We got six.

And then we got six, but do we get the camera?

Okay.

Good afternoon, everyone.

Good afternoon.

Good afternoon, Mayor.

No, this is the time that I love the most.

It's the budget time.

Woohoo.

Come on, there's some of us that care.

Really appreciate it.

So good afternoon, and I'd like to call our first council budget workshop for the 2027 budget development to into order.

As you know, this is one of the most important.

Yes, isn't that right, Duncan?

That's right.

Yes.

And impactful, isn't that right, James?

Yes.

And developing a plan to allocate the city's resources in our alignment with our strategic priorities and the needs of our community.

So we want to thank you, everyone, for joining us today.

And with that, let's get started by hearing from the city manager, Marcus Jones.

Mr.

Jones, it's on for you.

Okay.

Thank you, uh, Mayor and members of council.

Uh we are uh kicking off the uh budget workshop.

It's a little different this year.

Normally we have the annual strategy meeting, which really gives us a little bit of uh guardrails for lack of a better uh term before we go in here.

But I think we're we're going to be okay in the sense of we'll start with broad strokes today.

We do have the annual strategy meeting next Monday and Tuesday where we're going to a deeper dive.

Um so we think we're if we can almost pull these two events together, we'll by the time next Tuesday, I think we'll be back on track.

Uh with that said, Mayor, um, unless you have any questions, I'd like to uh turn it over to the chair of budget intergovernmental relations.

Where is he?

Oh, I can't see the this is where I cannot see around a curve.

So um, Mr.

Graham.

Chair, please.

Yeah, I I have brief remarks.

Uh I just on behalf of the committee, um Councilmember Owens, as Mayor Mitchell and Mayo, uh, we uh bring forward uh to the manager the opportunity to kick us off with the budget outlook and strategy session.

It goes without saying that the budget, uh our budget demonstrates the values we have as a community.

Um a lot of work will be done between now and I guess May, uh, in terms of a wide variety of issues.

Uh the city continues to be one of the best managed financial cities in the country.

Um holding out triple A bond rating, um, great enterprise um organizations, um great authorities that do well with the uh citizens' uh resources, it's money.

Uh and now our job is to allocate it in the way that best meets the needs of the community.

And so uh the manager will get the first crack at it and his team.

We look forward to working with them over the next couple of weeks.

And um, let's get this party started.

Mr.

Manager.

So thank you, Mr.

Chairman.

Uh so what I'll do, uh Council members is just uh do two slides today and then uh step away, turn it over to the CFO and uh Marie and her great uh staff in the budget office.

I thought you'd be celebrating that I only have two slides.

But I guess I'm thinking so I do want to uh talk a little bit about the last uh couple of weeks in Charlotte.

We we did uh spend some time having town halls with our employees, um a lot of early mornings, uh C DOT, Charlotte Warders, Solid Waste Services, because what we uh came to understand that while we spent a great deal of time over the course of the last year talking about the one percent sales tax, uh we didn't necessarily have that same engagement with the 9,000 employees.

So not only did we have a conversation about their awareness of it, um, but also we talked about what's happening in terms of uh workforce opportunities for our employees as well as upward mobility opportunities for our employees also, and so it was kind of interesting having the conversations, and it really brought me back to uh this slide, which was actually in this room, May 2023, uh and it we were talking about the 2024 FY 2024 uh proposed budget.

So we were at this inflection point, and there was a lot of concern.

We're gonna go back one.

There's a lot of concern that um if we didn't do something different on the revenue side, a lot of the uh opportunities that were out there for us um may be foregone.

So either this business as usual, maybe that that middle line, or maybe you would have a decline in our services.

But we um after this past November, we think that we're on the upward trajectory in terms of where we're going.

Uh even back in uh May of 2024, we talked about showing uh this community what we could do with additional revenue.

So I believe I have this right.

I think we've raised the property tax once in the last six years, seven years.

And the last time we raised it was FY25.

And FY25 was really for two purposes public safety.

Nine tenths of uh of all that went to public safety, but um point three of it, the increase we put in our CIP because we wanted to test these strategic investment areas, and we wanted to test if we had a bigger uh transportation bond, could we deliver?

So Ed McKinney and uh his team, the entire team, the strategic investment areas, $55 million to test to pilot.

We've um understood that we could be more inclusive with businesses, we can do these projects faster and about at a cheaper price.

So again, couldn't go out to the community and ask for this one percent sales tax with a business as usual uh mindset.

So we're on the upward trajectory.

I would say to uh the council, just like as we were talking to our employees of the last uh few weeks, uh it wasn't lost on me that uh this council has done some amazing things to get us to this point, including buying a railroad.

Okay, and so um the strength of the strategic area plans, the strategic investment areas, as well as some bold moves by the councils put us in in a very good position.

I will tell you this before I turn it over to Marie and team.

Uh we ran as hard as we could with the limited resources that we have.

And as we go through this fiscal year, I'm not suggesting that anything's wrong.

What I am suggesting is the previous year, spoiler alert, um our surplus was razor thin.

Um we're going to have to manage this budget to get to FY27 where we get that boost of revenue, and we've proven that there are some things that we could do in terms of a project delivery faster uh any cheaper.

And uh with that said, uh turn it over to Marie and team.

Thank you, City Manager.

And good evening or good afternoon.

And like the manager pointed out, a solid five financial foundation and focus on the core services, that's where we've been, and that's been the basis for our progress moving forward.

And a big part of our financial foundation is our management triple A.

We've gotten it for decades, and it it's uh the highest we can achieve from the bond rating agencies, and it shows that we really have strong financial and budgeting policies and practices in place.

And this one's so why does our community, you know, we talk about the triple A bond rating, it sounds great to the people that know what that means, but what does that mean to our community?

So for our community, it's a couple things.

It's a seal of uh of that we have a financial seal of approval, basically.

We're exceptionally strong financial stability, so that should give our community um not just us saying we're great and we're managing your money, but the external we're rated and and sealed that we're um doing well, both in our financial policies, also our practices.

If I was a community member, beyond just saying, okay, you're good financially, it also this triple A also helps us to save money.

So by having a higher credit rating, we are able to pay less in debt.

So more of the taxpayers' dollars are actually going to the project versus paying debt service on the projects.

So those are two important points for our community.

And also, not only that, but we're a good value.

And we show this slide, and we this is just a one glimpse into all the benchmarking and analysis we do behind the scenes.

But as you'll notice, Charlotte is lowest among the larger cities in North Carolina, and one of the lowest altogether as terms of cost to a typical household for municipal services.

So this includes city and county property tax, wastewater, water, stormwater, solid waste, and local sales tax for a typical homeowner.

So not only are we strong financially, we're a good value.

And how do we do this?

We're we're structurally balanced.

You know, a lot of people see we get a little bit of money, or we can do great things with it, but it we have to always be mindful and make sure ongoing expenses do not cede ongoing revenues.

If we get one-time money, that's great.

We can do a pilot or we can do a one-time project, but for to add a service or an ongoing program, we need to make sure we're having ongoing revenues to support that.

And also fully funded reserves.

You know, we go above and beyond the guidance says 8%, we do 16%, and that's a big piece of our triple A rating because we're really secure financially.

And Hannah's gonna get more into maintaining capital affordability and long-term steady state.

And we're the next slide's more in the first two.

So when we're closing out a fiscal year, when all the dust settles from all the expenses and the revenues coming in, hopefully we have a surplus.

And then when we have that surplus, the first thing we do though to maintain that 16%, as you recall, is really important to our triple A and just to our shoreing up our future, we have to take out 16% of the cost of the next the growth in the general fund for the projected growth for the next year.

And then Matt works his magic with the external consultants and says, you know, the dust settled, but is there any other dust in the air that may come up that we haven't accounted for, and they determine another figure to set aside, so it's double security, and then after that, anything that falls to the balance, we put forward to the next year's.

Well, it's two by the time you close the book.

So for 25, what we're showing is for 27, and that goes into your paygo.

Well, there's other sources of pay-go, but they are programmed, and then when we have this one time, again, we can use a one-time source for a one-time project, and councils used those for a lot of innovative things in the past.

Um, and the spoiler work the manager mentioned uh we have none basically no unprogrammed pay-go from fiscal year in 25 that would go towards it.

And we're we're really tight for the next year.

But this is it just shows, you know, like the budget principles, you're not expected to see these, these are in your book as well.

But this is one of the main ones.

Budget will maintain general fund balance of 16 percent, and the remainder will go to the PACO.

And then, of course, we do have a three point six five billion dollar budget overall, but those sections mainly focused on the 943 and a half million dollar general fund.

We're also talking about a little bit about the internal services fund that down there at the bottom that's more behind the scenes but foundational.

But so when we say 365 right now, we're focused on the general fund.

And where do we get the money?

So, how do we fund the general fund?

Mostly through property tax, over half through property tax, sales tax, cost reimbursements from non-geners, utility franchise fees, solid waste fees, and then there's a slew of other smaller revenues from cemetery fees to your pet fees for animal care and control, all types of fees that make up the balance.

And with that, as we said, property tax is over half of our revenues for the general fund.

But if you look at this as more of our benchmarking, over in the tax rate, we have the lowest tax rate among the cities surveyed.

Wilmington's like right on us at like 28 and a quarter cent.

