City Council - Regular Meeting

Sorry, I'm Alan Jones, again, on the mic now. Call to order this city council meeting acting as a committee of the whole. And I ask the city clerk to call the roll, please.

Council Member Joyner.

Present.

Council Member Andrew Bowen.

Here.

Council Member Scipio. Present. Council Member Clark.

Here.

Mayor Pro Tem Adams. Here. Council Member Taylor. Present. Council Member Hall. Present. And Council Member Burke.

Here.

Thank you very much. Of course, we're continuing today the discussion of fiscal year 26-27 budget, and I turn the meeting over to Chairman of the Finance Committee, Council Member Clark.

Thank you. Thank you very much. We're gonna have some presentations by the staff to answer some questions that have been brought up in the last few. And there's a few other things to discuss. At the end, before we finish, I am gonna make a recommendation on the budget, and it will be up to the Committee of the Whole to vote on it, not just the Finance Committee, it's the Committee of the Whole. With the understanding that this is, the vote will be to recommend something back to the council, now the council just happens to be here, and that will take place, which date? June 1st. June 1st. So just everybody understand the timeline of what we're doing. And with that, I'll turn it over to city manager.

Or to Mr. Tesh. Thank you, Mr. Tesh is going to start us off today.

Good afternoon, Mayor, Mayor Putnam, members of the City Council. City Clerk, if you could get the presentation up for us. Yesterday evening, a short response packet was sent out. We're going to go through a few of those things in a little more detail. There are several of those other items. If you have questions, feel free to ask. Several of them also say that we are committed as staff to bringing back presentations and more detailed information through the committee agenda in the fall, particularly things related to public works. Jamie, can you advance to the next slide for me? The clicker's not working. Thank you. So I do have one staff change I'm going to tell you about. We haven't done one of these in a while. It's a very simple technical adjustment based on something that council has already approved. Dr. Kina is going to come up. She's got a couple of slides to talk about some follow-up from benefits administration questions that were part of budget workshops last week. And then I will go through a few things that are in the response packet related to potential general fund recommendations and also community agencies. Tiny, if you can click the next slide for me. So the staff change that we are recommending, again, this is very technical in nature. You already approved a refunding of some water and sewer debt. When the Utilities Commission looked at that refinancing, it created about $400,000 worth of savings. They built that into their recommended budget for you and also into the rate structure that they are putting forward. We are just putting this into the city's budget as they recommended it. Again, already been approved, so it's just a technical adjustment where we'll reduce principal and interest payments in the water and sewer fund by $400,000 based on savings in our bond refunding. Dr. Kina, I'm gonna allow you to come up and go through the benefits.

Good afternoon. The follow-up from last week was the employer-employee share cost comparison. And so what you see before you are some of the localities that we were able to get that information from. The city is, what we're proposing would be 87% for the employer share cost and 13% for the employee. When comparing to the other localities, our plan is very competitive in the plan design, the deductible out-of-pocket co-pays, and we have a new benefits broker that actually went into effect in May. So there's a few months overlap with our current broker to make sure the transition happens, but you see those numbers before you with the percentages compared. The top chart is the employee and then the employee plans and then the bottom are family plans. So you can see the percentages that are represented there. And then the other item was about the merit increases. All employees that earned a meets performance evaluation in both 24 and 25, that's when we were doing meets and does not meet, received the merit increases and the Really, the only way that an employee would not receive it is if they were on a PIP and did not complete that PIP. But if they are on a PIP, which is a performance improvement plan during the plan year or during that rating period, and they complete it and get a meet, they would still receive the increase. So the majority of the employees receive the merit increase.

So with that, we will dive into the response packet. The first question at the top of the response packet and into the details, there were questions about potential reductions to the general fund, which would potentially help offset property tax increases that proposed in the budget. So again, number one item, if you're looking at your iPad in terms of the response package or up here on the screen, THERE ARE A SERIES OF RECOMMENDATIONS THAT WE WOULD MAKE THAT TOTAL JUST UNDER $2.4 MILLION. THE FIRST ONE, LARGEST AMONGST THE GROUP, WOULD BE A DELAYING OF THE MERIT IMPLEMENTATION. I SEE THE SENATE MANAGER POTENTIALLY TOUCHING. DID YOU WANT TO HOP IN THERE? NO.

Just to make sure we're all clear on what we're doing here, we're still recommending a 3% merit increase for all employees. As a part of when we're preparing the budget, we have to factor in when that merit increase would occur. And so typically that's done in the fall. This year we're recommending that it be done in December, likely, with these changes. There's also some flexibility in there for dealing with the compensation study that are ongoing. For example, right now, we've done the fire department. Our CDL drivers are next in the list of being looked at. The budget also includes some opportunities to deal with those individuals if the numbers show that they...

Oh, excuse me. Ms. Adams, I'm sorry.

Yes, thank you, Chair. I think we need to see that in a report, a spreadsheet or something, how it's like, I don't want to say compounded, but it does, in a way, changes some things as we continue to move forward. Basically, with these other studies we're doing and these raises and these other things employee compensations that we're doing. I think we need to see it in as big a full picture as we can, Scott, versus just, I got it, you all talking to us, that's okay. But I'm a visual learner. I need to see this and I'm sure all the council members would appreciate seeing it as well. And even though when it happens, start to happen, city manager, that we're delaying into December again, I already know I have heard her say we're delaying some other things as well when it comes to employee compensation. I just need to see it. And I think we need to see a report in it as to as far out as you can give it to us, because we need to see it. I need to see it. That's all I got to say. I need to see.

Okay. Yes, ma'am. My response to what the manager suggested is for every amount that you defer in this year, that just becomes part of the base next year. So for that $1.2 million, you're just kicking the can down the road to next year. And then the additional studies and things that we're doing, we will provide additional information on as they become available. Thank you.

Yes, Ms. Hall.

Thank you, Chair Clark. This is for City Manager Pay or to Director Clark, just for clarity. The 3% merit that is already budgeted for 26-27 is for all city employees, despite being career ladder, despite the increase that just came out of a pay study for firefighters is for all city employees, first question.

