Town Council Minutes Morehead City, North Carolina  Tuesday, May 7, 2024, at 2:00 p.m. Budget Workshop Meeting #1  The Honorable Council of the Town of Morehead City met in Special Session on Tuesday, May 7,2024, in the City Hall Council Chambers, 1100 Bridges Street, Morehead City, North Carolina to conduct Budget Workshop Meeting #1. The purpose of this meeting was to  review the proposed FY 2024-2025 Budget. Those in attendance were:  COUNCIL PRESENT:  Mayor Gerald A. Jones, Jr.; Councilmembers Richard Abell,  George Ballou, Lee Stiles, and Bill Taylor. Councilmember Harvey Walker was absent.  STAFF PRESENT:  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, Human Resources Specialist Kristen Flexer, Deputy City Clerk Carey Cooper, and City Clerk Cathy Campbell. Downtown Morehead City Inc. Executive Director Kathryn Metts  OTHERS PRESENT: CALLI TO ORDER  and Jan Willis.  Mayor Jones opened Budget Workshop #1 at 2:00 p.m. with a quorum present. He shared that Councilmember Walker would be absent but hoped that Councilmember Ballou  would arrive shortly. Councilmember Ballou arrived at 2:02 p.m.  Mayor Jones called on City Manager Chris Turner to lead the budget discussion. Mr. Turner began by addressing the PowerPoint slide handout stating that it is a summation of what isi included in the proposed FY2024-2025 Budget. He then reviewed the meeting agenda.  GENERAL FUND REVIEW  Mr. Turner began by reviewing the Council and Staff Work Flight Analogy chart, reminding Council and Staff of where their focus should be directed to improve effectiveness and efficiency regarding purpose and vision, strategic goals, priority action items, planning and oversight, projects and day-to-day tasks, which are staff, not council, functions. Turning to the budget overview, he shared that he cut $5.2 million from the Departments' Requested Budget resulting in a balanced budget that includes a General Fund of $22,905,189; Water & Sewer Fund of 10,588,080; 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.  TAXI RATE  May 7, 2024 Morehead City" Town Council Budget Meeting #1  1    Mr. Turner reviewed a summary of the city's municipal peers' and Carteret County's tax rate history, showing that Morehead City is the only government unit within the county that has  not raised taxes within the last four (4) fiscal years.  The FY2024-2025 Proposed Budget includes a three (3) cent tax increase on $100 valuation bringing the tax rate to 41 cent and a 3.5% water and sewer rate increase. The tax increase will result in an additional $8.03 per month for the average home, and the water/sewer  rate increase will result in an additional $1.63 per month for average usage.  Looking at income projections for FY2024-2025, Mr. Turner noted that the City is projecting an overall revenue increase of 1.36%, with an increase of 0.88% in ad valorem tax revenue, and a 0.01% reduction ($264) in sales tax revenue due to the decreased allocation resulting from other cities increasing their ad valorem tax levy. Having run a sample calculation whereby the tax rate for Newport, Beaufort, Atlantic Beach, and Carteret County was raised by 3%, Ms. Lasater stated that the model showed that the City would lose $354,000 in sales tax revenue, suggesting that this is why the overall General Fund has shown little growth and expects this trend to continue. She reminded the Town Council that the Fund Balance growth over the last couple of years is the result of the American Rescue Plan Act (ARPA) Funds and the sale of the old City Hall building and the Armory property, which was a one-time benefit. It is expected that the County will conduct a tax reappraisal in 2025 which will be effective for  FY2026.  Mr. Turner addressed the Unassigned Fund Balance stating that the City's policy requires that the Fund retain a minimum balance of 30% of the City's total expenditures to ensure adequate funding will be available in the event of a disaster or other critical occurrence. He also shared that the Local Government Commission (LGC) places the standard at 50% of total expenditures. The Unassigned Fund Balance is projected to close the year at $1.8 million. The proposed budget calls for the balance to be at $1.2 million at the end of FY 2025, which meets the minimum requirement. He cautioned that any changes to increase the budget would cause  the balance to drop critically low.  