And also, as the manager mentioned, we've only had one tax increase, property tax increase over these time frame, and you can see some of our peers have capitalized on that a lot more frequently.

And then that's where the money comes from, and then what's the plan to spend the money?

So this is a picture of our current year budget, and as you'll notice, it's over half of it.

61% is public safety.

Um, some notable parts are street lighting.

Before that wasn't as big of an item, but we get more and more street lights, was great, and also uh the cost to light those street lights keeps going up, so that's one that's emerging is notable to call out on its own now.

And so that's the plan on how we're gonna spend.

But when it the plan hits the road, sometimes there's some bumps, and we're working through those.

We've had some pressures in this year's budget.

We've had an odor time needed to meet service demands.

We have aging fleet and delivery delays that create increased maintenance costs, and you know, when we have ice storms, you know, usually we have some wiggle room, but we have a little bit less wiggle room this year, so and those storm-related expenses.

You know, we don't we we budget for the baseline, not peaks like the storm time.

So though those had to be absorbed as well.

So we have a very tight budget right now, but we will manage it within the budget.

And then next, so that was the current year.

Now we're rolling okay, rolling current year into planning for the next year's budget that you'll adopt.

So for 2027, we're excited, it's gonna be a transformational year.

You know, like the manager mentioned, we hadn't heard from all your discussions at the strategy session yet, but you've already clearly told us mobility plus a top priority, enhance public safety, small business development, affordable housing, and workforce development.

We've heard you loud and clear the manager's already has those on his radar, and we're looking forward to hearing more from you at the strategy session as far as your top priorities.

And the manager mentioned some about the town halls.

You know, he's been working with his executive team and managers and staff across the city to really instill a team of teams approach.

So it's not just this division's resources.

How do we share resources, money, and staff to really meet the needs of the community, expanding partnerships, and the manager spoke some on shoring up core services.

You know, we've been running and running running, putting gas in the car, but we need to make sure all the components and everything's got what it needs to keep us going.

So shoring up core services is going to remain a focus.

Capitalizing on technology advances and piloting new initiatives, and that's always you know, we always look at best practices and new initiatives.

What can we employ and do better and capitalize on anything coming down?

And then exploring cost recovery options will continue to be a focus.

And you we mentioned the tight budget pressures.

Well, those are going to be considerations when we're building the budget for 2024 or proposing a budget for 2027.

The core operational systems and equipment, we need investments to fit effectively deliver the city services, technology replacement and modernization.

You know, even though you all know about technology, it's very expensive and it's outdated quickly.

Um, so that's an area that we always have to maintain and monitor it, rolling stock and equipment, um, staff overtime and public safety and solid waste.

We have a focus on filling vacancies, and it also helps to review, I mean, to reduce overtime, and you know, next year we'll look at potential impacts that may be due to storm response since they're not recoverable.

And we're also increasing cost of fleet maintenance will be a focus when we're looking at 2027.

Delivery time on fire engines, it was usually it used to be a year and a half, and we thought that was forever.

And now we look at more like from when you order it to when you accept it's like four years.

So if you can imagine you have to plan ahead, and then while you're waiting four years to get your new vehicles, it costs so much more to maintain uh older vehicles, and that creates higher maintenance costs.

And I mentioned we'd also talk of touch on the internal service funds, those are essential, it's not the general fund, but these are essential behind the scenes pieces that we really have to pay attention to and make sure these funds are healthy.

The employee health and life fund, the risk management fund, and the fleet fund are ones that we're also going to have to review and keep an eye on because the and these are very important to us in our core services, but also the rating agencies pay attention to these as well.

And just when we're talking about paying attention to these funds, just this is just the main point of this is yes, medical and pharmacy costs continue to rise.

So that's a factor, you know, each budget cycle.

But this is just to highlight that these are real numbers, how it does continue to climb, and these are total costs for the city and the employees, you know.

So it's it's not just impacting us, it's impacting our employees and the health of that fund.

And then Christina Fath, Sheila Simpson, and they they routinely listen and to what employees need and want the most and try to tailor the best benefits packages for them, and they also work across the industry standards and with consultants to see you know how can we maintain that balance of being able to afford long-term and meet the needs of our employees.

And the main thing of this too is employees are one of our top priorities, and we want to keep investing in them for sure, but it does cost money, and that's a choice we think is right, but that's a choice, and it does cost money.

And we want to make sure and highlight some of the other things that human resources does for the employees.

Our core focuses on employees, but also not just the the paycheck.

We we pay people, of course, and that's what people care about a lot, but we also provide health and wellness benefits that are amazing in a lot of ways and a lot of options, and like I said, even um Christina, our teams try to adjust those as much as possible based on hearing from employees and what's most important to them.

We have financial support opportunities, financial counseling, we have education assistance and even housing uh resource assistance.

And the reason I'm bringing this up is just we it costs money to invest employees, and but it is really important, and we look at all the ways that we can best employees, and we assume that's going to be a focus moving forward into 2027.

But before you can do anything new and different, you have to look at your baseline cost.

So if you look at this stack, it represents our current costs on these sides, and on the right, you'll see the projected growth.

So contractual growth that could be our help desk contract, our tipping fees that we have to pay the county, any contracts that we have to have in place, and we know they're growing, health care and retirement growth, and annualizing pay actions.

So just our baseline, keep the lights on.

We're looking at 3.3 roughly growth, so that's 31 and a half million dollars growth in our baseline.

And then when you look at that, you say, okay, what's our revenue projections?

And we do conservative revenue growth, and this is based on mid-year, and so we're actual actively analyzing and looking at things.

But right now, there's roughly a $3.8 million gap moving into next year in terms of here's our baseline keeping our services the same and um our current expenditure.

I mean, our current revenue base.

But that will be managed, and it's important to note too.

This does not include a pay payment plan.

This is just keeping things going as they are.

And prior, and this is like so it's 3.8, that's that's a little steeper than prior years.

Last year it was a half a million to the good.

Um, but we always are always analyzing our services and our accounts to make sure not only are we meeting the basis, but we're also um aligning resources to what the council sees as the main priorities, and then we're so we're very much looking forward to hearing from you more at the retreat and being able to determine how to at most um to optimize the use of the city serv resources.

And then I'm gonna turn it over to hopefully more exciting beyond baseline services, compensation considerations, and Ethan Smith's gonna walk you through those.

All right.

Afternoon, Mayor and Council.

My name's Ethan Smith.

I'm the assistant director of strategy and budget.

Uh, and I get to talk uh a little bit about um some of the exciting things we do uh for to attract the best and the brightest uh here to Team Charlotte.

Um so the city has had some pretty aggressive pay plans in recent years, which is a fairly expensive thing for an organization our size, um, between 19.9 million dollars and 26 uh.4 million dollars.

And we were able to do that with some significant growth, particularly in sales tax and FY22 and 23 that we were able to reinvest in our employees in the FY23 and 24 enhanced pay plan.

Then of course in FY25, we had property tax increase that provided the ongoing revenue needed to have another enhanced pay plan.

FY26 required a little more creativity for public safety, similar to how we do for uh general employees who reach the max or top step.

Uh we we offered them a one and a half percent uh lump sum, and uh because it was a one-time, that allowed us to use one-time uh revenues.

For general employees, uh the pay plan include uh returned closer to the the three percent uh that was typical prior to some of the severe inflation we've seen uh in recent years.

But uh of course uh hourly was still a point of emphasis for us.

So uh we added an additional percent to that to four percent total, and then we split the pay increase uh between a one and a half percent market adjustment or across the board uh pay increase, and then two and a half percent uh as in a merit pool, which allowed uh management and supervisors to reward really those higher performing uh employees.

And then of course uh we increased minimum pay to $24 an hour.

Uh it's the fifth year we we've made such an increase.

Uh and that that really is the best practice, kind of that slow, steady, methodical approach uh to increasing minimum pay, uh preventing some of the compression issues that you'd see in kind of any one time major adjustment to those minimum pay.

Um even without including the one-time uh component of this, the pay plan costs 17.8 million dollars, uh which is a little bit more expensive uh than traditional pay plans uh before this time when you know 14 million, 13 million.

And that's because a lot of the enhancements that we made in these years with enhanced pay plans, adding steps, um adding premiums for things like shift differential, uh CDL, um, expanding eligibilities for certain incentives, uh those are continued uh to pay dividends with employees, employees are earning those new steps uh even this year and projected for next.

Uh and and those increases compound on one another.

Um we're glad to see that our FY26 pay plan uh is keeping pace with inflation, uh exceeding inflation, uh, even keeping pace at its peak in in September when inflation reached 3%.

Uh and so this is certainly something we will uh continue to monitor along with the the job market more broadly as we go to prepare the FY27 uh proposal.

Um but of course uh this is only part of what we um do to compensate employees each year.

Um the city contributes uh to you can see this is the three uh pension systems that we have, and this is what the cost of benefits are for our average employee in each of those systems.

Uh and that includes, of course, the employer contribution to those employee pensions, uh, but also other benefits as well, like health care uh 401k are extra uh two percent for uh sworn fire and therefore uh 57B and uh then of course federal insurance and and Medicare taxes.

Um so obviously these costs have uh grown fairly substantially, uh and while it's certainly not the same as uh the weekly paycheck for our employees, it goes to fund benefits that uh are of tremendous value for our employees both in the short term and and the long term.

