll probably take a little bit the same amount of time. Okay. And then I don't know if I'm I I did this math a couple of times. So if we have 7.9 billion in property taxes that are being appealed,

in valuations that are being appealed, and that represents 2548 parcels, that means that uh on average um I just off my calculator, it's it's 3 point it's these the average parcel is $3.1 million. You would you would have some very large tracks that are appealing that are appealing. Mhm. So, you know, the idea that this is, you know, mom and pop that are appealing, I I would I would call it a broad spectrum. It's a broad spectrum, but but really on average, these are very large properties that are appealing.

We could get a print out of the exact parcels to see um like the mean, median, mode kind of thing. Um that may help provide more of a picture of that. I I would hate to characterize I would hate to characterize because some of these are going to be single family property owners. Um but the numbers I think are skewing from these large tracks, large land holders that would be driving up that average that you're I' I'd like to see the print out.

Sure. and and that is something that um once it is decided if they have already paid their tax bills based on the unappealed number then we then also need to issue the refunds. And so, um, so it it can be kind of a double hit for those first two years in terms of having to not only take the lower amount of new revenue, but then also pay them back for what was deemed to be an overpayment.

And and frankly, it it is more difficult for the single family home that's in a subdivision to succeed in an appeal because they have so many

there's cost, right? Okay. Mhm. So when we look at our current property tax rate, we are sitting at 28.25 cents per $100 of valuation. We do split that toward a number of different initiatives. General services receives the bulk at 21.81 cents. We do have a dedicated affordable housing amount that equates to 67 cents. 5.1 cents goes to debt services and then an additional 67 towards CIP maintenance and as mentioned on the previous slide 1 cent is 3.543 million. So again looking back at historicals um we also found this um interesting that we um wanted to include. Um this is um I think really just a a good reminder as we go through revaluation processes and um we do see these notable upticks in valuation. Um uh sort of what happens um based on staying revenue neutral is the blue line or the blue box. where the city landed on um its actual levies is the red and then the tan is um what would have happened if we had just left our tax rate flat. Um and um so we are in no way suggesting that that should have happened. Um, there are certainly communities that have and do do that and they use that big uptick in revenue in that first year to say do a big slug of capital improvement funding and then they tick down as they get closer to the next rebal, skew back on the capital funding and use it for the natural increases and the cost of operation and

then do it all over again at the next rebal. Um, so there there are different ways to do this. Um, obviously the giant tick from FY 25 to 26. Again, we're not suggesting that's that what should have happened, but we we want to lift this up just as a a reminder of um what can be seen as sort of untapped potential in our tax base uh based on the tax rate that we are um are levying. and that there are different ways to approach this as we move forward related to um uh perhaps not having to necessarily have midcycle conversations about tax increases because we we basically went so tight to stay as close to revenue neutral as possible that then when things come up after that revaluation, we're having to have conversations about tax increases and uh what we need to actually uh complete the business that we need to um when that potential had been there at at every rebal depending on what you wanted to do with your tax rate. So, we're three years away from another uh rebal. Um but um just keep in mind that um this is the spikes that we've seen in the valuations of property across the city. Moving on to sales tax estimates, we are also seeing a slowing of what we expect to be the natural growth in sales tax. The really the entire state um or at least some of the more urban areas saw very large increases in natural sales tax growth particularly in FY24 and 25. it is flattening out. Even though inflation continues to drive up the cost of goods, we are expecting a contraction in the amount of natural growth as buying slows

down in response to those increased costs. So the 2.5% that we are projecting for FY27 is actually a a slightly aggressive projection. um it is higher than what you will see our neighbors projecting. We do feel based on our historical data in Wilmington that this is a pretty safe projection to anticipate for FY27. Um but it does represent a slowing um compared to what we have been able to count on or enjoy in prior years. So to summarize all of that, our property tax performance is a bit below our expectations. Again, a lot of that is due to the appeals that are continuing to work through the process. That does create downstream pressure on our overall revenue stability um as we try to continue to provide services to the community. Sales tax growth is also moderated by those external factors where we are expecting only modest growth. We of course continue to have a lot of economic uncertainty and international conditions that put a lot of that in into question um where we just don't know. Um these factors will be beyond our control and will of course impact everybody not just Wilmington. We do have some historical underutilized revenue capacity. Um but the strategic implications here are just to continue to review the impacts of those factors and then um think about opportunities in the future to align with what our fiscal goals are and what we need to uh to continue to do business.

So, as we look then to FY27, uh just a bit of a a recap of organizational priorities. We've talked extensively about some of these and then some of these are going to be new today. Um but we are of course embarking actively on an organizational realignment to find organizational efficiencies. Got more detail on that in the coming slides. Recruitment and retention is vitally important for us to ensure competitiveness and align with organizational expectations for performance. We do have some non-negotiable items in the budget where we know we need to fund health insurance. We know we need to fund retirement contributions and those base costs of doing business and then financial sustainability is of course vitally important to everything that we do. So let's talk about the organizational realignment in a little bit more detail. Um as we have gone through every single position extensively realigned uh created new positions uh went ahead and absolved others. The net result um is that we are 25.19 FTEES lower in the FY27 budget than we are than we are in the FY26. Um we do expect we do have some positions that we expect we will be able to further absorb in the future through natural attrition. Um but um we um we will wait for that to happen naturally. Service delivery efficiencies. We are streamlining customer contacting uh significantly stronger internal communications and have more consistent and standardized service delivery. And uh through the those efficiencies, we're streamlining workflows, creating fewer fragmented decision points, and having faster implementation and execution. We are already seeing this at work. Um we're only a few weeks into the official

transition. And um this is this is happening. Um the speed of what we're doing, why we're doing, how we're doing is picking up. um employees are rising to the occasion and um we're excited to sort of watch this grow and transform um organically um but still with a lot of intentionality um and we will continue to realize that as we move forward.

Where are these 25 where are these 25 coming from? because it it seems like a big part of the conversation that we're having is a budget strategy that helps us recruit new talent, but yet we are seeing some positions sunset, eliminated, whatever you want to call it. Is there like a theme or a general grouping that these 25 are coming from or are they scatter plotted?

They are somewhat scatterplotted. There are one of the analyses that we did was we we have a variety of positions that for a variety of reasons have historically been hard to staff and so if you've had a job open for two years and you're not successfully filling it that's not really the job we need. So in part of this was also creating new jobs that would be more apt to be filled rather than hanging on to these positions that just were not going to be filled. So they were just taking up space on the orchart and within the budget without actually providing any benefit to the community. There was additional realignment where things like we we took a hard look at the uh administrative assistance and where they were spread throughout the organization and what their roles were and really were intentional about reorienting them to customer service professionals and creating them based on whether they were dealing with internal customers primarily or external customers primarily. and then being intentional about where those positions sat. And so in doing that, then there were opportunities to eliminate some vacancies because instead of having three or four empty admin positions filtered throughout by creating a cluster of customer service folks within solid waste within the Department of Transportation, we could then eliminate those unfilled positions. We we made intentional decisions around things like providing city related surveying services for example and so we said we are going to to collapse that and rely more on thirdparty surveyors. We're going to keep a city surveyor but the folks that were in those roles have been reassigned other things and there were some vacancies there that were able to be captured. So it was a variety of positions across the organization and it was all done through extensive analysis. Everybody's seen pictures of the the war room, the the conference room that we turned into the nerve center for this

and we we accounted for every person and every position as we did this work. I have two things. Uh my first question is these uh excuse me these 25 FTEEs 25ish uh what is the what is the dollar savings and salary benefits etc. So the the dollar savings was largely then redistributed. So, like as an example, if we um found that we didn't need um three administrative assistants um but we did need a department manager for one of the newly created departments like those three funded the one but it was a net savings of two FTEEs,

right? So, there's no dollar savings. It's very it's it's basically flat. It basically turned out flat. It's across multiple funds. Yeah. across multiple parts. Um, and then my second thing is more of a comment. I was talking to a resident the other day who said their interactions with the city are so much better and they see people out more and they're very responsive. So, that's great. Thank you. That's just an anecdote. Love to hear show the efficiencies.

Great. Thank you. uh as I as I hear you talk about eliminating positions and uh eliminating administrative assistant positions to add manager positions. Uh, I think that is a concern throughout the community and throughout the organization where we're losing bodies that actually do work to to gain a body that oversees people that that do work and and definitely at a higher rate. And I just heard you say that the transition is pretty much flat dollar wise, but doesn't seem that way. Um, I've sat sat in these uh work sessions and uh retreats and all all I hear is money, money, money, money, money. And I it's a part of the game for certain, but you know, it it it troubles me. It it it makes me a little cautious or makes me worried about the direction that we're going in and how fast we're going there. Sorry, didn't mean to cut you off.

Go ahead.

