Good afternoon and welcome to the fiscal year 2026 proposed budget work session. In accordance to the Falkier County Board of Supervisors bylaws section 2-5, supervisor washer is participating remotely from Mexico due to a personal matter. Supervisor washer. Yes, thank you, Mr. Vice Chair. As stated, I will be participating remotely from Mexico today for some personal time. Thank you for that. Awesome. We will move. We will now move into the work session so I will toss it to you. I toss it to Janelle. Good afternoon Vice Chairman Gehrhardt and supervisors. Today we present the FY 2026 proposed budget to you. This year's budget process has been especially challenging due to modest revenue growth and inflation resulting in rising service costs. Despite these hurdles, the proposed budget focuses on stability, workforce investment, and school support ensuring we continue to serve our community effectively. Over this past year, we have worked closely with you, our constitutional officers, our department heads, and our school partners to receive input, discuss challenges, and gather guidance in presenting a proposed budget which reflects our vision, your vision, for our county. Thank you for your leadership and partnership through this process. This proposed budget becomes your roadmap. Over the next several work sessions, we will continue to gather input, work together, to make strategic and responsible choices, to lead to our final goal of adoption of a fiscally responsible balanced budget on March 28th. I want to extend my sincere gratitude to Ms. Stribling and the budget team for their hard work and dedication and attention and detail in bringing this proposed budget together. And I will hand the mic to Ms. Stribling. We will now present our FY 2026 proposed budget. Good afternoon. Today's agenda is a review of the budget as a whole. We will discuss the capital improvement program for FY26 through 2030. And then I will be passing it off to our advisors at Davenport to discuss debt service, as well as some alternate funding mechanisms. As statutorily required, the board must adopt a final budget for FY26 and tax rates for tax year 2025. Work sessions will be conducted throughout March, including a public hearing on March 20th at 7pm at the Falkier High School Auditorium. At the start of each work session, County Administration will provide the board follow-up materials as requested from prior work sessions or in between. Markup Markdown is scheduled for March 25 after the public hearing date and per code budget adoption must be scheduled at least seven days from the date of the public hearing and that is currently set for March 28th. A press release and a fact sheet was released at 2 p.m. today and we also have the full proposed budget on the website, the budget website. Working with the Commissioner of the Revenue on our revenue projections, the county is projecting 0.91% of growth in real estate, less than 1%. This equates to just over about a million dollars in new real estate revenue in the general fund. Increased projections that we've made in the budget for FY26 are increasing our projection for personal property by about $1 million. Sales tax by about a half million dollars. Food and beverage tax by about $50,000. And we increased our projection for interest income by about 1.4 million. In addition, this budget introduces updated fees for community development and those will be discussed in more detail on March 13th. In terms of our sales tax, as you know, all jurisdictions charge at least a 5.3% state sales tax and 1% of that comes back to the county. Sales tax collections are on a 2 to three month delay. So a little bit later in March, we'll have the December 2024 actuals to display on this chart. The FY25 in the bar chart is in blue. FY24 and red and FY23 and green. This has risen over the last few years. Our main driver has been inflation in this area and while inflation is not as high year over year this year as compared to the past The value of goods and services remains high So that is why we feel confident to increase our projection by a half million dollars Inflating can I ask the question on that last slide? I'm sorry to interrupt. I just want some clarification. Are these the net numbers that we receive after the state gets their share on this slide? That's correct. Okay. Okay. I thought. Mm-hmm. The county receives about a little over $14 million. So this year we're projecting $14.7 million in sales tax. Our current budget has sales tax at about 13.8 million so that is why we feel we can increase that projection sum. So yes, it's local only. Inflation, it has settled some. It's looking like it's settling at around 3% from the all time high that we saw in mid-22, early 2023. In terms of forecasts, we are seeing that 2025 will begin to settle down into the twos. We're hoping for with the potential low twos in 2026. But of course, a lot can change in the market. This is just forecast that's this time. In terms of regionally and in the Northern Virginia DC area, the US Bureau of Labor Statistics releases CPI historical tables. We have pulled together the last 10 years of that data. You can see in green the lowest CPI years of 2015 and 2020, at less than 1% growth, the highest in orange, which was in 2021 and then 2022 at almost 7%. And then our current CPI at 2.7% year-over-year. Personal savings in debt continues to be a stretch. There is some increased savings nationwide. It has started to increase some on savings, but you do still see quite a gap there. Our unemployment rate in Falkier remains low at 2.2%. The state is around 3%. Similar to unemployment, our foreclosure rates have also entered pre-COVID low trends. That is very positive for the county. The home price, the housing market, this data was derived from two different sources. Our median sales price continues to increase. This has at about $745,000, which are high property values in the county that continue to grow. Our sales do not directly correlate to our assessments, but for reference, our average reassessment in 2022 was $460,000. This is the last year of our reassessment cycle before we, well, it's the year three of four of our reassessment cycle. Next year's budget will be able to capture reassessment updates. Our median days on the market is around 46. This is up from last year by about 24%. And right now the market is looking more balanced than it has in the past versus before it was a big sellers market. Personal property has maintained. Working with the commissioner, we are projecting in the budget to increase $1 million, but our actuals will likely stay pretty flat from here this year to next year We have budgeted about 24% in the budget for Business personal property tax the remaining being personal This is data from 20 FY 2025 adopted budgets from nine different eight other jurisdictions, nine including ours. It looks at what percentages of localities general funds come from real estate and personal property. I broke that out for the real estate tax alone. Benchmarking against other localities, our real estate makes up about 51% of the general fund. In personal property, we're right around 16 or 17% of the general fund in the middle of those localities. In state revenue, we have increases to social services in state federal and in grant funding. We are anticipating reductions in communications tax funding from the state and that's just based on declining actuals. There are no substantial changes in federal revenues that are assumed in the budget, but the county is monitoring potential impacts from current administration. The budget team did quantify for the county how much was received in federal reimbursable grants. That's $12.4 million for perspective. Compensation board funding for our constitutional officers. The memos for those will be released in spring 2025 this month. Three percent across the board increases are proposed as salary increases to constitutional officers as well as the comp board funded employees. An additional 6 percent increase has been included for Sheriff's Office dispatch positions. All of those are offsetting revenue to the county. The budget team did look at existing salaries for the Sheriff's Office as well as the other constitutional offices. And the increases from the state will just offset what the county is already paying for those positions. The proposed budget recommends a 3 cent real estate tax increase making the overall tax rate 0.973 up from 0.943. The advertised tax rate does allow for an additional two and a half cents increase in order to provide the board flexibility during this budget process. The increase was advertised at one and a half cents to the general rate and one cent to the fire rescue levy. But besides the general real estate tax rate, there are no other changes in the tax table. The average homeowners real estate bill based off the reassessment value of the $460,000 average homeowner would be about $11.51 a month or $138 a year. There's zero tax increase advertised or recommended for the fire rescue levy as well as for the conservation easement levy no tax increase. This looks at the start lines are relative to the current year that we're in in our reassessment cycle so year three or four. and I just wanted to note that we are estimating a drop as we have in prior, at least the last three prior reassessments where year three you see one of the highest tax rate