Drawing attention to the City's future debt service, Mr. Turner noted the addition of the Pierce Velocity Aerial Tower Fire Engine, two (2) Pierce Enforcer Pumpers, the construction of Fire Station #3, and the unknown cost of the Multi-Use Recreation Center. He stated that he would like to define the Town Council's vision for the Multi-Use facility at the end of the meeting SO that a reasonable cost can be added to the budget, and the consultants will be able begin development of a plan to meet the vision. Mr. Turner explained that when the City approaches the LGC to finance these items, it must show where the funds are coming from to pay back the loan(s), and he stated that taking it from the General Fund is never an acceptable answer; the tax rate increase is the acceptable answer. It requires .005 cent to cover an annual  debt payment of$1.5 million. PERSONNEL  Mr. Turner shared that multiple requests to increase staff were denied in effort to maintain the required General Fund Balance, including the request to add four (4) police  May 7, 2024 Morehead City" Town Council Budget Meeting #1  2    personnel and four (4) fire personnel. These are hard decisions in that our city is growing and  the demand for service is increasing. The City must find al better way forward.  REVIEW OF STRATEGIC GOALS  Mr. Turner reviewed the Town Council's and Staff's strategic goals for FY2023-2024  TOWN COUNCIL'S FY2023-2024 GOAL STATUS UPDATE  PROJECT Sugarloaf Island Restoration Project Fire Station #3 Funding Stormwater Plan and Maintenance Program Fire and Police Staffing Thresholds Rewrite  ACTION  STATUS Complete Complete Complete Complete Complete Complete Working On It Proposed In Current Budget Complete  Legislation appropriation received and project is Legislative appropriation secured; Balance tol be Plan identified and projects are underway. Approach adopted to retain before we, gain.  moving forward. financed.  Unified Development Ordinance Project is underway.  Financing Capital Projects and Investment Strategy Multi-Use Facility Economic Development Officer Capital Equipment Cost Share STAFF'S GOALS  Options have been identified and reported to the  Debt' Toolbox - Debt Instruments Town Council; choice selection made on case-by-  case basis.  Fire Services agreement to be presented to the Carteret County Board of Commissioners in May.  The FY2024-2025 staff goals are presented in order of staff priority. The letters on the  left indicate the anticipated term of completion = short, medium, or long.  TERM S  GOAL  STATUS  Economic Development - Revenue Streams S IT/IS Department (GIS/ VC3 Use Change) M Expansion of City Revenue and Reserves M Recreation Multi-Use Facility Reserves UDO/Flood Plain Management Prevention/Practices) M Strategic Transportation Planning SPOT/STIP/CTP) L Fleet & Fuel Management S Water & Sewer Utilities Plan/Rates L Parking Strategy/Citywide M Staffing & Human Capital  Position proposed in current budget; Needed tod develop newi revenue streams ITI Director proposed in current budget; VC3 cost per year is about $399,000 Pairs with Goal #1 City"  S  Project is underway - "Advance Morehead Staff & Council will take a hands-on approach on how to respond to these Study complete; Need long range strategy  May 7,2 2024 Morehead City Town Council Budget Meeting #1  3    Mr. Turner displayed a picture noting the areas of impact between paying Downtown Morehead City, Inc. (DMC)$ $85,000 per year to approach economic development and hiring an Economic Developer at the cost of $124,000. DMC is restricted to the formal downtown area between 4th and 18th Streets. An Economic Development Officer will be able to serve the entire city. He complimented the great work DMC Executive Director Kathryn Metts is doing in the  downtown area.  DEPARIMENTALI BUDGET PRESENTATIONS  Mayor/City Council  Mr. Turner reviewed the Mayor/Town Council proposed budget stating that overall the Council's budget decreased by 9.30%, but a nominal salary increase was budgeted. Ms. Lasater stated that it has been several years since the Council's salaries have been reviewed and after making a comparison to the City's peers, it was determined that an increase was warranted.  Administration Department  Mr. Turner shared that the top three (3) initiatives for the Administration Department for FY2024-2025 are to unify our citywide economic development activity, approve a fiscally sound annual budget, to operate administrative services efficiently and effectively, and unify all citywide messaging. The Department's significant accomplishments for FY2023-2024 were:  Completed a full classification and compensation study;  Secured $33 million in local, state, and Federal grant appropriations for critical Brought the city attorney position in-house to improve efficiency and to expand legal Implemented S unified central work operations system for tracking citywide initiatives Continued the decriminalization of city ordinances as required by state law; Developed a method for indexing all policies, rules, and regulations and implemented a unified strategic plan framework for the Town Council and Staff inclusive of budget  infrastructure and operational needs; services to all departments; across all department in real-time;  planning and capital improvement programming; and Established a method for tracking public record requests.  He shared that the Clerks' office received and fulfilled 384 citywide public records requests in  2023.  