I was just going to say um to to be clear, the other thing that we looked at is like some departments had say an administrative assistant and a fiscal technician. And when we looked at the actual workload for both of those positions, they didn't add up to 80 hours a week. we were able to then have one person qualified to do both functions and so that work is still being completed but it's being done more efficiently um because we are optimizing the workloads of the staff that we have and then I want to be clear that the managers that we are hiring are working managers these are not people that sit at a desk and wait for somebody to bring them a problem they are actively managing ing contracts, uh, managing functions, managing programs. Um, they're they are they're doing the work. Um, so they may have some staff that they oversee, but that is not their sole job function is to oversee other people doing the work. We that that's not how we operate. Um, I wouldn't say that there's anybody in this organization that operates that way. So, we're we're happy to get you job descriptions. um, Mayor Prom or or any other members of council for any of the positions that are are new. They are also all going to be uploaded onto our website once we're done with all of them. The current job descriptions on our website are old. There's a lot that haven't been used in years and years. So, all those are going to be wiped out and these new ones will be here. But I'm very confident that you will see through those job descriptions that um these are not um these are not people pushing pushing paper and um not having more than enough to do.

Well, I' I'd love to have it before it goes to the website. Okay. They're we're finalizing the last couple of job descriptions. Um but yeah, we can get that as a as a big PDF council. That's no problem. Yeah, because I don't even know what we have anymore. So, um, we did, uh, print out we'll and we'll have your copy in your mailbox. Um, so everything, uh, the orcharts are in council's hands and then we'll also be emailing out an electronic copy at the break to all of you. So, um, all of those, uh, will be available for you to review at your convenience. Thank you. Yep.

Thank you. I would um I know last year we did I believe it was a 7% increase or was it not? What was the increase in the salary? So it was it was 5% I think across the board and then% across the board law enforcement was maybe it was 5%. And then the year before that when we did do an increase what was the what was the rate there because it also had a merit. It was like a I guess I guess my question is this. I know that the city over a number of years I'd like to go back the last 10 years

to determine what were the increases that we or the adjustments that we made to the tax rate. I just I just want to have I want everybody to understand that the city over a number of years has made small adjustments about every other year to keep up with the rate of inflation and growth and CIPs and all the things that we're dealing with. I just want to know in the last two years because I know not last year but the year before because we held the line last year although it was a 5% increase the year before that uh we also did a tax increase uh I think it was 2.5% um and I just want to say on the combination between those two on the salary increases you had five last year and was it five or seven the year before that what was the total number and then we asked for this particular year because I know this is going to be a big part of it

but it seems like we just continue to make adjustments ments and I understand we've been kind of middle of the road and you want to take it to the top end but as cuts me I have do have some serious concerns about the growth rate at 0.79 because we're not anywhere near that so we're going to have to make some tough decisions on something whether it be a combination of salaries cip whatever it is and what's the most important thing and then prioritize to what I believe is going to be the most important thing because we also have a lot of people out there that are going to be taxed across the board not just well do people, but people in all neighborhoods that will impact them dramatically. And we have a significant portion of our population that are literally at the poverty level.

And so, anything that we make, any adjustment that we make will force some of these folks out of their homes. And I want to be very clear about that. So, I think we need to be very intentional as to how we do this to be fair to you folks to give you the labor force you need and to pay the people necessary to get the job done. but at the same time trying to balance this thing as best we can because I see something coming, a little bit of a tsunami coming at me right now. And I just want to prepare myself in this community for what we're about to see because we're going to have some pretty serious discussions because I don't believe the county will be going up on their tax rate this year. So just want to make that point very clear. Understood.

So this is the reality of where we are with our workforce right now. Our vacancy rate is 12.4% citywide. We are at a 20.8% 8% vacancy rate in police and fire which um particularly in police we do consider a critical staffing gap. Our market position currently 138 of our employees are making below 60% AMI and 517 employees are making below 80% AMI and the corresponding dollar amounts are there. um we do feel like we are at risk of service degradation without intervention particularly where we have critical staffing gaps. The living wage impact um as a recap that would increase 100% of our employees to 60% AMI up from uh 85%. We would then lift 74% of them above 80% AMI where currently only 47% are higher than that. 746 of our full-time positions or 65% of our entire workforce are first responders and the average first responder pay increase with the living wage would be 19.3%.

Thank you. Can we go back to this real quick? I mean I noticed the police is at 20.8%. Is the fire I would imagine that the fire in in my years has always been the lowest turnover rate. It usually averages about five 5% 7%. It may be higher than that. I may be wrong. It's a little bit higher than that.

But but on police it's it's always been challenging and in the last couple years has really become challenging. And then the other challenging department that I've seen over the years has been public services in regards to trash and folks that are doing the hard labor u storm water and stuff of that nature. Is that still the same? And then that's one question. And then the other question would be is since Chief Zuda is here and then you've implemented the policy of giving them a bonus if they will sign up for a certain period of time. Has that increased the the employment base within the uh police department?

We we've had a few applicants take advantage of the recruitment bonus. Um what we have heard from a number of people is that's great. They would love to come here. They would love to take advantage of that. But when they look at our base pay that they would then fall back to until there are guarantees that those numbers will be higher, they can't make the switch. Is that base pay right now at we're at is it 52 about uh just just below 52 51 and change 51. Okay.

Can you uh give more detail on this service degradation like what services will be degraded? Yeah, I mean the the the biggest most obvious one is is police. Um we have um we have employee burnout. Um we have a lot of stress on our employees having to work overtime um being at minimal staffing and um there there reaches a point where people just say I need to go somewhere else because this isn't sustainable. Um, so, um, I would say they are, um, they are hanging in. Um, they are they are committed. Um, we are certainly responding to calls and all of that, but, um, we're at a point that if if we lose many more people, we would struggle to meet minimum staffing levels.

Any others beyond, please?

That that that's the biggest one right now. Um, recycling and trash. We do have a number of vacancies. Um we have an applicant who is completing the uh background process to come in and be the director. Um we do believe that we need to do some uh critical analysis of our our routes um our routing system to um see if there are efficiencies that we can find that may reduce the number of staff that are needed and and be more efficient in how we're collecting. that may minimize the vacancies that we're feeling right now, but until that work is done, um that is a strained area as well. Um uh fire, we we do lose a number of people. Um I know we just graduated a class, but um I know they're they're looking at needing to fill up another class. And so you it's that constant churn then of you've got new people who don't they're either new to fire or they're new to us. um and it takes six plus months to even get through the academy to then um be on a truck. Um and so um so even when the numbers don't look particularly high in terms of vacancies, how many people do you actually have that are deployed at a fully operational level? Sometimes that's hidden in there. And like right now we all of those new firefighters, they're here. We're glad to have them. We hope they stay, but they're they're not maybe fully operating.

Okay, these I mean they sound like some pretty core services. I just think it's important for the public to understand when we say service degradation, we're talking about our safety, getting our trash picked up. Those are that's a big deal.

They're they're they're definitely, you know, we everybody's important. Um but uh but we we understand the vital nature of those departments certainly. So as we look to balance our needs um we understand that compensation service levels strain our resources. We have um tried to focus on retention over other needs in in prior budgets. Um but um again it's we certainly don't want to take away from the investments that have been made in fighting for those percentage pay increases in prior years. Um but it it didn't move the needle in terms of where we were with competitiveness in the marketplace. Um and so it didn't have a um a notable effect on being able to really close the gaps the way that we would have wanted to. Um so if we go up 7% but our neighbors are going up 7%, you're not you're not necessarily doing anything to um to make yourself more attractive than they are. Um what ended up happening through those prior budget years though is that in focusing on retention there were a number of core needs that then also got deferred. So equipment and infrastructure replacements were delayed. Um there has been some inconsistent funding for safety equipment in terms of um hey not this year we'll try to do it next year. Um, and sometimes those things just eventually come due, things expire, um, things wear out, and, um, you reach a point where you can't you can't kick the can. Um, uh, a big one that we're dealing with right now that we're going to apply for grant funding is, um, SCBA for the fire department. Um, it's a $2.4 million cost. um they expire um in 27

and um right now we don't have a clear funding source for them um because the money just isn't there. We're hoping that and federal AFG grants may be able to significantly defay that cost. But with everything going on at the federal government, they haven't even opened up that grant cycle. So we are we're waiting like everybody else. And then um if we are unsuccessful in that grant application, those are dollars that we will not have a choice but to spend to keep oursel in compliance. And I'm fully good news today. I understand. um uh service impacts um aging equipment does um make it difficult for efficiency and response when things go out of service when things break and we're using backups or we need to then work with um fleets or work with um older things. It does make it more difficult to do the job um and in some cases it can create some higher risks for public safety. the the path forward as we see it is that we do need to align our reoccurring revenues with our operational needs and um work to fund replacement cycles um as consistently as possible. So these are some of the major cost drivers that are um within what we are uh building for the FY27 budget. That 14.2 2 million is new employee compensation dollars. That is not all employee compensation. Those would be new dollars if we are able to implement the living wage. That is just for general funds. So that is police, fire, um certain parts of public works. Um but then we do have some of the special revenue funds that say pay for solid waste and pay for storm water. Um so we are able to tap into some of those other funds to pay for applicable employees. Um but this is everything that's left

that doesn't have an additional revenue source. Um which is all of police and fire um is the major driver of that number. Uh retirement contributions, the rates are going up with the state and so we are looking at an additional $774,000 in retirement contributions. Health insurance um is going up $3.5 million from uh this year. That is the equivalent of a penny right there. Um, we went out to bid. Uh, we looked at remaining self-insured. We looked at fully insured. We looked at different pools that exist. Um, we turned over every stone. Um, and, uh, we do think it'll be before council. We do think it's best to move to a different provider to increase the customer service levels because we have not been happy with our current provider. Um but uh going through that process did not result in um any good news on the cost side. And this is keeping benefits flat. This is the same co-pays. This is the same co- insurance, the same deductibles. We were hoping that we would be able to make notable progress on that because a prior survey of health insurance benefits showed that we were not particularly competitive in that field compared to our neighbors. Um, but we have just had to draw the line based on how high these renewals came back to say we can't do anything but try to hold the line on not increasing the cost to employees which will require the city to absorb that entire increase in cost. Otherwise, any pay increase that you do give is essentially gobbled up by an increased expense and it kind of negates everything you're trying to do on pay. Um, but that is the reality that we are

facing with health insurance. Again, we're not alone. The national increases are 20 plus%. We're at about 14%. So, by comparison, I guess you could say it could have been worse. Um, but it certainly doesn't feel that way when you look at the raw dollar impact of of what we're going to be dealing with next year. Uh, Wave Transit also came and um talked to council and um but what they are proposing for FY27, that $516,000 increase, that is um sort of a base increase that is not even touching the expansions in service that they want to do. That is just a core cost of the general increase in the cost doing business. And then $400,000 of that is matching the request that they have to the county. They need about $800,000 to um essentially add a few buses and break up a few lines to be able to improve on service delivery times. They're not meeting the standards right now that were expected with the current level of funding. So this is just to meet base service level expectations of the current service is is what we would need to see an increase in.