proposed, but then if reassessment continues to remain strong, we do anticipate a decline in the tax rate next year. Overall the proposed budget is at $441.5 million. This is an increase of $27.3 million from prior year. The major drivers are that. Are in the schools, all of the school funds at about $7.9 million. Our asset replacement fund increases by $14 million and that's related to our public safety radios and our SCBA replacements which we'll be discussing further in a few slides. The general fund totals 234.7 million. A hundred and six point one million of that is for the school division. The general fund represents an increase of 7.4 million compared to the FY25 adopted budget. Fire Rescue Levy totals 31 million, which is an increase of about a half a million dollars. And there's no increase to the conservation easement levy. The top five funds in the county remain the same as prior year. The general then the schools operating fund Health insurance fund being our third most expensive fund fire rescue levy and then our CIP Our proposed tax dollar allocation across all three levies Has the school division at fifty two point six four percent of the budget last year's dollar bill has the school division at 52.64% of the budget. Last year's dollar bill had the school division at 52.46%. So it has gone slightly up by 0.2%. Public safety is at 22.7% and so on. The fire rescue system will be discussed our next work session in more detail by Chief Smith. That's on March 13th at 1.30 p.m. But the one slide on here just speaks to the overview. The budget in fire rescue system includes a 1.5% salary scale adjustment and a step increase for those employees. It includes 3% contribution increases to our volunteer stations. It includes a transfer of funding as well as from the ambulance revenue fund towards one ambulance replacement. Fire and Rescue did request three ambulance replacements that will be discussed during their work session. We have funded one through this budget. And then the budget also includes our public safety radios and SCB-A replacements. The cash funding needed towards those projects will be included in the fire rescue system. Public safety radios will be split half and half between the Sheriff's Office and fire and rescue in terms of the cash contribution. Our debt service will be discussed by Davenport here in a few, well maybe more than a few minutes. I'll try for a few. But in a nutshell, it has increased to about $837,000 over prior year. We were projecting this to be larger at last year's budget during the FY25 adoptive budget, but we were able to secure the low interest rate from our 2024 debt series. We also worked with our advisors to push out when we take our FY26 debt so that it does not hit the budget until FY27. And that's also been due to the timing of our projects that we're funding right now, being Opal Water System Central Sports Complex Phase 2 and Taylor Middle School. We also had two debt service payments falling off that was for Auburn Middle School and one school bus lease. Our asset replacement fund increased by $14 million that is is majority debt funded for the SEPAs and the public safety radios. The general fund increased by $104,000. And we kept that low because we would like to not have the asset replacement fund require impact to the tax rate. In order to do that, there are some one time projects that we will be recommending funded outside of the budget cycle, and that is as follows. Then Sheriff's Office submitted a 911 CPE Refresh Replacement project at $320,000. This is a replacement that occurs every five years, and it was on the schedule. We're recommending that we fund that in a transfer from Capital Reserve. The Sheriff's Office and the Fire and Rescue System, as noted, are splitting the cost of the cash contribution towards public safety radios. The cash contribution half for the Sheriff's Office is $492,000. That would be coming from capital reserve. And then on from the Fire and rescue system in addition to half of the cash for the public safety radios, they also have the full amount of cash for SCBA replacements. That's over a million dollars and that would come from the fire rescue capital reserve. The registrar's office requested electronic poll book replacements for $95,000 and we're requesting that be from Capital Reserve. And then lastly, we have parks and recreation. One time costs for central sports complex for the Phase II construction of that are 74,000. Our current balances of the reserve right now is at $9 million for our capital reserve. If we move forward with these requests in this way, it would leave a balance of a little over $8 million in capital reserve. And our fire rescue reserve balance is at $4.8 million. The request above would leave it at about $3.8 million. At this point, I want to, there's one more one time item that the board may want to consider. In the last week, there's been some discussion about a partnership with WSA to help expand the water connection down Widen Road after talking to WSA that's about 1.5 million. And that's something the board will have to make a decision if they would like to add this to one time budget option For expense to be paid in April, right? Yes We would do that outside of the budget Process if that's something that the board would want to do to like bolster economic development in that area I'm gonna jump in on that. I know we kind of had a discussion, but really hadn't gotten it off the ground on that. I would really like to discuss that a little bit further before we move forward on funding that personally. Yes, we did. Absolutely. This may or may not be the right time, but with water sewer between Remington Remington are built in actually and Midland. What are our thoughts on that? Is it now the time to throw something at that? Or are we waiting? That cost was a little more expensive, but we could definitely bring that back as a work session to look at what the cost is. We at the last WSA meeting we talked about that as well as Marshall and then also what it would look to pass on the oversight of Catlett Calpertons, Suer and the Midland Suer system. So we're working on those things currently to come back with cost. Okay. And we're also contemplating connecting the two sides of Opal to for greater fire suppression pressure, et cetera. Yeah. I mean, we might as well throw this on the table. So, let's make some decisions. When would we be able to schedule that discussion? Is that something we can do today or is it next week? I don't know that today we would be prepared for that, but probably in April, so I might get over next week potentially. I would I would refer to Miss Downs on the timing. So we had to schedule another liaison meeting with WSA for April. This is something that Board would like to have more conversation with. We could do it at a work session for the 13th or for the 25th. We do have a joint work session on the 20th, and then the next board only work session would be the 25th. Are there any deadlines or timelines that we have to think about in terms of when a decision would need to be made? No, we were, this item was one time items, post budget adoption that we could fund in April. So that's why we brought up first the Widen Road. But no, we can do this in April as we start to prepare what we need to do for funding for economic development. And these were able to do because we are performing better than we thought we would on the budget, this current fiscal year. So this would be- These are just a result of our existing reserves have the capacity to fund these instead of including it in the budget, which would just drive our budget, our annual budget up. I would recommend these one times just come from our reserves. Yes. Is this just of it for this one on WhitingRigis because the price point was lower compared to the other projects and that's why we were kind of slipped this one in now now. Yes. Is that the chance of it? Yes. Yes. Compensation for general workforce in the FY26 proposed budget is at 2.7% of a cost of living adjustment as well as a 2% average merit increase. The public safety scale employees would would receive a step scale adjustment of 1.5% and a 1 step salary increase that is for an average of around 3%. In terms of benefits we are currently in an RFP process for health insurance. The industry right now is showing 7 to 9% increases in medical costs, 12 to 14 percent increases in pharmacy and 7 percent increases in dental. The goal through our RFP process would be to minimize these increases as much as possible. And this may result in planned design and rate changes. There is a health addendum that both the school board and the board of supervisors signs during the budget process each year. This would be a focus during our joint work session on March 20th at 5. In this budget, the county continues to support the health insurance fund strategy that was presented in December 2023 to the board. The operating transfer of $106.1 million to the school division includes $20 million in dedicated funding towards health insurance from the school division employer costs, of which only $2 million is now one time, down from $4 million in one time during the FY25 adopted budget. The reduction of one time funds and the increase in recurring funds ensures a structurally balanced budget. This is a chart that we presented, co-presented with the Assistant Superintendent of