That is correct. Okay. The 3% increase would be across the board for all City employees.

For all full-time city employees who get meets expectation on a performance appraisal. Right.

There is a performance review. So if you're deemed as not meeting expectations, then you would be put on the performance improvement plan. So you would not get a merit at that time.

However.

But if you successfully complete the performance improvement plan, you would be eligible for the merit at that time.

Before December, before payout in December, if that's when your payment plan is supposed, I mean, performance improvement plan is slated to get completed. Okay. All right. I think that's all my questions. Thank you.

Ms. Burke, do you have something? Catch your mic on.

Yes, thank you. If we eliminate the black Philip Smith building as a place for collections, how will it be utilized?

Scott's going to go through all of these, but do you want to go ahead and take that one now?

Let him just go through all of them. He'll answer that when he gets there. Okay. All right. Scott, go ahead and work your way down.

Yes, sir. The second item on the list, Stormwater Fund Position Corrections. This is exactly what it sounds like. We are actually correcting positions. Currently, our TFO, or Traffic Field Operations Department, which I believe may be renamed here soon to Streets and Stormwater Fund, We had some positions that moved out of the stormwater fund into the general fund. We have determined they were not supposed to be there. We are simply moving them back. So this is a budget correction. The public safety phone leased lines reduction. I told you about this last week. The police department has been doing some amazing work chasing down some of our leased lines. through other vendors, and so that increase is not necessary in the budget. We are hopeful there may be other reductions, but we're waiting on that one as well. We are confident in the $250,000 number. Winston Lake Golf Course is actually having more rounds and has had increased revenue, particularly here in the last six to eight weeks, so we are very confident in increasing revenues at Winston Lake Golf Course to match what we are seeing in terms of gameplay here as the spring has started. The elimination of the decorative street lighting program subsidy, right now the Department of Transportation handles that for HOAs that have decorative streetlights. This would include requiring the HOA to handle that and reducing the subsidy for those decorative streetlights. Again, eliminating the secondary revenue collections location at Black Phillips Smith. Two positions currently in our finance department would be removed as a result of that. Our recreation department is still operating out of that and it is my understanding they are currently in the basement and would have the opportunity to move into a better working space upstairs if finance were to vacate that facility upstairs. All of the revenue collections that happen in cash would take place at the Bryce A. Stewart building here downtown. The next component of that is the elimination of the what I'm calling unallocated community agency funding. So last week we talked about community agencies. There was about $115,000 worth of funding that was not in that base case. I do have some information on that as well, but if you were to choose to cut that. That would be $115,000. And as part of the budget, we had eliminated already one position in our human relations department. That reorganization resulted in the potential elimination of a second analyst level position as well. Our human relations director is confident that they can continue to provide excellent services, even having lost that position.

Okay, Barbara, go ahead.

Thank you. How much traffic does the black Philip Smith building get?

I can get you the full report on that. It can all be handled at the Bryce A. Stewart building. It is not enough traffic such that finance thinks that they need a separate facility in order to take in that funding. But we can give you the actual numbers on exactly how many transactions are done in person as well as via phone and other methods over there.

Okay, thank you.

While you're getting that, go ahead and get the number of transactions for this building as well so you can compare them. I've got you. Did you catch that? Yes, sir.

Transactions are present. Okay, Ms. Scipio.

Yes, thank you for giving us these insights of some possible changes. How does that impact the rate of taxes? This $2 million equals how much of an increase in taxes?

$2 million is roughly a half a penny on the tax rate. So 2.4, if you were to do it, would be more than a half a penny on the tax rate.

Thank you. Oh, excuse me. Thank you, Chair.

I know a few months ago or about a year ago, Mr. Fanzer gave us a presentation on the The streetlights downtown, is this a separate program than the streetlights that are downtown?

I'm going to look at ACM King. This is the decorative streetlighting program for neighborhoods, but he can provide additional details.

That's right. I think you're thinking of the NCDOT money. We got to replace some of the decorative streetlighting downtown. This is completely different.

Thank you. Oh, excuse me. Y'all yell at me.

Okay, thank you. A couple of other clarifying questions regarding Blackfield Smith. It says secondary revenue locations and I know that's the satellite office for revenue. For clarity, can someone answer, whoever it is, staff, whether or not that's the only satellite office we have for revenue or is there another one somewhere else in the city? So we've got Blackfield Smith and then we've got Bryce A. Stewart. Is there another satellite office for revenue? No. So we would be, if we eliminated, told it to eliminate that, we would just have one kind of streamlined location for all revenue. Right.

As opposed to all other utilities out there that have basically eliminated all of those sites. If you try to go pay your bills anywhere for Duke Energy or Telephone, etc., they don't collect funds anymore. So we see a lot less traffic in terms of foot traffic at these facilities. We can get some specific numbers, but finance was very confident that the numbers at Blacksmith Phillips was very low. And so the cost of having to maintain that as a satellite office with all the extra precautions that have to go along with storing cash in that location, was burdensome in terms of the overall system. And I want to go back just for a minute to Ms. Burke's question because the other thing, if anybody's been in that building, you know that Parks and Recreation has the vast majority of that building. There are some upstairs and there's some basement areas. Neither one of the other areas in my opinion, are really conducive for having staff offices in those. But we do have staff offices, particularly in the basement. So another major advantage of this would be able to get those employees all onto the first floor of that building so that they're in good working facilities. They are working out of that building as opposed to how we're having to do that today.

Thank you. The second part to that, I don't know if you have a follow-up, but I was kind of still on my question. The second question that I had to go back to what was mentioned about, I think Council Member Burke may have asked about the two finance positions that are stationed in the satellite revenue portion of the building. What was said about those positions?

Those two positions would be eliminated. One is currently vacant and the other we would handle through attrition. but they would not be needed in terms of collections at the Bryce A. Stewart building. I do have the number of in-person visitors to the Black Phillips Smith building for collections.

Okay, hold on one second, Director Tesh. For clarity, there at least used to be two employees that were stationed in that satellite office for revenue collection.

