review I did want to briefly discuss a budget framework and then um the remainder of the time be taken without the ACUF uh in regards to um the the budget analysis uh that he did for us so first we'll start out with West then uh this is um the general policies that we all looked at there were four policies started back I think last February madam chair when we um did the amendment to the FY26 budget and so as we were looking at taking from uh taking funds from reserves we thought well maybe we need to put some policies in place because there's a reminder China Newton's only been this form of government for about what 30 years maybe or something like that.

So we're still working out the Kings as all cities do.

And so this is what um this is what uh we had discussed uh we discussed it in a previous budget committee and so at this juncture wanted you all to look at the revised policies uh councilman Henderson has um had questions and recommendations and so wanted to go uh wanted Weston to go over those updated recommendations and see if you all are ready to move this forward to legislation and uh I have notes from uh madam vice chair no she is on her way um um madam sorry councilwoman burrs is uh watching online she's at a memorial service for uh Chuck this morning so that's that's fantastic and prandy that goes well well I hope she's not watching this online yeah well I mean she's not watching online but she's gonna go back and watch I'm sorry okay yeah bless her heart yeah so she's gonna be doing that and then um councilman illy also is watching us online as well so welcome to our virtual colleagues and for those who are in route it's like we're famous hey all right everybody's watching this morning um and so um lesson if you go ahead and give us update on each other policies and then council at the end of this I would just like a recommendation uh what you would like to do next sure uh so we'll start with the volatile revenue policy councilman Henderson had some questions on uh specifically the the scope on that one it had um originally we had I think four we had four bullet points on there that were kind of high level and uh your recommendation was to add a more kind of exhaustive list to that and so what I did is I took our detailed revenue projection that we do that has every revenue account line item and anything that changed going back five years and anything that changed increased or decreased 10% in between any given year considered that's volatile and so that's what the list that's now on the policy is reflective of kind of that exercise if anything that's changed 10% in any one given year we'll consider volatile um and so it's a I forget how many points it is now it's it's considerably more than it was before some of them we have like permits there may be 40 or 50 different permit revenue streams so we just kind of left those high level building you know as permits and licenses and didn't go into each individual one but for the most part they all had those fluctuations so I think just an overall permits are for volatile is is fair enough almost um and then your other comment on that one was related to setting baselines and so added a points in um it was in trying to think of uh number three or four it's I think it was maybe a number four I have a point second page top point on the second page the last point uh setting the baselines um based on a historic five year average or the lowest in section two section two thank you um in section two point three um kind of a rule of thumb to set the baselines with a caveat that allows us if there's just something really strange that's skewing it to allow us to kind of pivot a little bit if it makes sense to not use one of those if there's just some anomaly that's really throwing things off to kind of re rethink how we set a baseline in any given year for for that but it allows us to kind of you use that five year historical average which is kind of best practice for a phone on something like that.

So you're looking at a base average for that for that particular year.

Not necessarily a baseline going forward it's just for that particular year.

That's right.

So it would sort of be like a sliding scale correct yeah every kind of with that five year average sliding up yeah yeah I think that makes sense okay so that was the volume volatile revenue policy yes that was that one any other questions about that policy okay but I do have one more would that be I mean when you're doing that I guess that will be reported to the council what you used as the baseline how you got the baseline or is that just something you're gonna do internally.

What you used as the baseline, how you got the baseline, or is that just something you're gonna do internally?

My thought is it would be more or less internal.

If there were any weird things we needed to point out, but again, there's 40 or 50 permit lines, and I don't know that you want us to go through the baseline for each one of those, as opposed to saying we you maybe we could just say this is the methodology we use, and if there were anything, we didn't use it for this one or this one because of this reason, something like that.

Um then obviously if you wanted to know a particular line or something, we could give you a report on that, but it would again it'd be a hundred plus lines of okay, yeah.

All right, any other questions, counsel about the volatile revenue policy?

Let's see.

Uh the one time revenue policy.

Uh Sherman Hill had a question.

There was a there was a reference to routine maintenance in number 4.1, and I think it muddied the water a little bit.

I think really what we're getting at.

I think salaries and benefits is the best example of just not using one-time revenues for something that's gonna encumber us moving forward.

Right.

And so I just removed the routine maintenance piece of it and left it as salaries and benefits is that's kind of the bright example of of what we're really talking about in that line.