Business and Planning in December 2023. And this was a three-year strategy from FY 25, 26 and 27. It shows the increased cost to health insurance and how we would move out of the deficit that we were in in terms of recurring funds to the health insurance fund. The orange represents our recurring need each year to find. And this budget does include those funds. The Sheriff's Office will be presenting on March 13th at 130. So he will have more slides detailed to his requests. But there is one position for the Sheriff's Office included in the budget, and it is a W Sheriff for traffic enforcement. And the position is needed as a top issue and concern of the Sheriff's Office, and it would provide more efficient related coverage throughout the county. The one time cost associated with this position are related to the vehicle. Ms. Hale requested a social services associate for family services. The position would be needed to address administrative tasks that have been associated with requirements as state mandates have increased. She is here today. Should you have any additional questions on this specific position? The position is offset by state funding. Offset in state funding by 32%. So the net impact the cost to the county is only $48,000. The treasure requested a W2 treasure one. This request has been in in the budget requests for the last two budget cycles. The position will support citizen demand, customer service inquiries and receipt of tax payments. This will cox is also here today. Should you have questions about that position? The FY26 proposed budget for the school division operating fund totals $182,834,357, which is a $4.1 million increase over the FY25 adopted budget. For all of the school division impacted funds which include CIP and our health fund, recurring cash increases are $22.4 million in state funds. Most of this as a match to the compensation increase. 453,000 in federal funds, a $1.425 million operating transfer from the general fund. $1 million in capital funding funding which includes $500,000 towards infrastructure and capital replacements as well as $500,000 towards the Taylor Middle School project. This is just a part of our cash requirement towards the project as we continue to draw down debt for it. And then two million dollars in recurring health insurance funds from the general fund. There will be more presented and discussed by the school division at the joint work session on March 20th. The FY26 proposed budget has local support projecting to fund 58.4% of expenditures for the school division. This includes the million dollars in cash towards capital improvements, 8.6 million dollars in debt service, 11.7 million dollars in consolidated services that are located in the general fund, and the 106.1 million operating fund transfer. In total, that's $127.4 million. In terms of one time funding over the last 10 months that the county has supported in partnership with the school division, it's about $3.1 million in the last 10 10 months and it's 525,000 dollars in one time funding to purchase four school buses $500,000 in ongoing capital maintenance 959,000 dollars towards capital maintenance That was also repurposed from the instructional assistant funding that ended up being funded by the state. And then $1.2 million towards the Kettle Run High School and Falkier High School turf fields. Over the last two and a half fiscal years, the transfer for one time needs has been $6.5 million to the school division. In terms of the all of the funds for the school division, which includes either operating funds, nutrition, asset replacement, governor's school and the textbook fund, the funds have grown from about $160 million seven years ago to about $196 million in this fiscal year FY26 proposed or, or about 22.5%. The school's operating budget this year will grow by $7 million. The asset replacement funds for the school division grows by 900,000. The regional governor's school fund grows by 29,000. Textbook fund grows by 13,000. And the nutrition funded by 533,000. Those other funds outside of the operating fund remain the same as what was proposed by the superintendent earlier last month. We're in the second year of the biennial budget for the state. On February 22nd, the amended budget bill was agreed upon by the House and the Senate. It's currently with the governor's office. The General Assembly is scheduled to reconvene on April 2nd. For the schools, the 3% increase on July 1 was, as gone through to the General Assembly, or through the House and the Senate, for all SOQ positions and all comp board supported positions. For SOQ positions for the school division, it's about two thirds of the school workforce, a little under 1200 positions. And that is included in this budget, the match that would be coming from the state. The state budget also authorizes a tax rebate for $200 for individuals and $400 for joint filers. It adjusts the standard deduction and it removes the governor's proposal that removes the car tax. The state also established a process for dealing with mid-year changes relative to the federal administration. And that is to reduce allocations for impact at grants and potentially calling a special session if the impact hits 1% of the general fund threshold. I am going to shift into the capital improvement program unless there are any questions. Any questions? Onward. A million questions. We'll try to be ready. Our capital improvement program totals $151.1 million, including 40.4 million for school projects, and the inclusion of a judicial center construction. This would be on the completion of the county's master facility plan. We also included updated cost estimates for existing projects to better project our debt needs. We removed projects that were identified as no longer a priority from the December 5th strategic planning session. Yes. On the judicial administration, I thought the number was significantly higher than that. I thought that was roughly the number that we saw from six years ago. In 2020, it was a $55 million project at the time. So we've escalated it about 5% each year. Okay. It is right now very much a fluid number. Yeah. We did not want to put forth the $55 million knowing that there was escalation. This also, that number also only included the consolidation of the three courts, and we know that through the master facility plan, we have other Entities at this time. That's that was the rationale behind the number and if we wanted to do some what if projections To look at what might be significantly larger numbers than the 70 When would be a good time for us to do that at any point in time? We work Davenport. They can respond back. I don't want to say same day, but I would say within a few business days, and we do have a portion of the presentation later that will show what capacity the board does have. Should we increase those costs? We are under all of our debt thresholds that we would be hitting. So we feel confident that at this point we, that presenting the project as 70 million was the best approach. And the master's facilities plan, the data from that would be returning to us right in time for this process next year. So that should help us Yeah. Yes. That was my fourth point. Thank you. For all of the projects that we'll run through, which I will not be going through details on each of these projects, I know the board is well versed in them. Just to point out the slides, they do the slides look similarly. I'll just point out what they signify. The tracker on the top is where there is funding in the CIP, in the FY26 or 2030 CIP. And then on the bottom right, if the project was discussed on December 5th, we included the preferences that were made that day. Beelston Fire and Rescue was pushed out one year and the design would begin in FY26. Fire and Rescue Training Facility would be a component of the master facility plan. So that will be, that's currently right now in future years until we determine that one. Marshall Fire and Rescue is in FY29 and FY 2030. That is the combination of those two stations into one. Southern Fire and Rescue is in future years. It would be a new station in the southern end of the county. The plains is in future years. That is a renovation of the existing station. Upperville Fire and Rescue is in future years. We are making significant improvements. I would say significant because it's been there long over two. We are making improvements to the station currently with existing funds that we have. So while this says future years, there are updates that we're working with Chief Smith on. The renovations that were limited, because the space is limited, just want to make that clear. Yes. This way. The Judicial Center project supports the consolidation and construction of the Circuit Court, General District Court, and the juvenile and domestic relations court, along with other entities that would be identified through the Master Facility Plan. The Central Library and Mistil Roso is here today as well. We have a few slides specific to the libraries. Should she want to join at the table. On the central library, we have that in future years at this time, which has been pushed. This includes half of the parking garage, half of the site prep, as well as the cost of the library that's been presented from the Path Foundation. The Van Hill library is in FY2026 for construction. This would be the renovation of the Vinhill dispensary. There