The meeting of the Duluth City Council will now come to order. Clerk Johnson, will you please call the roll. Councillor Wall. Councillor Wooder. Here. Councillor Forza. Here. Councillor Kennedy. Councillor Manning. Councillor Meade. Councillor Meade. Here. Councillor Svensson. Here. Councillor Lesnar. Here. Councillor Meade. Here. Here. Please rise for the Pledge of Allegiance. I pledge allegiance to the flag of the next state of America and to the Republic for the first state of one nation under God in the visible with liberty and justice for all. All right, welcome to the finance meeting. I'll go ahead and check in here with the administration, Mayor Reiner, any opening comments. Yeah, I just want to say thank you to counselors for taking the time to do this deep dive into the budget. Special thank you to staff, John Carlson, Jessica Asperger, the entire finance team has been at work on this process since June and based on the amount of time. I just went with them over the last two weeks, say three weeks. I've gotten appreciation for how much you and your team have all put into this. So, I greatly appreciate it. I know they're ready today. I help you walk through the line items as well as answer questions. And I think I won't say a lot more at a chance to chat with you on Monday evening and walk through the proposal, the new growth levy flat, but not status quo, recommending a few key investments around public safety and tax-based world than our life safety team. So administrative Montgomery, if you have any comments. Good morning everybody. Glad you're all here. I would echo this. This is the budget is always an all-hands-on deck. The vast majority of the burden of it falls on Jan, Jess and their team and they do an outstanding job, but additionally, it's our directors, our groups, our folks out there that are working it from the ground up. So they are also in the midst of doing everything they have to do during the week. It takes an enormous amount of time on their behalf to do this as well. It's also important to note with the budget as we look at it, it's not just a snapshot, it's a multi-year implication. So decisions we make in any given year, depending on all sorts of different factors, rolls forward into coming year. So you can't just think, well, we'll make this decision this year and the next year we'll make a different decision and yeah, things just continue to roll one into the other in different ways. And so that's a thing we're always looking to figure out and deal with. But they've done a great job. We're eager to present this to the council, to you for your consideration. And we'll turn it back over to President Randolph. Thank you so much, Mr. Montgomery. Before we begin, I wanna make sure we give a shout out. This is a beautiful space. Dorothy Pumpenhagen is our host and manager for the building. So shout out to Stuart Mountain and Dorothy and for allowing us to use this space today. With that I'll transfer it over. I want to thank Councillor Forzman. Early this spring we were hatching an idea to do this. He took the bull by the horns and put this together for us and it's I think it's going to be a really kind of a holistic way to look at this budget. So I want to thank him for that. And with that, I'll turn it over to him. Thank you, President Randolph. And I'll give all the credit to our budget thinking, it's this to us. So I think this is going to be an efficient way of getting the big picture and then have plenty of time to digest it over the next few months here as we sort through all things budget. So a couple of housekeeping items first. Based on our setup, which this is a great room, which is FYI, there are hot mics all over this table. So try and keep your paper shuffling and that sort of thing to a minimum because that's gonna all get picked up on the feed that's gonna get posted to the city's website. The other thing is my biggest school today is just to make sure that we stay on time so that we don't bleed into the next director update and then we're not short short for time on the back end of this day and that we have time for breaks too because it's a long day to sit through. So I will follow the same format that we've talked about which is we'll do the presentation and then we'll have time for questions at the end it sounds like each presentation is only going to have a few different slides so it's not going to be where somebody is presenting hopefully for 25 minutes and then there's five minutes for questions. So we should have plenty of time to get through each one but then I'll be a little bit of a stickler on just wrapping up at the assigned times to make sure that we have time for the next one too. Any questions before we get going? Okay and this can be a little bit more free-flowing since we don't have to follow the, you know, hit the button and it's your turn to talk. So just raise your hand if you have a question. But we will say questions until the end. So with that, I'll turn it over to Jen and Jess. Awesome. Thank you. Thanks everyone for letting us do this. I will say huge thanks to Jess in our audience, our Andrew and Kyle. That is our entire budget team for the city of $450 million. So they were so hard on everything that you see. One number has a million things under it, right? And they're the ones making sure everything is in line and ready to be presented. On top of that, Jess took an enormous amount of time to coordinate this, arrange this, from coffee to presentations. Everything that you see with budgets in the council comes from these three people. So it's really amazing the amount of work that they do, so I want to give props to them. We designed Budget 01, 101. Really, this is how it's going to flow, but it was based on, Jess and I putting our heads together and trying to think about the questions we hear most frequently from the council, and so trying and the community, and trying to think about the questions we hear most frequently from the council. And so trying and the community and trying to just explain in a little more depth about what we're talking about with budgets, roles of the county versus the city, assessments, valuations, appropriations. What does all that mean and what is your role? And so you're going to see that we're trying to answer what we hear most frequently. And then we plan to leave as Chair Forrestman mentioned plenty of time for questions at the end. And you'll notice that with all presentations, it's fewer slides, more room for questions, and kind of the informal atmosphere than being in the council chambers. So, what is the council's role in the budget? So, you said some of the tax levies, but not all of them. So, the levies that you said are of course the cities and so we need to certify to St. Louis County maximum tax levies by September 30th. And so the upcoming City Council meeting is our last meeting in which you can vote on the maximum property tax levies for the city, the parks, the DTA, and the HRA. You will hear from the DTA at the next meeting, other than that you've heard from the HRA, the city, and then the parks is a fixed $2.6 million referendum. The HRA is the only levy that is fixed by resolution. The rest of those levies will come back to you in December. So they can go down but they can't go up. So you're setting a maximum levy right now and by December it can go down but it can't go back. It can't go any higher than where it's fixed. So you'll see the ordinances come through for the city, the parks, the DTA. You'll also see an ordinance for appropriations. So what are appropriations? Those are our spending limits. So things that the city can write a check for, that is the budget ordinance. It comes through in the form of an appropriations, but ordinance, and so you vote on that in December as well, and that sets the maximum amount, per department for what we can spend for the year. I'll just point out, we've said this multiple times, but the city is only 27% of that property tax bill, right? The county's 41%, we have the parks referendum is another 2% and then the school is about 26% and other is where HRA and DTA fall as well as some others. And here is an example of a property tax bill. Your responsibilities to the HRA, the DTA, parks and the city and included in that other are the Arrowhead Regional Development Commission, the St. Louis County and Lake Regional Railroad, the Seaport Authority, St. Louis County, and then the School District are their own. But those are the ones that you do not do any, take any action on for their levies. All right, so as far as the timeline for you all, so back in June is kind of when we as a city in the mayor sat down and said okay, here's where we think we are What are the marching orders? We know your priorities and that's when we Provide a direction to departments They worked on their budgets from June through August and then the mayor just presented the mayor's budget on this past Monday. So I have that weird arrow going back because typically we would present between September and December and I can tell you personally by November I'm like okay what was in the budget that we the mayor talked about on Monday of September. And then, and then I felt like it was, we were asking you all to make a decision on a max levy at the end of September when you didn't have the deep dive information. And so, while this is crunch time and crunch time for department heads, so I'm really appreciative to them. And it's crunch time for me. I felt like, and Director Cross was about this. This was the way to get you to information, you need to make an informed decision at the end of the month. And then also, so you understand what you're doing with the budget process right from the get-go. Because I think that's, especially for the newer counselors, I think you're trying to learn so much much, so this just helps maybe give you some big picture of what the whole process looks like. We do have a few others scattered through, so the airport and the deck, you'll see that in December. But you'll take this, as Jim was saying, you'll take the mayor's budget. You're looking at the deep dive right now by September 30th. You've set the max levy. You can ask questions, get the clarification to the next few months. And then the December 7th, December 9th, that seven is when we would do the Truth Intexation Public Hearing. You'll see the first read of the ordinance for the appropriations at that point. And then the second read will set the max, set the ordinance for all our appropriations and the levies will be December 16th. Kind of understanding more of how the city and the county are different. So this is taken from the Secretary of State of Minnesota. And this is generally the county versus the city goals. And yes, there's some overlap for sure. But counties are generally responsible for the property tax assessment, high-concuban human services, tax administration, elections, record keeping, the list goes on, cities are responsible for police and fire protection, street maintenance, who are in one of the parks and the rep as well. You may also choose to provide utilities, sell liquor, operate hospitals, and pay the airport for buy-view-go-the-service. So you can see, generally in the state of Minnesota, this is kind of the differentiation between County Roll and the City Roll. The numbers are a bit blurry here, but I wanted to point out, on the left side, you'll see our proposed 2025 Copy Cat Study on the right side. This was the 2024 proof- approved lending for the county. So on the left side for the city, you see that our approved lending for 2024 was about 42.6 million. So that means every 1.1% levy point is about 426,000. The county, you can see, I believe it's 168, thank you. And so their lucky points, 1,680, 1,537. And this is not to, by any means, put them under the bus. This is just to show you, you know, we hear only, oh, the city is going up by this 50% the county is going up by the same. Those are two very different dollarums. So, just kind of a perspective. Just just really quick. So this is the one presentation where we're going to do questions during. So, since it's 101, like if people have questions as we're going, please feel free to raise your hand if those answer are welcome, Councillor Kennedy. Oh, I do have a question. On the three buckets, the arrowhead, the railroad, and the port, who approves those levies? Is that a mayoral piece? Who says yes to those? They're governing authority. So they're bored. So whoever, yep, they certify their own levies to St. Louis County, they don't come through the city. And do they all max theirs out? All three of those bodies? I don't know. Oh, okay. Interesting. Jen, can you talk a bit about how that's changed over time? So when I was on the council, they would present their levies to us and we had a year where we denied and then the authorities went to the legislature and made that change. So they used to have to present for the approval to the city council. Thank you. I'm on the timeline. I saw the deck and airport get to San Luis de San Verde. Can you just have a little more? I'm just curious how that gets decided after the maximum budget that we're doing now. So, in the airport they don't tax. So this is just the buy-through budget. Just for presentation purposes now. So you all have a role in improving the airport budget, but not the deck that's for information. Okay. Good question. Okay, so then the difference is between the county and the city of New York. So this is the taxation cycle. And so you can see, say those county can start to allow with assessment and classification. So they are responsible for valuing your property and for assigning and taxification. So that means valuing your home to say 300,000 and assigning yes, it's a residential home. It's not commercial, it's not a rental unit. And so I want to show you something that they put out, but I was really helpful and we'll get back to this. It's a lot of misunderstanding of the role of assessors and how they affect the property tax on horse pay. When someone hears the term assessor, they seem to think it's a scary figure reaching for their wallet. Not so, assessors don't set tax rates. Assessors don't chase tax dollars. And assessor is interested in fairly determining property tax. And it's a great pride in it. Property tax is determined by a simple formula. The Sessor is only, in fact, one of these variables. The value, and they do so with the final accuracy. The Sessor's of our tax collectors or the legal tax centers, they're just a fellow tax makers. And their primary goal is to make everything fair and effort. Imagine that you had a restaurant with two friends. One orders hot dog, one cleaning caviar, and you order a steak. The waiter comes to the table with a total bill of $100, but he doesn't know how much each of you should pay. If everyone paid the same amount, the guy who ordered capital would be happy. But what about the guy who ordered a hot pot? Enter the assessor's. The food is your property. Just like these meals, some people's property is worth more than others. And it's the assessor's job to determine how much each property is worth. That's it. So, in the same way the value of these manufacturers will be determined. An assessor places values on governance to ensure fairness and equity. After the assessor determines the value of each property, local government and lawmen will set their budgets for the company. They set the tax rate in for the chip of the use of the property does not affect the amount of property taxing. It determines the portion of the budget from the major property on the case of it. The sum total of all these budgets is a set number that has to be divided up among all the property owners. So even if everyone's value is cut and out by the assessors, the tax rate will be raised in order to generate the same amount of attacks wherever. The assessors that will determine the taxes you pay, they just determine the values of progress, thinking that it is fair and equitable as possible. When you notice a change in your progress in praise of God, the changes that result in a never-ending quest for fairness and impassuracy. Assessors use a detailed system to get accurate evaluations. First, the assessor will set similar parameters that will serve their sale prices and the terms of condition you'd say. That's the reason they're all oranges, and they're going to replace the next order. Studying things like square footage, age and location, helps assessors determine how comfortable another fabric is to work. Even some of the small details, like an extra bathroom or finished basement, can result in significant differences in value into otherwise identical cars. Ascension 18, the federal database of real estate information to make this process as precise as possible, changes in value are identically the result of what real estate copied sales for major changes to a fabric. Can you model pictures or image basement? Future fabric is value could increase. that resulted in real estate market sales for major changes to a property. Community model conditions were a major basement. Future properties value could increase. When you see your homes at Frays Valley, you can rest assured that the number has not been brought out yet or generated with many food that the equity can back to a save money. Long story short, the assessors go through to help and contract the payment. They focus on this accurate value since broad tax collection. The assessors are here to help the drug champion and their focus on these accurate balances for our tax collection. The only things an assessor can do is what the parents can have. And they take the whip cry. The question is, what do you want to do? So that is the first portion. So when Sigurd's County has set all the, they've valued all the parts of the Duluth, that gives us our tax space. And then the local webbing is where we come into play. And we've already said, okay, we're looking at our budgets. We're looking at our revenues. It's been a choice. We're seeing a gap of about 43 million. That's what we've