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I'm going to go to the next room. I'm going to go to the next room. I'm going to go to the next room. I'm going to go to the next room. I'm going to go to the next room. I'm going to go to the next room. I'm going to go to the next room. I'm going to go to the next room. I'm going to go to the next room. I'm going to go to the next room. I'm going to go to the next room. I'm going to go to the next room. I'm going to go to the next room. I'm going to go to the next room. I'm going to go to the next room. you you you you you you you Thank you. This meeting is now called to order all rise for the Pledge of Allegiance. I welcome you all to the Institute of Science and Public Science in America and to you a good honor for which stands one nation, and the God, in the New Zealand, with liberty and justice for all. Thank you to town council members and staff for convening this evening. First item on the agenda is item 4A General Fund Revenue. Linda Jackson. Excuse me, Mayor. If I may. Again, good evening everyone. I'm joined by the town department heads. They're here to answer questions, and a few of us will walk through the budget book. This is tonight represents our kickoff meeting for the first budget session, since I presented last week the fiscal year, 2026 proposed budget. We will start with the general fund, as you stated, followed by personnel, general general fund department overview and end with a Q&A session I'd like to now introduce Linda Jackson who will review the general fund revenue Good evening. I am starting on page 112 the budget book and I'm gonna briefly talk about the revenue So initially I'm going to focus on the center of that page, the donut chart. So general property tax is representing 35% of our budget, which is the real estate in the personal property tax, of which this would be adjusted for the decision that was. Close. Close. Thank you. So 35% of the budget and that will be adjusted for approximately 279,000 based on the action taken last night. Then the inner government, all revenue of 1.5 million basically is 9% of the budget and it's primarily made up of V.Money which is 950,000 of that money. Then there's the other local revenue for about 4% to 1,5% of the budget and of that 712,268 relates to investment income that will probably going down in the future. It also includes the vehicle license fee of 181,000 and you can see all these on the next couple of pages, but I'm just kind of giving you the highlights from that chart. Then it also has 42% of the budget as other local taxes. So of that, 3.5 million of it relates to meals tax. So it's a big chunk of it. It's about 22% of the overall budget is meals tax. And then we have the balancing item, which is about 1.6 million or 10% of the budget. And the primary driver of that is because we've transferred about 11% of our budget from meals tax to the utilities. And then the following, the bottom of that page and the next two pages, it's basically just giving you the revenue by account. So if you wanted to look at it for the history, the 24 actuals, the 25 what we adopted, the 26 budget, and then the year over year changes. You can kind of see how much each component drove. Are there any questions on the revenue or before we move on to expense? Yes. So I've seen the comments for the sales tax where it says the sales tax has gone down due to the reduction of student population. Can you explain how that relates? What tie that in for me? We'll let Connie handle that. So sales tax is collected and redistributed based on school age population and that's across the entire county. And so it's a formula that's not our formula. It's a state formula. And they look at the population and it's about two years behind to be honest with you that they apply the formula. But what happens is the sales tax calculation is made. That is forwarded to Loudon County. Loudon County keeps 50% of it. They redistribute the rest of the 50% based on the school age formula. As our school age population is declining, our share of that 50% is declining. So are you saying the personal school age children is articulating? Correct. Is that taken to consideration homeschool? I could not answer that question. I'd have to look that up and see. Okay, so it's just the public schools. And what happened with COVID, I'm thinking there's a chance that at home schools aren't included in that, or even the Christian schools or the private schools. I don't have an answer specifically. I can look it up, but it is a state formula. So even if homeschools are in or out, it's going to be consistent across all of the state. Our population is just declining, you can see it, as we look at it, the community, a lot of people who moved here 15, 20 years ago when the housing boom was in place, those children are aging out. I personally have that. I have my last child in school age, you know, now. So we're seeing that across the whole population, but it's not just, first of all, Leesburg is seeing it, other places are seeing it as well. Leesburg is a little up and down because they're growing but the school age population is growing in the county which means the county is keeping a bigger share because the eastern end of the county is not a town. So as the population grows, each of the towns portion is becoming less. I can add a little bit to that. The formula is based on census population estimates. So it covers both homeschooled and public schooled as well as private schooled children. It's just based on the estimates for a number of school aged children and not where they're actually situated. One other factor too is just the county school age population, especially Eastern Lowne, is really just going up. That's really the primary driver. We have lost a little bit of our numbers but really it's just the growth in Eastern Lowne that is changing our proportion of school age children. And just a miscellaneous question, the cigarette tax, does that take into consideration the vaping as well? No. So vaping is not taxed, it's strictly cigarettes. That's something that's going in and bouncing back and forth between the legislature to see if taxation could be put on there for localities but it has not gone through so vaping is not a part of the taxes truly cigarettes. And there was an email and thank you Mayor Bartow for clarifying that. There was an email related to sales tax I had sent out quite a while ago. I'll re-forward that to you. That talks about the whole formula and everything. Yeah, okay. Um, so, I'm just wondering, it's why we stopped getting back. So, um, we didn't stop getting them. We actually received it late this year. This comes from the state and it's my understanding that it was their vendor. We just received the payment and I think we just didn't budget for those. It's a small number so it really will have minimal impact on all of this. But yes, we're still receiving it. I think we received ever $10,000, but we received it in January, so when the book was being produced, we just didn't have that information. Yep. If there aren't any other revenue questions, we can move on to start with the expenditures and I'll hand it over to Ladonna, both discussed personnel. Good evening, Mayor and Council. Tonight, we are here to focus on the proposed FY26 General Fund budget and its impact on what I consider to be the town's most important collective asset, which is our employees. As the Director of Human Resources, I believe it is my responsibility to advocate for our workforce, represent their interest and ensure their voices are heard throughout the budget process. On page 55 in the budget book, the proposed FY26 budget maintains a total of 94 positions across all funds,anged from the previous physical year. However, funding for five vacant positions remains frozen. Four within the police department, which is in the general fund, and one in the water fund. Pages 56 through 16 year budget book. The personnel history is available by department, position, and fund. The charts on page 61 and 62 show the current workforce trends and demographic composition of our staff. The age demographics let us know that we need to prepare for retirement is 45.51% are over the age of 50. When this date is combined with more than 15 average years of service, which represents about 21% of our workforce. The potential skill gap becomes even more apparent. Session planning focused on developing and training employees new to the workforce to be prepared to move into more senior experience roles within the organization will be a focus that will have over the next few years. Slide 63 talks about our compensation philosophy, which is focused on attracting, recruiting, and retaining a high performing workforce. As in most organizations, the cost of employee salaries and benefits is a significant portion of the budget. And this year, our personnel cost is approximately 47% of the operating budget. I'd like to discuss where we stand in comparison to our neighboring communities and highlight the current and future challenges. To attract, recruit, and retain employees, we must be competitive with the market we recruit within. Even though Percivil is considered a small Western Mountain County town, our job market competition continues to be the east of Percivil. We are all competing for the same talent, so we must position ourselves as an employer of choice. When I gave my budget presentation last year, I laid out a measured and strategic plan to gradually migrate from a cost of living and merit-based structure to a merit performance-based compensation structure. Ideally, this transition would have been able to occur over three years to allow for the transition to minimize the impact to our employees. The transition also incorporated a merit based incentive structure to genuinely recognize the individual contributions of our employees. This ensures that those who consistently go over and above receive monetary recognition that accurately reflects their performance level. During the preliminary budget process it became apparent that this gradual transition was no longer feasible. This resulted in changing from the initial recommendation of a 2% cola to no cola, which will result in our pay the unsalary scale remaining the same. The initial merit recommendation was proposed at 4% with funding set at 3. However, to help balance the budget, this was reduced to a 3% recommendation with 2% funding. A merit-based performance pace structure is most effective when the percentage increase appropriately reflects an employee's performance level and contributions, ensuring meaningful recognition and reward for our employees. Under the current proposal, employees will receive an average increase of about 1.5 percent for FY26 performance reviews. In comparison, neighboring municipalities have an average salary scale adjustment of 2.33 percent, an average cost of living of 2.2, and an average merit living of 2.2 and an average merit increase of 2.6 resulting in a combined coal-emarred adjustment of about 4.8. An average salary management of 2.33 since that's what the average is for coal-as. These numbers will have a significant impact on our employees. When we compare the median current salary, which includes the FY24, FY25 COLA and merit increases, which were salary