The overall Administration Department's Salaries and Benefits decreased by 7.48% while Operating Expenditures increased by 99.56%. Mr. Turner attributed the overall decrease to azero based budgeting philosophy, stating that all department directors are instructed to begin  with a: zero base line and account for every dollar they will need.  Human Resources Department  Human Resources Director Leesa Jensen reported that the top three (3) initiatives for the Human Resources Department are to rewrite and implement a personnel policy that will provide  May 7,2024 Morehead City" Town Council Budget Meeting #1  4    clear guidance for all employee relations and bring existing policies up to date; implement the LEARN Platform for compliance training, succession planning, employee engagement and regrowing the Morehead City Safety Plan; and continue to develop and utilize online functions through Tyler Technologies to streamline functions such as onboarding, evaluations, and  recruitment.  The overall Human Resources budget decreased by 12.94%, which Ms. Jensen attributed to the completion of pay plan study. She shared that the Department participates in branding the city as an employer of choice and will continue to make this a priority. They will also begin an assessment ofa all current technology programs to ensure they are using the best products to carry out the functions of the department. She feels that the Department needs a better tracking mechanism for employment applications to determine the best recruitment resources.  Finance Department  Finance Director/Assistant City Manager Jewel Lasater shared that the top three (3) initiatives for the Finance Department are the implementation and launching of Tyler Payments and Resident Access, as well as ERP Bids and Contract Management portals that will support the Purchasing Manager, and the integration of employee time entry to projects, grants, and/or work orders for more efficient and accurate tracking. The latter will work hand-in-hand with the  Public Services work order tracking system.  Ms. Lasater reported that the Finance Department shows a 13.47% increase in salaries because the FY2024 budget only includes six (6) months of the Purchasing Manager's salary while the FY2025 budget includes 12 months of salary. Operating Expenditures increased by 194.16% due to the cost of paying Carteret County to collect property taxes on behalf of the  City.  Councimember Taylor asked about the total cost for utilizing Tyler Technology software. Ms. Lasater did not know the amount off-hand but agreed to send it to the Town Council. She noted that when the City first engaged Tyler, they planned to only utilize the Human Resources, Payroll, Taxes, Utility Billing and General Billing modules; however that has been expanded and changed over time. As an example, she explained that Tyler Content Manager only captured documents that were part ofa financial transaction when first purchased, but now offers the ability to capture and store all documents into one (1) repository and selected  documents can be made available to the public.  Legal Department  Mr. Turner reported that the Legal Department is a new department for the City as a result of bringing the City Attorney position in-house. He noted that the budget for this department is in line with what was agreed upon when the position was approved and is notably less than the City has paid in the past for legal services. The budget amount is inclusive of all  ancillary costs.  Facilities and Grounds Management Department May 7,2024 Morehead City Town Council Budget Meeting #1  5    Public Services Director/Assistant City Manager Daniel Williams reported on the Facilities and Grounds Management Department, formerly titled the Buildings, Grounds, and Cemetery Department, saying that this department is now using Tyler Technologies software for inventory control. They software tracks the purpose, cost, and location for each item used,  which streamlines the reordering process and assists with budgeting.  Mr. Williams shared that the top three (3) initiatives for the Facilities and Grounds Management Department are to continue to evaluate all City owned property for Americans with Disabilities Act (ADA) compliance and work to improve access; continue the GIS mapping of city cemeteries for accuracy in recording, inventory availability, and process continuity; and  continued maintenance of all current and new city facilities.  Mr. Williams reported that the Facilities and Grounds Management Department shows a 77.30% increase in salaries and a 7.44% increase in Operating Expenditures due to the reassignment of six (6) full-time maintenance personnel from the Parks and Recreation Department to the Facilities and Grounds Management Department. The Operating Expenditure  reflects the ancillary costs associated with the positions, such as uniforms.  