I have two questions about wave. Y um do we have any signals from the county about what their wave contribution is going to look like in this budget? They have anticipated that um they would be willing to match the $400,000 request. They would support that. they've signaled that they don't like the additional increase. Um, so the extra $116,000 out of that total. Um, so I think there's going to be pressure on wave to reduce that number from the county. It's not based on anything that I've heard besides they don't like it. So their their current contribution level is about $50,000. Is that right?

No, it's 1.2 2 million and ours is about 1.9. Okay. I don't know where I got that number from. Um, okay. And then my second question is, does Wade does wave just purchase fuel at the market rate or do they have some sort of Do you know the answer to that? So, first of all, they've they've uh converted most of their fleet to uh compressed natural gas. So, that's going to be something that okay, most of us don't have any idea what the market rate on that is. Um, and I imagine that they have contracts with both providers. They do. Yeah, I see some nods. Thank you.

We are um like all of us probably in our personal lives seeing utility rate increases. Uh we expect across all departments supported by the general fund $535,000 just to pay the light water and gas bills next year. Um we are we're underfunded in our current budget basically the actual bills that we're seeing. So we're having to take from other places and skim back just to make sure that the water doesn't get turned off. Um so um so this is um just trying to cover what we expect for next year. And then $1.4 million is kind of a general other um we have um increases in insurance premiums and then um some IT replacement and fleet uh replacements and contracts. Um again uh keeping up with those contract increases. We are um experiencing additional increases there. So, um, a lot of of budget pressures, um, on things that it's it's difficult to find a way to move the math in a positive way. Additional requests, we are um, full disclosure, we are very much still going through the the vetting process of the departmental requests that we have received. We've had initial meetings with every department. Um we've um carved a few things um but um some of the things that we um are facing is um they're they're good requests um and that is that is a challenge. Um so as an example a cyber security officer um that's something that we do not presently have. We think that it is very beneficial to have somebody um with that specialized expertise given um the nature of the world today and trying to protect ourselves. Um we are finding

that um we really need to be providing a higher level of IT support to public safety than has been provided in the past. If you think about the job that they do, it is IT intensive. It is tech intensive. there's a lot of specialized programs and equipment that allow them to run and and do their day-to-day. And so having um two staff that are able to work full-time from that department would be very beneficial. Right now they're um they're queued in with just the regular ticket system. Um and we have started sending people down to spend some of their hours down there to try to relieve some of the immediate pressure. Um, but that is just almost like a help desk day-to-day what the officers need, not necessarily some of the the more advanced infrastructure that needs consistent time and attention. In that department, we have another half million dollars in deferred core operating needs. Um, that we can get into the details of what those are if if you're curious. An additional 1.6 million in fire and police safety equipment. Um, and then 500,000 just for repair and and maintenance. Um, so again, we we expect some of these things will tweak down. Um, but some of these we do view as valid requests that are worthy of serious consideration within next year's budget.

I am curious about Go ahead, Kevin. Well, cyber security officer, aren't we currently paying a a a vendor to manage our cyber security needs? Yes. Yes. So are we going to bring are we going to get rid of that bill to to u get this cyber security officer or or we trying to have both this would be in addition to

can you speak to it Mary? Yeah, I a little bit. Uh, so this would enable us to so right now our contract is as we mentioned is all of the cyber security. So it's not just it's employee training. It's the back stuff that no one really sees but we do uh and that's managed inhouse in terms of that contract and some of the other work is done in house currently. This kind of heightens it a little bit given some where we are and what we're doing. we would enable us to do more in-house training which we need to do create some more mandatory programs. It was one of the identified needs that we had when we went through the analysis a little bit ago. Um it is a standard practice. So it wouldn't do away with the contract because the contract's bigger that actually does other things to help protect us, but this would help. I don't know if that makes sense. I'm trying to say without getting

there there was an an there was an analysis done and having a dedicated cyber security officer was identified as a a gap in our current approach. Yeah. Right now it's it's part of what we do, but it's scattered throughout the department in some different ways with different positions. And so this would enable us to put it one person is a standard practice if you look at most places have a security officer and so it enables us to do that but it wouldn't get away with the contract. Um in other organizations and it's been a while since I've worked in information security but I've often seen this called an information security officer versus a cyber security officer. there's this this

I mean we're still we have a job description we've been working through so we we can look at that and I don't know if we'll call it a cyber security or just security or chief security officer and the reason that I say that is because some of the implications around information security are bigger than it's not just I think information would make more sense based on what you're saying

um and I the reason I want to bring that up is one I want to understand this position but two historic torically when I've worked in organizations that have identified a CISO, there's a layer of internal responsibility and external responsibility that I don't think is appropriate for a contractor. Um, and and so I I would I would consider moving in that direction. Yeah. And it's the hybrid. And you'll have that job description when we upload the new one. So,

I wanted to ask about um deferred core operating needs. I would like some detail there because when I first read that, I thought it was going to be related to CIP, but I see that's much later in the presentation.

No. Um it is separate. So, um those are identified as um ballistic vest upgrades. Um so, ballistic vests um uh expire um and need replacing. They're not um guaranteed or certified after a certain number of years. And um the vests have become more expensive. And so even so this isn't buying more. This is just being able to fund the the next batch. Um fleet parts and um sublet and fireboat maintenance enhancements. So that's 144,000. So that is just being able to um cover the cost of the parts in fleet um that we are uh anticipating or that we experience. That's routine maintenance, that's repairs, um that's everything related to fleet. Um so they are running well over budget with what we're seeing from um actual experience with preventative maintenance as well as repairs.

So this 499 is all public safety deferred.

Um we so fleet is going to be um some public safety but also general fleet. So your other vehicles um we also have um Laura operational equipment life cycle increase. So, we have various um equipment in fire and we tried to get them in a replacement cycle and some of this is an inflation that they we haven't caught up and some of it is also equipment that was never in the replacement cycle and so we're trying to catch up to all of the equipment that they have. Yeah. And it's is the

Yeah. Um and then also um other PPE replacement increases is $191,000 and those are set plans already. We're just catching up with what they need and the price inflation.

Okay, thank you. So, um, Commissioner Santaa, um, you had asked before, um, about kind of the the dollar amount. Um, so, um, when we look at the FY27 base and then the the proposed budgets, again, we we do expect to ratchet this down a little bit, but kind of looking at where we are today. Um, and this does include the living wage in these dollar amounts. Um, but the the anticipated expenditures compared to anticipated revenues creates a gap of $20.3 million, which is the equivalent of 5.75. Separate from that is the CIP funding. At council's second work session, we talked to you about CIP and the gaps in funding compared to being able to complete what we deemed to be some of the essential projects. Um, bridge improvements, um, some things that were really kind of not optional. Um and then um some of the other projects that are also in the current CIP. The direction that we got from council at that time was um uh at least some level of support to look at what we had recommended for funding for that which was um sort of that middle figure where um we believed that we can do it for um complete all those projects for $50.2 million. Um and uh that does include a $13.3 million grant award. That is the grant for the

bulkheads that we are currently pursuing. We have over a hundred letters of support from the community for that grant application right now, which is wonderful. We will take all that we can get. So we would encourage people to keep them coming. But um if we are able to be successful in that grant that um is very significant in being able to get all these projects funded. If not it does create a different scenario. We won't know for a little while. Um but with that the prior conversation was that we believed we could do all of that for 61 cents per 100. We have continued to revise those project estimates and um have actually found some cost savings where we believe that now we can deliver the same projects for 51 cents. Um so something moving in a positive direction. Um, so that continues to be our recommendation related to CIP funding. But if um that feels like a new number to you, it's because it was previously 61, but now we would be um asking for less to be dedicated to CIP, but still delivering the same amount of projects. If we are unsuccessful with that grant for the bulkheads, we would come back and revisit what to do at that time because that funding would not be included in the 0.51. Um but uh we continue to recommend that to complete those initiatives. As a reminder, um one of the initiatives that we are looking at for future CIP, so the CIP that will start in FY30 is development of the property that was recently acquired for park development. um we would anticipate that construction would be in FY beginning in FY30 and so we are not anticipating needing to find

construction dollars for that park in the current round of CIP but that 0.51 does include sufficient funding to design the park. Um so we actually found more than uh a lower number below 0.51. Um but when we we and said, well, hey, we know we need to move forward with design to keep ourselves on schedule with those grant commitments. So, adding that in was what brought us to the 0.51. So, um that would make us um comfortable that we would be able to deliver on those timelines and have identified funding for the park design in the current CIP

of the design and that aspect of it. Are we doing this in partnership with the county in regards to the paying for the park? No, that the county explicitly said they wanted zero participation in construction costs. Okay. So, that all falls on this. It It all falls on maintenance. And maintenance. Um so, we will um happily have their name on the sign as far as helping us to have acquired the property. Um but the rest of it is ours and and we are the sole owners on the the deed. Um that reflects that.