additives, for our accounting technician position, our police officer and operator three, to the market average median salary for the same roles in neighboring jurisdictions, we are currently trailing behind the market an average of 13.5%. This equates to an approximate shortfall of 11,000 per position on average. You can find our current pay classification and salary scale on pages 64 through 66 of your budget books. Based on NO COLA and low merit percentage for FY26, our employees' compensation will continue to fall further behind. Presenting a significant recruiting and retention challenge moving forward, employee morale will be impacted. If we are unable to retain or attract employees due to our below market compensation structure, critical services will be directly affected. These services are not operated by artificial intelligence. They rely on a dedicated team of experienced professionals who consistently go above and beyond. Every employee within our organization plays a vital role, regardless of perception, ensuring the continued success and quality of our operations. Previous workforce assessment studies have consistently recommended increasing FTE positions. However, these recommendations have been carefully evaluated. And in some cases, positions, position responsibilities and technology have been optimized to mitigate the need for additional hires due to the long term cost impact to the town. Our proposed FY26 budget reflexes approach. With five FTEs frozen, this year's budget includes no new FTE positions. With personnel enhancements focused solely on compensation adjustment of 139,000. Representing the previously mentioned merit increase. Thank you for your time and attention. I'm happy to answer any questions or provide further clarification on any aspects of what I just presented. Do you have a breakdown by department of the delta between personal and surrounding jurisdictions. I can provide that. I do have a question, Lidona. There's a lot there I'm trying to absorb. I said something close to the beginning about. The Last year proposing a transition away from, did you say away from cola or away from cola and something else and replacing that with something else? Can you expound on that a little bit? Last year we had a cola plus a merit based system. So we were strategically migrating from cola and merit to a merit based-based system. So that way our employees, that based on their performance, are being recognized adequately. And it's not the numbers there are significant enough to where it's meaningful. Like right now, with the proposed 3%, which would be an average of 1.5% across all staff. Well if your top performer is getting 2% and your middle performer is getting 1.5, there's not much difference there. Okay so I think understanding we're still, I'm trying to reconcile that with the fact that we're 13.5% percent behind the market average so it sounds like what you're saying is you would eliminate COLA but the opportunity for it would all be merit but the opportunity would be much higher. Much higher. So okay. I think that's fun. Yeah, funded appropriately. Yeah, right. Yeah, okay. That makes sense. Thank you. You're welcome. Second question. Can you provide the additional cost to the budget for each additional 1% of merit? Yes, I can. Do you have a range for the merit? Well, if we could ideally, I would say it would be nice to have it funded at 5%. Which means somebody could, and basically we use generally 1%, they could earn up to 6% but it would be funded across the board of 5%. So touch your question. Mm-hmm. to earn up to 6% but it would be funded across the board of 5%. So touchy question. And you might have heard this in our campaign. So when we did before, Mountain County took over the tax billing. There were 12 people in finance. And finance hasn't been reduced by that latch since Mountain County. county now takes care of the billing. Why is that? Well, for one thing, the laws around accounting have changed and all that lists speak more to this, but there's also, even though the county has taken over the billing aspect of our real estate taxes and everything, there's still has to be processed internally. So all that was addressed that further. Okay, so first of all, a lot of our duties didn't stop because of the property tax statute limitations. We must continue to collect the real estate personal property tax for, we've already collected all the real estate, so now it's's just personal property but for five years after we turn over to the county so we'll be collecting that personal property tax and DMV stops and what not until 2026. Obviously that workload is going down every year as prior years roll off of our statute of limitations. We have excellent collection rates the team's done a great job with that. That's fairness for taxpayers to make sure that everybody's sort of paying their share. They also, even though the county is now doing it, they pass us these complex data files for our payment every single month. And the staff has to take those data tables, drop them, I guess pivot them basically, and then prepare, they have to reconcile the information, and then they have to prepare journal entries. That's, I don't know, probably a day, day and a half to do that type of work. So our property tax activities didn't completely go away, but definitely it was offloaded. The other thing is, the main customer service support for town halls and when the two part time admin front desk positions were eliminated, a lot of those administrative duties were passed to the finance staff. That revenue team now handles a lot of the walk-in customers of the town and routes them to where they need to go. We also handle all the administrative phones for the town. And they also get a lot of emails because you know people instinctively go to the phone number on their bills when they have a question and then they do a really good job of rooting customers to the proper department that can handle their particular questions. Another thing is post office. We have to make daily trips to the post office now. We are on an auxiliary delivery route, which means they don't pick up our mail and they don't deliver our mail. Obviously, it's really important that we get payments timely, especially around the utility billing cycles. So now our staff is going to the post office every single day. We've written numerous letters. We've had numerous discussions with the postmaster, but this is just kind of a fact of life in today's environment. Software implementations and upgrades. So we handle all of that internally. In other words, we have to manage our regular duties while we're managing software. And as we were implementing software for various reasons, for instance, Connie's team just recently did the portals. portals. It is a great asset for the citizens where they can go in and see their utility bills and make electronic payments. They recently put in place something that has been long requested by our citizens and that's credit card payments. So they had to put all of those processes and it controls in place. then more importantly link it into our software so the payments you know are automated and you know updating to the proper accounts. We also worked really hard to convert our paper to electronic files so there's some examples of ways that we're trying to leverage technology and sort of keep up with the times. We also manage all of our web pages and we have a number of web pages, for instance, our budget webpage that helps the citizens stay on top of all of the budget activities that we have going on. But more importantly, there's the citizen pages that talk to our tax rates and our utility bills and with tips on how to manage your utility bills and how to question if you might have a usage issue or possibly a leak. So staff really does take the time to work on those web pages. Let's see. The other issue is, and this is important, is one of our revenue team members has been now, has been moved over to the accounting team. We've had a lot of accounting changes, gaspies, standards. I think we're up to follow help me maybe 104 or something now. And a third of those standards, these standards have been around for decades. A third of those standards have been implemented in the past 10 years and they are heavy lists. Things like the least standards. And there's more than that, but they take a quite a bit of administrative time to sort of manage their fairly complex. So that team member is going to be helping Paula now with those sort of things. The other important aspect to that is that that team member, a junior member is sort of learning on the job as well so that Paula is not our one siloed employee who understands the complexities of our accounting and our accounting systems and how we reconcile them. And with reconciliation, you probably understand this because I think you have a finance background is you don't wait till the end of the year to do GL General Ledger Reconciliation or you will never catch up. We reconcile monthly. Obviously bank accounts, that's key, that's number one and she's actually teaching this staff member now how to do bank reconciliation, credit card reconciliation. This is people's money, this is really critical that we stay on top of these and we we stay current with those reconciliation. The other thing is procurement. So we transitioned this past year from a part-time employee who was a retiree from Leesburg who had probably about 40 years of experience into a more junior employee, but the junior employee went full time. And the reason why we didn't ask for this, the departments asked for this, because they needed more support with their procurement activities. So Connie's team is now really focused on supporting that member. She's kind of rolled in under Connie now and Connie, I know it's taking a lot of Connie's time as well, to support the activities of procurement. Obviously, that is a state requirement, but it's also just important to keep costs down for the town to always get competitive pricing on procurement. And then we support other departments as well, obviously budget procurement, but also like water meters. We're constantly working with, and in that particular team, the revenue team is constantly working with Chasen's team on the metering and the usage of the utilities. And they help with events more like newsletters and that sort of thing as far as inserts in the bills. Special invoices that the departments might have, like charges to others say when Jason's team goes to support another town with a water leak or a sewer backup. And then Connie, did I miss anything there? You covered the majority. There's a lot more stash towards them. I think about the meters. What actually is the involvement with the water meters? So specifically, the special project that the teams worked on, it was a cross-departmental issue where under our ARPA funding, we had to replace almost a thousand of the meters in town, the register heads that go on top that read the meters. So it was a huge project in which our team, particularly Stacy, worked with public works team, which was Scott and Sean primarily. And they had to organize and figure, you know, go out and basically replace all those and do them periodically amongst all their rest of their work as well as