are a few cost saving measures that Miss Dullr also has identified as we move into what the operating costs of this library would look like. And please jump in if I misbeginny. We would be, should the Vinhal Library be constructed? The reduction of the Marshall Branch hours would move from 58 hours down to 44. We would also operate the Vinhal Branch at 44 hours a week. Both of the libraries would share a branch manager. and this would reduce the cost impact to the operating budget that was originally sought out by about $112,000. New staffing for the facility would cost about $300,000 and then there are some smaller dollar items for building maintenance and annual operating cost increases. the first year of the Vint Hill branch, which would open in FY 2027, would cost $447,000 and then ongoing, it would cost $426,000. And if you have any questions from Mistil Rousseau, she is here today. Any questions? No, just want to say thank you for being very creative on how to keep those costs down the operating costs and Vinhills has been waiting a long time for that library. Yeah, we look forward to it. Thank you. Crocket Park is currently listed in future years here, but it is a near term priority for the county. This is an item that we are working with Mr. Repackie closely with. The cost estimate is being pulled in by other resources that we're hoping to secure funding resources. And so this may be an item that we will move forward amend that we would be able to complete this year. This also may be an item that we are able to do from our capital reserve as a transfer, which means that it would be pulled off the CIP, since it is a priority to replace. That is why we've inserted it here. The Kettle Run Greenville Connector Trail is in future years that project was presented last September to the Board of Supervisors. The Laurel Ridge Community College Connector Trail was also presented in September that is partially V.funded and the construction of that right now in the CIP is at FY27 and FY28. The Northern Swimming Pool is a project that is there as a part of agreed upon in the Melon Estate Agreement is in the future years at this time. Bramington Pool is a project that we're keeping a close eye on. It could be moved up in the CIP. So if I can just ask a question on the Melon Pool, was pool, was that, that was not funded by the mill on a state that the agreement is that we would do it? It's part of a deal. And it was part of the details on it or a little more because this was back in the very early 2000s, but they gave us a large amount of money to help with the construction of the Marshall area community center and part of that agreement was that we would at some point build a pool we have spent pretty much all of the Malon money on that but there is still no pool so eventually we are required by that agreement to build a pool but there's no absolute debt line there's no debt line no okay it's been like 20 plus years already but yes that's why it's still in there and They're not hammering us to live up to our end of the deal they've both passed away well I know that but there's a their foundation still exists not currently not currently okay I can the test the citizens desire to see move forward I guess prior to my getting in the office there was some momentum on it and I guess it kind of burned out but there is desire. The Fremington pool is a project I was saying we're keeping a close eye on. It could be moved up in the CIP and if funding comes sooner from a private developer we would amend the CIP to move that forward. Southern Falkier Recreation Complex was identified during December 5th and in discussions as a high priority. There is some funding towards a conceptual in that in FY 26. Vint Hill Village Green is in future years. The Marshall Convenience Site Project was removed in last year's CIP. This is something we are bringing back as we improve road access, egress issues. We are utilizing existing funds towards those immediate needs, but there are some future year's potential plans for that convenient site. The school division has three expansions in future years. These are in the CIP as submitted or as proposed by the super attendant. A future elementary school expansion and a future high school expansion. Those are all in future years. This data was presented to the school board on February 10th last month and this is the school enrollment, student enrollment projections over the course of the next five years. Light Blue is the the program capacity for the school division, and then the years that follow. School Capital Maintenance is a line item we added and the CIP last year in the proposed budget, we have $500,000. And then our Taylor Middle School Renovation Exp renovation expansion is in the CIP for some cash funding at $500,000 and then it would be our second tranche of funding for it towards the project. And I am working closely with Mr. Shrestha on the timing of the draw downs as well as the project spend and when that the bids return from that will have also some more clarity on timing of funds. The Sheriff's Office has a future range development. That would be the construction and development of the property that's in future years. We also added the School Reporters Project. This would be to provide installation of repeaters for public safety purposes. This was identified as a key recommendation out of the joint reunification exercise that was completed in June of 2024. Midland Service District has been identified as an area to begin planning. And then lastly we have airport. There are two slides on the airport. The first is related to the capital improvement projects. These are funded by the FAA and the state DOAV, Majorly Grant Funded, that would include runway rehabilitation, or fuel farm replacement, lighting and other apron work. The cash requirement FY26 is about 125,000. And then airport hangar development. It will also be discussed on March 13th, RSNH, our consultants and engineers, I'm sorry, for the airport, will be coming to present results. We just completed a six week engagement with them on a demand study at the airport where we sought our current and future potential tenants to better understand what hangar needs they have. We are also working with Ms. Hilton on the draft RFP at this time. So after our March 13th work session, we should be able to release that. So that is a project we have about a million dollars in prior year funds for that. But the goal would be that a developer would come in and pay the block of those costs. Our budget process calendar today is our first work session. We have a work session at 130 on the regularly scheduled board day. Then we have a joint work session that will be at the Falkier High School Library and that's at 5 o'clock on March 20th. Following that at 7 o'clock is our public hearing and that will be at the auditorium at Falkier High School. On Tuesday, March 25th, we have markup marked down at two o'clock, that is here. And then Friday, 28th at 10am is our budget adoption date. Also here at Ten Hotel Street. Our next work session would focus on public safety and any follow-ups from this work session. I'd be happy to answer any questions on this content. We do also have Davenport here to do a little bit more information on our debt service so that the board is aware of where we are on our thresholds as well as some information on TIFFs and special taxing districts. Any questions from the streaming? I do. Shocker? Shocker. On the school budget, specifically, the transfer, I think it's a 106.1 is the total and that includes 2 million towards the HIF fix. Yes. So, really towards the operating budget is 104.1 million, give or take. 106.1 includes 20 million dollars for health insurance. Right. but some of that. 104 is recurring, two million is one time still, yes. And so what percentage increased does that 104.1 represent over the same measurement a year ago? I would have to come back with that because I wanna make sure I also then would reduce the health component to So $4 million correct last time, right? Yes, so yes So two million recurring has been added and 1.4 million recurring has been added This is that's in the transfer to the operating so it's 3.4 million, but over what last year was then And currently it looks as though the amount that we had budgeted, the school had budgeted for their part of the health insurance fund, seems to be under budgeted again, right?'re tracking this year pretty significantly a deficit in that line item, does the proposed budget fix that as well? The current FY25 actuals are looking like the fund, we're only about $1 million over on the fund, So it's not as substantial. We'll be able to feel that that's the combined fund. Yes Yeah, but I think we need to be we need to be accurate with how we how we look at the numbers and and Are we okay with saying all right the school is over and the county's under and therefore it's all a wash, or do we need to account school for school and county for county? We are working very closely with the school division in a partnership to ensure that we have enough funds in FY26, recurringly, for the health fund. This is year two of three of definitely a large gap that we were funding. We're also in the middle of the RFP process. And so we're cautioning at this point on where we might land. That should be coming through the budget process. Missed down, did I clarify