looking at our budgets. We're looking at our revenues, it's been a year since we've seen a gap from about 43 million. That's what we've all saw last Monday. And so we said it fixed amount of 43 million in change and taking that divided by all of the total tax base gives us the tax rate. And that is applied to every person in Duluth to give us the city's portion of the property tax bill. Now you do that again for the county so the county does the same process for their property taxes. The school does the same process for their property taxes and then this is what we end up with. So it's kind of hard to see up here but so the portion right here and you have it in I'm not going to have you know but I can send it is the same as county and that's about 41% of the bells we've called before. So you can move the risk there, it's about 20% or 60% and then the school distance began around 60%. All the other pieces are long been here. It says, I believe it's a special taxing district. And so you can see that it's hard to tell what's in the special taxing district, but it's all the ones that Jen mentioned before, and we only approved the DTA and the HR agents in that bottom amount. Okay. One of the other things we've been hearing a lot is that people don't really understand what commercial tax-based growth means. And so we just wanted to do a little example in the city of council. So on the website, we have the city of council and all of you, it's very egalitarian, so everyone has the same home value. And the City Administrator says, we need a love of about 43,000 to keep the city going. It only works part-time. So you all say, okay, once our property tax? And in order to hit the 43.4, you all have to pay about $4,800. Every single one of you, because your home values are the same, and that's what the levy is for the city. Then this really cool business that comes into time called Gen and Just Financial Services. And they come in and in 2025, the city for some reason, the city manager says, I don't need to raise, I'm good, 43.4 again, but now you're all your home state, the same value, but now this business is in town. So businesses have a higher weighted class, so typically a residential is about 1% class rate. Businesses are 2% class rates. So they are taking on a bigger chunk of that 43.4. Yes ma'am. You know the properties that are nonprofits that don't pay you tax, so in the schools and hospitals. Is that a state mandate or is that a federal mandate? Is that the same across the country or is that our state? So yeah, it's a federal. When they're tax exempt, that means tax exempt, right? Property tax, a sales tax. Yeah, the 501C3 is an internal revenue code mandate that says we can't tax them. Staying across every state. Every state. Thank you. So, to this point, Jess, do you have a breakdown? I don't think I've ever seen one on what percentage of the levees stays by residential commercial. Yeah, we can have a little bit of that. Yeah. More franchises. Ameen. Yeah, we're DC. Are they C3s? They're nonprofits. Yeah, it just depends, I don't know what everybody's tax form is, but The mayor brought up a good point. They a lot of them may pay payment move tax or franchise fees You know, so there are other ways in which they contribute Versus the actual property tax and that's always a tricky balance as you may recall a couple years ago City of St. Paul for years had a tax had a street maintenance fee that they charged all property owners and a group of nonprofits led by some churches and some other nonprofits and that had been in place for 30 years that's how the city of St. Paul raised their street maintenance money which drew a street fee based on street fundage and smothered things. That went to court when all the way up, quite high, into the court system and the courts overruled it. They threw it out. They said, no, that is essentially attacks. And the nonprofits are exempt from that fee. And St. Paul had a completely revamped their system. And in the year they revamped, their levy went up 25-30 percent because they moved it from the fee into the levy. So there are situations where people do try to tax nonprofits, but it's always a little bit tricky as to where the feds and the courts will ultimately come down on whether or not it's in fact taxable or feeble or not. Do you see that as revenue that we could be getting? It feels like they use a lot of roads, they use a lot of services, and I say they, and I'm a small nonprofit, but the larger ones, and it seems like we're not getting the tax base, which would actually help our budgets. Well, several years ago, in the last couple years I was here, first go around. We looked at that and we were considering going to a fee based addition similar to Saint Paul and that's the point in time when the court stepped in and said can't do it and so that pretty much shut down that that opportunity to gain that revenue from nonprofits who I mean you think of the hospitals you think of the hospitals, you think of the universities, the number of employees, the number of students, the number of patients, traversing the roads, coming, you know, impacting the streets, but the courts have said no. So that would have to go to the federal policy could be helped by that, whether it's potentially. They are better fire stations, supporting a police or even in the rural areas, the public safety. I believe you need to rethink that. Well, you would have to look at the court rulings and see what they pointed to. And it may be state law, it may be federal law, but it's a lot of federal, you know, non-profit considerations in the IRS code. And, you know, obviously getting changes in the IRS code is never an easy, easy left. So I feel like my thunder was kind of stolen, but you all have been way less taxes now. Thank you. Thank you. I can't miss out on a lot of projects for financial services. Yeah. This is basically making the pie bigger. Yes. This is what you mean by making the pie bigger? Yes. Well, the pie is the same. The pie stays the same, your slice is small. If your pie stays the same. Right, correct. Your life. So back in 24, you were paying 4.8 because more people joined your city, or another business, and took a bigger chunk of the pie. Your piece got smaller. So with everything saying the same, just adding more to the community, you're paying $1,000 less in the theoretical package. And this is another argument to say building out of commercial businesses will allow all of our residents to pay less so projects like, you know, recent projects that if they're coming up, for us to be welcoming and business friendly allows everyone, even the ones that are can afford it to pay less. And to Jess's point, that double in Minnesota, it's a progressive tax rate structure, so that double of commercial over residential. So to President Randolph's point, reverse it and not growing your commercial tax base puts more pressure on your residential homes. And when you look at it, you really have two choices. Jen and Jess financial come to town and they expand the tax base, the amount of taxable property. You have two choices. You can say we're not raising the levy, we're going to stay the same and therefore everybody gets a slight tax reduction because Gen and Jess financial are sucking up a bigger piece of the overall tax base. Or you say, we'll keep everyone's taxes the same as what they were last year. And all of that new tax base growth becomes what the mayor talked about, new growth, new levy, and that's where you can grow your services and grow your opportunities for the city to do different things without adversely impacting anyone's taxes. They don't go down, but they don't go up. So that's always the two choices you have with new growth. And the decision to go down that first choice, which is reduce people's taxes and not have that growth. What was our mindset for that? Why didn't we just leave everyone's taxes flat? Because we're actually reducing this year. I have a good question to answer throughout the course of the day, right? Maybe. And also, the question to, so like a development process, how do we have for them to have a temporary met? This high-wind't change, right? Correct. We would just stay the same for 26 years of work. Or nine. Or nine. Yeah, exactly. But in the case of like a Costco, then you're capturing additional sales tax from a, sure, do you remember? I remember you were on the council, but they made a very compelling pitch on, you're on the council then. But they made a very compelling pitch, Sean. You're gonna draw more people into the region that only wise wouldn't be spending money. And that's, I mean, we're probably don't have a major conversation point around this, but that is why retail development is so critical in the city, other than just, you know, good for the overall city. The city derives a 1% tax base on all Creason retail and so Costco. Yep, we're not getting the property tax right now But we're getting a lot of retail 1% so that's why retail development is such a critical part of what we're doing in the city Back to Jen and just financial services Yes back to Gen and Jess financial services. Yes. So, very simplistic example, but just to kind of show you what the value in expanding that tax base is the commercial goal. So now we're going to get in the budget. So one, you know, the council's role is levy stuff, certifying max levy and setting the final levy at the end of the year and December. And then you also have a role in appropriations, which is our spending limits through our budget. Now, I'm going to pause on the slide for a second because the city's overall budget is about $440 million. But it's comprised of multiple different funds. And I think sometimes there's a misperception that, well, you have $440 million. Why don't you just hire more police officers? Why don't you just fix our streets, right? Well, we, the only part of money that we have that doesn't have restrictions is the general fund. And you see that's only 100 million of the 440, right? So 25% of that pie, we have more flexibility in the spending. The rest all have restrictions. So special revenue funds are funds, think of a savings account. There are a lot of your grants, a park referendum. There are things that have to be spent on what the legislation says we have to spend it on. ARPA. Right? ARPA came with all of these requirements. We could only spend it on those things. It went into a special revenue fund and was spent out of that fund so we could track what we spent ARPA on. The Parks Fund. We can only spend that $2.6 million of the parks fund on parks eligible projects. We can't spend it on the fire department or the police department, right? It can only be spent on parks. Our whole workforce, workforce gets grants. They can only be spent on those workforce initiatives that they are eligible for. So those are not pots of money that we can spend on city services. They can only be spent on what they're eligible to be spent on. Dead service funds, dead service funds are funds that come into that dead service only to make dead service payments. That's all we can do with them. So on the levy, we allocate a portion of the property tax levy to make those debt service payments. We have to use those funds to make the debt service payments. Capital projects funds. That's where we capture all of the funding for our capital projects. So our roles, those are all capital projects. The St. Louis River corridor projects. Our CIP is a capital project. We can't spend CIP on police services, right? We can only spend CIP on CIP eligible buildings and we have to track them in a special fund to make sure we are in compliance. So that's what capital service, Capital Project funds are. Enterprise funds. Enterprise funds think of a store. Think of a private business. That's how those are run. Rates are set like prices to pay for all of the costs of operating those services. So our water fund, our gas fund, our parking fund, our golf fund. We charge rates through water rates, gas rates, golf rates, and those are designed to capture all of the costs of providing the water, providing the natural gas, providing golf. We don't tax everybody on those, right? We don't have a levy that says, well, whether you use tax water or not, city water or not, you're going to pay for it, right? It's only the consumers of those specific services that pay for it. And they can't be spent on anything else. They need to be spent on what we are capturing the funds for, the prices for. And then internal revenue funds. So those are like, those are funds that we kind of internally charge. So think of fleet or medical. So departments bring their vehicles to fleet, and then they have to pay for them. It's like our mechanics shop, right? And so that's how we pay for fleet. Same with medical. We all have employees, and we have to budget for them. It's like our mechanics shop, right? And so that's how we pay for fleet. Same with medical. We all have employees. And we have to budget every one of our employees' medical. And then we transfer it over to this internal service fund so that we have one place where all of the medical and the entire city sits where we can manage it, track it, make sure the fund is healthy, things like that. So that's, we're like charging ourselves. That's what Internal Service Funds are. We don't charge, we don't let others outside of the city use our fleet and we don't let them join our medical plan. Right? It's only for our internal departments. And so, what your role is with all of these is you approve appropriations. So you approve spending limits for anything we set taxes and rates for. So you're going to see that you approve appropriations for the general fund, all the departments in the general fund. Any special revenue funds that have taxes and rates are enterprise funds, right? We charge rates for those. So your role is to set the spending appropriations for those funds. And to clarify, this will happen in December is when you actually set it. And so the administration proposes a budget. We propose a level of appropriation, a level of spending that we recommend for all our departments and all our services and everything we do. Council looks at that. In September, you've already set the max level. You've already said this is the maximum amount we can spend. You will get a budget that shows that amount being spent. And then in December, you can look at the budget and you can choose to make changes to that budget. You can suggest changes to the budget and set the appropriation. The city administration then decides how to spend and whether to spend and when to spend and what to spend within that appropriation. Just because changes have been made to the appropriation does not necessarily mean administration must spend it in that manner. There are certain limitations as to how money can move through a budget, within a budget, a department budget and between department budgets. There's limits on what we can do there. But administration makes the determination of how and when to spend whatever has been appropriate, or to decide whether or not to spend something that's been appropriate. So that sometimes gets confusing with counselors at different times. They think, well, we have suggested spending this and therefore it must be spent. It often is spent. It normally and usually is spent, but it doesn't always get spent and it hasn't always been spent either to the full amount or to a lesser amount. So that's the role and the difference between what council does and what administration. So you set the levee, you can raise the levee, you can lower the levee request in September. Once it's locked in, you can only, as Jen said, lower it in December, but you can't raise it. So all of that movement of the levee is sort of of recommendation of council. Think of administration drollies to just whatever you guys sign off on in December. Administration just has to work within that parameter. We just have to, we can't exceed that parameter, but we can operate less than that parameter if within certain limitations. Quick question on how much money you can transfer from department to department is that a hundred thousand what is that number? 