update every account and change it out. So that was a huge project that took some time but they really rallied and did it about half the time they expected to do. Recently the Water Department had an EPA regulation change and they had to do the service line. You guys have probably been seeing that as part of your GIS project where they're talking about whether or not you have lead, etc. So our team got pulled in because they needed to do a special letter for the EPA to the people who were left, the couple hundred people who weren't responding needed that letter plus. We had to implement a way to track in our system so that every time that utility account turns over, we advise you as the new owner that you may have to reply to figure out whether or not you have one of these service lines that needs to be checked or not. So that became a project. So there's things like that that happened constantly. On a daily basis, the revenue team takes all the calls. They're the customer service phase. So if you're calling about your water bill usage, they spend a tremendous amount of time educating the users and looking at each particular household with them if you're calling because you don't understand your bill or what your usage is. Then they work with public works to go out and they basically coordinate the leak checks and send that over to public works. We'll back then be a charge back to utility back. That would be why Stacy's salary is charged back to the utilities because she spends an inordinate amount of her time doing both basically. She's operating on behalf of the water service. She's the customer service and billing. Which is her primary role? Correct. I'll just add one more thing is as far as extra hours go since January the department has about 375 additional hours over regular schedule and it is a busy time. We're doing budget so it is a busy time. That is primarily non-exempt employees. So there is no incentive for these employees to be working these additional hours, except for pure workload. The other thing is I looked back over the past three years and calendar years, and it looks like we're averaging about 900 extra hours a year. So it's just workload. It is, this is not unusual for accounting activities because you have accounting deadlines that you can't slip on. It's not like a project that can just move. You have to hit those deadlines every every month or you get behind. And if it's revenue you have to handle the citizen questions and process the bills. We just finished a really busy time for the department, which is the business license renewals. That's really heavy during February and March. Account, audit starts, well, we're really gearing up in August, but that goes all the way through December. And then budget basically now starts in the summer and runs all the way until right now. So we have peak periods and we have to keep up. And that's what the department is doing. So I worked for a company with a $70 million budget and we have eight people in finance and we take in a lot of money. Do you periodically evaluate to make sure that, I mean, it sounds like you can very easily get caught up with an overwhelmed but Absolutely we are constantly adjusting roles between team members you know and and sort of reassessing things and and ways that we can support team members better obviously as the they're, there's still tax activities, as I said, but as that has gone down, we've shifted more into our very siloed accounting area to help Paula out. So yes, we're constantly assessing that. I didn't even go into so many of our other activities like the cash management, fiscal policy analysis. Obviously, if we have credit rating or credit reviews, you know, and they just come when the credit rating agents, there's no way to plan for that. They sort of trigger those and we have to move on it. We get a lot of questions clearly. From others, you know, the town manager or council, you know, as fiscal implications are impacting decisions that other people are making. CIP, that's a massive area and funding and that is actually at the point where we have to get another loan. We haven't done, we haven't had to manage a new loan for a number of years since 2012 was the last time we had a new loan But that is a very time consuming process because you basically it's not just Issuing the loan which is a whole area unto itself. It's managing the draw downs of the debt proceeds and and it's more than that because there's all of these statutory and IRS requirements. We have to do arbitrage analysis as sometimes multiple arbitrage analysis where we're working on experts with that. So I will say maybe that there is one big difference with governments and accounting is number one, we are the revenue center of the town. We are, we are also the customer service center for the organization. We're accounting is typically a back office type activity. We are not. We're very unusual in that regard because I've also worked in the private sector quite a bit and accounting does tend to be more of a back office activity but we tend to be the face of the town, the customers see us. But then there's all of these statutory requirements, you know, around how we hold our cash and investments because it's public trust. So we have to align with all of this. It takes so much knowledge to understand all of the areas that we are responsible for and we must comply with. ARPA, if you get federal dollars, whole another layer of complexity on that. And so it takes highly skilled people, but we also want new people to be coming in and learning these things. As Ladonna mentioned, as people kind of transition, you never want the department to be inexperienced. It's really, we have so much documented, but even for a new employee to find this documentation, you know, that is one thing I want to do before I retire is actually have a policy manual. We have policies, but in one place. It will only be as good as that particular day, but at least it would be in one place. Thank you. I'm monopolizing everybody else's time, but I appreciate your explanation. Thank you very much. Couple of questions, Emily. Did you say Liz over the past three years you have averaged or excuse me finance as averaged 900 hours of overtime per year? That's correct. It's not necessarily overtime though because we have a lot of exempt employees in the department. Okay. Okay. Lidata. Do away with cola, merit only, but merit would be higher in total, resulting in higher overall salary increases. Correct. Is what I understood for me. You said 5%. I do. Yes. So in the budget it says 3 which you say will average out to 1.5. Yes, because of the pro-ation that affect. True. That happens because reviews are year so with 5% What would that look like? That would Is it a 1 to 1 is 5% or is it? It would pretty much be about half of that because of the way that reviews fall right and So when we talk about competing jurisdiction, you know our neighbors because that's that's who we're competing with You said you said you have three numbers 2.33 2.2 and 2.6 resulting in 4.8. One of those was Merritt one was co-loved. The other one is salary scale adjustment. Sallie scale adjustment. So how does how if we go to 5% it averages out to roughly 2.5 that still doesn't square with 4.8. No that was the average for the market. The 4.8 is the average that the competing jurisdictions are averaging between the cola and the merit. The salary, the scale of just that just moves the salary banding up that percentage. So that people that are closer to the top have the ability to keep moving up financially. Good, got it, got it, got it, got it. Okay, that makes sense. All right, thank you. You're welcome. Yes. I apologize so they don't remember. Health insurance employees contribution to that that how much they go up this year? I would be going up this year. It did not go up that much it only went up I think 5.6%. So our share the town pays 85% and the employee pays 15%. So it was a very nominal increase overall. Five about 1% of us? Yes, definitely. Yeah. Okay. Any other questions? So, I, so who made the 3% was What was your original suggestion for merit? So you wanted the 5%. Well, there's two different things going on. Ideally we would have transitioned from a colamere-based system. So the question that Caleb had had if we had a merit-based system, what would that look like? So originally, it was 2% cola and 4% merit funded at 3% which would be 5% roughly yes. So my question to Quasia is why, why did you eliminate that? Again, this comes to your decision. Your reason why I eliminated it is to be focused on merit and performance. And that's why I put it at the percentage. And again, I open the discussion and if we need to put it to 5%, we need to see the impact of that. Again, it's your decision now. Are there any other questions? Okay, thank you. Good. Thank you, Ladonna. Now we'll bring your attention to page 136. This is starting out from the administration perspective, expenditure by department. I'll just quickly go over this because this goes to page 136 and then I'll get to page 138. Any questions on this? Admin personnel, the budget is 1.5 million. The next big item there is municipal insurance. So in fiscal year 2026, we are looking at $2.3 million. And as you see, historically, it has been flat between 2024 and 2025. Now we are 2.3 million in 2026. Any questions on this? These two pages? Okay. I'll draw your attention now to page 138. That's just the organization chart, town manager, town attorney who was contracted, followed by our assistant town manager, President Trump, Clark and director of administration and director of HR. Just a org chart represented on this page. Then we move all the way to the rest of it for your viewing pleasure, the mission description, summary of our goals, and so on, go on to these additional pages. And it takes you all the way to page 143. It's the next page where we'll deal with the facilities and tongue-haw. I'll pause for a second here between 138 and 143. Any questions? Okay, page 143. The tongue-hawler we call call it the facilities. This page shows you the purpose of the facility is building you sit in, key accomplishments. As we sit here, we are working on getting a contract to upgrade the HVAC system. We have two contracts we are reviewing. Hopefully we will come to agreement within the next week or so to make sure that when the warm weather gets here we are cool. So this is on page 143. Then move on to page 146. Page 146 is a summary of all of that are for funding and where we are. The first section of this show all the projects that were completed, totaling 1.83 million followed by parks and red, that project was also completed at 63,500. The incomplete projects are the ones on pending completion, is the water treatment plan to water main, which is a 95% followed by the Earth Reservoir at 95% and finally our new water storage tank, which is at 25%. So all in, we had a total allocation of 10.559 million and total expenditure is today, it's's $6.8 million. Any questions on this and this is a summary of the ARPA funds that were made available to us a few years back. One question. When is the anticipated completion date for the incomplete projects, the three incomplete. Okay, I don't know the exact date for that. Andrea do you know the exact