We'll have some public input obviously some the community decides significantly. Um staff is gearing up to start a year-long input process to have extensive community engagement on what they would like to see in the park to make sure that we are responsive to their wants. Um that will also give opportunity for the endowment's assessment of assets countywide to come back. That may be an additional data point to help inform what goes into the park. Um if the endowment is open to it, we would love to revisit a conversation about sharing in construction costs, but that would be uh years down the road. Um they initially signaled that it would be on us, but it never hurts to ask.

You may need to turn that park into a zoo so we can generate some revenue.

Zoos are expensive. So when we look at then um tax adjustments um when you add up everything that's been identified in the general fund which again we we do expect to tweak back a little bit but just for the purposes of today's discussion kind of the the allin impact of everything that we've gone over today. um looking at the general fund of um needing the 20 plus million to do everything that we're talking about and then the capital improvement program. Um that does bring a total tax adjustment to 6.26 cents per 100. I am in no way recommending that today. This is just for the purposes of discussion and understanding real dollar needs and then um what the related impacts are of those needs so that you can start to determine where you fall on that spectrum in terms of um capacity, appetite, interest um to move forward in a particular way. Um so allin is 6.26. Um we then um ran a few what we call reduction scenarios. So, um, if council said 6.26 is a bridge too far, but we can be comfortable at six, um, we would anticipate, um, still being able to fund living wage and health insurance, um, and many of the deferred core needs. Obviously, we would then be looking for about $900,000 in cuts from what has been proposed in the budget. Um, and then it scales down from there. So, um, if it was 5 cents, we still believe we could do living wage, of course, fund health insurance. We would then need to find, um, what

would that be? 2.3 3.3 million less than scenario one. Um, so cutting an entire penny off the 3.5 million down to 4 cents. um we would then be looking at needing to to find um many millions of dollars. The living wage implementation would simply not be feasible under that scenario. That's not something that I feel like I could recommend given the um the realities of the health insurance renewal and the realities of the base increases and costs that we're seeing in other lines that can't be ignored. Um we we can go on and on. These were the four that we ran. We can keep going. Um, if you said no tax increase, we can obviously run that. Um, we would I I honestly don't see a scenario where there isn't a tax increase as part of FY27 in some way, shape, or form. Even if we held um employee wages completely flat, um uh our our needs are simply higher than our expected revenues. Thanks for presenting this. When we had our a budget work session in January, um you alluded to a phase approach to the living wage and I think I asked to to have a like a work up of what that would look like. Have you done that and how does that play into? We were we were running that. Um we um if you if you are at 4 cents um I think we we managed to slide in maybe 40 40% of that living wage. Um so you'd be less than half of the implementation. Um uh and then anything below 4 cents would just be less and less and less. So it would be feasible to start the

implementation just not complete it. Correct. But you would be at um what would it be? Maybe an 8% 8ish percent across the board increase as opposed to the the 19 that is the needle mover. Yeah. And I don't I mean I don't want to get too too in the weeds on this because I know this is something that y'all are working up but I think it would be interesting to look at what is a phased implementation look like if we start with those core like communities that we talked about in earlier slides. Um what does it look to fa what does it look like to phase that out? What does it look like to to start it more across the board? Um I think just looking at these numbers I think that that has to be something that we consider and that we need more details on before we can make any decisions.

Sure. Yeah. And and certainly not looking for any decisions from council today. Um I would then say council would then need to be prepared for the tax increase than two years in a row. Um, so if you were looking at say 4 cents this year to do 40%, you'd be then looking at um two and a half cents next year to fund the rest of of the living wage. But then you it's probably another increase on top of it because it goes up year over year. So trying to keep pace with the market, we're usually out of market the minute we implement. That's been our challenge all along. That's always going to be a challenge. It is always, but yeah. So, sure.

But I and and I'm I'm not saying that I'm opposed to the living wage and in considering that. I just I want to understand what all of the options are. Absolutely. Um because I don't think it's as black and white as we do it or we don't do it. Yeah. There's some gray area there and I want to understand what those scenario scenarios look like. Yeah. I I agree with Cassidy. And also I have a question about the the health insurance. Didn't we just change health insurance providers a year ago or two years ago for the ones of you that were here? No, we we've had UMR for a number of years.

So um are you talking about changing the the rates, Mayor Prom? No, I I thought we changed the provider. the the 457 has changed, but health insurance has not changed. 20 2018 sounds like was how long we've had UMR. We did change our broker. The broker changed. That might be what you're thinking of, but the change. Yeah, the broker in 457.

So So the the broker might be what you're thinking of, but that that didn't change the um core provider. So looking at the implic imp implications of um these tax rates um this is this is always helpful for me of of hearing the sense of what does it actually do to uh property owner. Um so we looked at median value of a single family residential property in Wilmington uh is $445,000 based on the FY26 revaluation. Um so uh the 6.26 26 would equate to an annual increase of $279 for that property owner, which equates to a $23 a month increase. It then scales down 6 cents, $22 a month, 5 cents, $19 a month, 4 cents, $15 a month. Um so, um that is helpful in terms of of bottom line and um hit to the pocketbook. We do also have um at the back of this, if council was interested in it, we have um for like a $250,000 valued property, which would be some of our lowest income residents in Wilmington, and then also $800,000 property just to provide that spectrum um to understand that um tax rates obviously impact everybody differently depending on the valuation of the property that they're in. Um Is that that's in this

um that is um we had it at the back. Here you go. So this is for $250,000 single family residential. The 6.26 is $13 a month or $157 a year. 4 cents is $8 a month. Can you can you send those slides to us? Happy to.

Um and then $800,000 house $6.26. It's $42 a month. $500 a year down to 4 cents is $320 a year and $27 a month. Yes, happy to provide those. All of these um proposals I'm looking at page 25. All of these proposals include the CIP number that you gave us earlier. Okay. I just want to highlight that, you know, because it it sort of seems like today our focus is on um the living wage adjustment and some other maybe deferred operational costs, but I I want to highlight that you all have successfully incorporated like our vision for what CIP needs to be. Yes.

And and not just, you know, I don't I just don't want to I just don't want us to forget that like that was a pretty important decision that we made and a pretty big investment that we're going to make in this community and we are moving in that direction even though it's not a major topic today. like we're over that hill

very much so and I I I appreciate that. Um uh you know the other thing that this takes into account is that slowed natural revenue growth. Um where you know we're we're trying to absorb those appeal losses. We're trying to absorb that lost revenue that is coming from appeal losses to be able to cover the cost where when you set the tax rate last year it was based on a certain valuation and we are now um kind of lower than expected there because of those appeal losses. So we're taking we're absorbing that. Um we're correcting the CIP getting the sufficient funding for that. Um and so yes, when you start carving out um and any communication that we have like in the budget presentation will hit that really hard as far as um this is this is not just going to the the general fund. This is being parsed out for these specific projects and these specific initiatives that help deliver on council's other initiatives and goals in those areas.

So, so the only growth that we have that I'm looking at right now is sales tax revenue 2.5%. And a growth rate of 0.79. That's correct. That's it. Y nothing else. That's it.

So because like investment earnings is actually down because interest rates. So, the developments that have taken place that are under construction, do we have a percentage of what where we are or I guess what we've approved, what's underway, what's been permitted by the county and and us and where are we in that adjustment? Because there's been you're hearing all the time, well, you've got all these apartments, all this stuff has been built. Why aren't you guys generating more revenue? and we have generated more revenue. But I just want to know in that period where before it's fully taxable and it's partially taxable, where are we with it? Do we know? So the question that we have out to the county right now is um you know we're able to see the changes in valuation from year to year but we have asked them to provide for us a 10-year history of how much of that is um new development that has come online that is making up those valuations. Um they said it'll take them a couple weeks to parse that out, but they are working on that for us. Um I would caution looking to use building permit valuations because inevitably it seems like those never fully materialize. So somebody can go get a building permit for $100 million and then never build it. Or maybe they do build it and when it's assessed it's $75 million instead of a hundred. Um, so those those are swags that um never seem to correlate to actual valuations from what I've seen.

Then ABC uh revenue is that going to be flat or going up? It's essentially there's might have been up maybe 1% but it's it's not that significant in dollars.