10% 10% anything of the department it's moving out of of any budget. So if you are moving from one large police budget to a smaller finance budget, the finance department can't go over their 10% spending appropriation. So it's the smaller of the trade. So there is a little more teeth to what the council is to start. Correct. Because there's only a 10% give on once we lock and load. Correct. Thank you. You could just follow up and I think Wendy's been trying to ask a question. So you could move more than 10% on of any one budget, but you can't spend more than 10% in exceedance. Is that how to think about it? We can't move it either without going to council and doing an ordinance amendment. Right, got it. It's a 10% moving into or from. Yep. Thanks, I have several questions. Okay, a couple of more quick. Does the police department have all interest special revenue funds? Great question. And I'm glad that you mentioned that. So you're going to find throughout the day pay attention to these colors because there are so many departments that have multiple budgets and multiple funds. We try to color code everything and we're going to slowly explain to you the finance sources. So police are general services, general fund. When you think of the general fund, think about the general fund is designed to provide the basic services to the city. It's what we tax people for. Everybody gets police services. Everybody gets fire services. Everybody can use our library. Everybody can use the parks, right? They benefit everybody. So that's always your general funds. There's no necessarily spending restrictions. It's available to everybody and the levy pays for it. Now if you choose to do natural gas to heat your house, we're not gonna put that on the property tax levy because that your heating of your home doesn't benefit everybody at the community as a whole. So that's why it's tucked away in an enterprise fund. So when you think of the general fund, think of the services to the general population, the whole community, that's what's in there with them. But police also has other funds for some of their special programs and operations, right? Yeah, other high portions. Some of them overlap. Yeah, so police get grants for some of their initiatives. So you'll see council resolutions for accepting grants. So, it could be their alpha hot tobacco and fire arms grants. It could be some of their ballistic vests. Those are in a special revenue fund. That's that savings account, that fund that could only be spent on those initiatives. But police as a whole general services. I think you said earlier that parks fall into the special revenue, but then you also said to kind of fall into general funds, do you think so? That's another overlap. That's an overlap. Yep, so the referendum says it can only be spent on parks. We can't spend that to 0.6 million on anything else. So that's their main funding source, But park maintenance is in the general fund. That's kind of a strange one because of the referendum. And then if I may, like, two main developments, service center, those types of services, where do they pass on the part, or is it just coming on to develop? No, human development center, like, is that, that's just county? That's county. There you go, so we have, H, the H, you see contract is in the transfers and other functions, budget for 24, because it doesn't really fit in the department in the city. So we weren't sure where to put it because we don't really have anyone who specializes in that work. The colony does this is health and human services. Yeah, so we put it in this 700 transfers and other functions, mainly because we didn't really have anywhere nobody in the know that. Thank you. Madam President, if I could just for a moment, folks, phones, I'm sure we'll start lighting up. We just had a vehicle that lost control coming down the coastside crash and Myers Wilkins penetrated the wall of the gym, thankfully no children or image in no one's been the two occupants of the vehicle are injured not seriously. All indications are mechanical failure signs of impairments fire and police are unseen. I just spoke with the chief chiefs in Iowa. I spoke with the super intended. It was very grateful for the support of the fire and police wanted to reiterate that all children are accounted for. So obviously, this is evolving in a real time. They're an example of structural integrity of the gym. That's the extent of what we know right now. So thank you. Well, just for the interest of time, why don't we keep going on slides for a little bit here and pause on the questions since we, I think we want to get through this piece. Sure. So, let's quickly go for the general fund. There's a appropriations for the general fund. So you are going to see these budget presentations today, the directors of these departments will be present to walk you through the details of their budgets, answer any questions and come to December, your responsibility will be to set the approved ordinance for setting those appropriate. That was 24. It reminds me of the transfers in other funds. That would always throws me. Remind me again about that one. That's a good one. So transfers in other functions is a budget that benefits the city as a whole. It's our retiree health insurance. We couldn't retire a health in every single budget for multiple reasons. One, we don't want anyone making budgetary decisions. Like if they're falling short, we don't want them to say, well, we'll take it out of the retiree health line because they can't do that, right? So they don't have necessarily control over that line. So we put it in the transfers in other functions. It's also like our general liability transfer into our general liability insurance. Our work comp, things that don't fit in a budget and we don't want departments controlling, having control over, go into this budget. This budget is managed by the finance director and I will tell you that we were running out of time putting this agenda together, so that is the one budget that you won't get a presentation on today. And it's mainly because it's a lot of really broad categories that don't seem to be in the budget. And with the big change in our retiree health care benefits, we're going to be seeing that will dramatically down. Yes, okay. That and we use $9.2 million of reserves in the 24 budget. Okay. We'll see that in the next part. Okay. Yeah, to talk about going back to the conversation about 10% of the department transfers in and out and then also the transfers budget. When we talk about transfers of FTE, for example, the police FTE moving to say the attorney's budget, how does that work? Because we didn't see that come through council. How does internal transfers of FTE kind of fit into the budget? So, if we know that we're going to transfer police position to the prosecutor for the year, we do that up front in the budget. We don't have to transfer it in the middle of the year. So we build it into the budget. So for instance, what the pilot program for police and fire, that's already built in the budget. We don't have to do a transfer in the middle of the year because we already built it into the budget. Transferring in the 25 budget. Transferring is we set a budget and then we need to start moving money. That's what we're talking about. But if we're in the year, let's say like in 2024, we moved the parks person over to life safety for doing the camera. Is that part of the 10% limit? Yes. If it's during the year after the budget's been sent. And does that come through Caldwell? I just don't remember that coming through Caldwell. No. Not if it's 10% but not if it's less than 10%. And then that FT would have hit that 10% rate. Thank you so much. Because the police budget is 5.7 million. Yeah. But I think also for clarity, I can't speak to what was presented last year, but no FTEs are being transferred from police to any girls. Here are the nine departments, and this is exactly what you were saying to show visually that if we were to transfer the 10% rule, so we can only transfer 10% to fire over to finance, but it's finances 10% because we're low. Those are all divisions that fall within those different departments. That doesn't happen here. No. Between departments. It's a pretty uncommon. Yeah, departments. I'll tell you briefly that our budget team, the three folks here, spent an incredible amount of time working with departments identifying red flames. They don't wait until November or December, they're on this come February. They're looking at January stuff February, February stuff in March. And the winter that never ended a couple of years ago, where the snow removal budget was exceeded, like came, come March. They were on it in March. They were figuring out what they're going to not do and change the rest of the season to get through so that budget didn't exceed. They were on it in March. They were figuring out what they're going to not do in change the rest of the season to get through so that budget didn't exceed. So just so you know, these three people are always on strategically trying to work with departments and identify red flags before December rolls around and we're like, hey, council, we're going to have to do a major shift here, right? If we need to come to you, it's hopefully going to be in like October. Once we've exceeded an exhaust, I mean, exhaust to all of our options, which very really well hasn't happened. So I'm going to have to go ahead and ask. And then this is just to show you the changes. And like I said, you'll see more details on these departments as they present throughout the day. And the transfers and other functions look like the big change that's 9.2 million in reserves and 4.5 million in retail and then the incubator proceeds were 1.8 million. So those are the significant changes of that. For those who weren't here last year, just clarifying the 9.2 million from reserves was spent on streets from reserves, one time funding in the 24 budget. So by not spending that amount of reserves, that's just subtracting right off the top. You've got it. We're not doing that again in 25. Yep, in streets and equipment. So you will see in the department budgets that we are trying to both show you the line items, but then also convert that or translate that to the programs that people are working on. So you're all probably used to see, you know, the line items, supplies, salary and benefits. But we also want to talk about what we do with those salaries and benefits. So for example, the police department calls for service that would show up as salaries and benefits. That doesn't tell you a whole lot about what they're doing. But that program tells you what police is actually doing with that line-in and salary and benefits. Another example would be natural gas odorizing. That would probably fall under a supply line. That doesn't tell you a whole lot about what the utilities are doing. But adding natural gas odorizing tells you somewhat what they're doing. I can't explain what that is, but so we're trying to show you, we'll show you the line items, but then we'll go to another slide that will kind of give you the breakdown by program. And it's a percentage-based. And as we also score it as a city to the mayor's priorities and so you can kind of see it the alignment. And so the goal is to see, say, what does it cost to translate that to, what do we do? And then how does it align with our priorities? So you'll see the programs and then you'll also see the alignment. You're going to see most align, more align, less aligned and least aligned. Least aligned, it does not mean that it's not important and we should be doing it. It just means let's do it as efficiently as possible so we're not putting tons of resources at it because it's not highly aligned with the city's priorities. Good question. Can I back up one slide? Can you explain the incubator income? Yep, so if you remember, council brought forward a resolution in 2023 that for 2024 we would build in $1.8 million. Well, it was the entire proceeds of the sale of the Serious Incubator Building. If you remember, it went into the Broadband Fund originally. And then the Council Initiative was to transfer from the Broadband Fund into the different categories. Dita was one, Parks was another, and then the rest really fell in the General Fund. And so 1.8 balance was included in the General Fund. Where does the program stand currently? If those funds have been transferred out, is that an empty fund now? What is the status of funds that are had funding in it, and then that funding was reallocated to other initiatives. The other still there's now going up to my head like 1.9 million in it and the reason there's still funding in it is if you recall we are doing a major reconstructive West Superior Street and we received a significant raise grant. Part of that raise grant has a broadband requirement in it. And so right now that's the funding source for that project. If other grant funds are something should come about, we can start to make decisions on that, but right now that's why that 1.9 remains in there. And when you see a broadband requirement, you mean the raise grant is saying, you need to have wireless functionality within your project. Yeah, so when we applied part of the scorting mechanism was already within a half broadband. And we said yes. So leverage the $25.000. Yeah. Since we're on the incubator, we had allocated a portion of fund last year And we said yes. Okay. To leverage the $25 million. Yeah. Yeah. Since we're on the incubator, we had allocated a portion of funds last year for a fire wage increase and knowing that that was like one time funding is that baked into this year's budget formula. And I know we'll get to that later. Yeah. Perfect. And that's an example of one time funding having longterm continuing annual impact year after year after year. So it's not really one time. Sure. It's actually not at all one time. No, it's not at all one time. It's only one time decision that you're over your implications. Yeah. And you all saw this on Monday, but if you can look at the programs, this is just showing you, like, example of how we're talking about we had an F2E in the attorney's office. It would show up as salaries and benefits, but we're increasing our criminal prosecution. So it's just an example of kind of what you'll be seeing. And this is near talk about this and its presentation as well. Just the temporary transferring of the funding of three FTEs that will just temporarily go into 2025's fire budget as we work on reducing our overfiring. So you'll see that in their presentation. Just before we move on, just to counter all this question earlier, it's not a transfer of FTEs. It's using what we and DPD knows will be unexpended staff salary in their budget this year to try this model. If successful, we'll then have to find the funding for the FTEs and next year's budget. All right, so we thought we put together a budget example for you. As I mentioned, the three budget folks are continually trying to manage, right, this, with departments, millions and millions, hundreds and millions of dollars. And so our city, we as the general fund, as our example, our city general fund has a fixed amount of dollars. And so our city, we as the general fund as our example, our city general fund has a fixed amount of revenues, right? We set a budget for $120 million and that's what our appropriations and I'm using 20 24 dollars. And the example is your household. So you've got to work and you are salaried at $5,295 a month. Many of all your payments, right? Rent, maybe a mortgage, you have a car payment insurance, groceries, childcare, and everything else. But then things come up, right? So some bricks and arm. You got medical bills, hockey fees., now somebody wants to play hockey. Gas prices increase and you're like, uh-oh, your furnace breaks. So what do you do? How do you do all this? So you start making decisions like, well, we're going to have to buy generic and groceries and more ramen versus filet, right, or whatever it might be. And then all of the other things, like we can't go to eat for the next few months, like no more shopping, right? All those things. We're doing the same thing all the time in the city, right? So something comes up and engine goes down. They're almost, they're over a million dollars right now to replace. Like that is hard to find. The entire finance budget is $3 million for all the staff in the finance and we've got one engine. That's a third of that. That's hard to find. A new program or initiative. We want to now do this. We've got to find that somewhere. So we're like, okay, who's going to be able to afford that? Gas prices increase, right? Now we can't prep for that. And so we're thinking like, okay, how are we going to manage this now? Over time, things like that. These are all coming up, right? It's no year that didn't seem to end a couple years ago. One year, DPD had like five investigations in two months. That investigations are a lot of overtime, right? So right away we're like, okay, how are we going to do this? So we just thought to give you a more relatable example of this is what we're doing every day with departments trying to figure out it it may seem easy like well you have 120 million dollars what's 75,000 well that 75,000 is absolutely tied to something and that's something then that we cannot do and so we just wanted to kind of show you what it's like once you set these appropriations. We're often running and there are tough things that come up. We cannot foresee and plan for everything that happens in a year. We do our best and we try to forecast what we can, but things happen. How much contingency do you build in? We build in no contingency We we don't spend reserves unless we have council So we build our reserves if we have like vacancies Or maybe we collect more sales tax, but do you remember a time when you had to come to council and ask to spend reserves or something a problem of crisis? Well, we will come to council if there's like an engine breakdown. We'd have to come to council and say, we need to spend reserves for the reserve. We tend to be very jealous of our reserves. We think of them, I mean they're there for a couple reasons. One, they help support our bond rates by having additional cash on hand. So it impacts our borrowing costs. We view them as our catastrophic tool. We don't want to squib it away on 25 little nickel and dime things. We think they're there for significant major catastrophic kind of issues that we have to deal with in order to continue to function. We're very careful. We would much prefer to do this, managed by moving other line items around, and tightening our belts in here and there before we even consider touching the reserves. One quick question, where does tourism tax come in? Special revenue fund. It gets transferred into different department budgets. The general fund transfer portion. So please get a chunk of it. Treasury gets a chunk of it. Fire. Street maintenance. Yeah. And does the CRT and the community investment respond? How does that play into this? Is that an area you'd go in an emergency or how do you view that fund? Well, that fund, again, it's one of the anchor funds for our bond support in our bond rating. It also requires a much higher council threshold to access than just coming to you for just spending normal reserves. So that one is particularly more designed for major infrastructure kind of things, investments in core services, things where you're going to get a return on. We would almost never consider using the CIT for simply operational expenditures, because those are spent in God. But if you're going to use it and invest in a new water plant or a new thing that has a 50 year life, you're getting a return on those on those dollars. Like you really don't want to touch those for just operational expenditures because that money is just gone. So no worry in this budget, we're using reserves