All right.

We'll go ahead and call the afternoon session City Council to Order.

It is June twenty fourth of twenty twenty five.

And pursuant to VTCA Government Code, Chapter Five Five One.

Okay.

We'll go ahead and call this afternoon session back to order.

We're going to move on down to discuss some of the work session items three point one tray talking about everybody's favorite subject budget.

It's uh really everybody's favorite subject right now.

I think uh hopefully we're getting into towards the end of this, um, which in some ways is the end, but in other ways the beginning, right?

Of what'll happen in the in the fall, but um really trying to give you the least update based on some of the questions you all asked last time, and get any more support that you all might have as far as things you're curious about.

So we're gonna hit a few things about our prior discussions, kind of the existing tax policy and some of the next steps.

Um, as a quick reminder, embedded in all these presentations is our past discussion.

So this dates back to November where we started this discussion because we knew this year was going to be a really difficult year.

Um, and so we started making essentially the down payment decisions, if you will, uh, back in November again in January, then again in August, again a couple of weeks ago, and then we're here today.

In addition, uh tons of comparative data to show uh the high quality, high service that our that our citizens are receiving from our employees, uh, with very um, you know, uh modest head count, right?

There's a lot of hard work, a lot of good work going on by a lot of uh of our uh very capable city employees that are serving, and when you just bear you know, bear in mind all the benchmarking, it's uh the data is really pretty clear.

The efficiency and uh the effectiveness that our that our citizens are receiving from all of our employees.

But all this data is embedded in in your presentation, just as continued um uh uh deep dive as far as information goes.

Of course, also, if we haven't really um uh made our points clear on kind of the challenges, it's really uh boiled down into two or three key things.

Um is the ARPA uh funding.

This is the last year of the ARPA money.

Um, so it is the last year of phase in of a multi-year phase in of restoration of services.

We're thankful for the ARPA money.

It was a uh just a great help to the city as we came out of COVID.

Uh and we had a little bit of a plan to phase things in, but as things changed with some of the appraisal district processes, that last year plan became a little more challenging uh based on the uh changes that have been made, which are identified there in points three, four, and five with the uh appraisal districts modifications, kind of based on how conservative the comparison values are when you look at other cities adjacent to us or other counties adjacent to us.

The uh the value uh lost in protest, which is well beyond historical norms.

Again, we will never protest people protesting.

Uh we uh think that's part of the calibration process.

But when the calibration process is so notably different from historical past, it becomes really uh a challenge for us.

And then, of course, the the appraisal districts plan to essentially have no reappraisal plan, freezing tax values last year on residential property, and then again uh this year in a two-year plan, no annual uh modification.

So uh good when you're a taxpayer, uh bad when you're uh trying to run a city, and as Mr.

Peel always reminds me of the natural tension that exists between the service level that people ask us for and yet the the amount that they're willing to pay for it, right?

And how that comes uh together.

Okay.

Well, you remind me of it.

So the other thing is uh, of course, the senior tax freeze, and I want to talk uh a little bit more uh about that and how that's uh affecting us as well.

But these are the things that are really outlining uh this year's challenges that we've been trying to manage around since um since November.

So how we've been trying to challenge around it, we've been trying to do several things, kind of in a um uh peel the onion kind of way.

But we've looked at various citywide initiatives that have you know cross cut across the organization.

Um, some financial restructurings of various funds that also cut across the organization, uh, a lot of different departmental expenditures that impact different teams and groups uh across the city, some fee and revenue enhancements that are part of the mix, uh utilization, one-time utilization of some of our reserve funds, and then preparing uh should we not make it all the way across the finish line for kind of our furlough and roof procedures as it relates to how we would handle what I'm what I'll call challenge grants, and I'll talk to you all about in that in just another second.

Um at your place, I've given you uh kind of a fresh reminder.

It's a it's a it's a double-sided sheet that says closing the gap.

And this is where we've been over the last um you know uh eight months or so with the list of things that have been identified, and yet to this point, the one that we've changed has been the uh children's alliance that was on there originally that has been removed.

Otherwise, all the other items continue to move forward based on um the kind of the lack of feedback that we've gotten and uh kind of the quiet assent that we believe that that is something that you all are um uh okay with us moving forward on, so it's still bait uh baked into what we're talking about.

In November, we started with a down payment of $3.8 million worth of reductions, including a deputy city manager job, a vacant police chief, uh deputy police chief job, a fire department hazmat cleanup fee, some restructuring of debt to kind of more streamline it as mentions or examples.

Um then we went a little deeper as it relates to the meeting in January to 12.2 million dollars.

Uh lots of other changes in here, such as decisions to use the business continuity reserve for one-time expenses, changes in how bunker gear would be handled uh in the fire department, um, PTO conversion days, um, some elimination of various positions, and then when we came in April, we had uh modify the number up to 21.8 million dollars.

Again, looking at additional reductions of state uh median maintenance, a couple of eliminations of vacant code officers, elimination of vacant MWBE coordinator, uh eliminate document services and mail clock uh clerk positions, several other items that had had led up to about 30 uh 30 positions on top of the 22 positions from last year.

So as we sit here right now, between last year and this year, we've identified about 52 vacant positions for uh elimination as part of the 26 budget.

Um and then when we came to you last week, uh we started to get a little more streamlined as it relates to some of the things that we needed to to figure out now, okay, how do we like totally systematically close the gap?

How do we like totally systematically close the gap?

And this chart here, I want to make sure that what the gap that we truly had remaining cash unidentified was 2.3.

It's that white piece on the tail end of that bar.

But we also need to think about that four million dollar reserve and how we don't just use it as a one-time issue, but we use it to bridge and get recurring savings, right?

So that we don't create a structural problem.

Um and so it's really a 6.3 million dollar issue between uh now and when we represent the budget when you when you factor that in.

So when we talked last time, I think we got a couple questions as it relates to how tax policy could apply here and how we could um consider some adjustments and just generally is again reminder how it works.

Um this chart uh should uh be really familiar to every fo everyone because we've used it a lot virtually every year when we talk about the budget.

And these are things that largely you all control uh and every year you reappropriate it.

You uh you do things to continue to grant the tax relief.