that? Okay. Then the other question is around, there's nothing in our budget contemplating any major funding for PFAS, PFOA, forever chemicals. And we know we've heard numbers from WSA that are, you know, just I think for New Baltimore alone was a $45 million projection. And we would theoretically be obligated, or they would be theoretically obligated to fix every system in the county. We have three and a half years roughly to meet that EPA requirement, assuming that doesn't change, which is very well could given recent things. But I'm just wondering, I guess we'll find out if that were to A, is that something that we think that we will need to address at a county wide level? Is it something that WSA has the capacity to handle on their own? Which would ultimately mean it's only going to go to rate payers and not to citizens countywide. I think rate payers are roughly half of the citizens in the county. So I just want to make sure that that's something that we don't surprise ourselves with in a year or two. And but there's at present we'll just have to see whether what kind of what kind of room we have Decapacity. Yes. Yeah. Yeah. Okay. To that I wonder whether if we have a work session with them not to necessarily go over the Chemicals and what they'll tell but look at me that and the other Service districts and what the big picture calls for all of it is and then how we start itemizing how that goes. Now I just had one question and you can get me this stuff later but just on these revenue projections and the county and the .91% growth where commercial tax base breaks out of that compared to just the residential. Thank you. Any other questions? All right. Mallory, great job. As usual. Appreciate you giving us this overview. And I think we've got folks in the department who are correct. All right. And I think with that whole PFAS thing, that's going to, that's going to definitely change. I would think that PFAS thing is going to change. I mean, one drop, literally a drop, you know, 36,000 gallon pool is a flag. Oh, yes. Ridiculous. Whatever the rules come out, but I don't know. But I have to live by them. No. I don't know. I don't know if I'm listening to that. What do they think it's right around them? Right. How about it? How are you doing? Great. Mr. Vice-Chair. Vice-Chair. Members of the Board. As always, again Kyle Laux with Davenport, my colleague Gregor over here. We always appreciate coming and seeing you talking to you several years at a row here. What Miss Downes and Mr. Bling asked us to put together was maybe a little bit of an overview, financially, a little bit of background. I won't spend a lot of time in that, but then certainly focus specifically on the CIP, and the debt service, and the investments that you're making in the capital improvement program, give you an initial picture of that, and then certainly as Mr. Bling mentioned, if there's different scenarios, if there's stress testing of things, we certainly can do that going forward. But to start with, again, Azure, outside independent financial advisor, which we appreciate certainly during this budget process, which is always a puzzle to solve for you as the policymakers. I just appreciate being able to leave you a little bit of perspective, hopefully some good insights and answers as you work through that over the course of the next month or so. But really the focus for the moment is on the CIP, on the heels obviously of affirming and getting the county's triple-A credit ratings. And so everything we're doing and talking about today has that in our mindset in terms of how do we make sure that you as the county continue to have those triple-A credit ratings going forward. Which everything we see right now in the budget and the CIP, we have no concerns about that. We'll talk more specifically about it. Just a couple big picture takeaways, looking a little bit of history. You as a county have had a series of very good financial years. So five surplus is in a row, credit to you. In certainly the economy as well. We've had great tailwinds economically the last several years. You've enjoyed that as many of your peers have as well. As we look at 24 into 25 and down to 26, one observation we have that I think you're feeling in your budget is that revenue growth is still growing. They're at a much slower pace than it was the last several years. We'll give you a couple observations there. But it's making this year's budget arguably a more challenging budget for you and many of your peers than we've seen in recent history. The bottom of the page will highlight this just a little bit in terms of your fund balance. That is a very, very important measurement or metric or policy for the rating agencies. We just We want to stress that as we talk. We'll show you one graph on that account in terms of your fund balance and just reiterate to you and to the public just how important that is to the county's overall financial health to being able to achieve those triple-A credit ratings which allows you to operate in most cost effective manner possible going forward. A little bit of history, tons of small numbers here. I won't go over them line by line, but two things in terms of revenues that we want to call out. You've seen as many and most of your peers have very strong growth in your other local taxes and your interest earnings. So up and down the board, you've had very very good revenue growth but there are two big outliers but it's been in those other local taxes growing on average about 10% a year. So Mr. Blink mentioned the sales tax and how strong that's been. We've seen that in Meals Tax, some of those consumer discretionary things. Certainly impacted partially by a good economy, partially by some inflation. We'll just point that one line item out that has been so, so strong. But again, I think in this environment, the expectation is, while those numbers may continue to grow, they will likely grow at a much lesser pace than they have the last five or so years. The other very nice line item has been interest earnings. That ties back to your fund balance, ties back to the good work that your treasure is doing, reinvesting the dollars that are available to you in the fund balance. And so one of the reasons you have a very strong fund balance is indeed to make sure that the credit ratings are supported but also to make sure those dollars can spin off interest earnings that flow back to you as a county and help to take some of that pressure off of the budget going forward. On the expenditure side of the equation, nothing in particular will point out in great detail to Zaladi raw audit aside from the fact that you as a county have done a very good job maintaining your expenditure growth to be in line if not less than your revenue growth. So kudos to you as a board and management team for sort of making sure those two, meaning the revenues and expenditures are growing in line in balancing in the way that you would expect of a triple-lay local government. Of the next page in terms of the fund balance, again, mention this at the outset. Very, very important to the rating agencies. And we saw that with the AAA results last summer. You have a policy to be at basically 15% to 12% in the unassigned, 3% in the budget stabilization. You're above that. we recommend you continue to be above that Again, especially knowing that as we get to the CIP in the next section You are contemplating and moving forward with a series of Large and important capital investments very good thing to maintain that fund balance at or above that policy level In terms of the capital improvement program, kind of switching gears to the looking forward, portion of what we have today. We've talked about this before, but have very good result. Last year, roughly 45 million of lease revenue bonds and revenue bonds, pardon me. Sold in the summertime, competitively, that that interest rate was about a 364 and so we continue to see a very nice interest rate environment for borrowing that factors into how we think about the planning going forward being able to utilize those triple credit ratings to the greatest effect again to get the projects done that you as a board want to move forward. There's about 149 million of proposed future borrowing in the CIP. We'll look at that on the next page. We'll kind of steal the thunder here a little bit. Mr. Bling mentioned this as well. Doing that keeps you in compliance with your policy. So as we think about things that are keeping us within the white lines of good governance, the white lines with the rating agencies expect, that level of borrowing keeps you in compliance with those policies and causes no particular cause for concern with respect to the rating agencies. We'll also mention at the bottom of the page, we have an analysis in here that looks at that CIP and the impact on your policies, also the impact on your cash flows, it really your budget. When we do that, we equate the budgetary impact to a penny on the real estate tax rate. That's not for us to control. That's obviously if your UD control is a board, make those decisions. But that penny on the real estate tax rate does be it. Just a good marker that everybody can kind of get their head around in terms of what these dollars really mean with your primary revenue source, which is your real state tax rate. Before we get to the CIP itself, this is what we start with in terms of the existing debt