or CIT funds. Correct. Are we in a talk and dive deep into reserves at all? No? No. Can you tell us like is it 25% is that the healthy amount of the total city budget That reserves should sit at like what percentage are we at? Yeah, so a couple things The healthy percent minimum of reserves is 40% of the general budget between CIT and And let me tell you why that's important. It's not just to talk about if something happens, we have debt payments that we have to make. That's the first thing that has to get made. And so we have to have funds available to be able to make debt payments. So reserves back up our bond rating because these investors want to know that if something, you know, drastic happens, COVID hits in the federal government doesn't offer us a RP. We have to have a mechanism to make these bond payments. We have a lot of very large general obligation bonds that we are going to be issuing in the next two years. Very large ones. Consolidated maintenance facility, water plant, like with water plants, infrastructure upgrades, lead service lines eventually. That federal and state money is going to run out. We still have 10,000 lines in the city we have to replace. We're going to have to bond for things like that. We have the sports corridor, right? We have to finish the sea wall. We have all of these, we have annual CEP and CIP. These required debt payments and if some for summaries and something happens we have to be able to make depictions and that's why it's so important to have a reserve. It's not because we're trying to hoard money and tuck it away and not spend it and it's because we have to show investors, we're good like investing us and have confidence and give us a low rate because we can make our payments because we have and a lot a lot of it is the CIT fund because it's hard to get at and we can show them we have you know this fund and so we balance that right we don't want reserves to get too high reserves are one time we don't use reserves to plug a budget right a budget is ongoing we need to fund departments ongoing so we try to be strategic 9.2 million on streets for a year, one time improvements that will benefit us many years in the future. Beethals, right? Replacing equipment. Rolling it into a replacement plan. So things like that, that's what reserves are designed for. That's why we got to a point where we were like, we can afford 9.2 this year and stay within our spending that and do it on long time program. So that's how we look at reserves. So do you have that number for where we're at right now? Yeah, I think they mentioned on Thursday, on Monday, on 25 million for General Fund and 31 for CID. That's right, thank you. Yeah. How does the CIRT fund grow? Good question. Where was it funded from? Can we start there? Yeah, so it's funded from. We used to get funds from the casino. Yeah. To do some street work. So it started with that and it grew. And now there's no funding mechanism that goes into there. So it grows, it's invested through the State Board of Investment, which allows us to invest in equities. So remember the OPEV Trust was invested there as well. Now the OPEV Trust is no longer invested because we bought treasuries, but now the CIT fund is invested in equities. So, that's why that balance of inflows, the market has been coming down, so that balance is going to come down. But we don't have a mechanism that feeds that every year. How's entrusted with the sale of all of that? Yep, we took $4 million out of it. Just years. Yep, to put in the housing trust fund. And there was a proposal on broadband that the council did not move forward with that too. Yep. So quick time check, we got about 10 minutes. We were scheduled to break in five, but I just thought, let's get through whatever other slides you've got. And then if there are questions after and we have time, we'll get through those but I want to make sure you get through your content. Thank you. I think we can list through it. These are all just reminders. These are from the Mayesh presentation. 72% of our revenues are three sources and 83% of our expenditures are salary. We are a people business. We don't make widgets, we provide services. And that's the issue where when you have rightfully ongoing year after year after year, after year people expectations of wage increases, the levee has to keep up with that. Or we have to find more effective and efficient ways to do what we need to do with the same number or a few people. So that's that struggle. Wages versus levy and that's the challenge we have when we manage all the time. These are just mainly a visual for you. When you see departmental slides, you're going to see the colors. So special revenues funds, special revenue funds, you set up preparations for the parks fund, you set up preparations for workforce development funds, street maintenance fund and the street lighting funds. Street maintenance fund and street lighting fund are lipes that their allocations and the property tax level, we collect them, we put them in a dedicated fund and we use them for exactly what we say, we're going to do street lights and street maintenance. So you're going to see those and there's the appropriations at the end of the year in the ornaments. And then same with enterprise. So enterprise funds again, we collect rates to cover the expenses of the provided services. So you're going to set appropriations for water gas, sewer, stormwater, parking, golf, and really benefit systems. Remark again on that street lighting point. I always get, you remember when we had the street lighting fee and then the fee changed. How was that impacting the street lighting fund? Great question. So because that let me know is a bit... The street lighting fund is FTE's right there's over 5 FTE's in there and their wages are growing so it's squeezing that fund so there's not a lot left for actual street light infrastructure so at some point we're going to have to tap the lamp on as well because that's a fixed levium on when it was a fee. We bring out new customers or the fee would increase and we don't have that anymore. Now tell me what you were talking about. I just say that I can't stop. Finally, you will not hear about capital today because today is operating. We are working on capital right now. Capital plans. Part of it is already working on types of, that includes rolling stock, which just means equipment with wheels, and IT, equipment, and also capital improvements, a big project. So we're working on that right now. November 25th is when we will bring you the plan, great, you can ask a bunch of questions. We can tell you everything that we're looking to fund. And then we will come back to you December 9th for council action to say, here's the plan for 2025. Please approve it. If you approve it, then know that we will start spending on it January 1. And then it's kind of a backwards way to do it. It's totally going totally fine, but it feels backwards. So January 1, we start spending, but we don't sell the bonds until that next November. So a year from now, October, November 10th, when we sell those bonds. So it's a reimbursement of when we start spending. So just so you're aware, you're giving us the authority in December to start spending in January. And just so you know, on, I think it's the October 10th, council agenda, you'll see the 2024 bond issues come on the agenda. So just remember those aren't for next year. Therefore this year we've been spending. So we still have five minutes. I would say so. There's any questions. If we still have one for. So when we were talking about like the tip with mostly like so, sophilite. Technically, right, it's manufacturing, but they sell products. So is it considered retail and do we get sales tax based on that? It's a great question. We get sales tax at the end point. So if they sell their product to somewhere in Duluth, then we'll get sales tax as that retailer sells it to, I think they're toilet papers, I think they are. So they sold them to menards in West Duluth. Then when menards sells that product, we will collect sales tips. I have another quick tip question. Going back to that hydrant that we're looking at, the little debt, then just do when tips, when their end period comes, or does that help decrease that debt? Or does it affect anything on that hydrant? Yep, so, yeah. so when that increment ends, so remember with TIFF, we're still collecting the base. So the base before the expansion or project or whatever, like let's say you're building something, and that property is worth something. So we're still continuing to collect that. It's like unchanged, right? It's the increment. So they're going to put up something. Sofidel's going to expand. That property is now going to be worth a lot more with the expansion them without. It's just the increment that we are distributing back. That base we're still going to collect when the tip rolls off and the tip district is disertified, that increment comes on the base. And that's when you see that gray piece coming. But on the other pitch, is there any specific category that it affects? I mean, would you put it in any of these categories that when he's- It's just general tax collections to be allocated. Are you tacking during the period of time when the tip is- No, after. After it's done I need to finish. General funds might be running. Right. It doesn't affect the debt service lines. No. It does. General. Yep. Yep. Circling back to the street light fee that we talked about towards the end of the presentation. Understanding, I think the intent was to move it from a flat fee for everyone where houses of different sizes are paying the same fee, essentially, depending on how much you might be making or how much you own kind of a thing. Could we put it in the same context of that levy but put an escalator on it so that it increases with inflation each year or something so that the fun continues to grow but it's shared equitably across the city is that a possibility to adjust the levee? You can increase the levee. I mean you approved the max levee and so you can. But you can't set it into the future. Yeah we can only set it for this year. Exactly. Yeah, but you could put something on it that aligns it with what? For one year. Yeah, for one year. Yeah. So you could amend the loving resolution for the max levy. To however much you want to add to the street light portion and then at the end of the year decide is it going to stay or not? Okay. Perfect. Oh yeah. Yep. I see that. And that's an example of one time funding that we occurring funding. So that's the only fund that strategy is that's one fund. Yeah. But it could fall right now right is that true like it's not on time it's ongoing it's ongoing because it has to be there it's no longer into the levy I mean every year you decide on your total levy yeah but like it could be reduced this year too you're saying it could go zero. You can set it wherever you want to set it. Yeah. But if we set the bar for this year then potentially sets the bar for future years. This is great. Super job. Yes. I really appreciate it. Yes. No clapping or cheering. No cheering, cheering. And council chief. But it's a surprise thing wouldn't it? It's a great job. No, it was a great job. So we'll take a time to break. We're going to start right at 10. Because if we start late, we're going to be late all day. So. And a clock. So we are going to be here for the first actual budget presentation for a department today, which has legislated an executive. As a reminder reminder we're going to go through all the slides first and then we'll do questions for each of these now so leave Mr. Montgomery to show. Thank you very much this is the legislative and executive fund. Let's see if I know how to do this. There we go. It's fund 110. Total budget is about $4.7 million. When people around ask me what I do, I tell them I'm just overhead. Everybody else does the work, which is true. This group comprises basically the mayor's budget, the mayor's office, City Council, my office, and attached folks, largely the city attorney. That office is in legislative in this budget. And then we have some odds and ends in there as well. It also includes the mayor's appointed officers, community relations and policy. Also this is where the human rights officer is currently budgeted to be. That's sort of a floating concept as to the appropriate place, but right now it's in there, as well as public information officer, Kelly Latuska, is in here. And then we have between me and Roger, we have two admin positions. Right now we started the years partly for budgetary purposes. We said between the two of us, I can function without full support. Roger needed a little more support. But between the two of us, we're using one, but the other position remains in the budget and the position remains in place because when we bring on a new city administrator, the idea is that person very well may need more support than what I currently seem to require. Mindy Granley, our sustainability officer, reports in through here, reports to me, and then her staff of support grant funded positions that do the work, Brett Casillas and others that do a terrific job over there. So that's the overall makeup of the administrative and legislative and executive group. Could you tell us why the bottom-ungs green victim services specializes? Those are again special revenue fund positions as Jess and Jen color coded different things. Those are again special revenue fund positions as Jess and Jen color coded different things. These two. It's not the numbers, but that's okay. Yeah, the project coordinators that work with Mindy are grant funded. And the victim services specialist in legal are grant funded positions. So that's why those are granted. So watch for the color code, like you said. Watch for the color code. So on the revenue side, there's not a lot of revenue that comes into this budget. It's primarily some grants. The violence against women grant comes in and that's funding that position and those activities. The increase you see there in the interfund transfers of $26,000. That is... Oh, that's the opioid. Yep, those are the additional opioid for victim services. An increase in there to fund those victim services activities within legal. The 13,000 increase under all other income is really between a couple of things. About 9,000 of it is just charges for services. We charge DTA for legal services. And we're doing a better job of doing that now than we historically have. So in DTA needs legal services for whatever purposes. Jessica's group does that, and then we build them at pretty standard rates. The other $4,000 is a driving diversion program grant that we're using for those activities. So that's pretty modest on the revenue set. The driving diversion for DTA? Driving version is a program that we offer through our criminal side. It's not DTA-connected. It is a program for individuals who repeatedly come through with licensed violations driving after suspension, driving after revocation in order to assist them in getting their licenses back. Just to sub-remind your council's questions at the end. So legislative and executive, these are the expenditures pretty much straightforward in terms of the items. The increases under salaries are one, just projected salary increases for staff, so that would be the city attorneys, the admins, all the people other than the city administrator or the mayor, those salaries are essentially fixed, you didn't give me a raise, gave her a seat. So those increases are all coming from that and then it's a net increase that you'll see on the next page of two net increase positions. The $12,000 under software, this is an increase in the granticus legislative tracking service that we use for council in overseas that and That's the just software cost for that program that we that application that we use for tracking council activities So on the next page These are the FTEs and what we currently have we have Just under 27 FTEs and 24 we're going to increase that by two. One, we had one deputy city attorney position. When Marcus left to go to Rochester, we opted not to replace another deputy, have two deputies. So we just traded that position for a criminal attorney. So that was a net zero increase, but just changed the classification of the attorney. And then we are looking at a second prosecutor, and I'll let Jessica talk about those, and a real estate attorney. And then we also currently have a half time FTE doing real estate work. We're going to eliminate that half time worth of and roll it into those positions as part of how we're going to fund it. But I'll let Jessica talk about those position changes. Right. So the office has been operating effectively with five criminal prosecutors for some time, but one of those was the deputy position that Marcus left open, so we converted that. What I found is that actually, we weren't fully funded for all of those positions. One of my criminal prosecution team member, FTEs was actually funded through taking from the police department positions and funding into our office. So what we're asking is based on the needs of DPD is to maintain, it's really not an increase, but we're asking to maintain our positions with the five full-time criminal prosecutors converting the deputy into that same level, that same classification, in order to address the numbers that we are seeing. As of 2024 end of July anyway, we have 5,575 open gross misdemeanor and misdemeanor criminal cases. We've had 54 new domestic violence cases and 33 new fifth degree assault cases among other things. So that just shows some trending trends in our numbers that are going up and in order to meet those trends we need the staff members to handle them. We are far over what the I guess guess, recommended per capita case load would be for our prosecutors. So maintaining a level of five full-time prosecutors to address the needs of the bench for the multiple calendars that they are dealing with every week in order to try the cases that we are, that's what we're asking for with that particular