And so you can see the cost uh nearly doubled uh for uh for fire, um 97% increase, and then uh increase by nearly 50% for uh sworn and police.

And just give you an idea of of how that um balances with uh the salary compensation for every dollar that we provide in salary compensation that amounts to about 38 to 48 cents in uh compensation on the benefit side.

And so we're we're certainly committed to uh making sure these are funded, as Marie described.

Uh this is one of the first things we we try and make sure is shown up as as we're building the budget.

Uh so uh remaining uh competitive employer of choice is always top of mind for us.

So we look internally for uh areas of emphasis or opportunity that are uh vacancy rates.

One way we do this, um course we're always looking at individual jobs, you know, vacancy rates for police officer, um, equipment operator, uh technician, things like that.

But we also zoom out a little bit here at kind of the broader categories, sworn police, hourly overall, sworn fire.

Um for the most part, vacancies are trending well.

Um, and this is driven by um recruitment retention on the recruitment side.

We've had a lot of inner innovation, uh, particularly uh in the general employee space with things like our E2E program, educate to employ program, uh career training academy.

Um, and then uh I realize uh fire uh looks a little confusing here.

Uh fire fire department added 99 sworn positions in FY24 and 25.

So what that that dotted line shows is just uh positions that we had to include in the budget uh to recruit, prepare for new companies uh that were going to be activated but that were not yet um activated, answering calls for service, uh yeah, and and the chief to his credit has done a great job recruiting not just enough to to handle the resignations and and the biggest factor, which are the retirements that we've got to keep up with and have enough graduates to fill, but also fill in those new companies while maintaining a relatively low vacancy rate.

So Ethan.

Do you mind if I tag in for a second?

Please.

Okay, thanks, Ethan.

So um, mayor members of council, I think this is really important because if you go back to 2022, we were all concerned about these high vacancy rates.

Um would be asked what is a typical standard.

I think Sheila came back to 10 percent or something like that.

But this goes to show that all of your um decisions around employees and benefits, not just um comp salary, but some of the things you did, like absorbing the increase in the health care as opposed to spreading it to the employees has really positively impacted where we are right now with the vacancy rate.

I I couldn't imagine back in 2022 that we'd be at 6.8 percent with the general hourly.

So so again, the things like um what we what we have done or you have done uh for the employees, anything from down home assistance payments to how we handle health care is just employee focus, and and I think that's really important.

The other thing I'll say is that uh as I mentioned earlier, um FY26, we did about all we could do, and even in the compensation that Ethan showed you a couple of slides before, it wasn't as much as the 26 million, it was closer to you know 20 million dollars, and that was offset by seven million dollars of reductions across the departments to actually try to help pay for the compensation increase.

So just trying to get connect the dots that we got to a better place today, and it has a lot to do with the policies that the council is has set out.

Thank you.

I just wanted to respond to the manager.

Thank you, Madam Mayor.

Uh thank you, Mr.

Manager.

I certainly this graph shows that we've certainly invested, and that shows how the vacancy rate has gone down.

But if you look at police, we are back to almost where we were back in 2021 in terms of the vacancy rate.

So 0.7% difference.

So certainly I think that is an area that we need to certainly consider.

Um, as the chief said at the hearing, that um we are falling behind when we compare our city to other neighboring towns and municipalities.

So that's all I have to say thank you.

Thank you.

Um and we'll talk more uh about police specifically uh in the coming slides, but uh really the main reason for the uptick in police uh it occurred decades ago when we added a lot of different uh a lot of new officer positions, brought those folks on, and and those folks are coming uh to retirement age.

So each year between 80 or 90 officers retire with with the one exception in 24 when had a little reprieve is closer to around 60 that retired and allowed us to catch up a little bit.

So we talked a little bit about the recruitment side.

On the retention side, retention is up in most categories.

Every year where there's ongoing revenue to support compensation increases.

So how do we make sure we remain competitive for the most talented public safety employees?

Every two years since 2019, this is the fourth iteration of that.

And here's some takeaways.

And of course, as we've shared uh with the public safety uh committee, and uh as I'm sure they would agree, there's always areas for us to improve.

Um and and some of those that emerge were um you know starting pay for police officer, uh firefighter engineer.

Um a lot of our peers have a a real array of uh special assignment pays, uh anything from uh drone unit to horse patrol to uh bike patrol that for you know whatever reason we we don't offer, so uh maybe there's some opportunities there for us to explore.

And then uh finally the biggest takeaway um for me uh was just that a lot of our peers have a pretty significant differential between that starting recruit pay before graduation and then uh officers and firefighters after graduation.

And so to uh credit credit to HR uh working with the public safety pay committee to really kind of uh work work on that and look look at that a little bit differently.

Um and just to illustrate kind of what I'm talking about here.

Um here's us benchmarked uh for recruits and trainees against our peers who also have a flat rate uh like we do.

Uh and you can see uh police recruit um below national average uh while fire is slightly above.

And then you can see uh sorry, wrong way.

Um you see Charlotte here, uh same rate as recruit and trainee on the previous slide.

Uh since we don't change, puts us further behind uh the national average for police, below average for firefighter at that starting pay.

And then at uh the top pay for both officer and firefighter pay, we are below the national average but above the the average in the southeast.

And I think it's important to note these charts have are all without any uh education pay incentives, which again is an emphasis for us.

Uh so we we rank a little bit higher uh when you factor those in, but uh bigger picture here.

Uh the this is following 34 percent increases to starting pay uh since 2019, similar increases uh at the top, uh even 40 percent uh for police, and so um suffice it to say there's there's been a real nationwide escalation on uh competition for public safety employees.

Um in that environment, we're uh always gonna consider ways uh in which uh we can uh enhance um further.

And uh here are is our current slate of uh pay incentives.

Uh and for example, a couple years ago we uh implemented a shift differential.

Uh we expanded our associates degree uh incentive to include qualifying military service with some input from from the public safety pay committee, and and so maybe there are opportunities for us to do something like that again.

Um and you can see below uh our examples offered by by some of our peers.

And so uh as we do every year, uh we'll evaluate ongoing revenues uh and uh what that can support and with input from the public safety pay committee uh you know, including maybe any structural changes to the public safety pay plan, uh any changes in in incentive pay or anything uh like that that we just discussed.

Um and then for general employees, we're uh reviewing pay the pay structure, ensuring you know that jobs are competitively aligned to the market, um, addressing any kind of specific uh recruitment or retention issues that might emerge, uh, and then as always evaluating uh some considerable growth in in health care to make sure we're striking that right balance uh but in total compensation.

So with that, I will hand it over to Hannah to talk about next steps unless there are questions.

Are there any questions?

This has been a lot to do and read and understand, appreciate that so very much.

Um I was just recently out of town, and I was with over 15 um mayors, and almost every one of them had some concern about um having the ability to have so I guess people to serve as police officers and firefighters, and so I want to you know really say the same thing that Ethan said, which is a lot of this is going on across the country right now, and it is a really um difficult way to deal with this.

And so I want to you know really say the same thing that Ethan said, which is a lot of this is going on across the country right now, and it is a really um difficult way to deal with this.

So I I know that that's something that we're gonna have to look at care carefully.

So Mr.

Mitchell.

Mayor, thank you.

Uh just one follow-up question as it relates to the public safety.

And uh great Chief Patterson mentioned in her testimony and Raleigh, uh, which she did an excellent job, but she mentioned vacancies.

I think it'd be helpful to the council as we have this budget discussion if we can get a list of those vacancies.

Because I think priority public safety is a top priority for all of us.

So just to see whether I think 269 officers, right?

So if she could share that list with us, I think it'd be helpful.

Thank you, Mayor.

Officers 911 responders.

We'll go around this day, talk about that.

You want to go thank you, Madam Mayor.

So Mr.

Jones, first let me thank the staff for continuing to help us get triple A grading.

Um I appreciate all the work that the budget team does.

And I also want to thank the HR team.

Christina does an amazing job with health care and helping us with trying to stay competitive.

Marathon Health is probably a model for not just for the state, but for the nation, how our employees are able to get preventive care and get same-day appointments almost.

I think that's a model that I have talked about with other elected officials throughout the city, I mean throughout the state.

And so I appreciate how we are continuing to invest in that because uh prevention is the key here as we are trying to tackle our uh health care costs.

Uh with that, I want to talk about the budget pressures and I think a gap that we currently have.

Um I know first we always look at analyzing our services and finding cost savings.

That's the first step.

Um this seven million dollars on slide number 24 in fiscal year 2026.

Could you elaborate on um that seven million dollars?

Slide 24.

Sure.

I I'll take the uh first shot at it.

Um councilmember Ashmer, what we do each year is we go to the departments before we at the beginning of the budget process, and we know we're going to be at this point.

And I want to talk a little bit about the gap.

Normally we would have a conversation about this in January.

Um, and typically the gap gets worse before it gets better.

Yes, um, so we're like a month ahead of where we typically would be in terms of the the gap as starting point for uh FY27 at 3.8 million.

But the 7 million is just an exercise that we do annually to see um if each department can be more efficient in their delivery of services.

Sometimes it ends up um deleting positions, um sometimes it ends up um different departments sharing.

No layouts, no layouts.

Yes, what's that?

Oh, you said positions.

I just want to make sure everybody knows no layoffs of vacant positions.

