Thank you, Mr.

Chair.

Great.

Uh I wanted to note uh committee member Johnson would normally be here.

Uh, she's at home with a family medical situation, so we wish her all the best, and she will get on board, I'm sure, with vigor.

Uh, as soon as she's able.

Okay.

Um, so I have a couple of things.

Thank you.

Um, we're going to begin with our twenty FY twenty twenty-seventh budget workshop number two.

So um, I want to say good afternoon to everyone.

I hope everyone has been having a great day.

Um, and I'm going to call to our second council budget workshop for the twenty twenty-seven budget development into order this meeting tonight today.

As you all know, this is one of the most important and impactful pro policy items that we work on together each year in developing a plan to allocate city resources for our communities, alignment with our strategic priorities, and the need for our communities.

So thank you everyone for joining us today.

And with that, let's start by getting um our city manager, Marcus Jones to introduce the network that we're going to prepare to do.

As you do know, this is a an FY27 calendar twenty-six will be a bond year.

So there's a lot more work to put into this budget than what we did for the FY26 budget.

Then we have a mobility investment outlook, which is really a continuation from our discussion at the annual strategy meeting.

So, mayor, um, unless there's any other questions, I'll turn it over to budget and Hannah.

All right, thank you.

And then lastly, we'll discuss financial priorities as we head into FY 2027.

So just as a quick reminder, the capital investment plan is really a communication tool.

It's how we communicate with the community, what our plan is for the next five years in the capital expenditure space.

So year one is adopted, that's locked in, the four out years are simply a plan.

So you revisit them every year.

The capital investment plan includes various kinds of projects, and each one of those projects is born out of studies, data, plans, and community feedback.

The general capital investment plan is supported by general government revenues only, so primarily property tax and sales tax.

So you saw this slide last time, and it's really just a reminder that there are two funds within the general capital investment plan.

The one on the left is the pay as you go fund, PAYGO, and this is cash funding, and it's for projects and programs that aren't reoccurring or that aren't eligible for debt.

It can also be pilot programs where we test things before we put them into our ongoing annual budget.

And the important thing to remember about PAYGO is that the capacity is largely dependent on prior year general fund balance.

So remember from the February budget workshop, Marie and Ethan talked a little bit about our year-end closeout from FY25.

And there's only about 11,000 that's going to roll into PAYGO.

And from the last few years, the average has been about 14 million.

So that's quite a difference.

So we're gonna set PAYGO aside, and the rest of the presentation is going to be focused on the block on the right, the municipal debt service fund.

So this is how we pay principal and interest on our debt.

We have different kinds of debt within the municipal debt service fund.

Sometimes we take out COPS certificates of participation.

This is primarily used for facilities.

And then this is also where our general obligation bonds or our GO bonds are held.

You'll remember that we have three types of bonds affordable housing, neighborhoods, and transportation, and these do require voter approval because they're backed by the full faith and credit of our property tax.

So in the municipal debt service fund block, regardless of the funding mechanism, regardless of whether it's COPS or general obligation bonds, we usually talk to you about the capacity for this fund as one model.

So that's one of the differentiating factors of what Matt is going to talk about in a little bit.

So as we move on to talk exclusively about the municipal debt service fund, this graphic was in your February presentation.

It just sort of sums it all up.

We have our revenues on the left, they go into the municipal debt service fund.

That fund is used to pay principal and interest on debt that we take out for our capital projects.

So at our February budget workshop, I jumped to one specific section of the PAVE Act.

And judging by some of the questions afterwards, I think I made it confusing.

So I want to just take a step back and sort of zoom out, and I want to review a few specific sections of the PAVE Act that are relevant for our conversation today.

So the first one is we know that 40% of the PAVACT revenue is going to be dedicated to roadway system infrastructure.

We believe that in year one, FY27, that that'll be about a hundred million dollars of cash.

So that's about a hundred million coming in annually, specifically from this new sales tax source.

There was a question last time about could that cash be put into a debt model and used to finance capital projects?

And the answer is yes.

That's this second bullet, section 4.8, allows us to use it for financing.

So yes.

And then I've also included the definition of roadway system from the PAVE Act, just for reference.