position. With the real estate position, we have had for years a real estate attorney at, it's like 13 and a half hours a week. As we develop and as we focus on increased complex property matters, for example, the regional exchange district, rather than having to secure outside counsel to assist us with those complexities, it is our position that it is much more beneficial to the city, both from a financial standpoint and a processes standpoint to have a full time real estate attorney here to help guide planning to help work with the property service specialists that are in Mr. Philby William, director Philby William's department. Much like they are doing right now, but on a full time basis, the needs of real estate laws and incredibly complex area of the law, it needs somebody with specialization and in order to ensure that we have that and can provide the best services, avoid any potential liabilities by, I don't know, vacating the wrong street or eliminating easements that we shouldn't. It's really imperative that we have a full-time FTE for dedicated just real estate to assist DEDA to assist planning to assist property. On the water, Madam President, one who are in the back that's really hurt to hear, especially for those of us who are facing forward. So if we could just acknowledge that we have an audience now and if we could all speak up. So that's our FTE list. Again, we will have one of those positions will be open, one of the admin assistant positions at least until my replacement is brought on board. I would imagine shortly after that we would look and assess that and decide whether that do our budgeting and how we sort of qualitatively analyze our different programs. Basically the takeaway here is there's 12 basic programs, there's a bunch of other programs rolled into it, but 12 primary programs. Eight of them are most aligned. Four of them are less aligned. So we tend to be pretty focused in the executive legislative area on key matters, key issues. You can see, you know, 21% is criminal prosecution. Another 12% is civil litigation and general civil activity. So the vast majority of time spent by this group is obviously within legal, which is the largest component of this. So that's it for that. It's pretty straightforward. It's me, the mayor and legal, and Mindy Granley's raising tremendous amount of grant funding for various projects. Hello. Any of the positions when you talk about the salary increase are they all non-union? There are only one, two, three, four or five non-union positions in the entire city. These are the human rights officer will not be a union position. The community relations officer and the community, the policy officer are not union. I am not union. And the city attorney is not union. Everybody else is in one of the bargaining units. They're either in confidential CDSA or AFSCME. Legan at the Granicus contract and just these contracts in general, how often are we going out for RFPs to kind of determine, is there another service? I mean I know Granicus is a big name in the legislative kind of municipal level, but are there other options to help us keep those costs the same or similar? With most of our software application agreements, we will from time to time look and evaluate those. We tend not to do it every cycle because it gets incredibly disruptive to the business, to be figuring out an entire new way, say to do a legislative track. Ian, is this a five year agreement? Five, two, three. Three? Okay. So in those good situations, we often might look at running a couple of cycles and then looking to see to go out, but we really don't want to be, because it's such an embedded system, we don't want to be going through that destruction every three years. But looking at it say every six years or so, making sure to your point, are we getting the right value? Has someone built a better mall strap? We will be doing that and a lot of times that comes up before the contract expires because we're always looking at things we're doing and we'll hear that, hey, there's this new app coming out now and it's being used in all these places and it seems to work a lot better. We'll start that investigative process and when we think it's appropriate or it's been properly beta tested with other companies, we'll take a look at it. Do we know the last time we looked at everyone that comes back? You know how long we've been in Brandtis? I don't recall off-camera and I think we've been in the last few years. Okay. Okay. Thanks. Keeping numbers going. Okay. I got a little confused at first because the summer server on the cost with the percentages was making me think it was an increase for the reals. Is there a trade that shows the comparison to last year on the budget on these line items that shows increasing peace protection. I'm also. You need to begin. For the power-ups, for the electric. Yeah. I mean, you'll see that in detail. Right? Yeah. We don't have a chart that shows it programmatically. Paul E. Church on line item by line item. Is it something I could pretty easily be made and do not just? I don't know about easily, just to shape the internet. Not easily, maybe not looking at last year's program to her sister's understanding of the percentage changes. Yeah, that would take a bit. I guess we have to ask you, I mean, when you see the wine on budgets, and then just ask you how important that is, because it will be quite an effort to generate that information. So I would ask that, I mean if it's critical, we can do it, if it's not critical, we just assume no. So if you just want to think about that and get back to Jen and Jess. It would also not just from the legal standpoint. When we talk about program, programmatically classifying the work that we do. It's incredibly difficult to quantify that in the manner that you're asking for. We've done the best that we can with, with identifying where our programs fit but realistically speaking. I mean I can break down you know different volumes of numbers and cases but it's very difficult to quantify the number of hours that the attorneys are spending working with each of the different departments, directors, with you all, etc. to and put that into a percentage and a program. We've tried to do it, we tried to collect some data for a month and we're still sorting through how to present to how to present that it just doesn't necessarily work in that format. Like I can tell you we have 26 open litigation cases right now with two lawyers handling them. That's a lot. I can tell you we have the 5600 gross misdemeanor matters that are pending with five prosecutors trying to manage all of that, but I can't necessarily fit that into the programmer and I can tell you it's an increase in our percentages. We're going up in the number of cases we're having. I can so some things we have gone a little bit down. We've got a little bit of reduction in our civil claims, but that's largely because we had a very mild winter last year. The majority of our claims work comes from the months of October to December. We expect if we have a normal winter, again this year, most claim members will go up and potentially increase. Our workers' comp claims are increasing, our unemployment claims are increasing, those will go up again potentially increase. Our workers' comp claims are increasing, our unemployment claims are increasing, those will go up again as seasonal layoffs occur. And then the criminal numbers that I already talked about. Those are all up in the areas that I've identified. Thank you. Thank you, Chair. First, welcome. First, thank you. We'll see you get any questions. I'm sorry. I have a question regarding the two executive assistants. I'm seeing that, currently, you are sharing one executive assistant. So I'm understanding one executive assistant was removed from that position. There's one executive assistant now, but I'm still seeing that executive position in the line I'd up to her next year. Can you explain? I have no decisions for me. We had two positions. Bronwyn was in one and Amanda was in the other. Bronwyn transferred over to Jim Fibby Williams in his parks and library to support him. He had an open position for an admin support. That was a lateral transfer, same position, same seniority, just a straight slide over there. The Maroniah talked about and decided that as we started out, because we had that carryover severance that we hadn't been planning on, the way those agreements were previously structured, that in January those were rolling in, we decided that in an attempt to mitigate that unexpected carryover from 2023, that we would make do with just one position between us rather than two. So that was when Brahman decided that she could go over and work with Jim, we left that position open, but we're not eliminating it. We think at some point in time, especially I mean I've got a lot of experience here with just how things work and how I personally work Where I'm not a heavy consumer. Glad a man is not here because she would probably say something to me That we're leaving that position open so if the new city administrator comes in, then that position will be available if it turns out we do in fact then going forward need two spots. Thanks for clarifying that. Can you clarify further the severance that you mentioned the carryover severance? It's from employees, terminating employee contracts for this year. That those were the agreements with the prior city administrator, the prior community service, and the prior legislative support positions that were mayoral appointments. And when they left, they had severance that carried into that we had to pay. All of those severances have been paid out? They were all paid in January. That's the issue is done, the payments are done, but that was part of the rationale for suggesting we could work with one between us. Okay, thank you for that clarification. I had some questions regarding the Human Rights and Equity Officer. I understand that the Human Rights Officer is within our city charter. Is it city coder city charter that it's mandated that we have that officer position? With the changing of it combined, being combined with an equity officer and a human rights officer into one position, does that charter language, should that mean changed or addressed? Just curious about. Well I will, from my perspective, I think the duality of that work fits within the initial language. As equity work has become more of a established concept out in the communities and out across both public and private organizations, it's taken on a more kind of a specific concept. But we think there's kind of a duality of those roles potentially. And so we still think it fits within that role in the charter. I mean, we always are looking at charter language to determine whether it fits or doesn't fit, or we can make it more appropriate going forward. And I was wondering if you could just give a quick summary of where that position currently is. I know there was a second round of application posting of the job position. Is it on track to be filled this year? Accurious on. Yes, we do feel it will be filled yet this year. We're still talking to a handful of people, potential candidates that have come through the full process. We haven't settled in on any one yet, but we expect that will be resolved yet this fall. Thank you for presenting. Yep. I have a question. With the long-listed ordinances that recently were approved, the line item, like criminal prosecution, are we anticipating that percentage, that you go up. I guess I'll let you go. One of the things that I talked about at length when we're talking about these ordinances was the development and expansion of our internal diversion program and automatic expungement program. So while we anticipate that we may see an increase in particular case numbers related to that. You know, I can't predict whether or not tickets are going to go up. I don't expect that we're going to have a significant increase. But what I do want to see is not flooding the courts because we are going to be moving things through the internal diversion program. So one of the prosecutors will be working specifically working on our diversion program from three different entry points. One is through law enforcement, one is through a post-charge where we would see in screen and one is through the public defender's office kind of helping us review. So those are all things that are again in process. We are still continuing to work on with our partners. But one of those attorneys is going to be specifically charged with that diversion in order to ensure that we aren't necessarily flooding the courts. Our office, maybe, but the goal is divert as many as possible and then expunge as much as we can. On the previous slide, the alignment with the mission slide, I know it's kind of a reference for the priority-based budgeting, but it's not going to mean things like the public engagement and media relations was when I saw that it's at least aligned and I just worry about like deprioritization as it goes down like that we would lose any sort of like external facing is that just more for reference as you're budgeting and determining percentages of budget or is that saying as we move forward these are the things we're going to deprioritize and murder. Just because something is indicated is least aligned, doesn't mean we don't see its value, it's importance and continue to do it. What this helps us do is as we're budgeting and as we're looking at what we're doing, it's more from the standpoint of saying if your department is taking on new things and that new thing say is a more aligned you know it's just you evaluated and it's much more tightly aligned and you have the same overall resources. You're going to look at the not aligned or the least aligned items for consideration to say, if I want to do more here, where do I do less? And historically in the past, a lot of times the approach was, well, do a pro-rather reduction of everything. And we don't think that's appropriate. So instead, you would go down and look at something that's not aligned or least aligned and say, okay, compared to everything else, this is a thing that can be reduced or eliminated potentially if I have to, if I don't have the resources to do all these other more aligned things. So it's really a tool that helps the department keep things, all these things relative to each other and looking at what we're doing and deciding if I have to make choices, either to invest more or to invest less. Where do I put that or where do I take that from? This tool helps us do that. Now these rankings can change over time. Things that at one point are more aligned because of change in circumstances or change in priorities can become a less your aligned thing. Conversely something that's less aligned again because of change in circumstances or direction or focus or because other things have happened can move up. So it's a dynamic situation but you would look at that in a relative sense. As it sits, it doesn't mean we're going to take all those least aligned things out. We're not going to do that. Because right now those are important things that we think achieve what we're trying to accomplish as a department. And with that, you can be clear. So we got a role right in it. Yeah. Mine was just a really quick, who did the director to Armand Ed determines this alignment? Yes, the directors and their teams and their staff, whoever's looking at their work, they make these assessments in these determinations. One clarification, I understand the human rights officer had a .5 up to and I'm not seeing that in the old chart or personnel. Is that .5 up to still present under the Human Rights Commissioner, the officer? Yeah, so that's under other wages. She's not a permanent employee. And I assume that right of the city, it's really so. So she's paid under other wages. If you see the line, the detailed line item of the budget, when you see it, there will be a line other wages. That's where she is. And then it does the human rights officer and now also the equity officer, so human rights equity officer. Will they have a budget to be able to do their programming associated with their department? I believe within the legislative and executive budget there are dollars to do different things based on what is historically been done. If they come in and they want to do more expansive work, that would be something we'll have to consider, see how we allocate and or look to the 26th budget to expand depending on that program and how it works with the new person in place. Okay, we're gonna stop there because I don't want to short the next presentation. We're a little over already, so thank you for that. So we're gonna roll into Frapity Parks and Library of the correct word for the Bowling's off with this first slide. Just to remind you the color coding. So property parks and libraries is funded through three different kinds of funding. So general fund, director Phil Zylalians, Milwaukee, we all love this step in the general fund. The dedicated parks fund, remember we talked about that's an a special revenue fund because that 2.6 million can only be spent on park programs and then he has an internal service fund and that's a fleet fund. That's all of our mechanics that work on our equipment and build it back to the department. So I just wanted to remind you to pay attention to the colors whose org chart all of his supporting slides are going to follow these colors and you can follow where things are funded from and where they sit. Great. Thank you, Jen. Thank you, Councils, for the opportunity to present the 25 budget for our property parks and libraries department. I was rehearsing a bit last night and my 13-year-old daughter overheard me and said, how am I doing? She said stiff and humorless. How would you do that time for my stuff? I intend to present for about 15 minutes and to build the remainder of our time to Q&A. I'll try to answer all of your questions on my own. However, I am joined by four of our departments by exceptionally capable division managers, Bill Varrasa, Joe Miller, Despeder Susan, Carl Powers, as well as our remarkable budget operations analyst, Alyssa Arnson, and I may call upon them for assistance as needed. The Department has comprised of five conditions, library, property and facilities management, park maintenance, fleet service, and park management. As Jim indicated, we operate across three primary funds as proposed for 2025 those budgets total 24.9 million and do not include two lesser funds, the Gulf Fund and the Lake Superior Zoo Fund that we also helped to oversee. The department annually employs 134 full-time equipment, personnel and three to four dozen seasonal temporary employees. Puzzled three divisions, library, bathroom facilities, and park maintenance, our health and job fund. For 2025 revenue received by those divisions library, property and facilities in Park maintenance are held in General Fund. For 2025 revenue received by those divisions is expected to low $714,600, most of which is sourced from Interfund Fund transfers from other funds like Tourism Tax Fund or our utility funds. Our department's general fund operating expenses are budgeted at 16.1 million for an issue or are opposed to be budgeted. As with most city operating budgets, the bulk of our general fund budget is dedicated to personnel costs. 