There's not two employees over there in there. There's an employee in there during the hours, and then because the hours are a little bit longer than what one employee can take, there are times when you have to supplement that with a second employee, and it could be a little bit of an overlap there. So there was, when you say two employees, there was one assigned there basically full-time, and a second one that was assigned to work there part-time.

Okay. What happens? Are any employees being displaced because of this or losing their jobs because of this?

Under this move, the two positions would be eliminated. One of those slots, as Scott just mentioned, is already vacant. The other employee would be given opportunities to fill in at other places in the organization. So we would look to find them another place in the organization to go. Right now, we believe there's probably going to be a slot in finance that they could go to.

But they would not be losing a job because of this.

They would just be relocated. That is the intent, is not to have, for no one to lose a position because of this. That's correct.

Okay. Okay, Ms. Scipio had a comment.

Yes, I'm very familiar with the Black Phillips building. I think when it became vacant, it was a great way for the city to stabilize neighborhoods at that time. It's been quite a few years. And I know Parks and Rec's do some things there. Matter of fact, that's where you go to get your senior citizens discount card to use it on the buses. I wouldn't know that. I'm sorry. You wouldn't know that, but that's when you got old enough. I found that out anyway. But I think this may be an opportunity for us to assess whether that building is needed as an operation center for the city. It may not be able to We may not need to do that right now, but I think we should be looking forward to that when we do our facilities assessments.

Okay. Continue, sir. Oh, excuse me. Did I miss anybody?

To answer Council Member Burke's question, in-person is on average 39 people per day, which is between four and five per hour on average is the in-person foot traffic. Yes, ma'am. An average of 4 to 5 an hour. 425. Yeah, I'm sorry. 425? 4.7. An average of 4.7 people.

Okay, we got that. Thanks, sir. All right. Continue, sir.

So those are the potential general fund reductions that are a part of the response packet. The rest of the presentation relies on providing information that is in response to the budget workshop related to community agencies. So I have one slide for the general fund. as well as one slide for the occupancy tax fund what you see on the side in front of you is the general fund what is at the top that says subtotal previously discussed are the eight hundred and forty one thousand dollars worth of recommendations that were discussed last week and then there were council member requests to look at specific additions to that to get to the net of about $114,000 or $115,000 that was in the budget that was not allocated. City Clerk is going to pass out paper copies of this so that you can see it as well. And in that meeting, the Finance Committee Chairman as well as a couple of the Council Members had some back and forth. And what has resulted from those back and forth are prorations of some of the other requests that would total to the amount that is in the General Fund budget.

Let me comment on that. I basically took, I think it was seven, should be seven up there, that people commented on. I took what the system came up with, remember when we voted and all that, and I divided it by two, and that was very, very close, and I adjusted a couple thousand bucks here or there. But that's basically what it is. I took the seven, took half the request, and I think I had to adjust a couple by 500 or 1,000, but that's essentially how I did the math.

And again, discussion can take place on those. To show you what was landed on for the occupancy tax fund, again, community agencies, the first part of the table at the top that says previously discussed is what was part of the recommendation at the last budget workshop. And then the three items that were requested to be added, again, prorated are added at the bottom to add up to $406,000.

And what I did there, I gave a little bit more to collidium. There's kind of an unwritten agreement because this money comes from the hotels, the tax on the hotel rooms, that this is to be used to put heads on beds. And collidium does some of that, so I gave them a little bit more. But those were the three items that were three folks that were mentioned. And that's where those numbers came up. Thank you.

That is all of the follow-up that I have.

Oh, excuse me, Ms. Burke, go right ahead.

Yes, thank you. Chair Clark, when we met last week and we added to the list of seven, I thought that we had included on the last page of the three-page document under the line, the last page, Union Community Development Corporation, I had recommended adding that to that list.

What I took away from discussion, they were already on page one, and so you get one line for organization, so I did not include that. But that's the way I did it. Yeah.

Scott.

Scott. Thank you.

Thank you, Chair Clark and Ms. Sapio. So kind of going to that point of kind of piggyback off of Council Member Burke's question. Because Collydium is on the second page, proposed to get $12,000, could we potentially subtract $12,000 from the other page and then add it to another program? I think they're well deserving of the funding that they're getting. I'm just, they are.

They're different pots.

I understand, I'm just.

And there's some folks on the first page that are in the other part too. So you be a little careful. I think the dwellings is, for example. Dwellings is on the Roman numeral 26 in the budget. They're there. Matter of fact, hang on. Y'all may make a liar out of me.

Council Member Clark is referring to what's in the consolidated housing plan and is funded by federal money. Sure.

I was just looking at this. I thought I would make a question.

I got to remember my Roman numerals. Okay, the dwelling gets 22,000 on that page. Just as an example, I'm on Roman numeral XXV1. These are different buckets entirely. City with dwellings is over there. They get looks like about 50,000. So there is some overlap there. But I basically took each fund separately. Now, folks, the reason I did that, I've made the comment before, we spend more time on the nonprofit to do everything else in the budget combined. I basically took the seven that were new, were not funded in any way, out of that fund, basically divided the numbers that were in the right-hand column and came back where we are. All I say, if you want to change something, if you want to add something, you've got to take money off some other page, because that kind of adds up to where we need to be. And by the way, we're going to present all this. There's certainly time for comments.

Yes, ma'am. Mr. Chairman, I think... Council Member Scott is sort of right. We're not funding. We got collidium on the front page, and we got them on the occupancy tax. I think when I mentioned that in our previous discussion, I was thinking that they would get funded only in the occupancy tax as opposed to the other, either one or the other, but not both.

Well, if I do that, then I got to go back and change the amount those seven all were getting because it would be in that one.

Yes, they would get, oh, no, no, no, no. You would reduce that $12,000 out of the occupancy tax.

No, what I'm saying is I recommended they be included in the agencies. Yes.

Yep.

$134,000. $134,000. Yeah. We'll be also going to give them an additional $12,000.

Well, it was someone mentioned, it wasn't me, that were they putting heads on beds, why don't we give them some of that money? So that's why I went over there and got them some heads on beds.

but I was only thinking of it as being in one pile.

That was my consideration. Duly noted. Any other comments?