date? So for both the water treatment plant to the water main project and the Hearst Reservoir of the rehabilitation project, both of those are pretty much construction complete. We're just waiting for final documentation, meaning as builds and the project closed out documentation. So those will be within the next month, we will finally get those as both those final documents completed. And then the new water storage tank project. Now that winter is over, they have installed the water line that will loop into locations to both an 8 inch and a 12 inch water line. And they are gearing up right now to construct the access road from the school access road and they will be starting the foundation work for the tank in mid-April. That has a construction completion date around June of 2026. What a question. Thank you, Andrea. Now I'll direct your attention to page 149, Human Resources Office. So as you heard from Yodana, Director of Human Resource and we have a HR analyst. That's 2.0 FTE for the budget. Keeping through, we'll go to page 153, which is an overview of finance expenditures. This year's budget, we are looking at 1.4 million in personnel. The toll-off for this year budget, as you can see, is 1.5 million, which is a change of 0.11% from prior year. Any questions? We will now move on to IT. And Shannon is here to follow up on any questions you have. This is on page 160. IT personnel is the budget that is proposed. It's 620,000. Information technology, supporting information technology is 317,000. Total budget expenditure, 937,000 for this fiscal year. And again, it's flat, 0.01% increase. Okay. Questions on IT, budgets? Questions? So finance does a lot of webpage tasks? Is that not something that IT could? So we do our own web pages. I.T. handles many other things that I'm sure Shannon can go into, but we just manage our own web pages that are the finance web pages, budget, financial documents, I think, or financial, yeah, I think it's financial documents, this is what it's called. And then all of our revenue-related pages, what am I missing, Connie? Anything else? Okay. So IT supports the web page, the website, basically back into infrastructure. And then the wizzy wig that they use to actually upload documents, they're the subject matter experts, all departments, so we actually allow them to be able to update their data. Having it funneled through us would be inefficient to do that. So that's why they update their charts, planning updates there, their pieces to that as well. So when it gets, when the heavy lifts come, then we step in, build out the new pages for them, new sections, things like that. But for the updates of data, the day to day, we try to get that to the departments just for speed and accuracy. Which systems are moving to the cloud and what time frame? So we have many systems already in the cloud. We are moving additional systems up, email file systems. I'm trying to think that we've got, our active directory is gonna be mixed, going to have some hybrid systems, so we'll still have some on-prem. It's just a requirement based on being able to archive information. Microsoft does not have a strong lifetime forever-keep policy of their data. So we have to do some archival midstream to be able to support that. Some of the state regulations require some things to be kept forever, which is kind of a mind blowing task. But so we can't move everything unfortunately to the cloud as it were. But a large percentage of our stuff will end up being in the cloud. We should have most of that done by the end of the summer. Okay. Is there a disaster recovery included in the- Yes, there are- That's not great, then. Yes. For both systems and data. Correct. That is correct. Thank you, Shannon. No other questions. We are moved to page 164. And that takes you all the way to page 170. On page 164 briefly this is public safety expenditures by department. Police personnel is at 2.76 million as mentioned, which is a decrease of 12.96%. As mentioned before, we froze for positions and these positions were in prior budgets where were never filled. So this year we decided to freeze these four positions with the assumption that we would not be able to fill them. Any questions on that? Questions? Councilmember Wright? Not specific, but on this category. I didn't want to interrupt you. I just. No, no, no. The fire emergency services. Correct me. Understanding is it's a pass through. Yes. All that money is nothing but pass through for us to. It's both pass through as well as donation to the fire and rescue Department so it where you see the fire emergency services is 935 Versus the 45 the 40 we give the same amount as a donation the town provides the same donation to rescue as well as fire Which is the 45 the difference there is is is the pastor that you're referencing. Okay so rescue doesn't get a pastor just fire gets a pastor. Yeah it comes from VP or VP I don't know what this is anyway so to offset the fact that the rescue squad's not getting a do that money which is basically basically state money. The town historically has said, okay, here it is. And the only way the fire department can get the money is because it has to go through a jurisdiction. It cannot go straight to the individual company. That's correct. Gotcha. So, okay. So this year is anticipated that the fire department is getting as 45. I'm sorry. 93. So the we we provide a donation. The town itself, not the state, provides a donation of 45,000. On top of what the state gives. To each. So the difference between the 45 and the 93 is the state pass through for the fire department. Yeah. Hold on. You've said it correctly. I just wouldn't it. If 45 comes from the state that goes to the fire department or is the town given another 45 to the fire department as well? So Linda, showing me the numbers here. The other team of the 13. We have the fire department in the 8th revenue. So out of the 93, what she's saying is $42,800 is coming from the state. But $45,000 comes from the town of Percival. Just to the fire department. Just to the fire department. And then another 45 goes to the rescue squad. Correct. So we're donating $90,000 out of to the two organizations. Combination to the two organizations in the state. Correct. That's basically being funded from our revenues, our in the town of Percival's budget. And that's historically how long has that been going on? Roughly, don't give it exactly, but 10 plus years. I think that number has been pretty stable for a number of years maybe maybe 10. Paula, you have any memory of that? We've been giving 40. I would say we've been giving 45,000 for about 10 years for a long time. It was 40. Yeah. And before that, it seems like when I first got here, it was a very small number and it kind of rose over time, but it has been about that level for some time. Yeah, thank you. Appreciate that. Okay. No further questions. We have moved to page 171. public works. I like 26 1.5 million is personnel. Second major item off is public work streets, state streets. So the total budget we are projecting is 3.46 million. That's a 5% increase from fiscal year 25. Any questions on public works? We'll move on to page 175, which is our engineering and capital projects. This might be a little bit confusing. The reason why we put page 175 in there, this is the former department just to give you a historical perspective, because engineering planning and development were all one department in last year's budget. And so this just provides the historical information. Really your engineering department, your new engineering department that's separated from the larger department starts on 176. And there we have a personnel budget of 786,000.. Total budget is $920,000 for this new department. Okay. And we'll move on to page 183 planning and community development. questions there, community development. Any questions there? Community development personnel, 725K, 138,000 and community development, total budget 863,000. Questions on community development? Okay, we'll then move on to 189 legislative and advisory. And this is where the town council committee commissions and boards are all accounted for. The grant toll there in expenditure is expected to be 131,000. That's 2.72% decline over last year. That's it. And you have the rest of this document. Prior to this meeting, we shared a spreadsheet with you all. The first tab on that spreadsheet is what we call a straw poll, which will be towards the end of all of your deliberation. We look to you all as you come forward with your proposals and put it in a straw poll so we can vote on that. So you folks can vote on that. In addition to that you had a tab with all of the revenues. A request was made to have fiscal year 25 included in that tab so you can compare and contrast and work with Linda to see how we can get that to you all. In addition, that spreadsheet does not account for the decision that was made last evening about the equalized rate at 19.5 cents, is it? 19.2 cents, which equates to about $279,000. So we'll have to make that adjustment to reflect that. So you folks will be able to look in the spreadsheet and make your calculations and adjustments to assist in your deliberation. Any questions on that? The actual request with respect to the spreadsheet was for both budgeted and actuals for or let's go for 23, 24, 25. And obviously for 25, it's gonna be an estimated figure because we're only two thirds of the way through the year. Okay, I'm gonna see that. As for the information that would be fairly readily available would be the 24 actuals easily. The 25 adopted, the 25 revised. Right now the 25 actuals are not in our new system. We had a projected estimate, but I think it would be better to use the revised budget and the adopted budget for the analysis. I could easily quickly turn around the 24 actuals as well as the other budget items. If I start pulling in a lot more actuals it's going to take a little longer. Okay so we'll do 24-25. If that's if we want a real quick turnaround. I can try to retrieve the other but I just think it'll take a little bit longer. Probably have to drop it into a separate. It's French, it's kind of from a separate system. The 20 I can get to it. I just need to know the time frame that you're expecting at them. For me I I'd like to see 23 to the year. But the timeframe, what is the timeframe that you're looking for the information? Oh, that we need the information. When will you need it back then? Ideally by Monday, I think, because our next meeting is. So we're okay. So 23 24. That's it Tuesday? Yeah. Okay. Tuesday's next meeting. That's what I was planning on. How big a lift is that? Have it by then concerning. It's doable. I just have not focused on the 23 actuals because it is a new system. We usually only focus on one year's worth of actuals and then we look at the adopted budget year over a year so it's just more time consuming So I'm putting on spot here when you say time consuming we talk in how many hours do you anticipate having to put in to get in all this? I would probably need to focus on it because I'm the first time through it for a minimum of a day, just to focus and tick and tie and make sure everything looks good. It's a minimum. So the Monday, Tuesday, as long as that's the priority and there are no others, it'll work. Good. So to be clear, but it would just be 23 actual, 24 actual. Correct. 