Parking revenues. So parking revenues are um up a little bit but restricted um for for some of their their usage um uh or in terms of where we would want to make sure that we were dedicating them. It was for applicable related things. Um the um shoot lost my turn. I don't remember um oh in intergovernmental um revenues. So POW bill it has gone up a little bit but um intergovernmental across the state is continuing to go down typically year-over-year. So we're having to make that up um from our other revenue sources. Um so yeah there's there's not there's not good levers

besides property. The other question I have is on core services where we're picking up some of the service delivery and maybe should be picked up by other governments based on what they're receiving. Can can you can you parse that out to say if we're taking care of let's just say more homeless services and we have a certain locked in amount of money that we're getting in but the vast majority of that money that's coming in that's supposed to be helping in those endeavors is coming in for from the state or more money that goes toward public health.

How much you know what's that percentage look like? Because if we're picking up more services in the social arena that we're not built for, that other governments are built for, but they're not taking that responsibility. You know, we're looking at core services and paying our employees. And yet, we're taking on more challenges outside of the realm of what we're supposed to be doing, just like they're looking at what are they supposed to be doing.

I I think one of the great examples of that is the social workers. So, that is built into this budget. That is half a million dollars in new money that we are needing to find to put towards what we think is a very important needed initiative both for the community assist our police department you know there's so many positive attributes to it but to need for social workers in Wilmington um you know that's because those populations are here um and the need is is here that um that is not a cost that is being shared by anybody that's being absorbed completely by us.

I can't do questions. Um because I think in a lot of these cases when there's high attrition um in the public safety especially that is maybe hopefully quantifiable. I mean, is there any way to look at um what the result of bumping up the salaries would be on the attrition because attrition especially in those positions is super expensive. So, is there any way to quantify that?

I not having done it here, right? Um we we would certainly be able to track it. Um I I will say the community that I was in before, we implemented a similar initiative. we had similar staffing issues. Um, we didn't get quite fully staffed, but we were close to fully staffed and we did not have a voluntary resignation or um somebody leaving um of their, you know, for their own reasons, basically quitting to go find another job for 18 months. So, it it it held um now certainly that's paired with and again good working environment, you know, good opportunities, but we we very much feel like we can provide that in our police department. We do think that um there are a lot of people in law enforcement who are watching um to see what we're going to do. I'm I'm I'm optimistic enough that if we can move this needle to this extent that um we will start to see significant lateral transfer applications. Um, we hadn't seen them in Matthews in six years until we implemented ours. And then they were they were coming in. They were in North Carolina. They were sworn. They had years of experience because because and then they can hit the ground. They can hit the street without having to go through BL. They need some weeks with an FTO. Um, you know, make them we got to learn our streets and things like that. But, um, their ability to work at a fully functioning level is also much faster. So, I have asked the police department um they they filled a B class that just started recently, but let's pause on trying to fill the one for this fall to see if we're able to implement

this. What is the result? Because if we do get the influx of certified police officers that we are hoping to see out of this, we don't want the the seats, so to speak, to be already filled with individuals that are waiting to start BLT. You're probably you're 16 plus months then from that person having graduated and even being out on the street versus get them through background, make sure they're the kind of officer that we want. And to be clear, this doesn't lower our standards. Like just because you're certified doesn't mean we're going to hire you. Um you still need to meet the standards that we're looking for, the personality that we're looking for. Um the nice thing too about certified officers is they have a track record.

Yeah.

And so so if we're doing our due diligence through the background process, we can also better understand who are they as an officer and is this the kind of officer that we want working for us? And sometimes the answer is no. And that's okay. they can stay where they are, go find another job somewhere else. Um as opposed to a green officer with no experience. Um you you do your very best, right? But until they start getting out on the street, you know, that's when they they start to build that track record. So um so being able to hire certifies are um attractive for a number of reasons. Um we just don't have a lot of pull right now to be able to entice them to come our way. What does the city say in onboarding a certified officer versus a brand new?

I mean, we're we're paying them um as an employee. So, we will hire them before BL starts at a pretty low rate of pay. It's like maybe 15 20 bucks an hour, something like that. But then when they're BL um they're uh they're fully salary. They're on our health insurance. Um but they're sitting in class. So, we're And how long? Like

I'm looking for a dollar. So, uh, V is 6 months, about 6 months. So, um, you would be looking at, um, 25,000 plus benefits um, plus plus the plus all the time that they're an FTO. So, you're probably closer to 9 months, nine months to a year before they're off on their own. So, that would be basically a full year salary plus benefits plus the costs of the training facilities and trainers and all the all the things. Yeah. All the things. Mayor, you said something about somebody said something about on this living wage. So if we implement it or whenever we implement it, you're still looking at making adjustments every year to keep up with it.

What what we would recommend we do then is then every year we are looking at AMI because that is um reestablished every year for uh for this area and then we use that as the litmus test. Sometimes AMI goes down, sometimes it stays flat. Um, so in those years, we wouldn't be looking for an automatic change to the pay scales, but in the years that AMI went up 1%, 2%, whatever. We would um we would then try to move the scale accordingly. So you're always matching AMI at that lowest level, scaling up in your pay scale. So it would slowly move with AMI. That's essentially your new cost of living conversation. um instead of looking at CPI. So that's your cost of living conversation. And then depending on those percentages, if say the AMI only moved 1%, you try to give 3% a yearish in any given year. So then maybe you're at a 2% merit pool. So then you can be giving increases also based on performance. Because if you don't also then move people through the pay scale into the pay scale, you end up with compression. Uh because you then have people years of experience just sitting at the bottom not moving which then makes it very hard to bring in new hires um because um they're all kind of globed together and somebody saying I've been here three years why am I making the same amount of money as somebody who just got hired

less or less and we haven't sorry and we haven't been able sorry and mayor to that point it is keeping up with the market but we haven't been able to do merits in several years and so by going to the model that the city manager talks it would enable us to go back and and do merits which is important. Uh I think it's been three years now. I think it was two years 25 and even that was a modest merit and so that's something we've heard from employees in terms of rewarding performance especially when we're looking for high performers. So getting into this model would enable us to go back to that because we would just be looking at AMI

and No, no, no. I appreciate that. And we have had employees ask, well, what about merit? And and my response was like, I hear you, but we've we've got to invest in getting the pay scales where we want and and need them first and and then that conversation starts next year. It's just too expensive to even contemplate trying to do both in a single year. My second question was about um tax abatement to um regarding some of the lower income folks that own their own home which I worked with for 15 years. Um what tell me tell us about the tax abatement programs. What is what options are available to them?

Martha, are you able to speak to the So typically those are county programs. Um if you can to a mic. I know they exist. I don't know the exact ones in New Humber County. Um they have similar programs in county. I would want to follow up just to make sure. Okay, sure. That's fine. If I can get that information and follow up with you. I don't want to misspeak, but there are various programs that the county has. I just want to make sure that I get the accurate information. Can you send that to all of us? Yes. And that's something I would want to make sure we message really well because some people don't even know about it that are that would qualify would really make a big difference. I mean to some folks that I used to work with $8 a month is actually a lot. Sure.

So Sure.

Thanks. So this is this is really just wrapping up in terms of um sort of just understanding everything that we are trying to balance here um and understanding that it it does create it's a difficult scenario certainly um but understanding kind of the realities of of where we are one of one of my commitments to you as as your manager and and I'm not going to ever cover up the realities of what it costs to to do things and and we very much want to be fiscally conservative. We want to be responsible. Um but the realities of what it costs to provide services and have qualified, competent staff doing the work that's necessary, it's very very expensive and it is getting more expensive every year. And so, um, this is really just where we are right now in in the budget process. These are the the challenges that we're sitting in meetings talking about and putting together and, um, working and reworking the revenues and, um, some of these estimates to make sure that they're accurate. Um, but it is creating a scenario of, um, significant challenge of where do we want to land as an organization? and what is our our capacity to afford these things or our desire to afford these things? Um, and if we um don't feel like we can afford all of them, then what are the things that we're willing to forego on um either permanently or for another year, but then understanding the difficulty then in next year's budget conversation when we're all sitting around this table then saying, "Hey, remember remember we didn't do X. Well, well, now we have to

um and um and what other challenges may be associated with that budget um that we do not yet know. Um so that is um really where we are. Um and um we will continue to refine things, but um certainly any um early feedback from you all, any general feedback, good, bad, or indifferent, um it is helpful for us to hear it. If you don't have any to provide today because you're just absorbing everything, we understand that too. Um but certainly open to um whatever uh direction insight um you all are willing to share as we continue to shape what we bring to you in early May.