I just want to comment being on the tourism board. Occupancy tax money is for tourism. It's for businesses. That's why the state separated it out so that cities would be able to fund, invest like we do with economic other ventures or initiatives. If it is not producing tourism to some degree for people staying in hotels, then we might be using the money the wrong way. And again, this goes back as Mr. Payne, Raleigh is looking at everything you do now. So you better make sure you're doing everything that they have given us to do by the general statutes that they created. As much as we would like to take that money and give it to organizations, if it's not creating what it's set up for, then we are not compliant. Thank you, Mr. Chair.

Okay. If that's the case, two of those three that are added at the bottom do not put heads on beds. Anyway, let's kind of take all this in mind and we'll kind of see what we want to do at the end. Ms. Hall.

Thank you, Chair Clark. Well, to that point, if we are going to potentially consider readjusting some of the ones that were added to the Occupancy Tax Fund, let me put this out here as something to potentially consider. It does require going back to the drawing board slightly. If the 134, Jamie, maybe if you could adjust the slide back to the previous.

There you go.

So if the 134 for Collideum In the discussion last week, Mayor Pro Tem, we had talked about how we could justify Colladium as being a tourist site and bringing in tourism. One could argue that point. The point is, that's how it got there, just FYI. But if we were to remove, which is somewhat what I thought that Council Member Scipio was getting at last week, the 134 from Colladium from the General Fund Community Agency's pot, move that to the occupancy tax fund, then we may potentially have an additional 134 in that pot that we might be able to, you would still have to redo some funding if that's the case, then the youth, next slide, Jamie, if you don't mind, the youth summer program and maybe Tri-City Film Consortium, I'm not sure, might be able to be moved up to the other pot of funding.

So, potentially... Just bear in mind, if we were moving that amount, you would have to take a significant amount of money away from Old Salem, the North Carolina Black Repertory Company, River Run, Evon Film, and what's the same, Symphony, to balance those numbers.

To keep the $134 million.

Yeah, and that's why I was saying... Let me tell you why I put a little bit over there. We heard at the discussion Monday night from Colladium, and I think they said 40% of their... guests were from out of the county. Now that doesn't necessarily mean they slept in a hotel, but it means they were at least out of the county. So I felt like they probably would qualify, and that kind of gets back to Ms. Adams' comment, that it probably makes sense to give them a little bit of that because they are putting heads on beds. Now it was my understanding that while, and this is probably something we need to answer in writing, so to speak, that it was kind of, I would call it a gentleman's agreement. It's used to put heads on beds. So we didn't, you know, we could put a little bit for the summer youth program and for the triad film consortium, but maybe we need to get a definitive answer there between now and Monday.

Since I still had this and then I yield back, I think either way, based off of the conversation right now, we're probably going to have to do a little more finagling with kind of what we have here. potentially, particularly if we could be out of compliance with what is justified for occupancy tax.

Well, maybe we can have an answer on that before the day's over on that one. But I will tell you, I will look for you for the motion to cut Old Salem, National Black Theater, Very River Run, Piedmont Film Festival, and Wednesday Symphony by 20% to 30% each to get that to work, if you kept the 134%.

of what she said, that's what my understanding was

Based off of my understanding of what Councilmember Scipio was proposing last Thursday, I thought that her recommendation was to remove completely from general fund and to place in occupancy tax fund. I by no means would want to recommend that we reduce what Colladium get to place them in occupancy tax. I understand though, if we were to do that, then we would have to do major adjustments to the previous ones that were approved.

I've got to have five votes to do that.

I got you. I understand.

I think you have. Anyway, all I'm saying is this is a zero-sum game on this page. If somebody gains a dollar, somebody loses a dollar. So at the end of the day, anybody wants to make a recommendation, you've got to give me both sides of the equation. And then you've got to get five people to support it. I'm willing to bet you, right now, you won't get five people that'll vote to cut. I'll say the National Black Theater says River Run FEMA film, which is by 30% each.

What I would like before is for staff to be able to justify maybe with somebody that we're on the right track, that we're on the right track with what can be used for occupancy tax fund. I think that's the first step. And hopefully we have some staff members that are already on the line.

Let's see if we can find that out before we finish, Tonya. Right now, someone in this building is working on it. I don't know who.

Someone was me earlier today. The occupancy tax is authorized via a local act. The portion of it that goes to the Convention and Visitors Bureau has to be used for tourism and conventions, but the portions of it that go to the municipalities can be used for any economic development or culture and recreation purpose.

OK, so this is OK. Everybody hear that?

Mr. Chairman.

Oh, yes, Mr. Mayor.

I just was reminding us the full council voted at the last meeting to endorse the 841, so I thought we had put that one to bed, and we were now charged you to come up with a solution, which you have.

Yeah.

So I would suggest we not reopen the can, so to speak, and stay focused here.

Okay, thank you. Just for information right now, Mr. Tesh. What else you want to tell us? Oh, Ms. Burke, excuse me.

Just for a point of clarification, I asked about union, the CDC development, and you had included it in the first section, the general fund, you included both.

Yeah.

And so I believe that the same way you included union and they're only on one line, Colladium should be included on one line only. So I really see that being the same situation. They're included under the general fund. They're included under the occupancy tax fund. They should be included in the general fund. If we're gonna do it for one, we need to do it for all.

Okay, all I did was, I treat these two pages separately is what I did. And I thought I did it based on what everybody suggested.

I think you did. I really do think you did, based on what everybody suggested. I think that we got a little confused. I know I did when Councilmember Scipio asked about collodium. I really got a little confused last week, and I thought that we had decided that they would be listed under the occupancy tax area and not under the general fund. That was my thought, so I think we did.

I think the mayor just pointed something out. We approved the 841. which is what's on this page.

Thank you.

A camel is a horse designed by a committee, and I'm trying not to create too many camels here. But understand, anything you won't change affects something else. Thank you, sir.

That's out of order.

Okay. Anyone else for it? These are all good comments. I'm listening to everyone. At the end of the day, I'm going to try to come up with something that makes sense. Yes, sir. Thank you, Mr. Tesh, for anticipating that question.