25. Did you say you were a budget? And I guess it's forecast. It's forecast value based on the actual budget. I'm not sure that you are going to the 23 budget and the 23 actual and the 24 budget just the actuals 23 but I have not reviewed the 23 throughout the budget process So I as long as everything's clean when I pull it out and looks like what I expected It's not an issue. You just don't know till you go to do it to see if there are any issues there So I don't know what I don't know yet. All right. So I have two questions for the interim town manager. So this is the town manager's proposed budget for the year. Meaning you got the numbers, you put it together, this is what you think is best for our town. And this is our general fund meeting, so we're looking at the general fund, which as you said has a long history of strong financial performance, structural balance and robust reserves. For years, I've heard this from you, and in January, you told Caleb and I, and we have it recorded that you would take a deep dive and save us hundreds of thousands dollars on chargebacks. So last year we budgeted for 1.04 million and this year you're proposing 1.17. Where's the savings you promised us? Like you've said for years we've had a chargeback issue but this year you're proposing more. So where's the savings you said you were going to find? In chargebacks? Yeah. You didn't find anything. I didn't right now with this budget. I didn't. I selected not to. Why? If there was hundreds of thousands to be found, why didn't you find them? OK. Because we have recommendations with the charge rats, we have some functions that the majority of their work is in the utility fund. But their main line of business decor is in one of the general fund category. So that is a potential savings. But I decided not to do that yet because I want to see guidance from you folks Because as you read this budget document you'll see in the charge back categories We have about four employees that their home fund is not in the utility enterprise Taking that out of the home front and put in them into utility enterprise That's a reduction in the charge back. So why didn't you propose that already? That's what this is supposed to be. That's not our job. That's your job to do. So I would like to see that from you in the next week. And then my second is I want to know what your solution is because now that we've changed the tax rate to lower we're losing another almost $300,000 from our general fund. So now we're in a deficit of 1.9 million in our general fund. And if I'm doing my calculations right, because you're drawing down on the reserves and say it here in your budget, we have a three year runway before we're bankrupt in the general fund of savings. So what is your solution to make up for that 1.9? Because we're not getting in sales tax. We can't rely on meals tax dramatically rising, especially in this market. Like that is a lot of, that's a big loss. And we keep on getting rid of taxes, lowering taxes and stuff, but we're in a problem here. So I want to know what the solution is for 1.9 million that we're losing next year. We do have challenges and a lot of communities. What we discuss tonight is the fact that we are competing against communities with data centers. We'll never get data centers in Western Loud and what we do have as opportunities are in fill development. We have over 27 acres owned by the county. The county has approached us with the potential of development on that 27 acres. And that does not include the auto acreage within the town of Percival. But that will happen in the next few years before we're bankrupt. Like, we have, so what services are you proposing we're cutting for $2 million loss in the next years? The increasing more. Okay. Again, we are looking at, as I said, the infill is a potential of development and bankrupt is a hard word. But so real word, it's reality. That word bankruptcy assumes that everything is equal. And we're going through a lot of changes in this nation and in this county, AI, artificial intelligence. I'm looking at spreadsheets upon spreadsheets within this department and we're in 2025, right? You have and Bill Gates made this statement. There are only two types of jobs that are safe from AI. And so with that, artificial intelligence and focus on building efficiency and sustainable systems and operations, within the next two to three years, this place that you sit in will be completely different. And so when folks tell me that we are facing bankruptcy, I challenge that notion. Bankruptcy will only happen if all things remain the same. So you're saying in the next two years we're going to fully automate everything and you know how much money it costs to do all of that right? It's not free. I don't want to understand how you're going to automate our wastewater plant and replace everyone or replace our accounting or all of this. I don't believe that is a solution that's not reality right now. I just don't see it. You need to be realistic here. Yeah, and I look to your solutions also. Yes, absolutely, but you're the town manager. You're supposed to be coming us with these short, like solutions for this. And you've been here a long time. You should be looking at this. I have solutions, but again, I will present. But there's a lot of money and they're not realistic for what we're dealing with right now. You're entitled to your views. All right. I was under the impression that this was a draft, so to speak, and that it would be up to us to really look at it, ask our questions, and then come up with numbers that we feel are palatable. And that's how I'm approaching this. I was not looking to you to give us a final budget, just in contrary to what Erin is saying. I am looking at this as something that has been presented and I need to understand the data here and then if there's something that just doesn't jive, then in future meetings, I need to voice whatever adjustments I feel. I feel should be made. So am I going down the wrong path? No, no. And Councilmember Aaron is, Reina is not either. Because as a tongue manager, I have ideas. I see the day-to-day operations. And as I'm putting this budget together, I do understand it is a draft budget, but again, it's my proposed budget. But I'm looking for input from each of you and even the community to see how we can come together to find solutions. But to come to remember Aaron's rain is point. As a town manager and as previous town managers, I have an idea of solutions, but I do not have all these solutions, and I do not have the visibility to when things are needed to be in place or a schedule. But there, so you both are right. It is a budget from my perspective, but now let us collectively look at that budget and determine what other solutions need to be placed. And I'm committed to continue to provide in my solutions. Thank you. Thank you. I'm concerned about right. That's all right. Someone disagreed with your philosophy on that. The town manager is ultimately responsible for how the town operates. You propose a budget based on what the town needs to function and provide the services that have already been determined. You provide that budget, propose budget to do that. Looking out for the best interest of the citizens and employees and the town as a whole. That's the town manager's job to propose a budget that does that. Now this body's job is to look at it and see if the priorities have changed between year to year. So if we, as a body, say that you know what, at that cost, we, and I'm just throwing things at it, trash collection is no longer a rational thing for us. Okay, just using that and I'll say that's the thing but that's a change in direction for the town. Your direction, your proposal is that hey look this is the direction year to year that has been gone and we change that direction then the budget reflects that change in direction. if you know, use the employees, for example, is if our desire is to ensure that our employees are well compensated in comparison to other jurisdictions and we are a attractive place to work, which that would be, I would hope your priority as a town manager, if we say, you know what, that's no longer our party, then we would then adjust your proposed budget to the goal of the salary, how the salary is determined. So if you have innovative ways to reduce the budget that don't change the direction that you've been given, then they should have been in here. Okay, so in other words, if in this chargeback, if you had innovative ways to do that without changing the direction of how things operate, then that should have been in this budget to save money. It shouldn't have been, well, didn't put it in because you didn't get the direction. The direction hasn't changed from year to year. So if you're innovative ways of doing business are feasible, it would save us money, but it doesn't change the direction. They should be in this budget. They should be in your proposed budget, because that's your job, is to propose a budget that's looking out for the best interest town, but it didn't change the direction or what you've been, we've come from here to here. I'm making sense there. Not clear. You are the boss. Yeah, I am. You run the show. All we do is tell you what direction we want to show to go in. And based on last year's direction, that's what your budget should be reflecting, proposed budget should be reflecting. And last year's direction per se, because we haven't given you any other direction as a body, other than it proposed a budget based on what keeps the town providing the services that have already been being provided and doing a cost effective, because we didn't adopt a figure, a tax figure until last night. So you proposed a point, whatever it was, 209, whatever. Okay, and based on that, it kept operations of the town the same, basically, correct? Oh, no. It did not? Yeah. So the budget that was presented to me from management, this is a reduction of that budget because of my insight as your leader, as your tongue manager, included in that insight is that we decided to freeze four positions, right? Those positions were in prior budgets and budgeted for, but never really filled. So we decided to come to terms and get rid of those, right? So the budget that you're seeing today is from my perspective as the town manager. So it's different. I understand what I'm saying. As you're, I'm sorry if I'm not explaining this very well your job is to present a budget to us that ensures the priorities that have already been laid out prior to tonight are being met. Correct? Correct? The priorities laid out by who? By everybody before this body because we haven't laid out any priorities until now. We'll lay out the priorities through the budget process. We lay out how our priorities are. If we say we want to cut positions, then our priorities have been changed. Exactly. So, here is a challenge of a lot of tongue managers, right? When they're put in a budget together, they need to make a lot of assumption because you folks have not gotten together in a strategic work session yet. So it's almost like reading minds to get to that. This budget presents that. I am looking at this council. It's even includes the decision that was made to take half of the mill