Um I will tell you that uh 2026 I think that this is really tested us.

Um many times the council says before you come back for a property tax increase.

Show me that you've done everything.

I'm telling you we've done just about everything, and what's happening now, we're starting to see uh a little bit of a decline in service, and that's what we don't want.

We don't want our trucks to be in fleet longer, right?

Um we're also having a lot of things happened over the course of the first seven months of the fiscal year that has really had um a drain of our resources, whether it's um police and fire in overtime uh or whether it's because of um snowstorms and ice storms.

So it's uh almost like a perfect storm for us right now.

Um we're not you know waving the flag or anything, but I I do not believe that going back into the departments in FY27 and asking for that level of savings is really going to help us in in the long run.

What we are asking our departments is to consider technology, right?

How can we better use technology to deliver services?

And um that's uh top of mind for us.

But that's um, I hope I answered your question, Marie.

I missed anything, let leave anything out on that seven million dollars.

Okay.

No, I think that's great because residents, any time we are discussing property tax, they want to see what we have done to find cost savings, what we have done to streamline our processes before we go to them.

So they certainly appreciate this number one step, just like we do in our household, right?

Uh when we uh we had to find a way to um figure out cost savings.

Um so that's that's certainly good.

Does this account for uh 20 to 30 million dollars that we were giving to cats out of our general fund?

So how we had uh operate sure.

I think you're talking about the the maintenance of effort.

Yes, that's right.

But the maintenance of effort wouldn't be a part of this.

No.

So that would be simple.

Right.

And one last thing, I know that um state legislatures are discussing property tax and how uh they're finding ways to uh address how municipalities increase their property tax rates, right?

Um we need to certainly keep that into consideration as we plan, not just for today or for this fiscal year, but for five, ten years down the road.

Um if you could answer that.

Uh thank you, Councilmember Ashmira.

Uh there's a couple of things.

Uh, and I love it when council member Driggs tells me I told you so.

Uh as he grins.

So uh everybody knows how North Carolina works in terms of the reval.

And so while we've been uh very diligent in um keeping that tax rate revenue neutral, I I think to some extent it's harmed us because what we have is inflation, and we don't really account for the inflation when we make that rate revenue neutral.

I um what's the right words to use?

We are monitoring what's happening in both chambers now with the um discussions around property taxes.

Uh as Marie showed you earlier, we've been quite diligent with one property tax adjustment in the last seven years, and it really was for public safety and for our CIP.

I don't know what the outcome will be from what's happening in Raleigh.

Um I I do believe that we are trying to focus on core services in this FY27 budget.

Uh I do believe at some point um we've been so good at with this.

I would hope that which is not a strategy, that there would still be some flexibility at the local level to address property tax to deal with growth, especially when you start to talk about core services, and especially when you talk about public safety, which is 61% of what we do in the general fund.

That's all thank you.

Thank you, Mayor.

Um, my questions are really just because this is my first my first rodeo, and so I'm really just wanting some clarity.

You spoke to the fact that the rating agencies look to see that reserves are funded each year and that their expectation is considerably less about half of what we're doing.

Can you give me some historical context?

Have we always kept that 16 percent?

And do we view that as being part and parcel of retaining our triple A rating or where where do we come to that number of wishing to double the amount of reserves that are suggested?

Sure.

So the 16 percent um is sort of two months of operating reserves in a lot of ways.

So that's really making sure that when a snowstorm does come, we have reserves to be able to respond to that.

So a lot of that is is sort of in there, and a lot of it also has to do with looking at there is a state sort of standard that we have to do that sort of the 8%, and that's really just about meeting a state statute for what you have to do to be able to even to have things like public referendums on debt, other types of things.

The rating agencies are really setting what the best practice is and what it shows that we are a management triple A by managing to that level.

So sort of that 60 percent sort of giving us those two months of reserve, so as things come up and down during the course of the year.

You can also think about property tax, primarily comes in the course of you know, one to two months.

It comes around to the that December to January, but we're operating for 12 months of the year.

So that's 60 percent really helps us sort of manage throughout the entire year and deal with critical things that happen.

Um, and then I think you know, one of the things that happens just with, for example, today, the manager already flagging that we're having budgetary pressures and we're managing to those already.

We're not waiting till May.

We're not waiting till June to start addressing those.

So that's what sort of is really important when the rating agencies are looking at things that we're maintaining both that we're funding as our budget grows year to year, we continue to maintain that 60 percent, and that we're managing to those pressures throughout the year by getting ahead of them of that helps.

Thank you.

Um my other question is is again out of ignorance of how these processes are normally set when you go to the compensation considerations and the police and fire.

I just want to be clear that I'm understanding.

Um I think this would be at slide oh gracious, I don't have my slide in front of me.

I guess it would be slide 31.

Um I've heard various schools of thought with respect to payment of officers a bit more on par with one another, police and fire, and we don't quite do that, but I'm also seeing, I think, from the text that you've got here, that the fire is potentially under where it would be on a market analysis and that I'm sorry, police is is under in fire is over.

Is that do I get that right?

In in various ones like Ethan, if you'll click back to the actual data from Melissa's group.

So I'm speaking out of term.

We have our compensation um specialist over here, Melissa Golding, who who compiled these for us.

But yes, so if you see I want to stand up and point in it, but so for the police recruits.

If you're looking at recruits, yes, police is lower than both the national and the Southeast.

Whereas um Charlotte uh the retraine for a firefighter is not.

Okay.

And I just I I guess this is more perhaps a comment than a question, but I don't see either of those numbers being at the level of of being able to afford an apartment or a home or something in Charlotte.

So can you speak at all to to I guess the expansion of some of our programs?

I'm assuming that some of what we're doing is helping with housing security for for these essential workers.

I'm not sure that any public safety where we can follow up and get that on if public safety um employees have taken advantage of those or not.

Thank you.

Thanks.

That's all I have.

Mr.

Graham, do you want to pass?

Mr.

Drake's uh thank you, Mayor.

So uh on police, I wanted to just clarify we have vacancies and the vacancies are funded positions.

So we're actually paying for those.

Uh and that money is used uh for the most part to pay overtime to the officers that are filling in for the vacant officers.

But what I've heard from the chief is that that that gets us back to a certain complement.

I think what she's talking about is we need more officers than that.

And in order to study that, you need to get into the details of how that determination was made.

Call times and so on.

So uh I think we're facing a big challenge because of the emphasis on public safety and then the goals of our chief.

And uh that's something we're gonna have to contend with in this cycle.

She's also talked about the fact that they need a 10% pay increase, which I believe is consistent with some of what we're seeing here.

So um I will also mention I've I've said for the last couple of budget cycles that I thought we were loading a gun for a tax increase.

And I had a concern being the last guy to vote for a tax increase.

But if you're gonna make spending commitments, you have to fund them.

That's sure.

And you have to let the community know what the kind of hard part is of being able to do all the things that we do.

It's got to be paid for.

And letting yourself get behind just sets up even even more difficult situation later.

Um when is the next revaluation, Mr.

Manager?

It's uh 2028.

Right.

So we're a couple of years away from being able uh uh fiscal 28.

So we're one budget cycle away from being able to adjust for uh through the inflation mechanism.

Uh and in case anybody in the room isn't clear about the issue, uh we uh state law requires that every time there is a revaluation that we then look at our tax rate.

And it says we have to disclose to the public what the adjustment in our tax rate would have to be in order for us to get the same amount of money we were getting or would have had before.

Um we don't have to implement that tax break, we must disclose it.

So then we have a choice as to whether to actually reset to that rate or as a matter of discretion to increase the number to some or decrease the number less than would the adjustment would be.

Um and we have in each case we have uh adjusted in nominal terms, but that meant that our property tax number was frozen in in uh nominal terms, and we were paying more for our expenses.

So we were eroding the value of the proceeds from the property tax.

And the point that I've been discussing with the manager was we need to try and uh address that and make clear that there is an objective basis for not resetting the nominal rate and going all the way back to the pre-inflation number, but for getting the benefit of inflation as we make that disclosure about the neutral rate.

And um the policy has not changed, the state policy hasn't changed.

So it's going to be up to us to disclose as required, and then explain our reasons for not doing that.

But that's that is something that will occur in the next budget year.

So this year, uh, I believe that we are going to be facing a challenge on the property tax rate uh just because of things that are taking shape.

You've seen this, the three percent uh pay increase that we would normally want to adds to the shortfall that has already been identified.

We've worked our way through that in the past, but I'm just concerned that the uh we are very lean right now.

I mean, the manager said uh that we have seen some you know decline in service delivery, um, and we need to keep up.

So I'll probably vote against the budget, but I'm telling you, I think we need a tax increase.

For you to say that I mean, like we're really just the budget.

It's like our one.

Wow.

Just kidding.

In case my in case my Republican friends are listening or listening.

So one other thing I wanted to mention.

Oh God.

But can I say this, Ed?

I think that you've really just hit it on the head, is that right now when we have officers that are moving into other um departments, it's because we are not doing the pay, a sufficient amount of pay to get people to do this work.

And it's not anything that we thought was really, it's not we did it intentionally, but the world has caught up with us, and it's time for us to start thinking about that.

And I think it's very, very important.

Uh I believe, especially with the focus on public safety that we're experiencing, we need to make meaningful steps, steps that involve money and not just shuffling or or brave words.