You're quite welcome. In terms of the presentation itself, that is the end of what we have in terms of the details. Again, there are some other questions in the response packet. I'm more than happy to take additional questions there, but again, the vast majority of those are a commitment by staff to bring things back through the committee structure in the fall with much more detailed presentation and analysis.

In your hands, stapled are several pages. The first one was the numbers he just showed you. Are there any, and there's three pages here total, I think. And there's 11 comments. Does anybody have any questions on any of the others? Mr. Tesh was not going to go over all of them. Everything from closing the old Salisbury landfill to the Brushy Creek Greenway.

The response, Council Member Clark, the response packet is in your iPads as an attachment. You have my copy that you stole earlier.

Yes, I do.

Yes, I do, Council Member Clark.

And DeCipio has a hard copy. Okay, they're on your iPad. I don't have an iPad.

Yes, ma'am. Yes, I would like to go. Oh, now it's projected on the screen about the COLA that I asked about. I believe that was last Tuesday.

Number two, that is.

Yes, number two. Could you go over that for us, Director Tesh?

In terms of the cost of it again for the general fund about one point one three million dollars for each additional one percent that would be effective beginning in January so it would be for a half of the year again that's scalable if you wanted to do a two percent in January just double the number but the cost of living adjustment would be in addition to the merit that is shown in the proposed budget document.

Ms. Hall, let me give you a number I was given that is not in here. You asked how many people would get the 3%.

This is a little different. Yes.

The corollary to that is how many people are in the performance improvement bucket. Correct. And I was told that over 99% of the employees would get the 3%.

Correct. And I appreciate that. And that will be payable.

So just want to let everybody know it.

Thank you, because that was the other part of my question. I appreciate that. Regarding the COLA, which would be a little different, totally different, so I had a two-part question, which is what is in here, and I appreciate staff for addressing that. I think this is a little different than probably what the city has done. This would be two different things. It ultimately would be a matter of whether or not council had an appetite of giving a 3% merit to all city employees payable in December, in addition to a 1% cost of living adjustment. So I appreciate staff for being able to provide that and list that here. Even if that's something that we cannot do this year, I would like at least for council to be thinking about that. particularly as costs are rising just across the board with everything from gas to eggs to everything else. Now that we are also having an increase with what staff is going to have to be paying for health care premiums, et cetera, that 3% that they do see in December will be essentially eaten up with other costs that they'll be taking on. While we may not be able to do that this year, I would like for that to be something that we do think about in years to come if we don't have the appetite to approve that for this budget cycle. So thank you for staff looking into that. Manager Pate, did you have something to say? It almost looks like your hand is on the trigger.

I'll just add two quick things to that. I think what you're talking about, I would encourage council not to get too involved in the details of COLAs versus merit, et cetera. If the council's desire is to do more than a 3% merit, i.e. a 4% merit, then tell us that and we can bring you back the numbers that would do that. It would be a little bit more than the 1.1 million that Scott's got in here, not based on where we got merits now, or we can move all the merits back to January and you could do it for the 1.1. I want to remind council that that's a half year's worth of merit. So that means that you're preloading an additional, you're doubling that number for the next year when you do that. So if you approve a million, then just know that we've got to fund two million in the following year. But we can adjust the amount that the overall amount that folks are getting on a variety of basis. And it's easier for us to manage that. I will tell you that it is, we're putting in a new HRIS system with all the other things we've got going on, I would not recommend to you that you do a December and January increase, because that's a tremendous amount of work for our folks, and so I would encourage us to do those only at one time if there was any consideration for that.

Thank you.

Yes, ma'am. Yes, I was on a meeting yesterday. National League of Cities of seasoned elected officials. They put us on the advisory council and we all agree. We get ready to put together some tasks for us, three of them to present at the city vision. I mean, what is it in the fall? Yeah, City Summit in Nashville. One thing is for sure that we all need to come to grips with is the way government runs now and the way we all, everybody on there from all across the country, they were like 91 elected officials. Everybody is going through a tax crisis. issue with their legislatures, Mr. Pate, all of us are in the same boat. We now have got to start looking at how we govern with the monies that we know we can depend on and govern again to the monies that we know we will never get anymore. Whether that's the privilege tax, sweet states tax, whatever you want to call it. The one thing is sure that the city of Winston-Salem for the past, I know, 10 years or more, but more than that, we have worked diligently to try to improve our compensation to our employees. And that's before all of the new people got here on staff and others. And I think we did a pretty good job holding the water on that one. I think that moving forward, that there is, we can do anything. As Mr. Payton, some of us know who've been here. We can do anything y'all want, but you better figure out where the money is coming from. See, that's the caveat that nobody talks about. Talk about the wants, but our chair of finance is telling you that we don't have that kind of money and we still don't know what's going to happen with Raleigh. We still don't know. I told the city manager in my meeting with him, you better get a plan B. ACMs, y'all need to start putting together a plan B just like we are a corporation. What happens if we don't get any money from federal or state and what do we go from there? Just like we've had to do with DEI and some other things. You cannot wait until it comes to the door. You got to be thinking about it now. So in light of thinking again, these salary increases, It's not that we will never do salary increases again. It's just that right now we have to govern according to the map and the headwinds that are coming to us instead of trying to do this, not knowing what's coming in the next six months. So I asked the council, you know, if you all want to be on top of what was going on, go to website, the legislator read every day of what they're doing down there. These bills they're passing very quickly. that again we need to focus on what we can do now like we did during the recessions of eight and nine and those others you all remember when the economy failed the name of the game is to hold the household until we can get a better understanding of what's going to come it's not that we don't have an appetite council member hall it's just that We need to understand that we got a lot of more work to do to get this budget passed by the end of June. And some of the work you guys did while I was away, and I did get some information about it. I believe we're headed in the right direction. But again, if you want to move some money out to something else, be prepared to present the staff. They're going to do the work, but be prepared that you do your homework. Where is the money going to come from? Thank you, Mr. Chair. I apologize for digressing.

That's fine. Appreciate it. Okay. Did you have any, anyone have any other numbers on these sheets? Mr. Scott.