Garage Department  Mr. Williams shared that the top three (3) initiatives for the Garage Department in FY2024-2025 will be to continue to perfect the work order system and to connect it to the Fleet Management platform, aid in the selection of new vehicles based on reliability, supply, and maintenance, and to maintain an inventory of all garage materials and ensure labor hours are properly recorded in the work order system. Training will also be a primary focus for the  department. Police Department  Police Chief Bryan Dixon said the top three (3) initiatives for the Police Department are to achieve compliance with the North Carolina Law Enforcement Accreditation Program, continue training and education for career development and succession planning, and to utilize the workload assessment model to achieve the best staffing levels for an ever-growing population. The first part ofachieving the NC. Accreditation was accomplished this year with the successful completion of the North Carolina League of Municipalities' Risk Management Review, which offers a 15% discount on the Department's insurance premiums. Full accreditation will provide an additional 5% discount. The workload assessment model determines the adequate staff needed for current operational tasks. He noted that the  performance indicators are based on a calendar year rather than the fiscal year.  Chief Dixon stressed that although no additional staff are included in the proposed budget, the workload assessment model shows that the Department needs 10 to 17 additional personnel. Four (4) additional staff members were requested in his departmental budget. As requested by the City Manager, he will cooperatively hold the line one (1): more year.  Fire-EMS Department  May 7, 2024 Morehead City" Town Council Budget Meeting #1  6    Fire-EMS Chief Courtney Wade reported that his Department's top three initiatives for the year are to continue evaluating recruitment strategies to attract the brightest and best applicants, begin working to achieve National Fire Protection Association (NFPA) 1710 Standards staffing levels, and continue to evaluate the Department's apparatus, equipment, training, and public education needs to better serve the community. He noted that the Classification and Compensation Study supports recruitment and retention efforts; however, he continues to advocate for the addition of a firefighter's separation allowance to secure the City's recognition as the "Employer of Choice." Chief Wade reiterated that the Department stands at 48% of the 1,710 staffing standards, but he too, will cooperatively hold the line one (1) more  year.  He then reviewed the Department's s significant service level indicators to include the land purchase and initiation of the construction project for Fire Station #3, securing an Assistance to Firefighters Grant to replace all departmental radios, the addition of one (1) ladder truck and two (2) pumpers (all on order), and to secure a Big Rock Grant to purchase the educational Fire  Safety House.  Reviewing his departmental budget, Chief Wade stated that his overall budget increased by only 4.84%. While pharmaceutical and EMS supplies increased, the Operating Expenditures decreased by 12.12%. The Fire-EMS Department had some expensive repair and maintenance expenses this year; however, he was able to make some cuts in the budget to reduce costs for the  upcoming fiscal year.  Planning & Inspections Department  Planning and Inspections Director Sandi Watkins shared that the top three (3) initiatives for the Planning and Inspections Department are to progress through the Unified Development Ordinance (UDO) Rewrite project, to streamline and codify the departmental procedures in the Policy Protocol System format, and to increase information sharing through enhanced reporting and expanded online GIS mapping. Codifying the Department's procedures will aid the Department's succession planning in preparation for the retirement of tenured employees who  will become eligible within the next five (5) to seven (7)years.  Ms. Watkins noted that her overall departmental budget increased by 16.80%, which is reflective of the proposed Economic Development position. The budget includes increases in Information Technology as well as Travel & Training and decreases in other line items such as  contracted services.  Referencing a slide displayed earlier in the meeting, Councilmember Stiles asked how much of the $124,000 proposed for economic development would be applied to salaries. Ms. Lasater stated that the salary is budgeted $89,000, which is the midpoint of the salary range. Mr. Turner noted that he would be seeking an executive level professional that is knowledgeable of all aspects of economic development and ready to lead the City's efforts. Mr. Turner commended Kathyrn Metts and explained that vitality would be part of the City's economic development umbrella as such activity needs to be spread across the entire city.  