24 to 25 years over years in the free-send these budgets, it's just under 4%, mostly attributable to obligatory wage increases under our collective bargaining agreements. I want to draw your attention to an apparent reduction in the base library materials budget that is do not to an actual cut to the base library materials budget that is do not to an actual cut to the base library materials budget, but to the combination of last year's one time transfer of serious building proceeds for library materials. And my, in an urgent placement in the library materials. The Department's journal fund staffing is slated to increase by 2.25 full-time equivalents in 2025. The result primarily of one action of staffing increase, the mayor's proposal for which our library team is deeply grateful to increase a .5 FTE library safety specialist position to full-time. And one nominal staffing increase resulted from the transfer of two existing long-standing full-time janitor positions from the Public Works Department. The people in this slide represents our department's general fund programs to the lowlands of our priority-based budgeting system. In addition to the previously described increase in library safety specialist staff, the Mayer-Einer has proposed a $268,600 increase for maintenance supplies of contract services in our park maintenance and facilities divisions. These are non-personal expense lines that have been frozen for many years, with the result that our maintenance teams have been running out of some basic maintenance supplies that's early as a mid-year, and felt increasingly steined in their desire to serve the city. The proposed boost to these maintenance lines is a direct result of the considerable time devoted by Mayor Rhinard, our finance department leaders to visiting with and really listening to workers in each of our divisions, and it would be difficult to overstate how much our team has appreciated that time and attention. The increases in those non-personal maintenance lines will equip our co-its to be more effective in their service to the city and make a visible difference to the appearance and functionality of our parks care. Parks and Recreation Edition Budget, it's held a special revenue fund It's the appearance and functionality of our parks care. That goes in. Parks and Recreation Edition budget is held in a special revenue fund, often referred to as the parks funding. 2025, revenue budget is 3.182,400 dollars, sourced primarily from the voter approved parts that this represents. Well, I want to try your attention to an apparent decrease in the base parts and recreation budget revenue of nearly $700,000. That is the result of a 2024 one-time transfer of $700,000 of serious building sale proceeds that were dedicated to parks and so correspondingly our expense budget has also decreased by nearly $700,000 and we see that concentrated primarily in the parks capital of Long. Park Fund staffing is projected to be unchanged at 14.45 for FTPs. The table on this slide represents 2025 Park Parks and Recreation Division programs in the wounds of our prior defense planning system. Other than the decrease in the Parks Capital budget attributable to that one-time serious building sale, there are no dramatic changes to the 2025 Parks and Recreation budget. Lessor, a lesser but still important change is $56,400 redirected from a groomer lease, which has been now fully paid off, that will now be available for broader park maintenance expenses. Please note that a previous version of this presentation that you may have seen indicated a $25,000 increase in subsidies for nonprofit youth programming. Thanks to the guidance and support of the administration and our finance department, we have found a way to avoid those reductions at least in 2025. The Fleet Division by itself is dedicated in Journal Service Fund, which is a vehicle for building the cost to repair and maintain vehicles to each of the city's departments based on each department's actual vehicle use of cost. 2025's wheat buzzard anticipates 5.6 million dollar of revenue matched to 5.6 million of expense up from 5.3 in 2024. Expense growth is attributable to projected increases in prices for fuel, parts, contract services, and labor, and increases in payments to finance HRIT and attorneys to compensate those departments and divisions for the significant work that they perform. The size of the fleet workforce will remain unchanged as 17.2 FDEs. However, the composition of the fleet workforce will change in two ways. And asset and supply, specialist position will be changed to a fleet services coordinator position, both in Asmult. And a vehicle maintenance technician position will be changed to a vehicle repair specialist position also those Finally, table on this slide presents 2025 fleet division programs through the PVB lens. Oh, sorry. Thank you for the save. And I think that, in short, is property parks and libraries department's budget because I am stiff and humorless, but I'm also brief. So hopefully that conversation's a bit well happy to get to any questions I've got well we've got plenty of time for questions but as we just saw from our last one more questions come and come and come so let's guess where does the deck contract fall within property parts libraries is that a part of your budget or does that go somewhere else with general fund for that? Whatever that ends up becoming. Councillor Mayo, thank you for the question. The compensation for the A front management contract now held by Wintergay. It is part of the tour of the tax budget. the front management contracts now held by Winter Gwendoff, is part of the tour group task. Okay. Can we get back to the 2025 Parks and Recreation Program, since I know you have mentioned that there was some changes from what we might have inside of us to present it. So there has been a decrease for providing reservation trends or the reduction in youth programming. Right? There's no reduction in youth programming and the IOMedit, the there is an expected decrease in wedding revenue, I or a measure that does not have to follow the institutionally significant people in your town. Okay. And then there is still that increase from maintenance expenses as well, from the mayor's increase for maintenance. Councillor Hough, yes, but that here is not in this budget, but in our two general fund budgets, parts maintenance and property and facilities. Thank you for the clarification. I just wanted to make sure I was on track with what I was seeing in both of the slides. I have two questions. One is when the parts were for I moved and now passed last year by a very slim loss, is there a talk of trying to pass that referendum again to raise that issue with the voters again? No, I think that is a product of decades and decades of decisions. It's not a problem that it's complex or easy. It's not one that can be solved in a single year or even in the few years. So this is not the year that we're going to attempt to solve that problem. But I can say that our department has the best partners in the world in our finance department team at working really difficult budget problems. Not 10 years ago we were in a similar position with our CEP budget for investing in replacement vehicles and our incredible fleet leadership team here in combination with Jess and Jen just worked the problem tirelessly and now we're on track to really have a sustainable vehicle replacement code. We're going to have to work with the parks capital problem in the same fashion. It won't be easy, but we will get there over the next few years. So a more general question. Do you feel you have enough funding to run parks that we would want to and one more follow-up to that? Councilor Tomayak, I think the city has long had an unusually lean parts and rent budget. And we have made a virtue out of necessity. We are the best in the state at engaging nonprofit and other private sector partners to help carry the load that we cannot do along. We are the best in the state that tapping into federal state could provide grants to supplemented city funds. I think the one part place where our staffs, remarkable efforts are inadequate is in parks capital funding for neighborhood parks. Yeah. We have been able to tap into grant funding Our inadequate is in parks capital funding for neighborhood parks. We have been able to tap into grant funding and to some extent tourism tax for those destination parks. Generally speaking, those funding sources are not available for neighborhood parks. And so that is what we're increasingly seeing as kind of parks infrastructure on two trajectories. The destination part, which all of our residents who use it enjoy are an increasingly good shape and the neighborhood only parks themselves. And I think, I'll go ahead. Well, just to that point, the other question that has to go with that question is one we wrestled with since I was here the first time. I mean, we have these conversations in 9-10, 112. Is the extent of our parks obligations that we have at the same time of, you know, how much do we fund and how much do we want to try to maintain. And those two both go hand in hand. And I think to that point, thank you, Dave. Our Parks and Recreation Master Plan from 2011 and now our new one in 2023 calls out the priority for us to move in the direction of having of consolidating parks infrastructure, not consolidating park acreage per se, but infrastructure so that we have a smaller number of better constructed, better maintained facilities. And we have been moving steadily in that direction in ways that are maybe on the truth to the public. Every time we reinvest, we reinvest in a manner that very intentionally diminishes both routine maintenance burdens and the long-term capital maintenance burdens. We have a lot more decisions like that yet to. And we really appreciate your support as we engage with the community to make those difficult. In a similar question, I'm sorry. Can I do my question or is this a follow-up? It's a follow-up. In a similar vein, do you feel like you have enough funding to run libraries in the way that you would want to, given that the Council or Force members say we'll have fine $700,000 last year which we won't have on a repeating basis. So that was a great boost to library acquisitions. What does it look like to you running forward? If you have enough funding to run libraries that we would choose? I think the one-time infusion of both funds for library materials last year helped a great deal to help to offset a 20 year degrees upon those lines. And, you know, the overtime, you know, we will ask you and the administration for stepwise increases to that. We understand better than anybody that the such requests vastly exceed the available funds that every additional dollar made available is hard one. And so we will trust and defer to you and the mayor of the City of Administrator and Finance to make those hard decisions. Thank you. I have a question. Sorry if it's unclear only to me. In 2025, we've got that inner transfer from public utilities fund for 163.3. We didn't have it last year. What is that? And you probably explained it now. Just not fast enough. President Randerson, thank you for the question. Until recently, public works has had two of their own custodians, Volta, who have been kind of an island buttons of themselves, managed by public works, with the assistance of our custodial supervisor. Going forward, after conferring with director Benning and city leadership, we decided to pull those two positions into our larger citywide community. and city leadership, we decided to pull those two positions into our larger city life. And so that is just the transfer of the funds to pay for that. Got it. And then as a follow up, and I think this is tagging off of Vice President Monning, the less the 750 serious money, you'll be doing less improvements other than buildings. Give us an example of an improvement other than buildings that will be doing significantly $750,000 less in 2025. You know I would say prior to this year my answer would be well you're going to see that in the things like the continued deterioration of assets like fencing that's around our athletic facilities. That is not straightforwardly true this year because of the mayor's proposed increase to our park maintenance and facilities, materials and contract services lines, which are intended in part to help us pay for those small but critically important capital projects. So instead of the million dollar chunks that it takes to reconstruct a lake walk or something like that, five to ten thousand dollarumps can make a big difference in repairing really unsightly failures in our system like those with our events. And so I think where we're feeling the shortfall is probably mostly in at sites like Cascade Park and Old Main Park where the level of deterioration has have far less city funding available than would be necessary to remedy those. And so that's where you're seeing in those places, you know, we're putting safety defense in around assets that were not in a position to fix right away. But even there, we have a strategy to develop a plan with communities engaged in it and to seek grant funding wherever we're able. It's just those fixes come slower and with more staff work and process than if we had had city funds for those meetings. Two questions. First question is probably for you, Jen. So broadly, this is one of the first departments we've heard. What assumption does the budget as a whole make for non-policing fire wage increases for 25? The included in the individual departmental budget is 2.5%. Okay, so all the labor numbers are based on the 2.5%. Correct. Now I remind you there are. It's going to look higher because people have step increases. They hit longevity, things like that occur in there as well. But the general wage increases to an average of 1% built in. That's helpful. Now follow a question on this slide. So back to you Jim, on volunteer program, it just reminded me of some discussions about using volunteers more within our parks specifically. And helping take care of them, taking more bird-naught parks maintenance on more of the own M side. So I don't know, where are we at on that? Is it more, last same? What are your findings? Councillor Cork, but thank you for the question. The, we still have the robust volunteer program. As a result of staffing cuts in our park maintenance division back in the 2018 budget here, when we had a, we cut two FTEs, so about a 10% cut in that workforce. We had to eliminate the dedicated volunteer coordinator. So we struggle a little bit more to support and take advantage of the desire for volunteer service. And we face the necessity to maybe manage it a little bit more energetically. We steer interest in volunteerism in our parks into a subset of relatively straightforward types of projects that we're able to administer very, very efficient. We have less capacity to partner with the one-off group that wants to do something complex and special and amazing in a particular part. And we just struggle to provide the support and oversight for that. question of parks and program page at the bottom is golf and it is listed as least aligned with the mayor's priorities and I know when luster park when the luster golf course was shut down it was said that more money would go into improving anger, Skolf course, is the city still on track for improving the anger, what does that look like with this matter? The question comes to the worker. Yes, our golf enterprise funds continues to be healthier, which is to say more consistently in the black, to a greater degree than was the case previously. And that is helping us to, for example, very shortly complete the entire replacement of the anger golf course irrigation system. Already we're hearing from our citizens who love golf that they especially love golf of living grass because I'm told it's essential to this work. So yeah we're making strides for hearing appreciation and recognition from our community. So, is it followed up? Do you have any questions? Is it followed up to that? Can you give us a report on what's happening at Lester? And maybe it's just also had the golf budget presentations in two months. So, you know, it's followed with that, but that's probably the best. I think our preference would be to speak to that bat and other golf related questions in depth have the dedicated time for that. I just met who's making the decisions about that bat. City administrator, Montgomery, I'd be able to speak to that. We're looking at that we had, the mayor had a group to take one last look at whether they could create viable dolphin lester. That group is continuing to work and operate so far nothing has come forward of consequence. We are in ongoing contact with multiple developers. We