Thank you, Chair. So I personally have no issue with the two-month delay in the merit implementation. My one fear is that November is that election time when, if that or the property tax is going to be eliminated or whatever the restrictions are gonna be. My fear is that after November, if we implement a mayor increase in December, are we gonna hold back on some of those mayor increases because we saw what happened in the election in November. So I'm okay with it. I just wanna make sure that we are being real with the people who deserve the increase. That's it.

I would like to address that. The key issue that you're doing for council members, particularly that haven't done this for a lot of years, is that you're adopting a budget today, or you will for July 1st. That budget is locked in place. So when that budget is in place, from my perspective, we're making a commitment to our employees and to the community that these are the services we want to provide and these are the ways we're going to do that. So whatever happens in November... would not have an impact on these merit increases going forward. They would be in place. Now, to the Mayor Pro Tem's point, all indications are that there will be at least two constitutional amendments on the ballot in November, both of those to restrict both the state level funds and an unknown restriction on local government funding. I think to that point, you can expect that everything is going to be harder in the future if those happen. You can look at any other state that's tried to do some of these kind of reforms. The only, as Chairman Clark has said many times, the real only lever you have is a property tax. And when that goes away, all the other things that we do, typically our user fees are based on that service that you're providing. So that's not to pay for police officers or firefighters or road resurfacing. So it's going to be very difficult in terms of moving forward in the future based on those constitutional amendments passing. And I forgot to mention earlier, so I want to go back to the health insurance piece. We have been very cognizant about looking at what the health insurance increases would be versus our salary increases. So I just want to remind council that the amount, the per pay period amount for where the vast majority of our employees are, which is on the employee-only PPO plan, that increase is going to be $1.39 a pay period. there's nobody that's gonna get a raise that is less than that. Nobody will see a decrease in their paychecks because of the decisions being made on the healthcare side. On the healthcare side, we're basically just allocating out the increases, which is roughly over $8 million in the health, benefits area, 75% to the city picking up for all of us employees or everybody that's covered by our health insurance and 25% by the individuals picking those up. So we have been very conscious of that issue and to try to avoid that situation.

Okay. Ms. Adams, your phone is on. Do you have a comment or are you just? No, I'm sorry, Chair. All right. Mr. Tester, do y'all have anything else? I'm going to preach in a minute, but I want to be sure everybody's got their questions. OK. It's my job to recommend something to y'all, so I'm going to preach a little bit, then I'm going to make a recommendation. Where do I want to start? First off, I think the staff did a good job on the budget. I think there's no something big, new, shiny, fancy. You called it a bare bones continuation type budget. I don't think it is. And I will tell you, particularly for you new folks, our budget doesn't change dramatically year to year. We're always going to have both the police department, the fire department. We've always got potholes to fix, street lights, et cetera. We tend to nibble maybe more around the edges. For example, we've always provided health care to our employees. But the cost of health care has really been ratcheting up lately. So what we've tried to do for, and I just use this as an example, most of our employees have employee-only, the basic policy, and that's where we put the smallest increase in so that an overwhelming percent, I don't know what it is. Scott, you got a feel what percent just do the employee-only?

I think it was just under 1,000 employees or so that were on that, which would be 33% or a little more of our employees.

You can have employee, employee, spouse, family, basic, and then you can have the same three or four on the other. So there's eight or nine different plans altogether. But anyway, I don't need that. Just the point is we tried to hold the cost as best we could there. Absolutely. I made a comment, and Dee Dee's touched on it a little bit. I have been concerned, and this is what Raleigh is concerned, that we do not spend enough time on the other half of the budget. It's not in here. We have forgotten what we're asking of our average citizen. That's who called Raleigh and complained. All of us have citizens that got 30, 40, 50% increases in their property tax amount they write the check for. Now, there's some complexity there. I'm not going to go into it. At a minimum, though, we adopted a budget last year that had a little bit over an 8% increase in the amount of money we're spending. That was still three times probably what the average salary increase was last year. That's still a lot. We're proposing in here close to, was it 4.6%, something like that, which is probably two to two and a half times what the average salary increase people are going to get this year. We have forgotten to ask the question, what can our citizens afford? Yes, we have all these services we want to provide. And I will throw a data point out. The average fireman, and I got this from one of the city's managers, what their gross pay was last year, the folks on the truck, was more than what the average family in Forsyth County earns. And that's not an apples to apples. That's one person working versus a family. They were close. But the average fireman, not counting his or her spouse, second jobs, whatever, their gross pay was more than the average gross pay of the average family in Winston-Salem. It is for that reason I think we need to ask the question, answer it, what can our citizens afford? We cannot continue to give them two to three times more increase in property in their property tax than the salary increases they're getting. I have been told by a Democrat elected official from this county who is in Raleigh not the Republicans, the Democrats, that the constitutional amendment is going to pass overwhelming. And it's because the phone calls they're getting from people that are saying, they hit me with, now again, I understand there's some complexities here, but they hit me with a 40% increase and now they want to do another 5%. We don't know what Raleigh's going to do. But what I'm going to propose to you is that we show Raleigh today, this week, that we can be sensitive to the people who live here. It's for that reason that I'm recommending not a 2.6% increase in the property tax rate, but a 2.2. It's not a huge decrease, but it does get it below 4%, just a little bit. Now, I was the one that asked for the numbers. 0.4 is not $2.3 million. It's considerably less than that. So we don't need to make all these cuts. So part of my proposal is that we continue to have the 3% salary merit in here. And let me understand what the issue is with doing it in December versus March or whatever month. I can give you a 3% increase on June 30th, and it really doesn't cost us anything. But for the entire budget year, this time next year I'm sitting here, you've got 12 months worth of 3%. The only thing it impacts is for this year's budget, do we budget for six months of that or four months or eight months or whatever? But it doesn't change at all the budget we're facing next year, which everyone will have 12 months worth of the 3% increase. And that's the difference there. We're trying to save a little bit of money now, but it does not impact the fact that you will have 12 months worth of 3% increases that we got to pay for in next year's budget. Number two, this point's been made, but I'm going to be emphatic. The cuts here are eliminating three positions. Only one of them is occupied.