Transportation Department  May 7, 2024 Morehead City Town Council Budget Meeting #1  7    Mr. Williams shared that the top three (3) initiatives for the Transportation Department are to complete prioritized paving projects, continue to monitor incoming work orders and integrate them into daily operating procedures, and to add additional lighting fixtures to the Morehead Alternative Transportation System (MATS) Trail. He noted that the MATS Trial is underutilized and he is seeking to make it more appealing for both residents and visitors. The Transportation budget shows a 10.67% overall increase which reflects the salary increases; however, they are. holding steady with operational and maintenance expenses.  Library Department  Mr. Turner explained that the 7.10% decrease in Library salaries is not due to a reduction in staff but rather a change in how part time salaries are budgeted. Previously, they were budgeted at the maximum allowable hours that each part time employee could work (999 hours per year) and are now being budgeted based on the number of previously worked part-time hours. He shared that he will be conducting staff development for Library personnel to share  best practices for moving forward.  In addition, Mr. Turner advised that a budget amendment will be presented at the May 14, 2024, Town Council meeting to allocate $100,000 for the establishment of a Fire-EMS museum at Fire Station #2. The structure will not be connected to the station but will be located adjacent to it and will be built to match the aesthetic of the existing building. This will make way for the Town Council to decide how to best utilize and maintain the "fire station" side ofthe Municipal Building to meet the City's needs. Staff plans to open the museum in coordination  with the 100th Anniversary of the LaFrance fire engine.  Recreation and Parks Department  Parks and Recreation Director Jessica Mayo shared that she has been observing and reviewing the operation of the Recreation and Parks Department over the last year. The Department is very busy as evidenced by the service level indicators; however, she noted these are just a sample of the Department's activity. She shared that the prior performance indicators have exceeded capacity and she is now trying to identify new indicators that are not tied to  program numbers.  Ms. Mayo shared that the Recreation and Parks Department top three (3) initiatives for the year are to unify their standard operating procedures for consistency and alignment, to increase annual Recreation Center facility usage, and to improve safety procedures for recreational facilities by repairing and replacing equipment and cataloging inventory.  At this time, Mr. Turner returned to the topic oft the Multi-Use Recreation Center project asking the Council to share their vision of the facility, specifically what the activities they would  like to see included.  Councilmember Abell stated that he would like to see a larger basketball court or possibly two (2) courts with observation seating, pickleball courts, and a field that Councilmember Stiles said that he would like to see two (2) additional basketball courts added with observation space that could double as volleyball courts and  could be rented by others.  May 7,2024 Morehead City Town Council Budget Meeting #1  8    accommodate tournaments. He would also like to include a second level indoor walking track. He noted that some residents have expressed a desire to reestablish Mayor Jones agreed with the prior recommendations; however, he recommended that the multi-use field remain as is SO that is. It was his suggestion that the open space between the two (2) wings be utilized for the expansion. Councilmember Taylor also agreed with the addition of two (2) basketball courts and the need to keep the field available for multi-use purposes. Councilmember Ballou agreed with the two (2) additional basketball courts and pickleball court, and recommended that a concession stand area be added. Mr. Turner explained that expansion of facility must include increased parking but such is limited by utility line easements. All agreed that the building should retain the appearance of the original school building, as was done with City Hall. Councilmember Taylor suggested that the building be repainted with the original colors. Mr. Williams responded saying that he has  afootball league.  pictures oft the original building and that repainting was part of project plan. budget amount and will keep the Town Council updated on the project's progress.  Staff will share these recommendations with the consultant to determine a reasonable  Non-Staffed Departments  Ms. Lasater reported that the 10.08% decrease to the Central Services budget is due to insurance changes and the cost savings resulting from transitioning the city's newsletter from  print to digital format.  