have some people that have options there. So there's a number of parties involved in that process. That ultimate decision making process will be coming out of planning in the economic development sphere, the planning sphere, the mayor's office, my office, and in conjunction with the parks group. I mean, it will be a collective group together that decides what's the next step forward. I think the first thing we have to get to is, okay, has the lester option been fully explored and determined? That will probably happen between now and March. No, okay. And are there two schools of thought? Is there a group working on the 18 and a group working on the lower 9? How are those two happening in conjunction with each other? Well, there's multiple thoughts on what might or might not be. I think the group looking is not on the lower because that's already been set aside. It's the golf group is looking on the upper part. The lower part is the development piece that we've already been talking about. That continues to just work with developers who are working through financing questions in this high interest rate environment and we just continue to manage that process and continue to work with those developers to see if they're going to move forward or not move forward and that will make decisions based on each of those sort of time points as we go forward. I'm really sorry. I just wanted to say a quick question. The weddings and rentals decrease knowing that there are limited funding sources. Is there a way we can build revenue in areas like that by marketing it more or having more opportunity? Because I think a lot of people I have my wedding at a park facility but I probably wouldn't have known about it and I've not been a part of the city. So are there ways to do that better, maybe? Councilor Mayor, I think that the long-term trend for park rentals and associated revenue remains upward. The decreasing wetting is probably probably a short term factor. It's probably a combined effect of no longer employing a 13-hour per week person who just overseas our weddings. But also the kind of close pandemic return of lots of weddings to from outdoor settings and on parks to indoor settings. And we actually have the two more minutes, I think. Yep, we do. Also more time to your guest. Question on, do we have a naming rights policy? And it probably is most specifically applies to park assets, but in the city, if somebody came in, I know this is a way that communities have driven more revenues to their parks and other places, curious if we have them. Yes, Councilor Forzman. Our extraordinarily capable parks and recreation manager, Jessica Peterson, have been working on that. And I wonder if it would be okay to call up on her to help her to that question. Concert to our speaker, you please repeat the question as the hearing in the back is quite difficult. Yeah, so naming rights policy. I just said that. I know other communities have started looking at that as a model of the drive or revenue for park assets in particular. Oftentimes it's a new capital project where that comes about, but you know, just curious if we have any thoughts on that. Yeah, thanks for the question, Councillor Forzman. So for all of your information what the city does have in place is a park naming process. So that naming process is not tied to a dollar amount, whatsoever it's tied to a policy and a procedure for how a name appears on any public facility, whether it's parks or other. Our 2023 Essential Space's Long Range Plan calls on us to develop a sponsorship guideline with attached amounts to it. While we are moving through our athletics planning process that the sponsorship concept is going to be embedded into our estimations for building an infrastructure improvements, we know that there are opportunities and you do see a lot of sponsorships throughout our park system right now. However, those are acquired through our third parties who manage those individual facilities. So what we'll need to do is develop both single time and multi year sponsorship opportunities. And a lot of times those come in negotiations with the potential contributor. They may be wanting things we may be having other things to offer and so forth. So there's not a specific dollar month threshold How much would you charge for forksman field There is a criteria for disrepute characters. There. That's very fair. As we look at the expenditure side of things, outside of salaries and benefits, one of the bigger increases, and I'm assuming this is across the board, it's not just your department, so maybe more generally, how the city is advocating on electricity. And I know Councillor Forstman or Senator Pares, so I'm not going to aim this at Councillor Forstman, but more from the city and our lobbying capacity to kind of alpine on those rates, and how we can still be a good partner with Minnesota power. But at the same time, it does impact at the end of the day our budgets for these departments. So maybe administrator Montgomery have you seen ways in the past during your experience in the city that the city has stepped in and said this rate increase, here's our thoughts. We, I mean we have had many conversations with Minnesota Power over the years on a host of matters. We generally have not engaged in direct PUC commentary around rates. Our interactions with Minnesota Power is more around unique opportunities and cooperation and partnership around, say, working on solar gardens, working on certain rate, surcharge issues with our pump stations and like right here at Minnesota Power, where we work around how we can reduce or mitigate some of those issues, some of those situations. Minnesota Power has been very helpful in terms of applying technical expertise and planning and offering suggestions for how, so like here at Spirits Mountain, the surge time as we're kicking off the snow-making machines and those snow guns really drive spikes in the power utilization. And that triggers different charge levels with Minnesota Power. So we've worked at that at our pump stations. We've worked on pump technology questions, timing questions, how we can improve our infrastructure. So it's been more around sort of situational and problem solution approach with Minnesota power Mindy grandly is works extremely closely on grant opportunities and grant options for how we can do different things In how we use energy broadly even you know things like lights and Lighting and how we do things inside our building envelopes. But we tend to stay away from kind of the very political aspect of sort of rate interjection in front of the PUC. We are more tactical on the ground situation and approach. And they've been a tremendous partner in a lot of those areas. And I was glad to see that. And I would have said that same thing. Yeah. If Councilor Poroslav and I were not able to. Yeah. I was looking at my watch. Yeah. I was going to say the investment in the green energy improvements and kind of thinking about that too is that we might see some of that and anyway starting to shift to the electrical budget and out of other utilities that are currently being utilized with heat pumps going from a natural gas to electric. So I understand some of that is just relation to our changing priorities but just as curious more broadly. Thanks. Can you explain the addition of the assistant manager, so going from one to two assistant parks and recreation assistant managers, while decreasing the coordinator position, is there still a need for the, I understand there's a need for an additional assistant manager to really have the parks leadership team to be able to do their work well. But I'm curious if does that also have some programming challenges by not having a project coordinator? Councillor, I'll thank you for the question. Councillor, just to refer to the conversion of what was a project coordinator position to in our parks planning group to a dedicated assistant parks manager position that oversees that group. I think manager Peterson and I have been working closely together to really try to establish the right leadership structure for that very busy group. That's a beard to be the right way to go and it has already paid off well that all of our managers are working managers. And so the assistant manager in question, Cliff Knettall, is leading our parts still coordinating among the crowd. I have another question. We have five minutes of performance. On the line night I was a capital asset management and I'm saying it's more aligned with Can you just give some examples of what the idea is? What type of capital asset would change with the paper? Capital asset management occurs to a significant portion of our big manager of job that is concerned with working with finance to assess our long-term vehicular needs, to find strategies to reduce our overall needs by sharing vehicles, by disposing of vehicles that are underutilized, by caring for vehicles that they last longer. And then going about the very labor-intensive process of bidding out, where a particular purchase vehicle, some of which like fire trucks, are as complex to purchase as it is to design and construct the building. And so that's a major part of Gilberass's job and is reflected here. I had one more briefly related question and the depreciation I saw that last year to this year the difference is about 20,000 less of depreciation that we're budgeting for is there something did we retire a bunch of assets that were depreciating pretty fast or is there a reason for that great reduction there? Councillor Neill, big question I think I was called on my more expert alley-able bill, Verasa The question bill is Why did the fleet depreciation line drop? Is it expected to drop by 20 K from 24 to 25? So that's just the remainder of the depreciation Excuse me. Can you say that again? It's the remaining remainder of the building appreciation. Susan, can you say that again? It's the remaining amount of our building appreciation. I think we've got a few minutes. Yes. A few years ago, we made some improvements to the building that included providing an H-Back, particularly for our welders who were exposed to some unhealthy air conditions and some rehab of their office and parts of the place. Thank you Bill. Okay, let me take a quick break. Lump 15, start back us with our finance budget. We are going to start with our finance update for all who are present. Nice. Thank you. This is probably the one you've been waiting for all morning. So thank you for that. Our finance department is the smallest of the General Fund budget, and we're funded by 100% the General Fund budget other than, we do have, we have, one of our positions is an ARP accountant that you will see goes away in March of 2025 after our final ARP report is done. Okay, so here is our finance department. We have three divisions in our finance department. Our city auditor is Josh Bailey and he heads up that first team. They are our internal audit team so we have five accountants who do all of our transacting for over 50 funds. Remember when we talk about a fund, each individual fund is like its own separate organization. So it has its own set of financial statements, profit loss statements, balance sheets, all sorts of those things, any grant transacting, any daily transacting, it's all coming through those five people for all of the funds in the entire city. We currently have over 100 grants so those five people are also divvying up all those grants. Under city auditors also are Treasury management so that is actually one person and Josh Phills in as well who is doing all of our investing for the city. So right now you can imagine, we are trying to capitalize on every single investment penny because rates are so high. So that person is trying to time, when are we gonna have, how much are accounts payable gonna be every week? How much do we need to have liquid to pay those accounts payable? What is our payroll gonna be every other week? So these big transactions, winner or bond payments. So that position is receiving and collecting, or not receiving, but reporting on all of our daily cash collections, think of comfort systems and everybody paying their bills. So Treasury is managing that piece as well as all the investments that go on throughout the city. We do credit and collections that means if you have passed two bills for the city, that's our department as well to get them paid. And then also all of our revenue collections and the office support. We have one person that supports our entire department. And that's actually a working position that also does some of our transacting and is in the system a lot receiving our daily collections. So that's all under City Auditor Bailey. We have a budget division that is headed up by Jess Casper. And in that division is payroll. So we have two people that process payroll for the entire city as well as the airport. So over a thousand people and they are also responsible for knowing all the ins and outs of seven bargaining unit contracts to make sure that time is entered correctly, processed and paid correctly. So, two people are doing that. We also have financial systems. We have seven financial systems that we use in the city. Excuse me. And we have one person that's responsible for all seven financial systems. And then we have our budget team who I introduced to you earlier. There are three people. They are doing all of the forecasting, putting together all of the budgets, all the funds throughout the entire city, $440 million. They're coordinating meetings. They're the ones who when Director Philby Williams talked about how a sustainable funding plan was put together for our fleet. Finally, we've been waiting for this for years and years. I'm going on my 10th year and we finally, after the 10 years I've been here, have a sustainable funding plan for our fleet. And so that budget team is leading that up with our fleet manager. And then another really cool thing we do in finance is, we have what we identify as challenge funds. So one is the parking fund, right? COVID hit and all of a sudden, people weren't parking in Duluth, people weren't traveling. And so that fund started to go in the red. And so we moved that fund out of our internal audit team and we put it in the budget team. So Andrew is our financial analyst who has four of what we call our Challenge Fund. So he works really hard with those teams to find sustainable funding paths so that we can get them on a sustainable funding plan. And it takes multiple years and he dives in and they work on figuring all the things out. And then once they are in a sustainable path they will go back to internal audit and then the next challenge fund will come on to this budget here. And so they do a lot of work with that. And then finally we have our purchasing division and that's headed up by our purchasing agent who's Patty Stahlvig. Patty has under her in the procurement, team three people. All purchasing over $10,000 has to go through those three people. So you can imagine these days you can't buy hardly anything for $10,000, right? So every single time you see an RFP or something's going out to bid, those three people are advertising it, reading through any of the funding mechanisms, if it's a financial, or if it's a federal grant, they have to read through those hundreds of pages of document to make sure they have advertised that purchase correctly so that the bids come in and so that people are bidding on it are knowledgeable about what our expectations are with them. So we make sure we're in compliance with what the grants say. So they do all the procurement for all of the city any purchasing contracts they're responsible for. And then they review all those grant documentations and advertise. Also under Patty in our purchasing team is accounts payable. So our accounts payable we have three staff on accounts payable and those three people process over 26,000 invoices a year. So anything that needs to get paid from the city goes through one of those three people. They do all our 1099s and then they review and record about 350 contracts. So we are a small team but we are mighty. When you think of what goes on in the city, there's nothing that happens in the city that does not flow through finance whether we're paying people, whether we're purchasing something, whether we need a street repaired, it's these teams working together to either purchase it, budget for it or transact it, right? It's all coming through finance. We're the smallest team and we're the smallest budget in the general fund. When I just have to say, as Jen just laid out, the importance of finance, the integrity of the financial systems of the city, the financial capability of the city, our ability to pay our bonds, our, everything, the whole underlying financial health of this organization rests on this small team, and you can rest assured as counselors responsible for oversight for the city. You have one of the finest leadership teams in the city. I mean, that's not disparaging any of our other departments, but with Josh, with Jess, with Jen leading it in Patti, I mean, you have an outstanding leadership team overseeing and managing this enormous financial complexity and maintaining the financial integrity and health of the city. So you can rest assured you've got the right people running the show here, and that reflects all the way down through the staff that they hire, they mentor their train, they bring along. This is an outstanding. Yes, thank you, absolutely. Yep. In the finance budget, we capture a lot of the big city revenues. We have to put them in a budget and so they come into finance. So I'm going to walk you through some of the big changes in this year's budget. We touched on some of these in the mayor's budget presentation. Property tax is the operations portion is going down. And that's because of retiree health. So we are reducing the general operations portion of the levy the 4.5 million for retiree health because we're now putting that into the capital portion for the Consolidated Maintenance Facility and then we're