I wanted to tell you that this place that I went to, they had a um, it was the most important um policing place for everything that they wanted to have, every toy was in there, everything was making it possible, and they knew Stella very well.

So, you know, that's how I seen I think this is where it's gonna land.

I guess the only other thing I was gonna say was there is a history of comparing the rates for police and fire to your question.

And uh the difficulty there is they are all first responders, they are all prepared to risk their lives for public safety.

But the truth is that especially in recent years, the life of a police officer has been tougher, recruiting officers has been tougher, so the market for those things has been different.

I talked to firefighters, and they're very happy to work for CFD.

They have the equipment they need, it's a good life for them, good place to be a firefighter and police everywhere uh because of public sentiment.

I think it has improved compared compared to a few years ago when we were in the aftermath of George Floyd and Keith Lamont Scott.

Um, but still I don't think there's a presumption that those numbers are the same.

So we always need to be mindful of the comparison, but not start from a point of they should be the same number.

Thank you.

Councilmember Mayfield.

Thank you, Mayor Poe Tim.

And sometimes it is really not advantageous to go behind Council Member Jakes.

So staff, thank you for a wonderful presentation, Manager Jones.

You know, I've also said now for since I've been back on council that we have to have a real conversation regarding a tax increase based on the limitations that we have, even when we think of the corporate tax rate and the impact that that could have if it was a higher rate that was coming back and looking at our first responders that are not able to live in our city.

So that means we may be paying you, but we're also having to adjust for travel time, transportation costs, and those taxes are going to our partners in the region.

So I do appreciate that through concentrated effort with our housing trust fund and the fact that we have to have a real conversation of coming back to the community, because there's not a feasible way to go back to 15 million, much less 50 million.

We need to be bold enough to continue this 100 million dollar conversation.

But you know, every time we come to budget season, I am going to be the one to ask questions specifically for fire.

So I appreciate the fact that we identified funding to start to look at the design of our training facility because our training facility was extremely outdated, meaning, and specifically for our new colleagues.

Fires are very different today.

The level, the intensity of a fire, because we've gone horizontal and we've gone higher, and we've gone in much smaller spaces, five feet to less than 10 feet apart, that fire happens in seconds.

So what we initially had was not really given proper training for our firefighters for the realities of what they were walking into.

Yet going back to one of the questions my colleague asked earlier when we look at that 7%.

One of the other things that we also know is around this time of year, we sat our manager has to send out to all the departments.

Hey, how can we look at cost reduction without layoffs?

One of the ways that also plays out is what our fire were out-of-pocket costs.

So I correlate it to the teacher that has the body school supplies, the basic things that are needed in the firehouse when we look at utensils.

We look at whether or not that the dishwasher works, the washing machine works, the different things I had the chance, of which I'm going to be kicking back up after we get through the retreat.

But I was touring, I think I managed to hit eight, eight of our firehouses previously just to visit and to have conversation.

That was that's concerning that when we're looking at the cuts, how that impacts the employees, because the employees are already, we're not at the place where we can pay what we identify as a living wage for Charlotte.

Yet we do pay well.

Yes, but I also don't want us to be the cause of more out of pocket.

The cost of health care has gone up considerably.

And that previous council supported the recommendation when we had the extra funds for us to have money set aside to help our workers and families.

Well, if they ran into financial challenges, whether it was housing and or medical related, I hope as we continue to have the discussions, even though we were able to use one-time funds, try to figure out if there is a way, whether there is through grants or something to continue that to help lower the cost, but also I want us to take into consideration when the ask goes out to the departments to look at cutting back that we take into serious consideration what that impact can be, especially for me when we think of those out-of-pocket costs that our first responders and fire have to absorb.

And is that something that they can really absorb versus something that really should be our responsibility because that's all part of them having a quality of life and safety in their job capacity to the best of our ability?

Thank you, Manager.

Yes, Ms.

John.

So uh thank you, Mayor members of council.

And um, for both um Councilmember Drigs and Councilmember uh Mayfield, a couple couple of things.

First of all, thank you so much for folks knowing the employees.

I think it's really really important.

Um Matt or CFO talked earlier.

Um we're in good shape as a city, um, because Matt, I'm sure uh doesn't want the rating agencies to think that right now we're in a crisis, we are not.

Okay.

Um what I think uh is super important, just a few things, and I think these came out of town hall, so I think it's really important.

So, Christina, how many folks were unhoused that were city employees that we've been able to help them get housing?

27.

Okay.

So what you're doing is is changing people's lives, right?

So that's really important about the um reductions.

I think, and I have to do this for all of the departments.

Um, we typically take police and fire out of that pool when we start doing reductions.

So think about it.

39% of what's left from the department is um bearing a bunch of this give me a look.

So sometimes you go to the city.

I think Ms.

Mayfield may be speaking to this current year, tightening up is that gap.

Yeah.

Um I think the other thing with police that's important that um Chief Patterson and her predecessor uh believe that we can get these positions filled within the next two years.

But to Mr.

Driggs' point, even if we were at 1900, we're not sure 1900 is the correct number for a city of our size.

So I think as we continue to have conversations about um compensation, it's also how do we go about going beyond this 1900 to get to another 400 potentially?

And is there anything similar to what happened 32 years ago where the federal government gave more money for cops grants so that you can attract more people to the profession?

What I would um suggest is that it's not a hundred percent when you get those cops grants, but could there be something different in a legislative package, both state and federal, that gives more compensation or more money to the localities that are out there trying to recruit more police officers.

Okay, JD.

Thank you, Mayor.

Um thank you, Manager Jones.

Thank you, staff for such a great presentation.

Um I had some clarifying questions.

I and perhaps there's uh some answers that might not be responded to uh today, but I'm very curious to know the where is it the decrease from 2024 to 2025 on police recruitment.

I I would like to know, you know, what are the factors that went into that?

Um I know public safety has been huge for us.

Oh, it's slide 30.

Yeah, that one exactly.

Um I would love to look into more about the factors that went into that decrease.

Um, and particularly uh in slide 31, there was a mention about uh cost of living adjustments not including.

I think it's the next slide after this uh recruitment slide.

Cost of living adjustments not including in these numbers.

Could um could I ask why they weren't included in this?

Yeah, uh this presentation is just the existing pay plan.

Uh so it it's the current steps as they exist.

Uh each year uh a pay increase would uh adjust those steps and provide a market adjustment or cost of living adjustment, which might would ship those steps in FY26, that was one and a half percent.

We we shifted those up.

Got it.

Thank you.

Um I mean my thoughts are that we are the largest city in the state, and we're the 14th going on, 13th largest city uh in the country.

Um, and yes, we are at an infliction point uh where we really need to look at these pay discrepancies uh discrepancies between our police, our fire departments, as well as the vacancies.

Um, what can we do better to uh be better recruiters?

How can we adjust to the cost of living?

The reality is is that we're living in a very unique time in our country where federal funding is being cut, um the state legislature is having different conversations about our jurisdiction with property taxes, um health care premiums are rising, and we are welcoming a hundred and fifty-seven people each day to our region, right?

Um I think this is a moment where I get excited that I agree with a Republican colleague that yes, I think we need to have a conversation about uh tax increase and how we sustain the growth in our city because we have done incredible work with our housing trust fund dollars.

We have done incredible work at finding housing for our employees.

We've been able to sustain this growth.

Um, but I think to the mayor's point earlier, you know, that growth is uh outpacing us a little bit, right?

And we are now um having some real conversations about how do we continue to be a competitive city and to uh continue to showcase our ability of being the drivers and the market, right?

Uh whether it's housing, whether it's police retention, whether it's firefighters, whether it's our services, right?

And it is a big concerning that there has been a slight decline in service delivery, right?

We are buying to be a footprint across the country, right?

Not only are we trying to learn from our peer cities, we're trying to be the peer city that our peer cities learn from, right?

And so I I I definitely think we need to start having more conversations about how can we get creative and how can we have serious dialogue about a potential tax increase to sustain the growth that this incredible city is is seeing the thank you, Madam Mayor.

Um, first and foremost, uh inflation has not been our friend over the last several years, and it won't continue to be.

And in addition, we are facing uh headwinds as it relates to state and federal uh policies that are uh upon us.

And uh this particular topic is center of plate for all of us as it should be, and we should be leaning into public sur public safety rather than leaning out.

So I just want to say that first and foremost.

That's the tone.

Now, as as we have heard from our our wonderful new chief um as it relates to the opportunities to fulfill vacancies and other things, we can't forget our sworn fire officers as well.

Um it it's it's it's not a difficult task for us to uh look at the numbers as it relates to our growth rate for a city and correlate that to the growth rate as it relates to uh the number of fire stations, uh the number of uh sworn fire officers, and uh yes, CMPD officers that we need to be bringing on board.

So I don't want to leave one behind.

I want I want both to grow instead and be in tandem because um as we talk about so often, the first respond as the group of first responders, the very first responder is our fire department.

They're there first and foremost, and so we need to make sure that every pocket, every corner of our city has the opportunity to have our wonderful uh sworn officers be there immediately.

Uh uh I uh I agree with Mr.

Driggs as well, uh although I will be raising my hand if it comes to that, because um we have been a wonderful steward of taxpayer dollars, and our city manager has done that as well as staff.