stacks and put it into it. So based on that data, I came up with this budget. So it's not based on last year's information. It's based on what I assume the direction of you and your address of the town council will go. And that's how this budget is placed. It wasn't based on the history. If that makes sense, are. It does to a certain extent, but I know I'm not explaining what I'm trying to get a point here, but you didn't cut a service To propose this budget, correct. You didn't cut any services in this budget. I did. And you proposed service. Any proposed budget. Yeah. There are indications in this where you see a minus. A service or some component was cut? An expenditure not a service you may have cut down on how much expenditure is going to a certain Service, but you didn't cut a service. I didn't cut the service. Exactly. Okay, so theoretically you are the expert on how that As a town manager in term time or whatever you are the expert in how the town is to be operated based on. Correct. You're inside of how everything is going and based on the direction that every town council has, the last town council, whatever you want to give, right? And the last, the only thing you got from us was to move bills tax money over one point some I know. That's the only direction you got from us. And then last night, which was too late for you to make any changes to, was a reduction in the thing. Exactly. So you gave us a budget, a proposed budget, based on your expert opinion on, this is the best way to run the town today. Correct, correct. And that information was not just based on history, it's based on me assuming our antithem- You made assumptions, but you will give no directions other than to move the one point thing. Correct. But you still have your water and sewer, all that service is, I didn't touch. I touch your expense. Because you were not giving any direction to do so, theoretically. And you didn't see a way to save any drastic amount of money without affecting the service, correct? Yeah. You didn't see any way to save any money without affecting the service. That's why it did not end up in your proposed budget. Any way to save substantial amount of money without affecting the service? This sounds like a trap. No, no, no. It's a fair question. So you're saying, Show me how to trap. No, I want to find out. This is not a debate. Please. One speaker at a time. Yeah, yeah, yeah. It's all clarified a question just for the record. I'll let me understand your question. You found no substantial savings from last year's budget to this year's budget without affecting service. found no way to cut substantial amount of funding, not very good expenditures, without affecting service. No. Then why isn't in this budget? Then why isn't in this? If you found ways to have cut substantial amount of money, save substantial amount of money, if you found ways are no ways to save substantial amount of money, taxpayer dollars, without affecting service, do you have It's what is reflected in the budget, it was reflected in budget. And again, this is a collective effort. If you folks can find it. I'm not talking about me. You gave me this budget. I wanna know how it came together. So you were telling me because we're paying you the money to provide the proposed budget that You will unable to find any substantial savings without affecting service And why wasn't in this budget they are savings in this budget. I'm not saying there's not savings in this budget I'm saying a substantial amount of savings in this budget from last year. What's the difference between this year's budget and last year's budget total? There is, we are forced to involve- No, do you have to give me a number. What was last year's total budget? 13 point what? I'm sorry, what was just in general? Just in general operating. General fund was worth. Yeah, it is. Page 106. Page 106. Okay, so we are 30. This is without CIP. So last year was 24 million operating budget. And this year is 26.38 million. So you found no savings? 9.3 million. Yeah, hi. Yeah. We went up $2 million last year. We found no savings. 9.3 million. Hi. Yeah. We went up $2 million last year. You went up $2 million from last year. Say you found no substantial savings without affecting service. With all the fact that service. Correct. Correct. And that's what we pay you to do to make sure that you run a cost effective taxpayer in mind department town correct and you could not provide any cost savings you could only provide to Okay, I believe you've made your point. Did you go through line by line? Ma'am, I've been through this budget, so I'm not talking to you. I'm talking to him. actually happened and where things had to increase. One of the times please. I'd like to ask because he hasn't answered it. He's already answered it. So from last year we had 24 million and now we are 26 million. This is a budget I presented to you folks. You have to decide. I know what I have to do. I'm asking my question to you was, you are unable to find any substantial savings between last year's budget and this year's budget. Yeah, and I can keep looking at it to find more of this. I didn't ask you to keep looking at it. I asked you what you proposed you found nothing. Yeah, well, council member, right, with all the respect, the numbers are the numbers. So you're asking me a question that you know the answer to. Exactly. Right, okay, so answer your question. Yes. That's, that's, thank you. That's all, and you just hear the answer was yes. You could not find any substantial savings. Thank you. Is it fair to say that you think in your role as Tom Manager that it is up to the elected body to make substantive input and decisions in terms of reductions, potential reductions in the town government? No, absolutely. That's what the charter says. Right? You folks up the ultimate authority. And again, I'm doing my job to present you with a budget as a starting point. Actually, this is the second budget. We received a budget from the departments. I was able to do some reduction in that and present this to you all. But ultimately the decision is yours. So you had no expectation that you would put together this lengthy document with the assistance of town staff who report to you directly and then that would be the budget. You expected town council have input into it. Absolutely and that's what we've been doing since the life of the town of Percival. So this is not a final document. Thank you. Great. And it could be if they all decide on it. Exactly. Let's recognize that a budget is a balancing act. It's a balance between revenue and expenditures. And the revenue assumption that we started with, that we started with, was that we would have a 0.205 property tax rate. And that brings an assertive amount of revenue, or it can be estimated to bring an assertive amount of revenue from there. Expenditures have to be looked at. And ultimately, that's what builds the package that you see in front of you. Mayor Fomei. I think you also have to at least all of the budget best practice that I've ever read says that you have to, yes, absolutely balance your revenues and your expenditures, but your expenditures are built based on the services you offer or service level, right? And so one of the big components of this particular budget document, GFOA required, is Council's strategic vision. Clearly, I think you all know that only Council can appropriate dollars in the state of Virginia. So you always have the power of the purse. You guys always control the dollars. It is the town manager's responsibility to implement your strategic decisions in direction. But it has to be realistic because costs are gonna be based on providing those services and it's the town manager's knowledge that helps you understand limitations. Everybody in the world is gonna wanna cut revenues and maintain service levels. But obviously that is impractical in today's world if you aren't realistic. And a budget is a plan and you want a realistic plan because we don't want to get at the end of the year and find out whoops we spent way more than we should have or we've burned through reserves or we said expectations we couldn't fulfill. So I would say it's all integrated and all very important but again council sets a strategic direction and has the vision for the town and the services that are going to be offered. Again the general fund what does it do? What do you do with your taxing authority? You have a very special privilege that is granted to you by the code of Virginia. You're taxing authority. That is the provision of services to your citizens. So what level of services do you want to provide? Obviously, there are certain things like VIDOT roads and whatnot that the state kind of supersedes on that. But you set that and so your tax rate or whatever, your revenues are set based on the services that you wanna provide, the town manager's job is to make sure the staff team is implementing that. But he also has to give you a realistic budget, you know, on what it really takes to provide those services. Utilities are a little different because you're providing a product for user fees. And that's different. Your user fees should be supporting the provision of that particular product. It's just a little different philosophy, so to speak. But maybe that helps clear it up a little bit. Yeah, and my budget is $26.3 million just for the general fund and next meeting we'll be talking about the utilities and then finally CIP. Mr. Marriott, we have a question. Okay. This is for Mr. Fischer and probably also finance. So the proposed budget for 2026 for legal is only $200,000 where adopted for 2025 is 2715 and the actual for 2024 was 238. What makes you dramatically decrease it to only 200? And we were looking at this at the end of last year and with the previous town manager and the previous mayor and we're talking to management thinking what would the cost be because the experiment of having it contracted out has been expensive and delays bringing it back in house but part time having a set 20 hours a week lawyer how much would that cost to bring it back in house at 20 hours we can probably in a dedicated attorney and we'd probably, like we've discussed and we were asking me out last year, probably the same work product and what we need. Would it be under that? But like why a dramatic decrease of $71.5,000 for legal? Why do you think it'd be so much dramatically less? 136. 