Town Council Minutes Morehead City, North Carolina  Tuesday, May 14, 2024, at 2:00 p.m. Budget Workshop Meeting #2  The Honorable Council of the Town of Morehead City met in Special Session on Tuesday, May 14, 2024, in the City Hall Council Chambers, 1100 Bridges Street, Morehead City, North Carolina to conduct Budget Workshop Meeting #2. The purpose ofthis meeting was to continue review oft the proposed FY 2024-2025 Budget. Those in attendance were:  COUNCIL PRESENT: STAFF PRESENT:  Mayor Gerald A. Jones, Jr.; Councilmembers Richard Abell, George Ballou, Lee Stiles, Bill Taylor, and Harvey Walker City Manager Chris Turner, Finance Director/Assistant City Manager Jewel Lasater, Public Services Director/Assistant City Manager Daniel Williams, Police Chief Bryan Dixon, Human Resources Director Leesa Jensen, Public Information Officer Anna Smith, Assistant Finance Director Leeann Vinson, Fire-EMS Chief Courtney Wade, Planning and Inspections Director Sandi Watkins, Parks and Recreation Director Jessica Mayo, Grant Manager Kelli Jones, Deputy City Clerk Carey Cooper, and City Clerk Cathy Maceo Donald of the Carteret County News-Times, Downtown Morehead City Inc. Executive Director Kathryn Metts, Board Chair Kayla Brown, and Board Members Tony Holloway, Mark  Campbell.  OTHERS PRESENT:  Kelly, and Tom Kies; and. Jan Willis.  CALLTOORDER  Mayor Jones opened Budget Workshop #2 at 2:00 p.m. with a quorum present.  RECAP OF BUDGET MEETING#1  City Manager Chris Turner provided a recap of the May 7, 2024, Budget Workshop #1 stating that that he cut $5.2 million from the Departments' Requested Budget, which were prepared to run as lean as possible. He presented a balanced budget that includes a General Fund of$22,905,189; Water & Sewer Fund of10,588,080; Solid Waste Fund of$1,542,601 for a total annual budget of $35,035,870. This reflects an increase of5.37% over the current budget. Mr. Turner briefly reviewed the Council and Staff Work Flight Analogy chart, reminding Council and Staff of where their focus should be directed toi improve effectiveness and efficiency related to purpose and vision, strategic goals, priority action items, planning and oversight,  projects and day-to-day tasks, which are staff, not council, functions.  Mr. Turner then reviewed the tax rate history comparison of the city's peers showing that Morehead City is the only local government entity that has not raised taxes within the last four (4) years. He stated that he is opposed to tax increases; however, such is needed to cover the anticipated capital improvement projects, and the budget is presented with a three (3) cent on the $100 valuation increase bringing the tax rate to 41 cent. The budget also includes a 3.5% water  May 14, 2024 Morehead City Town Council Budget Meeting #2  1    and sewer rate increase to fund current and future water and sewer infrastructure needs. Currently, one (1) cent of tax revenue generates approximately $240,000. He anticipated that the Consumer Price Index (CPI) would be released on May 15, 2024, and it was expected to be at  4%.  Councilmember Ballou asked if Mr. Turner could provide the value of a penny for each of the other municipalities. Mr. Turner could not but offered to provide it at a later time and reminded him that such does not serve as a good comparison because property values and  services in each: municipality are very different.  Mr. Turner continued to explain that when other municipalities move their property tax rate, it has an impact on the distribution of sales tax to Morehead City. Therefore, Morehead City must move their tax rate to keep up with the distribution. The General Fund Major Revenue Items chart showed that sales tax revenue is expected to close the year at -.01% (6/30/2024) due to not having kept pace with the tax increases of the City's peers, and he reminded the Town Council that the Unassigned Fund Balance cannot be used to offset the loss as the Unassigned Fund Balance Policy requires that a balance equal to 30% of the city's total expenditure be maintained. Using this Fund for operational needs can have a significant impact on the City's ability to secure lending. Currently, the balance is at 38% of total expenditures. The Local Government Commission (LGC) recommends a balance equal to 50% oft total expenditures. Turning to the future debt service budget and the proposed current expenditures:  Pierce Velocity Aerial Tower Engine (ladder FY2025  $83,495 $166,991 $166,99 $77,000 $151,000 $390,175 $390,175 UNKNOWN  truck)  FY2026 FY2027 