So two of them, there's no person to get rid of.

I am putting in my suggestion that no one be laid off. And I can tell you, we've got 2,400 employees. There's always positions being opened that that person be assigned. It may well be the same department they're in. Someone will retire, whatever. Anyway, there's no actual person that's being impacted from that. I'm also proposing that we do not eliminate, if you look at it on here, the remaining unallocated community agent funding of 115,550. Although I will say if I did, I think I would feel a lot easier because so far that's what we spent most of our time on, but I'm suggesting we keep that in the budget. I'm also suggesting that we do not eliminate the decorative streetlight issue. Let me tell you what that program is. Everybody gets a free street light on your road if you want it. Believe it or not, there's some communities, neighborhoods that do not want street lights, but most of them want them. And we pay for them. If you do not want our standard street light on the pole and you want a decorative street light, you pay the difference. You don't buy the street light from Duke Power and they put a meter on it and sell you electricity. They charge you a set rate. And they take into account what the streetlight cost, how long the bulb's gonna last, all that. So what these neighborhoods pay for is the difference between what a free light cost us, the city, and what the decorative cost. They pay the upcharge, so to speak. I mention that in that these neighborhoods are in every ward. They're everywhere, these streetlights.

And I think to do that, we're opening a can of worms.

And I'm not quite sure it's fair that, okay, you don't have to pay for your streetlight, but I want one that's a little fancier, so I have to pay the whole cost, not just the additional cost. Anyway, I suggest we adjust those two with the 2.2 cents, and I would call on the mayor if he would like a comment, because he deals with Raleigh, too, or Ms. Adams.

Yeah, and D is involved, but I think you're on the right track, Mr. Chairman.

I think you're on the right track. Once I turn the mic on.

I know you're on the right track, Mr. Chairman. I agree that... And going back to council member Andre Bowens, the constitutional amendment doesn't say what to do. It gives the legislature authority to set those limits there. So as much as we can, if we're giving a good positive you know, picture, if you will, to the General Assembly. I think it will help us in our arguments next year when the General Assembly convenes and puts the meat on the bones of what this means there. So saying to them, hey, look, you know, inflation's X, Y, Z. We have limited our budget to less than 4% growth. So we're responsible and active in a responsible manner and continue to provide quality services to our citizens. So I agree with where you're at.

Thank you. Let me add one thing to it. If anybody, because I'm leaving all that $115,000 in, if anybody wants to change any of these, you've got to bring a piece of paper that shows what's going off and what's coming on. Okay? So that we can... Anyway, go ahead. It's the podcast.

Your light's on. Just, I want to make just one comment for you on the, for council, because I know there's a lot of discussion going on around the nonprofit agencies and the chair, and I've thought about it. Right now, what you've got in the budget is a lump sum amount to allocate to those agencies. It doesn't say where that money is going to go. That's what you've been working through. So, just to let you know, you can continue going on the path of adopting the budget with that lump sum, even if you haven't decided where this additional 115 or whatever else is going to go. It's preferable to get that done, and so it's out there, but just so you know that you can continue moving forward in the budget, even if you still have, if you still have this budget.

Thank you. If you look in here, it's just a lump sum. So, thank you. Ms. Scipio.

Mr. Clark, I think it is important for us to let our constituents know that we understand and we are empathized with all of the increases in their tax liabilities, but I don't want them to forget that their properties also increased in value. Oh, yeah. That is really a great thing because some properties have been depressed for years. But my question is if we have an increase of 2.2%.

2.2 cents, not percent. 2 cents. 2.2 cents. Cents. Which is a 3.9% increase.

But if these... changes here only represent a half of a penny?

Is that what you said? Yeah, but what the chairman said and what Scott's prepared is that if you took the cuts that the chair just recommended that's on this list, then you would be reducing, we could reduce the tax rate that you're proposed by 0.4 cents or so it would be, right now it's in there at 2.6, it would drop to 2.2, And that would be the increase that you'd be voting on later to move forward as the recommended property tax rate. Does that make sense? So you're making these cuts and you're cutting the proposed tax rate back to 2.2 cents.

But if we do that, what else do we don't cover in what was proposed?

No, everything else is covered. Everything else, if we do these. These are the only cuts that you need to make to do that.

All right, thank you.

Ms. Joyner. Thank you, Mr. Chair. I know... Manager Pate just said everything is covered, but I just need clarification for myself. Would that include or exclude the potential of a half a cent to go towards the unhoused and housing issues?

That is not included in the budget. That was an item for consideration by council. So that additional funds are not in the budget.

They're not in this budget. And if I could comment on that, I did struggle with that. We still have enough money in the fund to get us a little bit further along. And again, I just think we need to be so sensitive right now, this year. And maybe we can work that in next year or whatever. But we... If we do not show maturity, this is my opinion, Raleigh is going to cram something down our throat and you're not going to like it. And that's just my 26 years experience. Anyway, this is all.

Thank you, Council Member, Chair Clark. In order to realize the portion that we talked about could potentially go towards the unhoused or any efforts towards that, Is there enough remaining in possible eliminations that we could eliminate to arrive to that? This is pointed to either Director Tesh or the manager.

I think your question is how, this budget doesn't include any of the money for housing. So the cuts that you're talking about doing to reduce the tax rate, if you did not reduce the tax rate, then you could allocate that portion towards housing programs. But I think that's the debate the Chair is alluding to now.

Yeah, Mr. Mayor, your own.

Great, good points by everyone. I would just say that We're making decent progress on creating our own local housing trust.

Yeah.

And I think that's going to give us some dollars to work with Council Member Hall to help us with our, you know, there's no one more in favor of affordable housing development than me. So this region we've been working hard to get our own trust fund basically help make up the difference until we can schedule perhaps a bond vote or some other financing mechanism.