The Information Technology (IT) budget is proposed with a 27.95% increase to provide for the addition of an in-house IT Director position to begin January 2025. The delay will allow time to develop the position and the program. VC3 service costs increase annually for technical processes such as setting up new employees. Mr. Turner stated that Ms. Lasater and Assistant Finance Director Leeann Vinson spend about 40% to 50% of their time working on IT processes, which they cannot continue to maintain. He also advised that it is necessary to have a staff member certified to work on Police Department servers. An outside contractor cannot be certified in this capacity due to the expanded risk exposure. Mr. Turner recommended a transitional process for returning to an in-house IT Department rather than an immediate switch. He will be seeking to hire someone with the skills to serve as ai network specialist, a department  director, and technical service specialist. minor adjustments for operational changes.  Ms. Lasater advised that the overall Powell Bill budget remained the same with only Addressing the Community Projects budget, Mr. Turner stated that the City is taking a new position on how it views Non-Governmental Organizations (NGOs) resulting in a 52.25 % or $66,750 reduction to this budget category. The largest change is the transfer of the $85,000 previously budgeted for DMC and applying it towards the Economic Development Officer position. He cited three (3) reasons for this change with the first being the City's inability to grant funds to a non-profit entity with the purpose of giving the funds to a for-profit entity as done through the façade grant program. Legally, the City may only grant such funds through a  May 7,2024 Morehead City Town Council Budget Meeting #1  9    direct transaction with the for-profit business as part of a Mainstreet program. He stated that Morehead City's Mainstreet program is unique in that it is managed by a non-profit entity rather than a government entity. Asas second reason, he stressed the importance ofs spreading economic development efforts across the entire city to fill empty buildings, and commended Planning and Inspections Director Sandi Watkins for bringing Chipotle Mexican Grill to Morehead City. He shared that in the past there have been situations where businesses approached DMC to discuss establishing a location in Morehead City and the information was not shared with the City. Therefore, there is no method for tracking the reason why such businesses decide against locating in the city. And lastly, he noted that DMC has lost its State non-profit status and until  such is restored, the City cannot issue funds to them.  Councilmember Stiles asked if an agreement could be worked out to bring DMC staffi in- house. Mr. Turner stated that Ms. Metts works for ai non-profit Board and it would be up to their board to decide how to move forward. He confirmed that the City has no intention of competing with DMC's vitality efforts and therefore, the City has discontinued its Concert in the Park series. Mayor Jones noted that if the Economic Development Officer position is established,  anyone may apply for the job.  Councilmember Taylor stated that he would like to hear an idea of how to ensure the DMC's vitality efforts remain robust, saying that he was not in favor of pulling the rug out from under them. Mr. Turner expressed understanding ofl his position but made it clear that no funds may be granted to DMC until their non-profit status is re-instated and the City has rèceived a copy of their 2023 tax filing. In response to a question, Ms. Metts stated that she has discussed with her board how they would move forward with the loss of the significant funding and determined that they would only be able to continue in a short-term capacity. She assured the Town Council that she is working with their accountant to resolve the non-profit licensing issue and will provide proof to the Finance Department once resolved. Ms. Lasater advised that the contract established between the City and NGOS also require that the purpose for such funds be noted and that said purpose must fall under the provisions for which public funds may be  granted.  In response to Councilmember Ballou's question, Mr. Turner stated that he has not spoken with DMC about the: situation because his first obligation is to the Town Council, but that he is happy to respond as instructed. Councilmember Ballou was surprised that the City is just discovering this situation and encouraged Mr. Turner to be clear about his reasons for making the recommendation for pulling DMC's funding since he has been accused, from the time hired, of being intent on closing DMC down. Mr. Turner stated that he is focused on determining the best way to move the City forward and offered three (3) possibilities: 1) DMC could become an advisory board under the City, making recommendations to the Economic Development Officer with the Town Council determining who sits on the board; 2) the City can hire an Economic Development Officer to address economic development needs across the city with disregard to DMC's position; or 3) the City can continue as it is without addressing its economic development needs. He added that Ms. Metts would be welcome to apply for the Economic  Development Officer position although he could not promise her the job.  