Well, I mean I can tell you right now I'm not voting for this 6.25 25 and I'm going to have a I'm going to really have to really get in some of the weeds on this because this is a pretty significant seat change. I mean I think we've always made an adjustment about 2 and 1.5% or 2.5% or something like that. I that's the highest I think I've ever remembered here and we usually have done it every other year and I know this is a significant change in regards to philosophy in regards to pay and all that. Um, and obviously we're a city and everybody uses our services every day. And it's this not people across the river, it's the people that are living at the beaches that come over that bridge every day that use our services. Everybody uses city services. And when you superimpose on top of the the folks that are not paying taxes, the universities, the hospitals, the community colleges, government, churches, there's a sign significant amount of folks that are not paying to live to be part of the city. So if you extract all of that and then you're also being whacked with the sales tax revenue at only 26 cents uh with the majority going to the county and because they can do that based on state statute. If we did it on population we we'd have a much better adjustment but we're not going to do that. Um and at the same time I have to be concerned about the folks that live here. So I'm trying to find that balance. Um, and at the same time trying to keep up with the CIP and maintain our our parks and our roads and all the other things that make our city great. Also taking into consideration in the last two years that we have made adjustments to the employment base here uh for for our employees and we value them and I I believe that they deserve an adjustment also. But I'm kind of falling into the camp of if we do this in in in maybe two three phases. I just that's going to be a hard thing for us

to swallow. This is a pretty significant increase overall and um not saying it's not needed and I understand that the pressures that we are under now because now we're starting to really see the imp implications of the 2010 decision for cities not to be able to do annexation. And now as a city, we're pretty much locked in geographically and people are living on the edges of our city and using our services every single day. Um, and I've always made this comment to a lot of my beach mayors. Everybody that goes to any one of those beaches has got to drive to the city to get there. And so they're using city services, police, fire, you name it. And um, I think we did a study years ago when Chief Evangel was here that 52% of the traffic accidents are not citizens of Wilmington. And I don't know what that number is today. I'm sure it's it's about the same, if not higher. So, we we're taking on a lot of responsibility for a lot of folks that are coming in here every single day. And yet, we're also hamstrung understood what we're able to um give back in in revenues. Um so, I want to really delve into this thing and maybe talk to some of you guys about uh how you feel about it. But, uh it's tough. It's going to be a tough budget and I know it's going to be ongoing uh as the pressure is built around us and this this area and this region continues to grow because we are the epicenter of commerce in our communities. Uh most of your jobs are located in the incorporated city limits and so we're going to continue to deal with that. Plus we had 4.3 million people visiting Hannover County of which most of them came to the city of Wilmington. So you have that pressure that's coming into us. So, um it's gonna be a challenge. That's

right.

And I just I know we're going to take this very seriously because u know people concerned. Um, but we're also being asked to take on more responsibility as a community and that's also got pressures and what we're going to do and what we're not going to do and what we can do and what are the responsibilities that we really should be adhering to and really start having serious conversations with others that maybe need to be taken more responsibility in certain ways. And I'm not saying there's any one particular government or nonprofit, but we need to really think through some of these things because it seems like everybody has kind of like walked away from some things and say the city you guys take it all

and uh we can't do but so much. Uh, and I will say we've always punched above our weight, always. And, uh, we've been we've demonstrated that that uh, we've done a lot of great things here, but it's challenging as to what as to what we came into. So, I I want to ch I got a comment. I got a question. I'm going ask my question first. And at the last uh, budget work session, I asked how many police officers uh live in the city limits. But now I'm going to ask what percentage of staff lives in the city limits

and and then we can't spout that number off at the top of our head right now. You you can send it to me later. But I I think that's a a pretty good question as the mayor talks about. you know, a lot of people do. They come into our community, um they use our services, um and and they leave and and we got a good bit of employees who come here and make good money and and leave every day. So, I just want to get a percentage of how many of our employees actually live within the city limits.

Sure, we're happy to get that. I have a couple questions about our revenue. Um any of our uh enterprise funds although those are kind of like don't really generate significant profit. Right. Correct. Okay. Um the other question is what about uh the storm water fees we collect? Do they cover the costs that they are supposed to cover?

So they they cover the costs. Yes. Um but everything is restricted in terms of we can use it for storm water related functions staff that is doing storm water related work. Um so um so like as an example these uh proposed increases to wages. They've been applied to the staff that are paid for out of the stormwater fund. They've been applied to the staff that are paid for out of the solid waste fee. Um and so um so those funds are absorbing those increases. Um and then what's left is then what we're talking about with the general fund. Okay. Thanks. That's very helpful.

So yeah, we we've carved as many and and through the realignment we also have looked at um additional staff that may be able to at least be partially funded through um some of these funds as their work is changing. Um, so we've we've tried to um push as much to the special revenue funds as possible. Um, would we need to raise those um rates to cover this? No. No. They're they've been able to absorb it. We've done all that analysis. Okay. And um my only other comment is when you bring us news like this, you need to give us something stronger than coffee. Sorry.

We can meet somewhere at five o'clock if you need to. I've been giving my feedback as we go. I guess the only additional thing I will say is um I appreciated seeing in the in the capital projects the application for the 13.3 million for the bulkhead project.

I just I'm sure you all are doing this, but I just want to say explicitly like I encourage pursuing other methods of funding some of these needs. Yes. Um, and wherever we can lend support or I can lend support, like let me know because I think it's important that we pursue all avenues of funding and not just look at property tax as the only way that we can support the needs of our city. Absolutely. Thanks. I have some thoughts on um our living wage model and I hate to revisit a conversation that I know you all have thought through pretty well and are now asking us basically for a thumbs up or a thumbs down on but um you had sort of indicated that there was going to be a ceiling on a a compensation level that would not necessarily see the same amount of increase in their compensation you know as part of this and and I you know I don't have the background or training to really understand without further explanation from you all the compression dynamics here. And so I think that's actually the information I'm probably asking for right now is to better understand compression and whether or not we can lower that ceiling such that we can still make a difference for the people who are making less than uh area mediated income without compensating people who are already, as Kevin alluded to, making a lot of money and taking it outside of the community.

We can definitely get you that information. I'd say in in a nutshell, um your your biggest pinch point is at the $75,000 mark where if somebody is making 75,000 and they get a essentially a 19% pay increase, if you then um don't give the people above them uh an increase, you will have them leapfrogging somebody. So now they're making more than

um more than their supervisor in in some in some cases. Um and then um you have that compression then uh throughout the rest of those upper upper pay scales. Um and so um the um sorry lost my train of thought. Um the other issue that you have with it is that um uh there's actually very few employees who are in those upper pay scales. Um so um certainly every dollar counts and I get it, but if you're looking to like move the needle in a meaningful way um off of that $14.4 a $4 million implementation cost, your the bulk of your dollars are already going to the people who are making less than $75,000 a year because that's the vast majority of our workforce. And so we can certainly run the numbers however you wanted them, but your your net savings is going to be fairly nominal if you scale that down because um because that's just not what most people are making. like you you see the majority of the people in the organization sitting in this room who are who are making that kind of good money. Um so we can run it but if you um it that big pinch point at the 75 is where you then start to have people jump and wherever you cut it off um you may then see some of that people jumping jumping above. So, we're happy to get you the numbers. Um, but the cuto off was that, um, nobody in the organization would receive more than $15,000. Um, a $75,000 earner making a 19% increase is just a hair below that, but then it caps everybody above that um to be getting no more than $15,000.

And we shrunk the key flipping the 47 to the 74. Yeah. and we shrunk the range. So the higher ranges used to sorry we also part of the living wage proposal was the higher and uh HR can correct me a little bit on numbers but the higher ranges used to have more capacity so they were wider ranges if that makes sense greater earning potential. So well one of the things we did was actually shrink that as well to be in line with the rest of the organization. So um like salary ranges for when you advertise a position.

Yeah. So any you know the higher anything over 75 some of those those salary ranges were wider that back in the day it was easy you know so we could hire within a greater area in terms of the range if not making any sense we've narrowed that uh to be in line with the rest of the organization which also helps us create savings but it it does shift as well so so it it caps the the earning potential at the top

the ultimate earning potential of our highest earning earners, it caps it lower than it would if we had kept those ranges as wide as they normally were because when we think about recruitment, what we what we're advertising is the bottom of the range to about midpoint. And so that that's really how we're trying to get people in the door. So, we want to raise the minimums because that's how you get more qualified people and and higher quality people, but they don't need this vast high number on the far end to still be earning a competitive wage for that level of position. And so, we've we try to bring those into alignment and and cap it. So, it it over time then people can't exceed far into that high end. they're going to be um in alignment with everybody else.

And do you budget positions at the midpoint? We budget positions at minimum. At minimum. Yeah. So So anytime you're then negotiating and bringing somebody in over minimum, you are then kind of banking on carrying some level of vacancy in the organization to be able to absorb it.

And then compression is also about that. So we mentioned earlier, I think Becky, the time and position. So if we if we minimum if we do less at the upper end for those that are here now, all it's going to do is also hinder us in terms of hiring and bringing staff in because you'll have people who are sitting and have been with the organization for long tenur who may not even be at some of the higher levels but are making over the 80,000 or whatever that number is. And so they're they're limited and so we're bringing new people in higher than them. So that's another form of leaprogging or compression as well. So time and position too. Uh and so this you know moving everybody helps with that uh in terms of our ability to bring people in.

But we we can get a list of and we would just take names off of it of like current pay rate and then if implemented what the pay rate would move to. Um, yeah. And I normally would not want to be poking around at people's salary data, but since this is the kind of change that we're doing, it it's it's valid, but we can also then like color block off like the ones where like, hey, they're below 60% AMI and it shows all of like there's there's, you know, 135 of them, right? So yeah, we can we can get that to you so that you can see and then it shows the um it would also show that maximum increase for those other positions. Okay, that would then show

who's going to be who's going to be point for that, Mary. So um HR will need to run it and then we'll jazz it up with the colors and the explanations. Um and uh we'll we'll be emailing all this stuff to you guys. Thank you. Yep. while you're um running scenarios, I was wondering, you said of the 14.2 million, a majority of it is the um public safety. So, I just wonder what um you know, approximately the majority of it was is it like 60% is it 80% of that?