115, I. $1.15. So we look at it as being $71,000 of us. Yeah. Yeah. That's an estimate. But based on history, we don't even come near that. So like why so low? And like, would it be worth looking at? Like, how much would it cost it because I we spoke about this last year Diana and he should bring you in a In-house dedicated 20 hours a week lawyer because that's what we would need and was Told instead of contracting out because it would actually would be more efficient and probably save us money So it'd be I would like to know what it cost to that Yeah, I think it would be a cost savings from what we were looking at last year. Yeah, we were looking to that. But again, this was just an estimate that we all... But it is dramatically lower, and I just don't see it being that low. I think we'd have to go over. Yeah. And I'll look back in 2023, what it was in 2023 we had a full time in house. Yeah, I just want to see contrast. Okay. Any other questions? So as we go down through in the revenue we see the reserves 1.6 million. That's General Fund Revenue, flowing to the general fund from the general fund reserves. So we're pulling 1.6 million from the general fund reserves. Right. So that's the last night we cut 279. Something correct, I think it was 279. Okay, 279. So the 1.6 million transfer from reserves would indicate that without that transfer we're 1.6 million short from having a balanced budget where the revenue and the expenditures are equal. After last night that's up to 1.9 million, roughly. It's 1.9 million now of a deficit total from having a balanced budget. So this is coming out of our general fund reserves, which under the proposed budget would be sitting at just over 8 million correct. It's 8.1 or 8.3 thereabouts. And then policy is 4.1, something like that, right? So the difference from where we would be leaving General Funders' Erves under this budget and our fiscal policy is almost exactly 2 million might be 2.1. That's correct. Probably the best place to see that is page 19 of your book. That shows the general fund profile. So toward the bottom of the page you see the policy target of the 4.3 arm. Yeah, 8.3 and a policy target of 4.3. It means cash available to spend is 4 million. So at a rate of 1.9 million per year, that's two years. So in my mind, we can't go year to year. We can't show up in 25 and say, this is what makes sense. And then show up in 26 and say, this is what makes sense. And then show up in 27 and say, this is what makes sense. We have to be proactive and we have to look into the future because I can say, sure, I'm good for a month, I'm good for two months, I'm good for two years. But if I don't plan for the future, we're fine now and it could be a problem very, very quickly. So this 1.9 for two years brings us down to our policy target. So my question is, what happens in two years? Two questions. Do you foresee that because we ought to be thinking long-term and not just focused on this year? Do you foresee that potentially next year or the year after General Fund Reserve draws maybe necessary? And if so, do you foresee that they would be necessary for two years bringing us down to our fiscal policy? No. And why I say that is what I've witnessed in these outcomes and meetings is an opportunity to be architects of solutions versus spectators of progress. You folks need to have a strategic work session. There's a lot of opportunities before us that if we were sitting in this seat next year, we could be getting revenues from multiple sources, but it needs to come from strategic vision from you folks and operational excellence from us. So to answer your question, I'm hopeful that we can all work collaboratively to identify those solutions that will prevent us from sitting in this seat next year and drawing down more money. Okay, but hang on, we've got to slow down them back up often before we get to that. Key words they are hopeful and could be. I don't like hopeful and could be when we are stewarding the town's financial future. So I will agree with you, strategic session, look for opportunities for new revenue, explore innovation, explore streamlining efficiencies, optimizing all of that. You'll get no argument from me, I'll be first in line. But today as we sit here, that is a could be. Right? So why are we drawing down reserves in anticipation of something that could be before we know that it will be? I would say it should not be. And that's your obligation to this community for us to all sit together and make it happen. When I say hopeful, I know hope is not a plan. But I'm hopeful as a taxpayer and as a voter, all of us will come together and find solutions. That's my hope. It's not, I understand hope is not a plan, but that is something that myself and others in this community expect. I expect it as well. And I would concur with your verb, it should be. But until it moves from should be to is, we don't have a solution. Until the solution is in hand, we cannot plan for the solution. I can expect something to go a certain way, but I can't plan for something to go in a certain way until I know that it is going to go a certain way. So to draw 1.9 to operate at a 1.9 million dollar deficit in expectation of something that should be, before we know that it will be, strikes me as irresponsible. So how do we bridge the gap from where we are and what is currently the reality, what the numbers are, because as you said, the numbers are the numbers. How do we get from the numbers that are the numbers today to what should be in the future? Because right now it seems like we're hopeful, I too am hopeful, but we are only hopeful. And so to draw down 1.9 million to operate at a 1.9 million dollar deficit, before we know that something that should be actually is seems irresponsible. I would not agree with the characterization because I'm looking at seven individuals that are looking at this budget for the first time. I spent a month looking at this, right? And my expectation is that if there are additional cuts or revenue drivers, I expect this body collectively to bring that to the area. Because right now the budget is... I would agree with that. I would agree with that. But the budget you bring should be balanced. Then if you bring it to us seven, the seven of us, and we then find additional revenue opportunities and opportunities to cut expenditures, we can then do that, and then we're even even better situation. But to start 1.9 to bring a budget that is 1.9 million dollars in the whole, we're behind the starting line. We're way back here instead of starting at zero. This is a balanced budget. How can we make it better? We're starting $1.9 million in the whole and having to make it $1.9 million better. Let's get it to that. Your responsibility as town manager is to bring a fiscally responsible budget. If the seven of us can then improve it, that's great. But you've brought a budget that's $1.9 million in the whole. And that $1.9 million in the old, as you said, right? Comes from Mealstats. No, it's coming from reserves. No, the direction from town council was to take half of the Meele Stacks out. That Meele Stacks at 1.8 million was going to go into the budget. So that 1.8 million gives you a 0.1 million dollar. So that's all the direction. Go ahead, sir. So your question is absolutely. The 50% Meals Tax Transfer created the deficit, the general fund deficit. I don't think it's a big number. It's 12% of our general fund revenue. There's no way to look away from that and not see it. It's the truth. It's a hard fact. You're supporting the utility funds with those dollars. Not saying you can, you can, you have that authority. But you probably, I guess, getting back to what I said earlier, you're gonna have, you had a revenue problem in your utility funds. This fixed your utility funds. They're actually showing a small surplus now. So it balanced them for now. They balanced the increased debt service that we're now paying, okay? But going forward, if we continue to invest in our capital infrastructure of our utility program, then that's going to go up. We know costs go up over time as well. So obviously sooner or later, we're just going to have to look at utility rate increases. We'll know more about that number when we see the STAN Tech presentation on April 9th. So, but we did not generate any new or any additional revenues. We just moved it from the general fund to the utility funds. So if we don't replace those revenues, we're in a deficit position. The other alternative is to change the services that are offered, you know, for that price. That's the expenditure cuts. I'm not sure if I'm missing anything, but that's like the simplest way to look at the issue. I think it's very accurate. Here's bottom line. Here's what my concern boils down to. This council made a decision in January to transfer 50% of the meals tax revenue to the utility funds. And what was stated at the time is we will find expenditure cuts to make that up. This budget does not have expenditure cuts to make that up. Now I understand that we have an opportunity, the seven of us to find those cuts. Hopefully we do, but as it stands today we haven't. So the budget that has been brought is 1.6, or after last night, $1.9 million in the whole. So we are 1.9 million, we are starting this process, $1.9 million behind the starting line. We're not balanced, we're not taking in the same amount of revenue that we're spending. We're $1.9 million below. We are $1.9 million behind. That's where we're starting in this process. That's concerning. That's concerning throughout this process when you define nearly $2 million of cuts just to break even. Is there any question for the position on the map? I'm not talking about Leesburg. And the position on the map. We're starting $2 million in the whole in this budget, is the bottom line, and drawing from reserves in the process, and giving ourselves two years of runway before we hit our physical policy. If you want to reserve a lead you to that one point nine. Correct and we can do that for two more years before we hit our physical policy. This is all else equal. This is nothing else changing. This is all else equal. And we know that all else is not equal because we know that we have CIP considerations that are becoming online within the next five years that are going to require the issuance of new debt. That's going to drive up costs and the wastewater and water funds. So all else is now all else equal we have two years and all else is not equal because expenditures and those funds is going to increase. So best case two more years to fiscal policy. And that's probably not gonna be the case because expenditures are gonna go up with new CIP debt issuance. That's all very concerning. We have to find solutions. Yes, we have to find solutions because we're starting $2 million underwater. Thank you. Is there any additional questions? Have them been asked? All right, I just note that we're starting our general fund reserve well above the policy level and that's what makes this possible. And we not transferred the 50 percent of mail's tax income to the utility funds. We would be looking at utility rate increases of 18 and 22 percent for water and sewer this year starting this year. So let's keep this in perspective, let's work together and try and find those savings where we can. It's obviously problem we need to solve, we don't need to solve it instantly with respect to drawdowns on the reserve, but it's a wonderful target. So let's go find that two million dollars. Do I hear a move to the adjournment? That may or I have a following question, because I think that's a great point that you just made. Perfect world. We find the 2 million in cuts. We find 1.9 million dollars of cuts during this budget season. We're very responsible. No utility rate increases because we've got 1.9 million. What happens next year to utility rates? If assuming that we do not make transfers from the general fund or from the mail's tax or wherever it's coming from, what then happens to utility rates? Because as the mayor said, we just avoided 18 and 22. So assuming we were to find those cuts and not do this next year, what happens to utility rates next year? And that may be for Liz. We've already