FY2026 FY2027 FY2026 FY2027  Pierce Enforcer Pumpers (2) Fire Station #3 Construction Multi-Use Recreation Facility  No amount has been entered for the Multi-Use Recreation awaiting Council's vision for the facility which was provided atl May 7,2023, Budget Workshop. He drew attention to the footnote at the bottom of the presentation slide, a quote from the NC Department of the State Treasurer Local Government Commission, "If the government habitually uses fund balance to balance the General Fund operating budget over several years, then the FPIC (Financial Performance Indicators of Concern) may indicate that the local government is facing fiscal issues. Fund balance should not be used to finance recurring operating expenditures, such as salaries and benefits or utilities." Mr. Turner noted that utilities are not a concern for Morehead City as it has  an utilities enterprise fund. CAFTALIMPROVMENT PLAN  Moving on to the Capital Improvement Plan, Finance Director/Assistant City Manager Lasater noted that there were some errors in the totals at the bottom of summary pages that would be corrected and she reviewed the chart key explaining the meaning of each symbol. Mr.  May 14,2024 Morehead City" Town Council Budget Meeting #2  2    Turner reviewed each schedule, one (1) through eight (8), pointing out the items budgeted and  requested but not budgeted. The following were noted:  Asterisk * indicates that other funding sources apply - See Schedule 8  FUNDED Schedule  Transportation Sanitation Police  Replacement of V#4534 2016 Chevrolet Silverado Replacement of V#47112018 Freightliner M2106 KB Replacement of V#00502015 Chevrolet Impala Replacement of V#001020161 Dodge Charger Replacement of V#0014 20161 Dodge Charger Replacement of V#0022 2017 Chevrolet Equinox Replacement of V#CS01 2013 Ford F150 Crew Cab Replacement of V#CS03 2013 Ford F150 Super Cab Replacement of V#4913 20101 Ford Explorer Replacement of V#6152 2006 Ford) Explorer Replacement of V#6153 2013) Ford) F150 Replacement of V#7506 2013 Ford] F150 Replacement of John Deere 855 Mower Replacement of 2007 Toro 48" Mower Z441 Purchase of ODB Debris Loader (Leaf Vac) Purchase of] K91 Patrol Animal #3 & Equipment Purchase of Removable Barricade & Bollards 5R Replacement SCBA Units Purchase of Swag CC & Mobile Payment VM Purchase of] Exercise Machines Purchase of Apex 24x241 Mobile Hydraulic Concert Purchase of ODB Debris Loader & Collection Box Annual Street Improvements Annual Sidewalk Construction Annual Drainage Improvements Municipal Campus Expansion - (Warehouse, Record Retention, PD Impound, & Other Overflow) Bay Entry & Exit] Door Replacement Attic Space Dehumidifier Emergency Operations Center Upgrades Attic Space Dehumidifier Construction of New Station 3 (Cost TBD) Multi Use Facility Construction (Cost' TBD) Picnic Tables & Benches Citywide 10th Street Water Access Bulkhead 10th Street Water. Access Wave. Attenuator & Dock 12th Street Walter Lewis Landing Erosion Mitigation Jaycee Park Docks Fire Line Replacement Shevans Park] Playground & Splash Pad] Re-sealing Shevans Part Tennis Court Resurfacing Hwy 70 & Arendell Corridor Landscaping Operations. Building Construction Server Upgrades & ITE Reserves Tank (NCSP) Paint & Rehabilitation  $50,000 $250,000 $94,000 $94,000 $94,000 $94,000 $65,000 $65,000 $40,000 $40,000 $50,000 $50,000 $50,000 $30,000 $16,000 $95,000 $23,000 *$316,030 $60,000 $31,500 $12,475 $178,146 $95,000 *$415,751 *$42,025 *$62,424 $350,000 $18,000 $13,000 $15,000 $13,000 *$4,000,000 *$6,000,000 $59,000 *$115,000 *$210,000 *$100,000 $30,000 $20,000 $65,000 $50,000 *$1,100,000 $30,000 $303,500 3  Fire-EMS Planning & Inspections Recreation Parks Water & Sewer Sanitation Police Fire-EMS Recreation Parks Sanitation  Wastewater Treatment Plant Replacement of V#7209 2009 Chevrolet Silverado  Schedule2 Facilities & Grounds  Stage  Schedule3 Transportation Schedule4 Central Services  Fire-EMS Station 1  Station 2 Station 3  Recreation Parks  Replacement  Transportation Water & Sewer  Schedule 5 Information Technology Schedule 6 Wells, WTPs, & Tanks  May 14,2024 Morehead City Town Council Budget Meeting #2    Water & Sewer  Reserve for Automated Meter Reading Water & Sewer Utility Mapping Digester Oxidation Ditches (Grit & Sediment Removal) Effluent UV Treatment Generator & ATS Switch Generators Drainage  $50,000 $50,000 $16,000 $40,000 $200,000 $180,000 $375,000 $40,000 $478,175 $225,000 $237,23 $4,800,000 $6,000,000 $240,000 $75,000  Wastewater Treatment Plant Aerated Grit Unit  Lift Stations