65%. Okay. So 65% of our workforce are first responders. Okay. So that also makes up the dollar amount. And um the uh public works the one the one that we're also having trouble filling vacancies. Is that percentage in here somewhere? Services on trash, fire, trash there. Yeah. there. We we've included some of those

so certain certain employees so it wouldn't be trash. Um but like certain first certain public works employees who get called out for emergencies and things like that are included in the first responders because they fit that definition. Um but trash and whatnot, we don't have that that percentage in terms of the percentage of the um workforce. Um but remember trash is paid for. outside of the general fund. Rebecca, do you have on the CIP the half of Sent, do you have a breakdown of of the different things, the projects? Yeah. Has that changed since we looked at it last time? No. Okay.

The the dollar amounts have just a little bit. Oh, did we put the second on the file? We find it separate. We have a few slides that show the

take a break while you the meeting back to order. Assault. Thank you. Mayor. Yes. I'm sorry. We have to have a roll call. Madam clerk, would you please do the roll call for the record? Thanks, sir. No problem. Mayor Pro Tim Spears, are you on? I'm here. Council member Garner here. Council member Andrews here. Council La here.

Council, I'm sorry, Cassie here. Council member Chima here. And Mayor Sapp. Thank you. Appreciate it.

Okay. Uh we had a question about the capital projects. Um these are the the projects that you saw last time um that we had split up into ones that were related to um bridges, structural improvements that were needed and then um some other projects that um we are either in the in the process of completing or um we are completing design on. Um the total budget um for those is 52.13 million. Um and uh so we had a little bit of a deficit to be able to afford those. Um let me get to it's at the end. Right. So this was where we had landed um before we added in the dollars for design of the park property. Um, but if you wanted to see the actual list, it is there on the screen. Can you go to the unfunded screen?

Oops. Funding. Sorry. Funding challenges. So this shows the difference between the cost of these projects and then the current available budgets which left the delta of 23 million and that's what we're trying to close. Why is Front Street Bridge highlighted again?

So Front Street Bridge change. Sorry. Um so I'll also introduce myself for those of you that don't know me. Uh my name is Justin Carter. I'm the director of our design and construction group. Um, Front Street Bridge is highlighted because it's one of the ones we reduced. So, last time you saw it, it was probably north of $600,000. Um, we put in the new bid that was awarded. Um, what is also not reflected there that will hopefully put us in the positive is an ILA that will become before you um the April 7th meeting will actually put us in the positive. It's highlighted because it was one of the ones that was a major change from what we showed you before.

Thank you. and the um trail on Greenville loop up toward Seagate area. That one is under that one's underways. Yes, sir. All the way through to to the river to see bikeway. Yes, sir. Greenville loop phase three. Yes. Okay. So, the ones out of the transportation fund that was done in 2014, the only is the Pine Grove um redone there with light, although we purchased all the right away and then the roundabout at Greenville Loop.

Yes, sir. both those projects and then car app trail as well. Although we did get um some assistance with funding uh through in through the WNO um through the grant. The the other thing I do want to say just for the record um not to confuse the issue um but a lot of these projects have been referred to as the 2014 bond projects um and we heard recently in in the community somebody saying well you know they they haven't spent all their bond money and I want to be very clear we have more than spent all of the bond money. uh we just weren't able to complete all of the identified projects that the city had hoped to complete with that bond money. We weren't able to complete all of them before we ran out of bond money. So all the bond money is spent and out the door. This is trying to then make good on the promises to the community for specific projects to be delivered and we need more money in order to be able to do that. So, I just want to make sure that terms are known and clarified in terms of we are not sitting on bond dollars that are unspent. We would be outside um of what is allowed by general statute and those dollars are long gone.

So, and Wallace Avenue, the roundabout there is is funded. So, that project is funded. We do have a negative shown in that project. That is really for um some of the property settlements that remain that push us there. Um in terms of the actual project and contingency needed without that property settlements, we would be just fine, but there will be additional funds needed um as we finish out a couple of those items.

Okay. And Becky, going back to the Pine Grove one, since we purchased the right of way, the design is 100% complete. We know what we want to do. We know how to do it. The issue comes down to the money. And then the other thing um is can you do most of this work at night or during the day? I know the state wants us to do it at night which drives up the cost dramatically. How much could you do during the day? How much could you do at night? Could you split it? Like when you're doing the piece going uh connecting Oleander to Pine Grove, that section when you're not going to be in traffic, you could obviously do that during the day. the other stuff you may have to do at night and limit the amount of impact that it would take to do it at night or whatever.

Yes, that's that's correct, sir. And we've talked with NC DOT about that and and gotten some feedback. Um I know that that North project we did bid um we did have those conversations. Um we're also worried about the bidding environment at that time with that project, but um we didn't get a huge difference when we had conversations about daytime work. Although I do completely agree with you there there should be a significant difference. Um we hope when we rebid the project we'll do it a little differently um with having some options in there for daytime work to hopefully reflect that and get some some more information. Just make sure when you do it you put up there that this we're doing this for public safety for the state of North Carolina. We're doing this on behalf of the DOT

Mike. We can do that. And um speaking of the DOT, there was a conversation with them that um the MO director had about cost share since that is a DOT intersection. They were not amanable to um to be contributing. Um I think there's a a push to maybe see if there are other pots of money from DOT that could be tapped into before we fully exhaust that, but the um the general answer was no. Thank you. Um but we will continue to try to push on that. And then the the roundabout in Pine Grove in Greenville is that project that designs is done is 100% complete.

Yes, sir. That design is 100% complete and we just received final permits just earlier this week. So, it's just a matter of what is the cost? Correct. We have an idea. Um, I'd have to go look at the exact OPCC we have in the budget right now. So I think in in this slide I think it's 14 million that we'd be looking for um that we would need to put in to finish that project. Okay. But we can get you the exact OPCC that our engineer. So even if it just set sat there and with the 100% design aspect of it, we could pick it up at any moment.

We we could keeping in mind that the longer you wait, the more expensive it gets. Y but yes, but then we might find ourselves in an environment where people are needing to bid work to keep people employed and depending on what happens with the economy. I'm not a guru in that, but it it's a gamble. Um uh we have seen times in history where that has worked out. Um in other cases, it because of the inflation that had happened before, it maybe just brings it down to the cost that it is now. Yeah. And with with materials and um tariffs and whatnot. Um I would be cautious

on the bulkhead. Just this is a side note. This is maybe nothing, but I know that um north of the memorial bridge, they have I don't not to my knowledge they've dredged in years. And you know, they're talking about this 135 on the bridge. Uh, and if they were to dredge, let's just say hypothetic, if they were to dredge, has have we ever an analyzed if if they were to dredge at the 42 going north, uh, which at one time they talked about doing, what it would do to the bulkhead or if it would do anything to the bulkhead? Would would it compromise it in any way? Because obviously you're taking it to a certain depth, they're taking it to a certain depth. there's an erode in the the wall and then all of a sudden you you've got a slide going and the wall starts to fail on you.

That's a pretty significant investment on this riverwalk that we've got. It absolutely is and that was something that we brought up in our comments that our infrastructure impacts to them deepening were not taken into account anywhere. So they not only were they possibly raising the flood elevation, they were also not looking at some of our infrastructure impacts that they could possibly have negative negative impacts on and and costs that would be incurred. Um so that was a question for us um and what we we asked about. Good. That's good. And then uh Hooker and Hen that is is that underway?

That is underway. Um we will have something coming to council update uh hopefully. Um we've kind of got a lot of fencing out there and everything else but you'll be seeing in your council update um a project update on that one but yes we are underway on that project.

Fantastic. See the the only other item that I wanted to bring up, this isn't in any slide, um but uh Laura reminded me um that I had wanted to bring it up. Um just philosophically, it is it is by no means um something that solves the budget. Um but as we've been going through the budget, um one thing that did come up um was related to our golf fund. And I believe a number of years ago during was it 2021 or 2020 um council at the time made a decision to um send $200,000 in general fund to support the golf fund. Um so that is some that is a transfer out from our general fund that is happening and continues to happen every year. Um wanted to sort of check in with council again. you don't need to make any decisions today. Um since this is sort of new information particularly for some of you um but um philosophically um from my position uh golf fund should operate as a true enterprise fund which means they are fully self- sustaining and the rates and fees that are charged should be sufficient to cover all costs inclusive of operating that municipal golf course. um to include staff, to include um equipment, to include enough money going into a capital fund to be able to make the repairs and improvements and the added infrastructure that they want to see over time. Um that fund does not currently do that. Um uh we're looking at possibly needing a relatively small

fee change just to have revenues match base operations. um for FY27, but that would not address the 200,000. So like that is an area that if we ran the model to um have them fully sustain starting in 27 um whatever that would do to fees, we would need to look at it. But that would be $200,000 that we could essentially recapture in the general fund and it would offset. again, by no means fixes what we're talking about, but again, when you look at ways to ratchet those numbers down to start having actual tax rate impacts, that is something that has come up that um that if there's appetite on council to make that change, we um could bring that information to you and that could be a $200,000 benefit to the general fund um if we wanted to undo that previous

we don't how many how many how many golfers played that course 60,000 I know 60,000 rounds but out of the 60,000 rounds I don't even know if you could if you could extrapulate this how many of them are not residents because we did have a program at one time that we would charge a little bit of a higher fee for those that are non-resident as opposed to the resident we did away with that for certain reasons so you we could go back to that

so they don't because they don't have that program. They don't check to know specifically. I mean, I guess you could argue whether you're a a resident or a non-resident, it's it's the same expense since it's a a um enterprise fund. Um that there's there isn't a financial benefit to the city. Um uh either way, what what is the current um rate? Green fee. Yeah. And if there's a green fee, then you get a And then you have those that don't have a card. And then there's punch. Then there's punch cards. I mean, I'm not a golfer. I know. They've got all kinds of programs over there. I can't figure which one's which. So,

good morning. There, as you know, are a multitude of different fees um depending on whether you're playing a weekday, weekend, holiday, cart, not cart, but I would say the average is $49. $49.