Uh but at this point we're at a point of inflection, and due to inflation, compounded inflation um over a series of years, uh, as well as uh the outlook, we might be facing a situation that we have to increase taxes to double down on public safety uh as it relates to CMP D as well as uh our our fire sworn fire officers.

So I want to say that we need to lean into this more.

I don't want to leave our uh fire uh sworn fire officers behind.

I want them to be a lockstep.

Um even if it's at a a percentage of rate uh rather than just uh regular dollars, they need to be in lockstep because as we grow uh and continue to advance to be a top 10 city in the United States of America, we want to make sure that our our fire officers are there with us and we don't have the same vacancy um trepidation that we do today.

Thank you, Madam Mayor.

Right.

Message Mira.

Yes, uh thank you, Madam Mayor.

I wanted to follow up on uh Councilmember Mayfield's point about health care, because this is a concern that we have heard from our employees as we are looking at our health care insurance premiums that are rising, our out-of-pocket costs are rising, and that's not because of the city.

I mean, this is an issue that municipalities across the nation are uh increasingly concerned about.

So I'm glad that we are doing sort of comparison in terms of the pay, but can we also look at some sort of health insurance competitive study and how are we aligning with peer cities?

I'm not sure if that is also a contributing factor to our recruitment and retention, but I would like to think it is.

So if we can have um that as part of the overall study, I think that would help us understand the gaps.

Um I certainly appreciate the work that HR has done to figure out where we are in terms of the pay, but I think having having benefits as part of the overall study would certainly help us.

Um also I just saw Councilmember Johnson and reminded me about uh response times.

So uh certainly Mr.

Drake's brought this up earlier about uh Chief Parrison's point that even if we were to fill all the vacancies at CMPD, are we really where we should be?

And we know the answer to that.

But I think one data point that can help us answer that question is emergency response time.

I know we had done that a couple of years ago because we were getting calls and emails about how it was taking longer time for our CMPD and CMP specifically to respond.

Um and I think contributing factor was high vacancy rate among dispatchers, and it looks like based on the graph that you had presented earlier, we have been able to address that with the pay increases.

But having that data set would certainly help us, how far have we come along in terms of emergency response time?

We had that benchmark that uh cities across the nation try to get to that benchmark, and we were just a little bit behind.

But I would like to see from all the actions that council has taken, have we really made a meaningful difference in that response time?

Because at the end of the day, if someone calls 911, we got to make sure we are not meeting that benchmark, we are exceeding that benchmark.

Um if someone is having a heart attack, or if someone's uh their house got broken break broken into, we got to make sure that CMPD is there in no time.

So if we can get that data data point, that would be appreciated, as well as how are we doing on dispatch dispatcher vacancy?

Um and last, I agree with you.

I think um we have the Mr.

Jones, we have um law enforcement retention and recruitment as part of our state and federal legislative agenda, and I think any help from federal and state will certainly relieve pressure uh because we can print more money like the federal government does.

Uh so certainly I think any um outreach and intentional lobbying effort could certainly help us there as well.

That's all right.

Thank you.

All right.

Um can I Mr.

Graham asked to speak and then we'll follow up, Ms.

Mayfield.

Thank you, Madam Mayor.

And I intentionally wanted to kind of listen to a lot more listening and talking.

Um my first time kind of chairing the committee, and I I think there's some consensus around the room on an on some issues in reference to public safety for sure, uh, and treating our firefighters uh in the same vein as uh police officers, which I think is extremely important uh that we do.

Uh I I think we all acknowledge the growth um that the city is experiencing and how that we pay for it um through a wide variety of city services that we are providing to the constituents.

Uh and but um I guess my question was in terms of as we begin to um transfer um employees out of the city via transportation, I mean uh the impact that will have on the benefits of any uh at all, Mr.

Manager.

So um thank you, Councilmember Graham.

Can I try to do two things?

Um Councilmember Ashmara, uh you asked about response times.

We have done some things with um 911 callers from CMPD.

Um we have a data point which is January, which is not a trend, but we did some things December and January was really really we met our goals first time in a while.

So we'll see how those things happen.

And also with um response times, um, we're building that's why it's so important to continue to build the fire stations.

It's very different than law enforcement.

Um policing, right?

And so as we do that, that helps with the response times.

And um, we hadn't talked about this in a while, but there's a study.

I think the chief's still here.

Um there's a study going on with Medic and how we go about dispatching as a big impact on um fire and police and uh submissive uh council member Graham.

Um I actually had a conversation with Councilmember Owens this morning.

And um with this transfer of employees from the city to the MPTA, our number one priority is to take care of our employees.

And if we do this the right way, it should be seamless.

Their last day at the city should be no different than their first day at the authority.

Um health care is something that right now I I can't tell you if that will be the same, right?

Because we have such volume with 9,000 employees and their families.

Um, but as we go through this, we will try to limit the impact of those employees.

Other thing I I would say to you is um you know, those employees typically of authorities are compensated more than somebody who works for a city government.

So there's going to be a lot of, I guess, um pluses and minuses, I shouldn't say the way, but I think that as we move forward, we're going to um make sure that we take care of our employees and with but their benefits will be a part of the authority providing benefits and not the city of Charlotte providing benefits, whatever those are compensation health care.

But they're retired, they will stay in the retirement system.

And impact on our budget once they leave in terms of the cost to those employees that remain.

Yeah, we will we're looking at that.

Sheila's in the room, I'm not gonna pull her on the spot right now.

Um, but those are the kinds of things that um is a part of this transfer.

It's our assets, our debt, is all of those things, and how the impact would be to uh the city's budget.

If there's something that's outright um cost for the city to provide something for the authority, our intent is to recoup that costs.

Well, again, I I think we'll we we're we're got a um a long way to go for sure, but um I um I um I I like what I'm hearing around the room in terms of uh a meeting of the mind on on some very broad issues, right?

In terms of how we move forward.

Right.

Thank you, Madam Mayor, and uh so city manager, I think you know, these opportunities when we look at a at it from a budgetary perspective, vacancies are a challenge, and we're always looking to fulfill them.

However, they do create fiscal opportunities to invest in other spaces and other ums.

It'd be it it it would it it would behoove us to think about some of the things that the vacancies have allowed us to invest in over the last couple of years that as we uh increase the uh population populate those vacancies that might decrease the opportunity to invest in certain areas and um the level of import for the for those spaces as well, and as we um think about uh we're we were talking about police and fire here, but as we think about the transition of employees to the new um transit authority, I think that would create um a whole new pocket of opportunity for from us from a city perspective to look at how we can reinvest, double down and align in other spaces.

So as we're looking at a forward focused budget, I'd I'd be interested in seeing and talking about those opportunities.

Thank you, Madam Mayor.

Ms.

Mayfield, Ms.

Thank you, Madam Matt.

I just wanted to ask the manager because um my colleague, Councilmember Ashmir did mention 911, which I look at as separate from the police and fire conversation.

Are we going to have and since we had the budget discussions and parts, are we gonna have time for that conversation?

Yes.

Because I do have a resident that reached out Sunday.

But they actually unfortunately witnessed the accident and saw the impact of the individual and the actual motorcycle and the experience with calling for assistance first being put on hold, then finally getting through, and the questions that they were being asked were not helpful considering you just witness.

So it would be helpful if when that time comes for us to have that discussion, we get the very most up-to-date numbers and time call times.

Thank you.

Mr.

Drake's mayor.

It's interesting.

I remember a few years ago, a deputy chief of CMPD explained to our committee what the basis was for determining the target manpower levels.

And uh that deputy chief was so impressive.

I thought that lady is going places.

And she did, all right.

Uh it was Chief Patterson, now Chief Patterson.

But what she explained then was that there is a pretty complicated process through which uh calls are prioritized in order of urgent immediacy and urgency.

And then the responses to those calls are tracked according to target times for response.

And then the question is what does it take to stay within those target response times in each cla category with the manpower uh that's on uh call on on duty, right?

Because then you've got to gross up from there to the total manpower you need.

And that led to this number.

But uh Mr.

Manager, just a question.

I don't know if you offhand, you know, in the last time that calculation was updated.

Yeah, so the um again, one data point is not a trend.

Um we did some big changes in December.

In the January data point, we were within 90 percent of calls being answered within 10 seconds.

So uh that's a high percentage.

It leaves still a lot of room for unsatisfactory experiences.

Uh and uh so really, if that's the way we're gonna determine our manpower requirement, then we should be at 100.

Uh so I'm just saying these conversations are related, right?

The the the response time question, the manpower question, uh it all ties in because response time is how we determine the target level of manpower.

Thank you.

All right.

Renee.

Thank you.

Um I just want to piggyback off the whole 911 hold time.

I know that um Mr.

Jones, you and I had a meeting, I want to say it was before COVID, about hold time for 911 callers.

So I know there's new technology that's available for 911, there's text to 911.

So the and I've had a consultant reach out to me.

So if we're looking at new technology or upgrading the technology we have, I think we've talked about it.

There might be a way to optimize that.

But um, yeah, I I I definitely support um not just getting up to uh current staffing level, but really taking a look at where we should be for staffing in our emergency services, CMPD, Charlotte Fire, and again, as a large city, and I've said this before, you know, we're it is time for change.

We're a big city, so the small town charm, small town charm is nice, but we want to have big city policies.

So if we could stop looking at peer cities and seeing what they're doing and seek to be a leader so that organizations and cities are you know following us.