Police Fire-EMS Recreation Parks  Schedule 8 transportation  Powell Billl Funding for Annual Street, Sidewalk, & NCDEQ Waterfront Dredging Grant Homeland Security FEMA Grant for Purchase of Removable Barricade & Bollards Bank Financing for Station #3 Construction Bank Financing for Multi Use Facility Construction NC Water Access Grant for 10th Street Bulkhead, Wave Attenuator & Dock NC Water. Access Grant for 12th Street Erosion Mitigation  Water & Sewer  Bank Financing for Operations Building Construction $1,100,000  Ms. Lasater stated that the full cost oft the Police barricade and bollards was included in the budget in case the grant is not awarded. Project construction costs for Fire Station #3, Recreation Multi-Use Facility, and Water and Sewer Operation Building are entered as  placeholders until the costs are determined. REQUESTED BUT UNFUNDED  Schedule  Fire-EMS  Ford Medic 4 2024 Ford F1504WD CCAB Toro Dingo TX1000 & Attachments 2004 John Deere 310G Backhoe Loader 2008 Hardee Boom Mower Adult Training Simulation Mannequin Evidence Room Improvements Secured Vehicle Storage Site Bay Floor Rehabilitation Connex Boxes Paint Exterior  $450,000 $65,000 $60,000 $105,400 $240,000 $18,000 $30,000 $125,000 $30,000 $21,000 $56,000 $17,000 $6,000 $35,000 $28,000 $50,000 $150,000 $150,000 $100,000 $75,000 $180,000 $85,000 4  Schedule2 Transportation  Fire-EMS  Schedule 4 Police  Fire-EMS Station 1 Library Parks  Station 3  Unseal, Repair & Restore N. Entrance Doors 11th Street Water Access New Kayak Storage Rotary Park Field #3 Renovation Roary Park Bathroom & Shelter Roof Replacement Well #7 Future Location TBD Wells tanks Media W&S Pipe Extension & Replacement Slip Lining and I&I Reduction Press Building Rehabilitation Effluent Pipe Inspection Walkway  Schedule 6 Wells, WTPs & Tanks  Water & Sewer  Wastewater Treatment Plant Clarifier  May 14,2024 Morehead City Town Council Budget Meeting #2    Lift Stations  Lift Station #TBD Renovations City Signage  $600,000 $50,000  Schedule7 7 Transportation  Mr. Turner noted that a replacement for Police V#0007 2016 Dodge Charger was also requested but was not funded, and such is not reflected on the schedule. He then drew attention to the request to replace the 2016 Medic vehicle that was not funded, stating that it was remounted in 2015 with a 2006 box and cannot be remounted again. The current box and all equipment contained within is now 18 years old, and this vehicle is used on aj regular basis. Fire- EMS Chief Courtney Wade advised that the lead time, as of] March 1, 2024, on receiving these trucks after the order is placed is 36 months. Ms. Lasater explained that the entire cost of the vehicle must be budgeted at the time the order is placed. Councilmember Abell asked if this vehicle would be used to transport heart patience out oftown. ChiefWade: responded saying that all oft the Medic vehicles travel outside oft town and although Medic 4 is intended to be a backup unit, it is being used on a regular basis. Councilmember Ballou was in favor of budgeting the $150,000 with the intent of financing the vehicle once received. Hearing general agreement among the Council members with no disagreement voiced, Mr. Turner agreed to add it into the  budget.  The Fire-EMS connex boxes were not funded due to ancillary costs. Funding for the Water & Sewer pipe extension and replacement as well as slip lining and inflow and infiltration (I&I) reduction are traditionally budgeted annually; however, it was determined that excess funding is available due to reduced need over the last few years; therefore, it was cut from the  budget for this year. FEE SCHEDULE  Mr. Turner reviewed the recommended Fee Schedule noting textual and monetary The addition ofa $15: non-refundable reservation cancellation fee for boat docks; The addition ofa $50 security deposit for the Curb Market and W.S. King Room;  amendments. The key monetary changes included the following:  The addition of a $50 alcohol fee for the Train Depot; Increases to the EMS Transport fee; Recreation Program feei increases;  Addition ofa a Non- Resident fee category for Recreation Programs;  Addition of a Program Fee to provide for new recreational programs with a price range rather than a set fee to allow fees to be set based on program requirements and Establishment of] Miscellaneous Fees to accommodate contracted instructors; Establishment of a Re-Issue Fee for previously paid and expired permits; Water and Sewer fees were amended to reflect the proposed 3.5% increase; Water Consumption fee categories were added based upon pipe size; and  other needs;  Increases to the Recreation Center Usage fees;  Addition ofa Water Hydrant Meters category.  