adding the new growth amount of 789,000. So when you net the decrease of 4.5 and add the 789 it's the difference of the 3.7 million decrease in the general operation. So not the whole levee is not going down. The general operations portion of the levee is going down. Sales and use tax is going up. We feel like based on what we're seeing and projecting that we will see an increase in sales tax from what we budgeted, not from what we're actually collecting this year. So one other thing that our budget team does is they put together a monthly economic indicators report that we review every month. It tracks local indicators permits are being issued. Are we seeing permit issues slow down? Things that are local, it tracks regional. So what's going on in the region? What does unemployment look like at the state level? Some of the, what's going on in our region? What are those indicators telling us? And then they track national. So what's going on nationally? So within there are things like layoffs our businesses filing bankruptcy What are gas prices doing any any other national news going on? So there's there are over 30 economic indicators that they're tracking So that they can project because we will always our budget will always be wrong, right? We can't see into the future, but we want to be the least amount of wrong that we can. We budget conservatively, but we try to budget wisely, so we don't want to budget too conservatively, but we also don't want to have a plan B, right? Because if something doesn't come in, we've got to have a plan B and what is that? And so we're trying to be conservative and smart about it. And we have seen indicators have been wild since COVID. They've been wild. Things that we thought the economy would start slowing down far before now, right? And it just kept increasing and increasing and increasing. And so we're finally seeing it start to kind of level up. And you can see that in our sales tax. You can see that in our tourism tax. So we have been prepared for this. The 2024 budget has a conservative number for sales tax. We feel that we will continue to collect about the same amount that we are for 24 which allows us to increase the budget about the $1.8 million. Minnesota Power franchise tax. We collect 3% of revenues from Minnesota Power. That's passed through to all of the ratepayers and And so that is a tax that Minnesota power pays to us. And then we collect the next line is the, is the Northern Minnesota Utility franchise. That's our cable. Charter pays us five percent of gross revenues for their franchise fees. So that's going down a little bit. I'm sure for obvious reasons, people are using electronic means of cable versus the old. Everybody had to have either the old fashioned direct TV or whatever you chose for your cable. Cost allocation? Oh, let me go to assessment certificate fee. That looks like it dropped 120,000. That just was in the wrong line. It's really assessments, other. So that's what that is. That didn't really go down 120. It just belongs in the line, a few below. Cost allocation. What is the cost allocation? It is the amount. So our attorney's office, our finance office, our HR provide services to our utility funds, to our authorities. So like I mentioned, we process payroll for the airport. It's so they don't have to go out and have a whole separate staff and thing services that they hire. Instead, they ask us to do their payroll for them, to do their hiring for them, to use our attorney services. And we in turn, turn around and build them for the time it takes us for non-governmental services. So that's what the cost allocation is. And then in your fund transfer from special revenue funds, you see that's going down 93, 97,000, that is that ARP accountant that is going away on March 31st. ARP, American Rescue Plan Accountant. Yep. And then finally, gas utility and lieu of tax, that's our annual pilot. That is based off of 2024 projected sales. And so that is the amount that we project to collect off of the 2024 project in natural gas sales. So those are the major revenue changes in the budget, not necessarily related to finance, but the city as a whole. Our finance department budget by category, you can see our salaries are appear to only be going up 27,000. Again, that's because we are going down a person in 2025. So it's being on. The salary increases are being offset by we are going to have one less FTE in the finance department. And benefits that is based on election benefit elections, people may choose to decline medical coverage instead of needing family medical coverage. It could be, you know, it's all based on the decisions the employees make. It's protected as we know by HIPAA. So I'm not able to share details on that with you, but I can tell you that we budget every single person salary and benefit by the individual. And so many individuals change their benefit elections, and that's why you're seeing a major decrease. Along with the grant, the grant funded position going away. And here's where you'll see that. You can see it says .75 that's because that position will go away March 31st. That's when our last ARP report is due. Those reports are quarterly. They are extremely cumbersome. I am so grateful that we had this position. It was funded through our ARP funds. I honestly can look at you and tell you I don't know how we would have done ARP. Had we not had this position, something major would have given. So I am really grateful that still is going to be a big hit. To us we absolutely need more people and not less. And so it's unfortunate that we're going to lose that position and at the same time I'm doing what I told you I would do in that I was able to hire that position and it's going away after the ARP funding goes away. Here are our programs. You can see that in finance we spend so much of our time on accounting, you know, the audit payroll, accounts payable, purchasing, investing, all the things that we just talked about is what we do. It should come as no surprise that we're more and most aligned because so much of what we do is strategy driven and huge implications to all of the departments under us. I also want to remind you that priority-based budgeting really says how aligned are we to move the needle on the five top priorities of the city. It does not mean it's not important. It means if we are set, if our goal is to provide to do these five priorities and we want to focus on these five things. Which programs are going to get us there to all five? Not just one. Some things are really important and going to get us to one, but there are five of them. So what touches all five and moves the needle on all five. And so I just want to remind you that when you see things that are least aligned, it does not mean they're not important. It means we should keep doing them, but we should do them as efficiently as we can. And if it comes to decision time and we really are serious about these top five, we need to start looking at what are not as aligned if we need to both resources to more alignment to get there. I love how City Administrator Montgomery talked about its dynamics. So you remember our priorities, we used to have seven priorities, right, and they were based off of Mansion Deluce of 2035. Now we've shifted to the mayor's five priorities, which are very similar, but they don't include a couple of them, right? And so this does move. Every time we change priorities, all of this stuff gets reweighted and relooked at and re-worked so that we're constantly moving towards where do we want to be, right? And how do we achieve those? gave those. And so there is the fast presentation on finance and I'm happy to answer any questions. I have one. And I think I got the answer but please tell me, we know in the general fund there's's 108 million. This is 92, 9, 21. Is the other 16 in the transfers? So, so you know how you've been seeing every department's revenues. There are revenues in all of the departments in the general fund. So you're going to see $120 million worth of revenues scattered in every single department. The finance department is where we pick up the bulk like property taxes We wouldn't want to put those in the police department right there. Those belong in a budget So it's in the finance budget sales tax where the ones who collect it where the ones who report on it so it comes to our budget So it gets confusing in that not all of our revenues relate only to us. If I got to spend all our revenues, you know, that'd be great. See a police and fire, right? But that's not how that works, right? We collect them and then we disperse them through services in other departments. So this isn't a total role up here on the general fund line? That's just finance department. And I see. And the total for the general fund 120, not 108, but 120. Oh, it's 108? It was, right? Oh, yeah, 108. Sorry. Yes. That's OK. I just have to get that one. 108. Good. Thank you. At the beginning, when we did budget 101, that was the whole 108 million. OK. Yeah, that was the whole 108 million. Yeah. Okay. Now we're just talking finance. Perfect. Slight. Perfect. The challenge was the parking fund that you talked about. I don't know in previous years if that had come into the finance budget through the interfund transfer, but I know it went, there was a parking fund transfer back to the general fund and we, as a parking commission talked talked about like having more discussion and it sounds like there's been a lot of ongoing conversations since last budget season about what that transfer is and what it looks like what the number is. Is there any update? I don't know if that lies within your budget or if that's a police budget question later in the day on where that's at. Yep, so we do have an interfund transfer from the parking division. It does come in ours. It's interfund transfers in from enterprise bucks. Okay. One, three, four, six. And so that amount comes into the general fund from the parking fund. We do have a justification for that. And yes, there are conversations. Nothing has been decided. We're moving forward with the unchanged $1.346 million. Should that be decreased? We need to either decrease a program in the city's general fund budget to make up for those funds or find another revenue source. So just remember anytime we want to add a program or decrease a revenue, we're now in an unbalanced budget so we're gonna have to make decisions on then what does that mean? Okay, perfect. So enterprise funds is parking fund. That's the part of it. Thank you. I have a couple of questions. I think maybe the same page he was on. Assessment certification fee that 120,000. I know you talked about that. It was supposed to be in the line directly below it or the assessments line. It says assessments other. Assessments other. It was just budgeted in the wrong line. But I this might be a silly question, but I see it's in one spot. It's a negative 120 and then the other spot It's it's 100 what's the difference between that 20 it just depends on how much assessments are coming in so we We assess projects for Developers who want streets Added to their development or utilities and it just depends on what we're assessing if we're assessing the utilities it'll go into the utility funds if we're assessing streets it'll come into the general fund and then how much those assessments are that we are planning to collect in that year so some rule off after X amount of years so it's dependent on what the agreements say is a 10-year assessment a 15-year assessment and so it's the collection of all of the assessments coming in. When I look at this it looks like summer rolling off some have probably made their final assessment payments and we're not going to collect none of them anymore. They've been paid in full and now we have a hundred thousand remaining that'll come in over the next however many years, but that'll be 2025's portion. Thank you. And then the Minnesota Power Granchise Tax with it going up. Is that just respected to the rates going up? It is. Yep. And it's probably usage too. So we work with Minnesota Power to get that amount. And it's based on their bill. So usage type rate is those sales and we get 3% of that. So I know with each grant coming in and there's multiple departments doing amazing jobs, bringing in funding for example sustainability. Each of those grants need to go through your office with a reporting, you know, like applying reporting and then conclusion. And now losing a .75 FT that puts the burden back on the finance team in managing all these grants. Can you speak to some sort of like, is there a plan for sustainability purposes? I understand the finance, whether the smallest crew do the most heavy lifting, your staffer oftentimes in the offices pretty late. What are some plans going long term or some wish list items? Yeah, thank you for that question. I'm really glad that you asked that. What are some plans going long term or some wish list items? Yeah, thank you for that question. I'm really glad that you asked that. I want to be really clear about something. We have an office who have been there for many years. We have accountants who are extremely knowledgeable, extremely efficient at what they do. If one of them were to leave, that would be a challenge, because it would absolutely create a backlog in our department. We have great retention rates, and with that comes great efficiency. And so thank you for bringing that up. We have implemented a different grant process where we are taking a closer look on when we apply for grant. Does it move the needle towards the top five priorities? And so with that has come less grant, less grant applications. And so that allows my staff to focus on the 100 grants that they have now and not saying we're not gonna apply for other grants because there are some really great grants out there that apply to our, that will move the needle on our top five. But we're trying to really rein that in because we don't even necessarily have the staff that need to actually do the work that come with these grants. It's so we have all these projects going on because they're granted funded and we need to be able to catch our breath. So we're doing a little better job of reviewing these grants before we apply for them. So that is slowed it down organically a little bit. I am absolutely not going to sit here and tell you that I'm never going to come to the table for more personnel because that's unrealistic. We are absolutely at our minimum. I probably didn't do my team a service by not coming and asking for to keep that position, but also recognizing that this is a low property tax here. I chose to leave the funds on the table and any asks for other departments and I didn't submit an ask. Now that doesn't mean that next year, I'm not gonna have some asks because I cannot tax my team anymore than I am now. Yep, so thank you for that. As it relates to grants, and she mentioned we're doing a preapproval before we're making our directors and managers go through a process to explain why we are applying for a particular grant. Because some of what we were finding is we were doing things because we could get a grant. And so we had some projects and from teams that were saying they're stretched, they're busy, they're having a hard time getting all the work done. We had a couple projects that, you know, in and of themselves, it was a valid project. But when we talked to them, they said, well, here's these 20 projects we're working on. We said, is this project even in your top five or your top ten? They said, no. It said then, why are we applying for a grant? So we're trying to sort of slow down the intake so we can get done what we have and also make sure we're focusing on the highest priority projects and not be getting cluttered up with a lot of other projects just because we can get a grant. Because that's just the money part of it. The real crunch for us is the people part. The people to execute the project, the people to do the work, and we're getting backed up and backed up and backed up. So we've kind of slowed that roll a little bit, and we've done a pretty good job. Most of them are still going through, but we've stopped several and said, look, you can come back to this next year or the year after, get done all these in your back lot first. I have to look more. We go for a concert. Just follow back up on that question. Thank you for being honest and just truthful at your team's capacity. Just understanding how backlocked it is. It is unfortunate that we're going to be applying to less grants because, but I'm glad that that's not being done at the expense of your team. And in the future, I highly recommend those ask come through. My question is, are we going to be looking at larger grants that potentially add additional part time or FTEs? Positions just like the ARPA funds have done. Is there a plan to, is, if there's a grant coming in or a consideration of a grant, is there an allocation of an FTE with that grant? Yeah, thanks for that question. So it depends on what grant it is and how much is allowed for administrative expenses. A lot of times there's a 10% cap on what you can spend on administrative expenses and then remember the sustainability. So if I have a grant position, if a grant allows enough funds for a year or two, I have to hire someone, train someone, and let them go. And so that's the challenge of trying to fund positions with grants, because if I don't have enough grants coming in to continue to cover that payroll, either goes on the levy, which I might as well just do in the first place hire someone that I can train and hope to keep in the long run and then start going through more grants and so it's a great a great question it just comes down to the sustainability of the funding for the position. Thank you Director Carlson. Appreciate the work that you've all been doing. So we will break from lunch technically. I'm guessing we're going to stop to reporting, but a reminder there are microphones on these tables. So just be mindful. And then 1230 is when we will formally re-compete. Thank you.