I'm also happy to see that we're looking at Charlotte Fire.

We've heard from Charlotte Fire and the the firefighters union for years.

So I'm happy that um that we're seeking equity there and um and I look forward to reviewing the budget.

Thank you.

So one thing clarify.

So um thank you.

The standard for police departments across the country is to answer 90 percent of your 911 calls within 10 seconds.

And we made that in January.

So I just want to make sure that I'm saying this the right way.

And so again, one data point doesn't make a trend, but we believe some of the changes, including technology back in December, is helping, and the way we've changed the whole pay structure to make sure that people have career ladders and things of that nature.

Part of our problem has been we can't retain them.

So we train folks and then they they leave, and then you're at the deficit again of trying to train folks.

So we've listened to the council, you're right.

We started talking about this well before COVID.

Um and we're trying to make sure, just like we've been able to tackle some other problems with staffing and retaining folks.

We're trying, we are doing trying to do the same thing with 911.

So when you talk about retention, I know CMPD has always had a high turnover rate.

Are we looking at that from an HR perspective?

Retention rates and organizational culture, a cult uh organizational culture survey might answer some of the questions of why um why we're not retaining such essential employees.

Thank you.

Okay.

Any other comments?

Just one last coin, if I may, Madam Mayor.

So I know you're looking at the data in 10 seconds or less very responding to a call where I would like to see a data.

How fast are at the location?

Right.

I mean, I think that both data points are equally important.

That's okay.

All right.

I think that if everyone has had an opportunity, staff Marie.

Let's go to the capital investment plan.

Good afternoon, Mayor and members of council.

My name is Hannah Bromberger.

I'm the deputy director of strategy and budget, and it's good to be back with you today.

It's been a while since we've gotten a chance to talk about the capital program.

So I have just a few slides today.

Um, and really the intent is just to sort of refresh and do a little bit of a level set on the way that our capital program is currently structured.

And then I'm gonna be back with you a week from today with Matt Hastett, our finance officer, and we'll be going a little bit deeper on the capital program and how we incorporate the new Article 34 revenue into the capital model.

So just to start us off, um an overview of the capital investment plan.

It is really a public communication tool.

Uh so it presents the city's plan to the community.

Um we fund different kinds of projects out of the capital investment plan, including street improvements, we build facilities, we maintain facilities, and all of the projects that are in the capital investment plan from data-driven um exercises or from studies, plans, community engagement.

So they all originate um from the work that our staff do.

These funds are life to date, so unlike our operating uh, which goes away at the end of the fiscal year, these funds do not, so they roll forward.

The idea is that a capital uh project extends longer than one year, so the the funding rolls forward, and if debt is utilized, the life of the asset needs to extend longer than the financing itself.

We put together a five-year plan every year that's part of the budget book.

Year one of that plan is adopted by city council and appropriated.

The four out years of that plan are simply a plan.

So we revisit them every year with council, and there's an opportunity to adjust them annually.

So by the user fees themselves.

So if I'm in front of you, we're generally talking about the general capital investment plan and not the enterprises.

So there are two main components of the capital investment plan.

Um, the first one is paygo.

So pay-go or pay as you go funding is used for projects and programs that aren't reoccurring or that aren't eligible for debt.

So this is where we test a lot of things.

This is where we put pilot programs.

Uh in recent years, you've seen things uh like pilots to reduce juvenile crime, some of our affordable housing programs like our NOAA subsidies, all of those are in pay-go.

And about 30% of PAGO funding relies on the closeout from the last full fiscal year.

So, you know, Marie was in front of you about an hour ago talking about how tight FY25 closed.

Because of how tight FY25 closed, we've got about 10,000 rolling into Pago.

So essentially nothing for that 30% of revenue.

These are cash funded projects, and the paygo program is appropriated annually, but again, it's a five-year plan.

So you appropriate year one and the four out years are a plan.

So the second main component of the capital investment plan is our municipal debt service fund.

And so the municipal debt service fund is how we pay principal and interest on debt.

And we have a couple main types of debt.

The first one is certificates of participation or COPS, and COPS are used for facility construction and improvements.

So think of this like your mortgage.

And this pledges the asset for the debt, and because it does that, it does not require voter approval.

We appropriate COPS annually.

Again, it's a five-year plan.

You appropriate year one, and the four out years are a plan, so you revisit them annually.

And we model COPS, we model this debt on a steady state capacity.

So basically, we look long term at the revenues that we anticipate and the expenditures that we anticipate, and we have a steady amount every year available to budget.

The other kind of debt in the municipal debt service fund is general obligation bonds.

We have three types of bonds affordable housing bonds, neighborhood bonds, and transportation bonds.

And these bonds do require voter approval.

So they leverage the full faith and credit of the city of Charlotte, which means that they pledge to raise property tax if it's needed to pay for our debt service obligations.

Again, that steady state modeling is really important here.

We consider decades at a time in our model.

We anticipate revenues, we anticipate expenditures, and so we can plan for our bonds so that we don't have to raise taxes.

So 2026 or this upcoming budget, FY27, is a bond year.

So if council approves the bonds as part of the budget, then they'll be presented to the voters in November.

So we talked a lot about a lot of pieces.

We've talked about the capital investment plan, municipal debt service fund, projects, funding sources.

This graphic puts it all together into a nice little story.

So we have revenues on the left for the municipal debt service fund, it's primarily property tax and sales tax, and then there's a few other revenues that make up a lesser percentage.

Those revenues go into the municipal debt service fund, which then pays principal and interest on our various types of capital projects.

So I want to talk a little bit more about steady-state modeling because this is really important.

We introduced it in 2018, and it supports our long-range capital planning.

So we model those anticipated revenues versus the anticipated principal and interest of our expenditures, and we use that to determine our capacity.

So it ensures the predictability into future years.

But when you look at the planned 2026 and the planned 2028 bonds, this is where you see that steady state of 220 million.

And so this is from the FY originally FY 2025, also it's in the FY 2026 book.

And what's hard to miss is the 400 million dollar bond that was approved in 2024.

So we had 100 million dollars for housing, we had 300 million for transportation and neighborhood bonds, we were able to increase every program within the bond, and this was really unprecedented.

This was a historic level of investment for us, and we couldn't accomplish it without taking some actions.

Some of those we've already talked about today.

Um we did 0.24 cents of a property tax increase, and we also pulled forward some of that out-year capacity, and all of this was to enable the 400 million dollar bond.

We included a new program in that bond called the the strategic investment areas for 55 million dollars, and this was really important to deliver projects to the community quickly.

We made a commitment that we would deliver on these within two years, and we're on track to do so.

Um, but also this was really important for us to test our own organizational capacity and find where we might have weaknesses because remember at this time the PAV Act hadn't been approved.

Um so we wanted to make sure that if it were approved, that we were prepared for a consistent, uh consistently higher bond amount.

And so what we know now uh is that uh the PAVE Act was, of course, enacted July 1st, 2025, last summer.

Voters authorized it in November, and so FY 2027 will be the first fiscal year that we have to contemplate Article 34, this new sales tax revenue as part of our budget.

And so we know that 40 percent of that revenue is dedicated to roadway system per the legislation, and for Charlotte, we anticipate that that is a little over a hundred million dollars in the early days.

And when I say 100 million, I mean cash revenue coming in.

And so to turn that 100 million of cash into even more capacity, we can put it into a debt model.

But what's really important here is that the PAV Act has some language around using this revenue to supplement and not supplant or replace local expenditures on roadway systems.

And so the PAVE Act tells us how to calculate it, it tells us it defines it.

Um, and so we will, of course, follow the law.

But the PAVA Act is also explicit that the local expenditure calculation does not apply to the proceeds of indebtedness, so meaning the expenses in our municipal debt service fund.

And so as we begin to explore how we incorporate this revenue into the debt service fund, we're gonna talk more about that next week at the retreat.

We're gonna propose um, we're gonna review some proposed updates to the debt service fund to make sure we're in alignment with the PAVE Act.

We're gonna discuss debt capacity, and we're gonna highlight um some of our debt management.

Oops me, some of our debt management principles that we need to keep in mind that really help support us being a triple triple A city, and then we're gonna draw connections to how it relates to PAGO and operating funds as well.

So as we look ahead, um, of course, next week, next Monday, Tuesday, we have the retreat, then next Thursday we'll have our budget committee meeting where we'll have some of our enterprises come and begin to discuss their budget.

We'll be back in front of you a month from today on March 23rd for another workshop, and then in April we have another budget committee where some more enterprises will begin discussing their budget, and then ultimately the city manager will propose the budget to you on May 4th and turn it over to you for uh budget adjustments.

All right, any questions or comments?

Mr.

Jones has a few.

Um thank you, Mayor members of council.

Hannah, can you go back to slide 43, the plan bond schedule?

There we go.

Awesome.

Nope.

Okay.

So we appreciate the council's willingness to uh go to 400 million, the last bond.

What's important about that is that it gave us a two-year lead time to test how we will be able to implement projects.

I will tell you in this budget we're going to that won't be a business as usual.

We'll need to have some level of additional resources, whether you call them staffing to make sure we're implementing these projects.

The other thing that's really important is that what we will present to you at the retreat or subsequent budget meetings is a planned steady state that's going to be higher than 220.

Is that fair?

That's right.