Inr response to a question, Mr. Turner stated that water and sewer fees were last increased  on January 1,2020, by 3%.  May 14, 2024 Morehead City Town Council Budget Meeting #2  5    It was Mr. Turner's recommendation that Fee Schedule amendments become effective  July 1,2024, in alignment with the annual budget. There were no objections.  OTHER  Video Taping Town Council Meetings  As requested and promised, Mr. Turner distributed information regarding the options for sharing videos of the Town Council meetings and the estimated equipment costs. The options  included:  1) Video to Website - within 24 hours after the meeting; 2) Video to YouTube - within 24 hours after the meeting; or  3) Livestream to Social Platforms.  Mr. Turner explained that the videos under Options 1 and 2 would be edited to include agenda tags to make it easier for viewers to quickly find the topic ofinterest and such would be linked to an amended agenda should items be added during the meeting. The videos under  Option 3 would be as is without agenda tags.  Staff recommended Option 1 due to the reduced security threats and the ability to satisfy record retention requirements. Options 2 and 3 were not recommended due to the heightened security risks. Mr. Turner explained again that the City's Facebook page is a public forum and that using it to live stream meetings opens the City up to the risk of having the platform suspended based on derogatory language or inflammatory statements. The same would also  apply to streaming on YouTube.  The cost estimate for equipment needed to professionally record the meetings was estimated at $26,294 and Staff would require approximately eight (8) weeks to receive, install, and train on the equipment before implementation. CivicPlus integration would be in excess of $15,000 and would require ADA compliance and closed captioning. It would, however, satisfy the City's record retention requirements. Bidding requirements will apply utilizing Requests for Proposals for the purchase of equipment, installation, and service specifically to provide encoder equipment, and proper means to record, distribute and/or broadcast through a third party  platform.  Mayor. Jones asked ift there would be any additional statfrequirements to accomplish this. Mr. Turner responded negatively, stating that the responsibility would fall upon the Public Information Officer (PIO), adding that there is no back up should the PIO be unavailable, but it  may be possible to train the Deputy City Clerk to serve in this capacity.  Councilmember Taylor asked Mr. Turner to explain why Option 1 is the best solution. Mr. Turner stated that it allows for agenda and video integration to account for any additional items added during the meeting and does not carry risk of being blocked from using social media outlets that serve as key communication sources for the City. Also, social media presentations do not belong to the City, and Staff will not have access to them to satisfy public record laws.  May 14, 2024 Morehead City" Town Council Budget Meeting #2  6    At this time, Councilmember Taylor recommended that the purchase oft the equipment be added to the budget. He shared that during his campaign several people requested the option to view meetings remotely, and he felt it was time to move forward with making it happen. Councilmember Walker asked if Councilmember Taylor had heard any requests since the  campaign. He had not.  Councilmember Stiles stated that he also received request for the same during his campaign and had heard from numerous citizens since then. It was his position that every other community within the county televises their meetings and as the largest city in the county, Morehead City should set an example for transparency. He did not feel that $26,000 was too  much to satisfy the desire of the citizens.  Councilmember Abell was in favor of Option #1, stating that he was totally opposed to Councilmember Walker stated that videotaping the meetings would cost much more than $26,000 do it right, and the City is not prepared to move forward. He stressed that the City does not have a problem with transparency. The actions taken at the meetings are recorded in the minutes, which are available to the public through the website. It was his position that the idea oflive streaming meetings was being promoted as a way to fix a non-existent problem. He was accepting ofi it being proposed as something new but felt the Town Coyncil should have more time to think it through it, and the decision should not be made until all costs are determined and  live streaming.  