asked Anteck to run that. The town manager hasn't had the opportunity to see it because we just got the numbers yesterday and we were verifying the numbers. They had to make some tweaks to their model. He's going to meet with them on Monday so he hasn't even seen it yet but when he does we'll present you a number of scenarios so that you can evaluate the decision points. Yeah because I went back to your presentation from last year and I looked at the rate modeling recommendations and I ran the numbers. did the math myself and I was like, oh it all adds up the percentages 18 and 22 and then I looked at the 1.6 and I was like, okay cool. So no utility rate increases and a 1.6 million or 1.9 million. So my, so then my question is what does it look like next year because we've pushed this off a year. So I think a critical question we have to answer in this year's budgetary process is if we're avoiding utility reacts this year and let's assume in a perfect world we find these cuts, what does it look like next year? Because we can't just look at this year, we have to look at next year. Exactly. And those numbers are coming to us and also keeping in mind even with this meal these meal stats, right? You're now looking, this year we are projecting an 8.6% increase in the meal stats. So if you do well in your meal stacks, you'll be doing well in the utility funds. Because that's an 8.6%. I'm not saying next year it will be 8.6% but if it was to go to that That's a Freight set of money going into your utility funds that you didn't have before that's assuming you find the expenditure cuts Otherwise, you just have to make it up from general fund reserves. Yeah, so it all has to tie up Ask so you only the The information you're getting is only for what happens next year. Correct. For stand-tech utility. No, we go 10 years out. We don't always present 10 years because after about five years out they're pretty unreliable. But we he will be seeing 10 years out. We tend to just show five years out to counsel though. My question is, you know, go back to what I said is, you know, that's basically we pulled 1.6, whatever we pulled out of, we moved meals tax over this year. Basically we had to offset that we're pulling from the general reserve. We could do that one more time, basically, before this time and one time and two times, whatever, before we have met our finance, our fiscal, fiscal, I'm sorry, I don't policy, correct? I want to know what it looks like. What the, if we don't raise the utility rates this year, and we don't raise them next year because we do the exact same thing, then what's the rates the year after that? I want to know, worst case scenario, worst case scenario that we continue down this path just in, we don't find any huge savings, we don't find any solutions. Then what do the utility rates look like? Once we've already wiped out all of our general reserve down to the fiscal policy. Then what does our utility rates look like? And does a static model, does a static model? I just want to make sure that the information we get back goes that far. So just point you to page 98. So stand. General fund. So stand text is going to be focused obviously on the utility fund rates because it's a utility rate analysis. But Linda here has given you some, in fact this is another GFOA requirement is that we have long-term, long-range plans. We don't actually spend a lot of time here, but this does give you the trajectory of continuing the Mule tax transfer. You can see the other sources and uses, the 1,758,613. I don't make any assumptions there that it's going to grow, but in theory you could say it grows some over year over year. And this is what I would see with the assumptions I know of today. Based on the car I've been given for five years, based on the one time projects that I know for five years, based on any other assumptions, and then some of the details for the car, and the operating projects are in the supplemental section of the book that support these numbers. But this is all subject to change. It depends on what assumption to use. I'm gonna be really dumb here because I understand percentage wise. Does it show me what percentage wise? Well, it's far as... Now I'm not worried about fiscal limit. I wanna know what the utility rate, how much do you tell the rate we have to go up at that point? That's going to be more of a disadvantage. Yeah, that's the state. Yeah, this is, I'm not way about the judge. Yeah. Once we once we've used up all the ability, all of our reserves out of general fund that we can use without going below fiscal, our fiscal policy. If it's two years, three years, whatever that is, once we reach that, and we have found no solutions, what does the utility rate have to go up to percentage wise to make it? So that sounds like a new scenario we need to run. What we did was we looked at one year of Meals Tax Transfer, and then we looked at continuous meals-tax transfer, but it sounds like we need to limit the meals-tax transfer for the reserves that we have available now and sort of estimate how much we have that we can draw on. That would be my request, as if I get that information. Okay, yeah. I guess the point I was just making is they aren't going to give you the general fund. We kind of do that part. Linda, you're pointing to this bottom row on page 98. So FY26 we're going to be 4 million in excess of policy in the general fund reserves. That's as it stands today with the 1.6 million transfer. It does not include the real estate. Not including the $279, right. And so then all you did was you just extrapolated that. And made any adjustments I knew of for operating projects or changes in cart? Got it. Okay. So, yep. So FY27, we're 2.4 over policy. FY28, we're 1.1 over policy. That's when the runway runs out. So two years, that's when the runway runs out. Based on these assumptions based on these assumptions All yes, we everything can change but as as it stands currently this projection taking into account what you know in the best projection you can make We can do this for two more years. We can do it in FY 26 We can do it in FY 27 and then in FY 28 we can't do it without violating our fiscal policy because then in FY29 we would be below our fiscal policy Yes, and if and if by 29 yeah, yeah Just like to just better just stating more than the question is, we find this cuts this year. However it is, whatever we find this money this year, whatever we do this year, what's the solution next year? If revenue doesn't go up, And I know it's not a question that anybody can answer. What are we cutting then? What are we cutting then? So it's just something to remember that, again, in the perfect world, this would be very simple. But this is in perfect world, and none of us have a crystal ball in those. Let's come in next year or even next month through a certain extent. So, when we look at this, we need to ensure that we don't do the maybes, the hopefuls, nice to be, should be, it's reality what we know today. Reality of what we know today, because that's the only thing we have to go on. We can hope that interest rates go down. We can hope that a meal's tax goes up another 8.6%. What if it doesn't? What if it doesn't? We don't know that. We're just hopeful it does. So that's my big concern here is we can make this work this year maybe. But then what do we do next year? I can answer your question. Any cuts that happen this year have to be long term cuts. We can't go back next year and repeat the mistake or not the mistake, but repeat something that's not going to put us in a good financial position. We need to take a hard look at everything and make sure we are running lean and mean and cut where we absolutely have to and then we'll look at the bottom line over there. But it's not my intention to make a temporary cut this year so that we only face it again next year. We've really got to be serious about this. We have major expenditures coming on. And we need everybody's cooperation in getting these expenses to a palatable level. So that's my answer. We shouldn't be here again next year. We need to cut this year and make sure that going forward, we are lean and mean. What's your opinion on being the son of the constant? Once you get to a lean and mean, what comes after that? What comes after lean and mean when you still have to, you still ain't making it. So that's the problem. We get leanin' me in this year and in next year our revenue is on what we hope for all this other stuff. What are you leanin' me in? What are you there? What comes next? What's after leanin' me in? And by the way, I was on the council last year that did the budget and I assure you that we all took it serious and we all looked for everything and we all did what we felt and believed and knew was in the best interest of the citizens in the town. So it incinerated that that body didn't do it. But that's what you and that's not stopped the cross talk. Mayor if I can add if we're serious about getting lean and mean no transfers from reserve should be necessary. If we truly think we can get lean and mean to the two and one point six or one point eight or anything in that ballpark, if we truly believe that's feasible, no transfers from the general fund should be necessary because if those cuts are truly there and we can truly make them without degrading the level of services that this town provides to its residents and businesses, then there's no need to transfer from reserves because we've cut expenditures, the equivalent amount that we transferred from the general fund to the enterprise funds. So if we can get lean and mean, the general fund reserve transfer should be not necessary. And if the general fund reserve transfer is necessary, it is an indicator that we have not gotten lean and mean. Mr. Chairman. I do.. One last point please. Well, last call. Last call. Thank you for one more chance. I do, I'm offended by that. We sat through again, Mayor and Councilwoman Luke were there. We sat through what, heme 15 budget, line by line two years ago. We went through every line of the budget and we didn't find maybe what, $3,000 worth of savings. We are leading, we are under staffed according to multiple reports. We are 13% below paying our good hard working staff. We are border line, that was my question for the utilities for Jason, that if we add all these infill developments you're talking about, when do we have to go to 24 hour operations which will cost us a lot more money, operations, full time employees, so that will increase too. So we are leaning, we're actually incredibly leaning, we've had national awards that says how well our finance runs it. And so it's very offensive for you to say, we haven't taken our job seriously in the last few years. I've been here three years and every year, it is really hard going through it and they do a really good job. And we are incredibly clean and mean. And like I am doubtful, we're gonna find two million dollar savings. Because if we had had, we would have found it in our line by line two years ago. We really would have. And the New Town Manager has been here what, eight years. You would have found it, all the savings that you keep on saying. So I think that's really offensive Councilwoman for you to say that. I really do. Do I hear a motion to adjourn? Second. All in favor?