It will be higher than 220, but it will have all the principles that we've always had with a steady state to begin with.

Um and that's what's exciting for the all the planners and all the engineers and everybody who in Phil Regar and everybody who's been waiting to have an opportunity to make great infrastructure investments in our community.

Any other comments or questions?

I I do think that um what you've said was really important because we went out for that bond and to make it possible for the opportunity to have the mobility money come in.

I think a lot of us said here's what we will do and how we will accomplish it.

And I think that is a real requirement for all of us.

All right, Ms.

Johnson.

Thank you.

I just have a question.

Um slide, I guess it's 41.

Other revenues is mentioned.

Can you give us an idea of what revenues those are?

Sure, that's like interest earned.

Um and there's some other small revenues, uh, but they don't amount to much.

Okay, so this is just for the CIP structure.

Okay.

Because I wanted to ask about the hospital hospitality taxes.

Where are those listed in the budget?

That is not part of the general CIP.

Okay.

So we when will we receive information about that?

Thank you, Councilmember Johnson.

So I think the the hospitality funds are within the hospitality funds themselves.

So I I don't I'm not sure if that is a planned presentation to council as opposed to the the manager's budget presentation.

Um but I do believe that next week at the uh strategy session, there will be a detailed discussion about the hospitality program and some of the horizon projects that are that are upcoming.

Okay, thank you.

All right, Kimberly.

Thank you, Mayor.

Um I had a question about vision zero.

I've had a couple of inquiries from the community around the transparency around the expenditures that we've made.

If you go back to the budget on that, I don't know that I see the dashboard as necessarily capturing that degree of transparency.

Is there some intention to upgrade our reporting with regard to those expenditures and further and vision zero?

Sure.

I guess uh and uh we will actually when we're back with you a month from today on March 23rd, we're gonna talk about active projects.

And so uh council will get a full report out of all of the sub-projects within that program and the state of them.

Um and so we we can talk more about that there, but we do plan to talk more about everything that is currently active next month.

Thank you.

And sorry, just so I can add, and Hannah's taught me this in the past too.

When people look at that pot of money, that's upfitting current infrastructure.

It's important for the community to also understand any new investments already include those vision zero considerations.

So this is more enhancing current infrastructure.

Am I saying that right?

Okay.

So that you know, so when the community looks at this amount of money, that's not all it is.

That's helping current infrastructure, but anything new already has that embedded.

And under certain I appreciate that.

I think the inquiry that I've received has been around the bounds of what things that we've done and how we've categorized and prioritize the expenditures of those monies with respect to either some of the lighter touch things that can be done immediately in the aftermath of an accident, such as restriping or or just some of the things that are perhaps lesser dollar amounts and how that budget's being expended.

Thank you.

All right, Mr.

Jones.

Thank you, Mayor.

Uh and uh councilmember Owens, we will have a set aside discussion at the annual strategy meeting next week that includes Vision Zero and how we can prioritize some projects.

All right, JD.

Thank you, Madam Mayor.

Um, thanks for the presentation.

And I have two questions.

The first one is very similar, if not the exact same request from council member Owens for corridors of opportunity uh to see how we've used that money, how we uh dispersed in in the community.

Um so that that's something I would be very interested in learning next week in the um annual strategy session.

Um I had a question of clarification back to the once in sales tax slide.

Uh you had mentioned that uh we wouldn't use that those funds for the proceeds of indebtedness, but that we will find ways to apply to the debt service fund.

Yes, so the PAV Act is specific that it that this revenue is to supplement and not supplant local expenditures on roadway systems, except when derived from indebtedness.

So it excludes the municipal debt service fund.

So really, when it goes on to define it, um it it talks about it's really like our our general fund or our PEGO expenditures on roadway systems, and they ask us to average our spending over the last 10 years.

Got it.

Okay, thank you so much.

Thanks.

All right, Dimple.

Thank you, thank you, Madam Mayor.

So to follow up on that, um you talked about the average over the last 10 years to council member Maserarius question.

Um that's not from what I understood, that's not operating, that's not capital, that's the operating number.

Is that correct?

Yes, ma'am.

Okay.

So that's what you will provide us at the retreat, what that number is.

No, I believe the average over the last 10 years.

I mean operating.

I think they're talking about talking about the actual projects they're being delivered, but just to give example of surplanting, you know, when we had that pie chart up that showed the general fund budget and like 14 million for street lighting.

Street lighting is considered roadway systems uh is defined within the act.

We couldn't take part of that penny and pay for that 14 million because it is part of the general fund.

Yes, I I get that.

I guess what I'm what my question is in the PAVE Act where we this PAV Act money where we have to spend average of last 10 years on transportation related projects.

I'm trying to find out what that average 10-year number is that we have to um continue to spend on transportation.

Thank you.

And then we can look at that, but to us it that's not as applicable because we're not reducing our spend.

Right.

You know, so I understand.

I just want to make sure, yeah, we are not reducing.

I just want to know what that number is.

Uh so and and certainly I'm I'm sure we will get the at the retreat, we are gonna get the new steady state, which will be at much higher than where we are at currently, 220 million.

That was based on previous year.

Um so the request though that was made by some of my colleagues about vision zero.

I think that's what I'm look thinking about is more independent from the budget cycle cycle is just the dashboard.

So I um regardless of what happens during the annual allocation time for the budget, I guess just more friendly dashboard of where the projects are.

So remember how you gave us this um at every budget cycle we get this uh long uh spreadsheet that has like all the projects.

Um, but that's that's not what's showing on the dashboard.

Uh but the one we get, it's more masterless, it's not just vision zero, it it's everything and everything, including facilities.

So I I guess in order for the vision zero dashboard to be more user-friendly.

I think what I would like to see aside from the budget, it's what projects have been completed, what projects are underway, what phase of the project is underway, and what's the timeline.

I I think that's what I'm looking at in terms of uh vision zero and high injury network dashboard aside from budget.

Okay, and and lastly on slide number 46.

Okay, uh if you can help me understand what updates would be needed to the municipal debt service fund as a result of a new new sales tax revenue, sure.

Sure, we'll go pretty deep on this next week.

Um, but the PAV Act can only be used for roadway systems, and right now the model in the municipal debt service fund builds our facilities, it's our for affordable housing bonds, it's our transportation and neighborhood.

And right now, the model in the municipal debt service fund builds our facilities, it's our for affordable housing bonds, it's our transportation and neighborhood.

So we need to be real intentional about carving out space for that revenue to ensure that we are complying with the PAP Act.

That's fair.

So any of this hundred million dollars that we will get every year.

Yes.

Okay.

That's all I have.

I'll have more once I see the steady state, but that's all for now.

No, thank you.

Okay.

Any other comments?

All right.

So Mr.

Jones, do you have any wrap-up for us?

Uh no, Mayor.

And so um, I think it actually will help us when we get back together next week to talk more budget.

I expect so I understand that Miss Are you going to be excusing yourself?

Oh, you can do it now.

Well, we can do it now.

So um our next um meeting is um coming up.

So what time where is our time?

At five, and it's now five thirty.

So um let's get ready for that.

Um, we are doing four.

Oh, it's four.

Oh my god.

I thought I looked at my watch and it said five.

I was like, uh my watch is really fast.

So okay.

All right, we have an hour for lunch or going up part go and doing anything that you want to do.

Do we have a motion to adjourn?

I have an attorney, is there anything we we need to do?

Oh, is there a needs to do for this meeting?

No, I don't think.

It was wait a minute.

I I wasn't told that we had to have you're not doing this.

What is that?

Oh, sorry, thank you.

Thank y'all for bringing that up.

That's my fault.

I did want to mention that we need uh consensus to add to allow um the municipal service district to move forward with the community engagement.

Thank you so much for reminding me on that.

Well, it's all of them.

That's what I want to clarify.

I thought that's a good question.

Mr.

Jones, just one university city.

Just the university city, and this is just the first phase, no ma'am, Ms.

Asmir.

We weren't talking about um discussing, they're gonna go away and do community engagement and then come back.

So just is that the meeture requests?

Oh, I I thought there was a presentation, but adjourn this meeting.

Adjourn, we're gonna adjourn this meeting.

All right, so all of the And just to clarify, so I have consent to move forward with the um community engagement for university city partners.

She wants a motion.

Councilman Johnson made the motion.

I second it.

Okay.

All right, so now we're we're you have a motion and a second.

All in favor, raise your hands.

You think we're gonna have to do that?

No, no, no.

That that is fine.

No, that's what our attorney just said.

Because we started jumping into the close this conversation that was.

This is part of the budget.

I'm sorry, this was part of the budget.

Are we closing budget and then opening on MSD and giving her authorization for them to do community engagement?

Or this is part of the budget, she says I thought so too.

So no, I was just simply saying close this meeting.

I don't think we're going into the MSD portion, or we thought you we just need a consensus to move forward with the MSD.

Okay, before we get to that motion, that the motion to adjourn the meeting.

Then do you have consensus?

You're asking for me.

So if we're not in the budget meeting, we can't just have a a meeting, right?

And just an open meeting for one vote.

We haven't closed the close the budget.

Good.

Okay, good.

Okay.

Do we have a motion or we just do consensus?

We do have a motion.

Right.

And we have a second.

And so all in favor, please raise your hands.

This this part of the meeting is adjourned.

Thank you very much.