profile of the county. Again, this is all, we've talked about this in the past, so this is all fixed rate. It looks very much like a mortgage. It's a series of different bonds or borrowings that we've aggregated together here for sort of ease of discussion in one picture. But what the county does is makes annual principal installments. So if you've had a mortgage and you're making your regular annual payments, that is much like the way the county's debt operates. You can see the dark green is the principal component of it. The light green is the interest component of it. And you see how that pays down over time. And so by virtue of the borrowing we did last year, we do have a little bit of an increase going into next year. Let's know surprise that was within the planning for the CIP last year. But once we get over that hump, we've got a very nice decline. And so we'll look at that as we see over the next couple of years. A little bit of a hill decline, but once you're over that hill, very nice decline into the future. You also pay your debt off rapidly. And so there's a little column on the right-hand side there that says 10-year payout ratio. It's basically measuring what proportion of the total principle of that 147 million do we pay off in the next 10 years? It's about 59-60 percent. Again, we use a residential mortgage corollary or typical 30-year mortgage you're paying off maybe 25% in the first 10 years And so the county is paying off its debts rapidly. It's not pushing things in the future generations And that's a balancing act that we'll look at on the next couple slides This total debt service does that Doesn't appear that that incorporates the next tranches Not yet. Okay, this doesn't but we'll get there there in a couple of minutes. Okay. All right. Sir. So Mr. Brothers, to your point, so that's our existing. We'll start to layer on perfect segue with the CIP. Looks like going forward. You've obviously seen this in great details. This is more of a summary, sort of look at it. We've highlighted the borrowing component in the bottom there in blue. It's about $149 million, rounded up called, about $150 over a five-year time period. So that's not all at once. Take it out in basically annual installments. You have an ability to course correct and adjust as different budget cycles come along. Another thing I'll point out on this page is that you are not just borrowing for your CIP and so there's a cash component, you have a policy to make sure that you're putting cash into the CIP, that's a healthy practice to make sure that you have a balance in what you are paying for, of current dollars versus what we're borrowing via long-term financing. The other observation we'll make on this page, well, there's not great project detail, is with the county's in a good job of, there's also saving as debt capacity for the bigger projects. And so last year you were borrowing for schools, meaning a middle school, utilities, rec centers, other things in the CIPs, judicial complexes, fire stations, libraries. Those are big, long-lived assets. And those are the types of things that, if and when, you as a board decide to go borrow of those are the things you want to borrow for. The cash component of it, some of the asset replacement dollars being able to cash fund those that helps free up the debt capacity for again what all term, you know, unofficially the bigger things. The middle school is the judicial complex is so forth and so on. So that's a good healthy practice, something you've done historically and continues within your proposed budget. budget. So on this page then Mr. Brottis, exactly to your prior question, I've to open up on book here because the numbers here are small, but we'll give you a sense of what that going forward picture looks like. And the board obviously has this in a handout, it's up on the screen, so forth and so on. But what this page is really doing is Taking a look at as we layer on with your existing debt service. It's in column a a projection of what the debt service of that roughly 150 million in principal looks like and that's in column B So very simply take a plus b that equals c that is the current projection of what the county's debt service looks like and that's in column B. So very simply take A plus B that equal C, that is the current projection of what the county's debt service looks like into the future. And again, this is a rolling projection that we do. And so arguably as you get into your 678, 910, will there be future projects? There certainly will. That'll be up to you in future boards. But this is working off of that roughly 150 million shown on the prior page. That's what shows up in column B. Importantly, we are using above current market interest rates, and we do these projections. So when we borrowed last year, we borrowed four 20 plus years at about a 365 plus or minus. We've assumed a 5% planning rate in here that's on purpose. We don't control the markets. You don't control the markets. And so we like to try and err on the conservative side. For a long time, that 5% rate has been a pretty good bellweather for planning purposes. If we went borrowed per se soon tomorrow, we'd probably be in about the same range as we were last year. We actually just did a financing this morning that was a 20 year, about a 364. So the numbers that you see in column B relative to the current market are conservative but purposely so. Would you say this morning was? What's up? 20 year and what? Would you say about this morning you locked in something? Oh, you know, we've competitively been a financing this morning that was 20 years triple rated that that was about a 364 in terms of interest rate. It's a very similar to where you were last year And so the way this chart works without going through too many of the sales basically if you look at column E Columery is really comparing how many dollars do we have in the budget to how many dollars are going to need going forward to pay debt service. Assuming the only place we have to come up with these dollars is their roll state tax rate. Now in reality You as a board have a variety of different levers you can pull but the real estate is your primary lever and so that's That's what we compare that to Importantly, there's no dollars needed in fiscal year 2026 So as you're looking at this proposed budget, the Stribling mentioned this, the timing of how we kind of phase these borrowings, we can do the next tranche without having any impact in 2026. So kind of save that year that is coming up. As we look into the future years, then in 27, we do see a need, again currently, about 2.6 million in terms of increasing the debt service budget. But again, not this year, going into next year, 2027, about 2.6 million, that equates to about 1.7 pennies on the real estate tax rate. And so if the only place you had to come up with those dollars was the real estate tax rate, it's about 1.7 pennies where they're abouts. Again, that's really numbers. The balance of the years, you can kind of carry your eye down there, the expectation is then nothing in 2028, and then you get to the latter part of the decade really, and there's expected to be an additional need to kind of incrementally ramp the debt service budget over time. And so this is purposely set up in a way that it's done on an annual basis, reevaluated on an annual basis, no need in 2026. But as we go over it, basically the next five or seven years in an expectation that will need to kind of stare a step up the dollars in the debt service budget from what is right now about 16 and a half million to about 22, 23 million over the next five or seven years So that's the affordability side of it with lots of very small numbers Well, sometimes called the capacity side the capacity side is our ability to do these various things and comply with the debt ratios That you as a county use a board have and that the rating agencies look like or look at. So we'll use a couple pages here. The first policy that you have is debt service versus revenues, basically measuring how many pennies out of every dollar in the budget going to make a debt service payment. You as a county have a policy that you don't want that to be any more than 10 pennies out of every dollar. That's that red line. What this graph is doing is layering our existing debt service, which is in the dark green with the future CIP, which is in the light green. We get to a maximum of about 8%, so we're in compliance with it with the entire CIP labeled on, layered on from a capacity standpoint. You do have more capacity than what is in here, so you could move those green bars up and still be in compliance with your policy, not suggesting you have to do that, but that's what that gap between the green bars and the red line represents. And again, we've tried to use some conservative planning assumptions that 5% interest rate and some relatively nominal growth in the underlying revenues when we do that. Your next policy is debt to assessed value. This is really just measuring how many dollars do we have outstanding in total debt to the total assessed value or total tax base in the county. Your policy says we don't want that ratio or level to be any higher than 3%, you're right now at about 1.5%. So you've got plenty of capacity here. If you were to look and say which is our limiting factor, it's included the policy before meeting debt service to expenditures