$49. And so we are proposing um to balance the budget a $2 green fee increase this year and a $2 increase on the punch card. Uh we have for a regular green fee if you live within New Hover County, Penry County or Brunswick County, you're paying one fee. If you're living outside of that area, you're paying a higher fee. So it could give you that data. um years and years ago we did have city uh resident versus non- city resident green fees and it was um impractical to implement given the um volume of play at the golf course and checking people's IDs it's they came up to check in for their greens times and people arguing well my license says I live in Wilmington but okay but you don't and so that's why we moved away from that however a city res does have the ability ility to buy a discount card to where you're um prepaying for a certain number of rounds a year at a discount and that is avail we are checking to see if you're a city resident for that so we can get you that data as well but um we have raised the rates uh six times over the last 10 years um it used to be more difficult to raise the rates we had a little bit in terms of the um negative feedback that we would um receive from the players I'd say the population that's playing the course has changed over time a little bit, especially since COVID. There's a lot younger of a population that's playing out there. I can attest that my son who's 20, all of a sudden all of his friends started playing golf during CO. So, I think that the rate increases are accepted um graciously now and we're still one of the cheapest, you know, places to play in town. So, $2 per green feed, $2 per

punch card we're suggesting to go up um to balance the budget. And then and that's um the 200,000 that Becky was speaking of that the city manager was speaking of is the golf all the enterprise funds pay toward an indirect fee towards the general fund every year and council a few years ago did make the decision to put that back into capital for the golf course. So we can balance the budget with those changes and then we just won't have that capital funding to rely on in future years. But we we do have the unsigned fund balance. So out of that fund balance, we're also replacing the carts. I know that we have gas carts out there.

So the next the next project on the um capital priority list for the for MUN is to build a car barn. And you may recall that was actually um part of a larger renovation project to the clubhouse in 2018 that was value engineered out. So that design is um expected to be complete any day now along with a penny of probable cost and um that will allow us um first of all to um better take care of the fleet of golf carts because right now they're stored outside but um the carbon is being designed to with electrical capabilities to flip the fleet to electric carts in the future. So that's what we're going for. And so um we have uh about 8 uh million in the unassigned fund balance right now. Um Victoria, you may remember what that percentage is. We just ran these numbers yesterday. What the percentage to the operating um

it's below 70%. So we're at about 70%. So we feel pretty comfortable with I haven't seen the final cost uh estimate on the cart, but we do feel comfortable that we can transfer money out of the fund balance to complete that project and a healthy fun balance. What is that about 10,000 square feet? What how big is the car park we know? I'm so bad at spatially estimating. I We can send that to you as a followup. And Amy, does this also include in the golf course fund inland greens or is that totally separate? Inland Greens is not part of the enterprise fund. That's part of the recreation operation really general fun generated revenue off of off of inland greens.

We um we recoup about 80% at at Inland Green. So, that's not an enterprise fund, but it's a very healthy um uh cost recovery and it's within the cost recovery tier. Council may remember that you adopted a park recreation cost recovery philosophy um and policy last year and that's at at the highest tier where we want to be recouping 70 to 100% plus and we're we're in that range. Well, when we talk with the golf course advisory committee, I know they're always always maybe sometimes positive about their I know that y'all go to the meetings and they have these meetings and blah blah blah and this and that and they've been supportive over the years of some increases and other years they've said hold the line where are they? Do we know where they are this year? Do we have any idea? Um I'm sure I'm sure one way or the other.

I'll be able to tell you that after the April meeting. Initially um staff was not recommending a rate increase this year. Um we did a cart increase last year and the year before that we did a green fee increase um due to the um health insurance costs and additional u retirement costs that we're going to have to bear this year. Um we're that's that's why we're recommending the the $2 increase. So, we'll um we'll bring that news to them at their April meeting. We're uh how many rounds now? 63ish thousand. It's probably more popular than any golf course in this area. Okay.

Amy, I wanted to ask um and I do support the the golf course being a full enterprise fund and um but along those lines and and you kind of reminded me when you said that um the demographics are changing. I know that in private courses um a lot of them are having trouble making ends meet because the demographics are changing and a lot of younger people don't have the time to put into the time or the money to put into um a sport that has the requirements of golf. Um are we doing anything as far as offering programming to are we offering any golf lessons to young people and and then expand that question across our other uh facilities for tennis and all that.

Sure. Um, MUN does have a junior rate. Um, pretty affordable. Um, and we're not recommending a fee increase to that this year. We also, um, the city had supports the first tea program um, of Katefir and their home base. Their building is actually right across the street from the clubhouse at MUN. And the city leases that building to them for just a dollar a year. And um, they have a practice facility at MUN. They re reimburse um a maintenance cost to the city for that every year. I think around $55,000 a year. Um in addition to the programming that they're doing at MUN, First C goes to our community centers, the MLK Center and the Davis Center um regularly for programming. Um so it's a really great symbiotic relationship that I have with them that the city has with them. and it's not only introducing them to the sport of golf and trying to expand that demographic that plays golf. It's more of a life skills program as well. So, it's definitely a dual purpose and um and that's that's a nonprofit.

That's a nonprofit and at no charge to the students or is there a fee to the students? To the participants in the first TE program? I I can't say for sure. I believe that it is free. At the very least, it's a nominal fee and um I'm certain that there are scholarships that that people can participate in free of charge. And um we offer um junior clinic youth tennis um programs um at the Aliens Tennis Complex in addition to through the city or through a nonprofit through the city. Okay.

And then our our youth athletics program overall um is um It's a hearty It's a robust program. It's one of the programs that um I'm really proud of. Um in addition to regular youth sports programming, adaptive youth sports programming, we received a grant last year to expand and encourage girls to participate in youth sports more. Um that was really successful and we're looking at applying for another grant here in the next few months to expand that program. Thank you. So, so we've got the greens redone, the irrigation is in, the clubhouse has been redone,

right? Yes. It's coming a long way. And once hopefully the cart barn is finished, what we would look to do next is a master plan um in addition to the Pine Grove Drive crossing improvements. um but get that master plan done before we entertain asking council just for any further capital improvements.

So, so, so I guess the way it's been explained to me is with the closing of Echo Farms and with the closing of the Cape Golf Course in Hover County, we picked up a lot more that play. Plus, we're pretty competitive. So when you talk to some of the golf pros around they're they're amazed at the amount of play that we get at the meeting. So that continues to be healthy.

It it does and and I have to attribute a lot of that to the staff that is taking care of the golf course. We have um some really dedicated and proud um people who take care of that golf course. And also want to remind council that after the 2018 winter storm in January, we suffered um a lot of damage to the turf, a lot of frost damage. And um not only did we have to remain closed for a while, but it was very costly to fix that. So we invested in um greens covers after that. And we had to close the ball course for three weeks this January due to the temperatures. But um we had already paid for the covers and now we won't have to pay to repair any turf and somehow miraculously we're still $37,000 ahead of where we were this time last year even with that closure. So

that's good. And and we will double check the numbers before we confirm the the $2 increase to make sure that we're accounting for the future capital needs so that it's a a one shot. But there will be some level of of fee increase proposed. Becky, can I also have something else? Because it's it's sometimes we have to play defense here. Yeah. Could you also give me some of the rates of the surrounding clubs because when these guys when these people call me, I want to say, "Oh, by the way, you can go play over here for $100." Yeah. And anecdotally, I've heard that we are still quite low um compared to a lot of our neighbors. So I I think we will still be highly highly competitive if not still lower even

still 60,000 rounds is a lot of rounds to be put on that force in general. When you bring us that can you include the details of the junior youth discount so we better understand that. Yes, we'll send you the whole piece and and and on that um on the first T when the three acres that the city owned, did they who I know when we was built, I want to say it was 375,000 or something like that. It was part of that whole issue when we did the Wells Fargo here in Wilmington. There was a certain amount of money that was given. Not not all of it obviously, but there was some given. How did they pay for part of that? Did we do all that? Did we Did we do most of that

in terms of the investment to build the practice facility? I have to go back and check that. But that still is owned and maintained by by the city by by the enterprise, but they pay us. They pay pay us back some first. He does pay annually to contribute to that maintenance. Yes. Okay. And um one final thing um Mayor Prom's question about the number of staff that within city limits. Um, as of February 13th, um, 302 staff members were 28% lived in city limits. 28% 28%. Thank you. Thank you.

That's all we have. Anybody else? Thank you. Thank you. With that, we stand a journ. Thank you.