Members of the Town Council expressed a desire to find a way forward for both entities. Mr. Turner stated that he has not advised Ms. Metts to cease activities for the funds already  granted; however, no new funds may be issued at this time. May 7, 2024 Morehead City Town Council Budget Meeting #1  10    Water and Sewer Fund Department apply the requested 3.5% fee increase. Revenue and Collections Department  Ms. Lasater stated that the primary change to the Water and Sewer Fund Revenues was to  Ms. Lasater reported that the Revenue and Collections Department budget shows an overall increase of 2.38% which is reflective of the salary increases as well as the position change from a Revenue and Collections Supervisor to a Revenue Officer. The Revenue Officer  will oversee revenue received across the entire city for control and efficiency.  Public Services Department  Mr. Williams reported that the Public Services Department consists of several sub- departments including Wells and Pump Stations, Water and Sewer, Lift Stations and Force  Mains, Wastewater Treatment Plant, and Sanitation.  Wells and Pump Stations include five (5) wells, three (3) water treatment plants, and four (4) elevated water storage tanks. Two (2) employees oversee the process of pumping, treating, and distributing water across the city and into areas of the extraterritorial, jurisdiction (ETJ). Water and Sewer picks up where the Wells and Pump Stations end, carrying the water throughout the city and ETJ. Eleven (11) employees maintain 80 miles of water and sewer lines  and taps.  The Lift Stations and Force Main sub-department takes over as the water returns back to the wastewater treatment plant. Three (3) employees maintain the city's 40 lift stations and the generators and two (2) pumps assigned to each. This sub-department is monitored 24 hours a  day, seven (7) days a week, and 365 days per year.  The Wastewater Treatment Plant is the end oft the line. Mr. Williams reminded the Town Council that Staff is working to address the States' new copper limits, utilizing several grant awards. He commended Grant Officer Kelli Jones for keeping him advised of all reporting deadlines. He explained that the State selected an arbitrary limit that was imposed on all cities regardless of the dilution factor. The City solicited help from two (2) different firms who conducted independent studies to determine a reasonable limit for the city. The City is now  negotiating with the State to approve ai more: reasonable limit.  Mr. Williams stated that a fee increase has been needed for some time but prior managers were reluctant to implement an increase. He noted that this is an enterprise fund that directly supports water and sewer operations. Itl has been determined that a 3.5% increase is sufficient at  this time.  Sanitation is the yard debris trucks and the one (1) full time and (1) part time employees that operates them. This fund provides for the periodic replacement of trucks, as well as other  future needs.  May 7, 2024 Morehead City" Town Council Budget Meeting #1  11    Councilmember Taylor, as the Chair of the Public Services Committee, shared that Tyndall Lewis developed a plan years ago whereby a small increase would be applied annually to the enterprise fund, allowing the fund to be slowly increased to cover future capital improvements. He stated that this practice was discontinued and needs to be reinstated.  CAPITAL IMPROVEMENT PLAN  Mr. Turner stated that the Town Council will discuss the Capital Improvement Plan and the Fee Schedule at the next budget meeting scheduled for Tuesday, June 14, 2024. In preparation for the discussion, Ms. Lasater reviewed the Capital Improvement Plan key explaining what each symbol represents. She advised that items added to the Plan are not removed until they have been sold and all actions necessary to change ownership have been completed. The amounts listed under years 2026 through 2029 are future outlook projections  only and have not been approved or budgeted.  OTHER  Mr. Turner asked all department heads to attend the next budget meeting scheduled for Tuesday, May 14, 2024, at 2:00 p.m. At that time, he will provide the cost for sharing videos of town council meetings and schedule time to discuss the details regarding NGO contributions, the Capital Improvement Plan, and the Fee Schedule. Town Council members were encouraged to  contact department heads with any questions they may have. Mr. Turner agreed to place al hardcopy in their mailboxes.  Councilmember Taylor requested copies of PowerPoint presentation from this meeting. Mr. Turner will schedule a time to meet with the DMC Board in an effort to learn about  their operational vision for the future.  ADJOURNMENT  There being no other business to discuss, Mayor. Jones adjourned the meeting at 4:40  p.m.  ADCITY  Attest:  R  Cariulanph.cQ Cathy Campbell, CitylClerk  May 7, 2024 Morehead City" Town Council Budget Meeting #1  12