is more of the limiting factor than this one debt to assess value. The last policy that we'll show and talk to you than happy answering questions is the fixed cost policies. So this is something that is relatively new for policies for local governments like yourself. Many AAA higher rated are putting them in place and certainly you have. It's really measuring not just the debt service component of the budget, but other fixed costs, which is basically pensions and OPEB or other post employment benefits, like health care costs, things like that. The rating agencies and credit markets like to look at this holistically gives you a sense of between the debt that we take out for large capital projects and the pension liabilities, how do those things add together, and that's what they term the fixed costs. You have a policy that says we don't want that to be any higher than 25%. And you're right now at about 15%. It probably grows a little bit of the next over years to 17%. But again, you're well within that policy range. We keep an eye on it, but nothing concerning here for the moment. And that really is the CIP portion of the presentation. Pause there. Any questions? Anything? Ms. Downs? Any questions? So, when we look at the, what appears to be the limiting factor here, the debt service versus revenues, and we're approaching by 2030-2031, we're approaching at 8% number, maybe even exceeding it slightly, depending on what the rate's gone in at. When we establish this 10%, that only our policy or is that driven by some extent, the external realities that we have to, the market that we have to face. It is driven both by your reality, but also by the external expectations of the rating agencies. If you look around regionally for other counties of your size and credit quality, most of them will have a policy that is 10% plus or minus. Maybe see a nine, maybe see a 11, but best practices would be somewhere in that 10% range. And if we are approaching that 10% does it impact our ability to get the AAA rating? Or as long as we're at 9.9% what they say, you got it. Not necessarily. It depends. When the rating agencies come up with their credit ratings, they're looking at a variety of different factors. So it's not just this. And there certainly are instances in many regionally and locally where for one reason or another, maybe a big, big capital project came up, the local government had to push at or even maybe through sometimes the policy level. And really what the rating agency is going to think about that is going to depend on how these other factors play in. And so if we saw ourselves getting towards 8%, 10%, we'd know that well in advance, not going to be a surprise. And we'd be able to talk about, like on the fund balance side of the equation at the beginning of the presentation, we was kind of like to talk about that during the budget cycle because it's a great way to counterbalance in the eyes of the rating agency. If we're going to be taking on some debt for some big capital projects, a great counterbalance there is make sure we've got a really strong fund balance to again to kind of counterbalance that and provide some contingency. And the total, let me see, I'm going to find the right chart, the modal outstanding principle that we would owe at that moment in the 2030 let's say is How much I'm like I can't find any of these charts. Yeah, outstanding principle I have to get back. I don't want to do too much meatball math for you Mr. Page 14 Total debt as a thing that says value. The debt service. So it's 12. If you looked at page, maybe page 11 is getting you where you're looking for, which is the payments on that annual debt? Is that helpful, Mr. Brutus? I'm looking to, as the principal balance, the outstanding. The principal balance? Yeah. Yeah. Yeah, how much do we owe? Gregor just pulled it up very quickly. I can't promise we'll have that level of speed all the time. But in 20, 28, you'd have about 217 million outstanding between existing in the proposed CIP. I'm sorry, can you repeat that number? 217. 217. And I see that the debt service grows is the principal growing after that. Are we taking our last tranche in this scenario? Our last tranche is taken in 2020. The peak you would be, so 2030 is the peak. So the end of your CIP, about time you've laid all these different pieces on, the peak is about 243 million in total. Okay. And so just judging from this, where that hits around 8%, we could conceivably just extrapolating borrow another 10 or 15% more than that and still be within. But is that pushing it? I'm just trying to figure out, do we have room you know another 30 million on this on this building building and or for for water systems if that becomes. Here's what I would suggest we will we will test that I'll give you more specific wonder and follow up with this downs but on so there's really two questions that think you're asking given the limiting factor which is really a payment driven driven factor, so is that so much of the amount of debt outstanding, but what is the payment on that debt? We'll go figure out and calculate if we were basically to push those green bars all the way up to that red line, how much more could we take on over and above the CIP? To kind of stress test that. If that's hopefully helpful in answering the question. Yep. Yep. I'm just wondering what your monthly payments will be. Well, only because it helps us understand what we could borrow. Right. If we have, you know, every experience we've had in construction lately has been, we think it's going to cost X. Well, guess what? It's going to be 2X. And so, you know, I just want to make sure that we have plenty of breathing room before we feel like we're totally committed to this judicial center or whatever else might become down the pipe. The CIP also, sorry, I'm back here. The CIP also makes a few assumptions on that project, that it's over the course of two years, that it could be longer, the timing of that. So all of those variables we would put into consideration. Yep. Thank you. So do you have any questions on that topic? No further questions on the call. All right. If not, I think we've got one more presentation who's operating the slides. Thank you. Excellent. Okay. So, second part here. again, this down and this troubling asses to come and give maybe a little bit of an overview on what we've titled here, TIPS and Special Testic, Special Taxing Districts, which are unique, financing mechanisms, you usually across the country, they come in different forms, but maybe just comment on those a little bit. I think maybe they've been in your general mindset for some specific things, so if you can give you an overview of that, then certainly can follow up with any other specific details. But again, just for a conceptual discussion, I hope this is helpful. The first topic we'll talk about is a tax increment financing. Oftentimes, short into a TIFF. That's what that TIFF acronym stands for, is tax increment financing. Again, this is a financing structure or financing strategy. It's been widely used for a long time across the country. It can be used for any variety of things, a lot of it is governed by state and local law. But in this context, the concept is really taking incremental revenues. So usually in the context of a new development that is expected to add value to a portion of the county to certain maybe parcels of land and economic development maybe will come in and by virtue of whatever type of development that's going to happen it's going to increase the value of that property of that land and thus it will increase the revenue generation in terms of the taxes and that could be in real estate could be in the meals tax, sales tax, any variety of different ways. And it's that concept of the incremental tax revenue that is critical to this financing structure. What really kind of takes place when you think about that is to the extent there are local infrastructure improvements that are needed in order to spur on that economic development. Could it be roads, could be water and sewer, could be utilities, things of that variety. If there is some need to basically come together in a public private partnership to say, okay, the public sector may make some public sector investments, increase the taxable values, spin off additional revenue, in order for that to happen, they may need some help, I say they, the private sector, may need some help in terms of paying for and funding some of the public investment that may be required again, whether that's in roads, utilities, so forth and so on. And so what can be done is taking this concept of a tip for a tax tax increment financing. In setting up a financing structure, we're by your basically carving off the new revenues that are generated by that economic development and using just those revenues to help pay for that public infrastructure that is required. So again, not using dollars that are widely dispersed in terms of the general fund, but really looking at a specific area, a specific area that's impacted by that development, and using the incremental new dollars that are generated from it to help pay for the public infrastructure. You see, we've seen this all across the state. They can take all kinds of different forms. So it's not like a cookie cutter approach. They tend to be very facts and circumstances specific. You've seen them across North of Virginia, in Richmond with