presented for consideration.  Councilmember Stiles disagreed, insisting that the City does have a transparency problem. He acknowledged that it would place an additional burden on staff, but a large number of citizens have emailed him requesting an option for viewing meetings remotely because they are unable to attend for a variety of reasons. He agreed that placing the videos on the website is  the safest option.  In response to Councilmember Ballou's question, Mr. Turner confirmed there is additional labor cost that are not included in the estimated equipment costs. He also confirmed that the task is not included in any existing job description; however, the PIO is very familiar with video processes and the tasks could be incorporated into herjob description.  Mayor Jones agreed that the City is being as transparent as possible, but said times change and ift the Council wants to extend the transparency to another medium, iti is acceptable to consider it. He noted that the Council has encouraged citizens to come to the meetings and participate, and expressed disappointment that this would give them another: reason: not to attend. He reminded the Council that the video will not be limited to Morehead City residents. Ifit was to be done, he preferred uploading the video to the website. Councilmember Abell clarified that video editing would apply to adding references to align with the meeting agenda, not changing  the content of the discussion.  Councilmember Ballou asked that Mr. Turner clarify the costs in more detail and bring it back to the Town Council. Mr. Turner stated that he would provide ai total burden cost including record retention for further consideration. Hearing that there was no agreement for adding it to the budget proposal, Mr. Turner estimated that it will be at least three (3) months after budget  May 14, 2024 Morehead City Town Council Budget Meeting #2  7    adoption before the details could be gathered and presented, as it takes several months to work through the approved budget items. He will weigh the importance of providing this data against other life safety items toj prioritize appropriately, but assured the Council that he would provide it  as soon as possible. Community Theater  Councilmember Taylor shared that he received a request from the Community Theater group asking that the City consider a donation in support oft their fundraising campaign. Mayor Jones stated that they will need to submit a letter of request to the City. Mr. Turner advised that the purpose for the donation must fit within the qualified purposes for Non-Governmental Organization (NGO) donations. Ms. Lasater said they will need to move quickly in order for it tol be included in the budget. She further advised that it would require the proposed budget to be amended. Mayor Jones stated that the average contribution to NGOS is $3,000.  Councilmember Ballou noted that Staff will be meeting with Downtown Morehead City Inc. (DMC) tomorrow to discuss their possible donation from the City and suggested that two (2) council members attend and bring feedback to the Council. Mr. Turner was not opposed to the council members attending to listen; however, he reminded the Council that the City cannot contribute funds to any NGO that does not have non-profit status. Mr. Turner stated that DMCis working as quickly as possible to resolve the concerns and once such is accomplished they may come back to the City to make ai new request, but until then, it cannot be added to the budget. Councilmember Walker expressed concern that DMC may lose money during the transition period and suggested that the City utilize lapse salary funds to support them while the issues are being worked out. Mr. Turner shared that the City is not their sole funding source, although a significant one, and that the City has no mechanism for funding them at this time. Mr. Turner commended DMC Executive Director Kathryn Metts for being honest and transparent with the City, and for being a professional leader for her organization.  ADJOURNMENT  There being no other business to discuss, Mayor. Jones adjourned the meeting at 4:06  p.m.  Gerald Jones, Mayor  ue  Attest:  ADCITY  Caty Canphd Cathy Campbell, City Clerk  858  May 14, 2024 Morehead City Town Council Budget Meeting #2  8