And to that point, Chair Clark, if it's okay, regarding the housing trust fund, I think the Winston-Salem Foundation is leading that, working with self-help and some other agencies with that. It's a good point to note. I think particularly with the unhoused, what I'm unsure of is whether or not the housing trust fund will also have funds going towards some of those efforts to help at least the remaining stock of nonprofits or agencies that we have addressing that. I do know that in the budget, we do have some funding, I think in the community agency list, that is going to help like dwelling and city with dwellings. So it's not like we're not putting funds there. But I did want to at least highlight that or ask that whether or not there will be additional funds that would go towards particularly some of the unhoused. But I appreciate your point about a housing trust fund and putting that out there.

If I can make a comment, because you're using a little bit of a unique term, To me, unhoused means the homeless, not people who pay 30% more for their housing. They're maybe financially challenged on where they live. Again, not to belabor my room numeral 26, but that is the page that has over a million dollars, and most of that money is going to the unhoused. Bethesda Center for the Homeless, City with Dwellings, Dwellings, ESR, housing authority, and some other things as well in here, Samaritan Ministries. But I would recommend, and here's the United Way has a rapid rehousing. Anyway, I would say that's hundreds of thousands of dollars. Bear in mind, and I made this comment Monday night, we're only dealing with general fund money. This is all CBGG home. This is all the federal money. It has to come through us. But I don't want to give the impression we don't do anything for the unhoused. We do an awful lot for them. Yes, ma'am.

I just want to make one more comment. I was involved with a conversation past week, and I know there are some conversations going on that a lot of you have no idea of where we are right now as a country, as a state. There are people in Raleigh that believe that municipalities do too much social work. I hope you understand what I mean. Social work. And if you know the lanes that the fed, the state, the county, municipalities are in, most of the social work should be per the county. And the amount of concern that we get from people that the city doesn't do enough for the unhoused. That is not true. We do what we can, again, with what we got and what we get. But again, and the mayor, Councilman Clark, city manager, right now, municipalities, particularly large urban municipalities in North Carolina, are being looked at also in this scheme of thought that's going on about how we're not taking care of the people and all of this narrative just going on around us and it is a narrative. We are doing too much social work. You're not really doing as was stated what your job is and social work ain't it. So when all of you or anybody you hear wanna talk about what we're not doing to help the least of us in this city, again, this is where some of you gotta help sell our story. We do it because we care and we wish we had millions and millions of dollars. We don't. But I can tell you this, that whatever decisions happen after this bond, this constitutional referendum in November, it could come down to there may not be any money to do social work in the city. That means a litany of children's youth programs, senior services, habitat, homeless, unhoused, affordable. It could mean a whole bunch of things. The bond fund, the trust fund the mayor is talking about, we would then end up landing our hat on that because that's all we'll have. We may be able to have a bond referendum, but you got to remember who can control that as well. the state. They may decide they're gonna use that money to do social work and they're gonna tax our citizens more. I just need all of you to start thinking. I'm not going down a rabbit hole. These are conversations that are being had with some of us. How do you get your citizens to understand that you all are in the wrong lane? Think about it.

Any other questions, comments? If not, I'm gonna make the motion for the 2.2 cents, accepting those changes to the budget with the exceptions of the ones I mentioned, also with the exception that there will be no layoffs and that everyone, the 3% will stand as a whole. So moved. Second. We have a second. Any other discussion? Scott? Yes, sir.

Just do my math right. So I know the original proposal was 59.3 cents. Is that correct? So we're going down to, is that 57.1? Is my math right?

No.

No, it's not? Okay.

Council Member Clark is talking about the proposed increase in the tax rate was 2.6 cents. He's talking about dropping it 0.4 cents to a 2.2 cent increase.

Oh, I understand. Thank you. What's the old tax rate and the new tax rate?

The current tax rate is 56.7. 56.7.

So it's going to 58.9. Yes, sir. Okay. Thank you. Approximately.

Instead of 59.3, which is what's in the proposed budget. Thank you very much.

Thank you.

Thank you.

We have a motion and a second. All in favor say aye. Aye. Any opposed? That is approved. Keep in mind, this is just a committee to hold. This then goes to the council next Monday night. Everybody got that? So it's not next Monday. You can come here, but you better bring your key because the door is going to be locked. Excuse me. It is Memorial Day to honor all our veterans. So it'll be two weeks from Monday.

Thank you, Mr. Chairman. Thank you, Mr. Chairman. Go ahead.

Council Member Clark, on your agenda cheat sheet is the items that are in the next part. that are preview items. If you would give me an opportunity to go through those for three minutes, I would greatly appreciate it.

Okay, everybody will look at the agenda. There's some things that are unrelated to the discussion, and I can't find it. You keep talking.

As part of the budget process every year, there is a packet of items that come in the agenda. Several of them are the ordinances that we call annual appropriation and tax levy ordinances or project budget ordinances. We will bring you those ordinances. In addition to those in the agenda, you will see there is a resolution authorizing the capital plan. Again, we use the capital plan as a financial planning guide for future years. Orders to collect, that is simply to allow the county to collect property taxes on our behalf because they do that. By state law, we have to give them the authority to do that every year. Again, opioid settlement funding, we use that to cover the Bayer team, but you are required by state law and by the MOU that we have to enact a resolution each year approving that. And then also the user fee schedule. There are several user fee changes that we discussed, I believe last Tuesday, that will be included in there. There is an exhibit to show you the user fee manual. We have changes to the city code for stormwater. Again, that's a stormwater user fee. And then the other piece that would be coming forward would be changes to the personnel resolution. As was discussed today, in the personnel resolution, all employees would be receiving the same raise on the same timeline. In prior iterations of budgets and personnel resolutions, certain public safety officers, both in police and fire, had received June and July increments. Under the personnel resolution that is coming forward, you will see that all city employees would be paid, would have the same raise on the same timeline.

Yeah, there'll be about eight or nine motions on everything. We don't need to talk about it today.

These are for information only. I just wanted to note each one of them and let you know they will be a part of the package, and they will be individual votes on June the 1st as part of the budget package.

Thank you. Okay, everybody's happy now? I entertain a motion to adjourn the committee. Thank you. Mayor Probst, do you have a second? Second. Second by Council Member Joyner. All those in favor of adjourning, please say aye. Aye. Any opposed? We adjourned.