the Diamond District right now in the building of baseball stadium using some of this. And so there's a lot of different ways to think about it. You can carve off, so to speak, in terms of incremental revenues. It could be real estate, it could be meal stacks, it could be sales tax. A lot of it can be done at the sort of administrative level to the extent that there is a financing that is required on top of it. That can be done as well, whereby it may be that the public infrastructure, if it's roads, if it's water and sewer, you may want to borrow for those dollars. And you can use this tip structure to basically allocate those incremental revenues and use those revenues to pay for debt service on a borrowing. The dollars not borrowing will go to make that capital investment. So that is one concept. Again, at a relatively high level here, I'll pause there to see if there's any questions on that or anything more specific I can give you. I have a question on that. So if you're, let's say you want to put infrastructure in an area specific and to create some sort of development, when you talk about the incremental taxes paying it back, are you trying to take up a specific tax and create for that area? Or are you just allocating that we're going to take out this portion of their real state taxes once it's done because their real state values have gone up not that they have the opportunity to taking out later, or is it before, or how does it work? In a TIFF, it's a great question, because you've actually given a perfect segue to the second portion of the presentation. So in a TIFF, what you're doing is you're taking, for instance, the real estate taxes that will be generated in the future by virtue of the development. So these tend to, especially in Virginia, you've seen a lot of these, if you go back in the early 2000s, they were often used in combination with something called a CDA, a community development authority, but a residential development was done that way. That term of CDA, by virtue of a lot of, you know, the real estate collapse in the 0910 time period, those are not very, not used anymore. It's the concepts, not widely used at all. But to answer your question, let's call it some, the concept with the TIFF is taking future revenues that will be generated by a development. So by virtue of that, they tend to be a little riskier in so far as you're needing to bank on some future development and future revenues. And so it's oftentimes combined with other concepts to help make it viable, help protect you as a local government in terms of how that gets done, especially if there's a financing involved. And I think if we flip the page here, maybe part of your question was in terms of an ability to use a special service district, which is a different concept whereby in Virginia, I'm going to play lawyer here a little bit, which I'm not, but in Virginia you have an ability in powers to basically create special districts within your county. They can be done for any variety of different reasons. Sometimes it's utilities, sometimes it's parks at rec, facts and circumstances specific. But within those special districts, you as a board and you as a county can levied basically a special tax within that district. And so that provides you an ability to generate revenue within that portion of the county. However, as you decide to draw it basically, the way the rules and laws work, you've got a lot of flexibility in how those districts can be created and drawn, so to speak. And with a special service district, you can levy a tax that is specific to that district. And it's got to be used for the specific purpose of that district. It might be utilities. It might be parks and rec, so forth and so on. And that's a way to basically generate revenue to pay for infrastructure. It does not hit the county as a whole, so it's not coming out of the general fund, not coming out of the budget that you're talking about right now, but it's a way to derive revenue from a specific targeted area for a specific targeted purpose without having to sort of look forward and bank on or hope for revenues from a project that may or may happen in terms of economic development. So next couple of pages, we've given just some specific mechanics around how that would work. But again, these have been used pretty broadly around Virginia. Really, you have a couple right now in the county, special tax districts, you look up in the Marshall area, so forth and so on. So there's a lot that can be done with this. Again, a lot of its facts and circumstances specific in terms of what you as a board are trying to accomplish. But they are a way to basically isolate a certain specific portion of the county who generate revenues from that certain portion of the county. You can borrow against those revenues. So the extent that the purpose is to put in place some infrastructure, whatever the infrastructure may be, you can use the revenues generated by that special tax to pay for a borrowing, the certain mechanism you have to go through, but for conversational purposes, you can use the revenues from that special tax, dollars against it. Use those borrow dollars to put the infrastructure in. And the advantage relative to a tip is you know specifically what the revenues are going to be. You're not having to go sort of out on a limb with a hoped for a series of projections via economic development. You're living attacks that has all the certainty as to what those dollars will be. It gives you much more planning ability when you think about how to use that and leverage it. On the, back on the TIFF, the last bullet point says, often bonds are structured so the TIFFs will be pay back. But an especially assessment is a backstop to funding the deficiency. Is that special assessment something that would be done through a service district as well? What's between a special assessment and an SS? Yeah, a special assessment is really tied specifically to a CDA. And so we should probably maybe strike that bullet point for this conversation. But you can use a service district in combination with a TIFF. And so, you know, what you might think about doing is if there is a certain project that you as a county want to take on and it benefits a certain district, you could put in place a TIFF district around, whereby you say as a board we're going to carve off these incremental revenues. We've got some projections about what those are going to be. We don't know exactly what they're going to be. In an addition to that, we're going to put in place a special service district in the same area to levy a certain amount of dollars to basically make sure we've got some guarantee as a county. that term advisedly that term advisedly, that there's gonna be revenues to pay for the needed infrastructure. If for some reason the incremental new revenues don't come to fruition or don't come to fruition in the amounts that have been hoped for, so forth and so on. So these concepts can be combined. So a TIF is used only when you're using debt financing. you're using debt financing. You're getting a bond that is structured around a tiff. Typically. Correct. Typically. Under a special service district conceivably, we could use cash to apply a special tax to repay ourselves the cash we put out. That's right. That's right. There's no requirement or obligation in that really either of these concepts are used in combination with the borrower. Oftentimes they are. Because oftentimes the reason for putting in place is to help generate revenues to put in place some infrastructure that usually has a big upfront cost to it. But there's no obligation to go borrow really under either concept, but usually see a borrowing tied into both of them. Okay. Thank you. Any further questions? I do not have any. All right. Thank you, sir. Thank you. Appreciate it. Appreciate your. Ms. Downs, any announcements? Yes, I have three. My first announcement is I want to give a shout out to Mr. Bob Rankin. When we move to 21 Main Street, we often don't get to see him. And today we're back in our original meeting room, and he is working the streaming, the audio visual he he does everything. And Bob, we couldn't do it without you. You make it seem seamless. You help us out every day, and we're thankful for you. And you are the March 2025 Employee of the Month. So we didn't go by. I'm sorry. I'm sorry. I'm sorry. My next two announcements are just as exciting. The next budget work session is March 13th, 2025 at 1.30 p.m. at 21 Main Street. And the next regular scheduled meeting of the Board of Supervisors is the same day March 13th, 2025 at 6.30 p.m. at 21 Main Street. Thank you. Great. Thank you. Any questions, comments? I would just like to say, I really like this room a whole lot better than that other room. This, right? I mean, the acoustics, the aspect ratio, your closer to people, I like this. If we could come back here for our regular meetings, I would find that really an exciting change. Well, we went to a lot of effort to go over there. So who knows? We can certainly look at that. Anything there? Nope. All right. At this point, I'll go ahead and look for a motion to adjourn. So moved. All right, second. Second. All right, all those in favor, second. What are we saying? Aye. Aye. I have it today for zero with one person. Absolutely, unfortunately. All right, you just have a good one and we will see you back here soon. Thank you.