So um so I think that was the only question we had on that coming out of last time.

Okay, any other questions about what's our revenue policy for general fund?

Okay, structurally balanced budget.

I didn't have any questions on that out of the last discussion, so unless anybody has anything today, if we can pass that one.

Okay.

And then fund balance stabilization, this is the fun fund balance reserve policy.

Um the only question we have was around potentially investing in in certain commodities gold or whatever, and and I think there are some logistical and some technical issues with doing that at the state limits our our ability to say we can't do that.

The state has opened that up to allow them to do that, so maybe at some point they'll push that down to municipalities.

Um kind of preclude us from doing that.

And also, there's just the the logistical, where do we put it, how do we secure it, okay, stuff like that.

How do we trade it and sell it and buy it?

And I think so I think it's there's some hurdles there to try and do that.

Um, but I think that was the only kind of question or comment that came up in that discussion on that policy.

Well, so then here and then a taxman here.

So for the working group, just a brief discussion I'd love to have would be the fund balance target range.

You know, the thought with this policy is that um it will aid us in discussion and decision making when it comes to um budget amendments or pulling from the fund balance, right?

Because uh periodically the mayor um of any administration will say we want to make a capital investment or we want to top off the pension fund, right?

And so what we've noticed in the five years that budget chairwoman and I have been serving, and and then councilman Henderson and his esteemed tenure, that those conversations then tend to go back to how much is enough and how much is too much.

And so uh I'd just like us as a working group to just briefly discuss.

We're talking about having 20% of our um to be our minimum level of reserves, and that's 20% of our general operating fund in our rainy day fund, right?

Saved up 20% with a max of 30%.

And so is that something that this body can stand confidently behind um as uh thinking toward the future.

And just real quick on how we got to that range, yeah.

Yeah, remind everybody back early, really late 244, early 25, the city engaged uh GFOA to come in and do kind of a detailed analysis of our fund balance that said, hey, 10 years looking out, taking into account uh economic downturns, significant weather events, all sorts of things.

They they did this analysis and came back and provided this tool, and this is really where the policy recommendations came from was at their work.

And in their dis in discussing with them and also taking account this the state's recommendations and and general best policies, fund balance reserve should be around 17% of your revenue.

And so working with GFOA, if we set it at 17 and we hit one of these economic downturns, it's gonna go below that.

So based on the analysis they did, we came up, I think it was around 24%.

If we had it at 24%, it would give us an 80% confidence that even if we hit one of these things, we would not go below 17%.

You're never gonna get to 100% confidence.

You'd have to have way too much in reserves.

And so we kind of targeted that 80 to 90% confidence level.

Um and so that's really where the 20 to 30% came.

It gets us right in that 80 to 90 percent confidence based on the analysis that they did.

Um and so yes, that the rule of thumb is 17, so you you may hear that, you'll probably hear that.

Um, but the idea is you overshoot it a little bit in case you hit a COVID or uh or a tornado situation or something that's or a mass flood event or something that would take some reserves.

Um it'll keep you keep you above the line.

So that's that's where these these recommendations came from.

The number was from GFOA was kind of right in the middle, so we said, well, let's just do 20 to 30, and then obviously if you guys have thoughts on it.

Thank you.

With the councilman handerson.

So the cop what is the the comp troller's number is 17 or yes.

Okay.

Okay.

And then so I guess my question is uh, you know, maybe Kevin and I was talking about this, and he you know, it was interesting something he said.

He said, Well, what if it was the reverse?

You know, we we want to set it at 30, but what if the comp troller said it was 30?

You know, then we would just say it would be it would be 30, you know, for whatever reason.

But but I I get your point of comp controller says 17.

Well, you obviously want it higher than that in case something happens and you drop down to 17.

Um I'm wondering if if our floor needs to be 24 instead of 20 since it covers that 80 percent that puts us in that 80 percent, which is kind of where you think about your pension fund being healthy is at that 80 percent.

Um I think I think probably 30 percent is a is a good number for the top side, you know.

I I also told Kevin, I said, you know, um having more than 30 percent in the fund balance would be like um you know having money in the bank and your kids are starving, needing something to eat.

If you've got more money than you need, you take care of those kids.

Right.

Uh obviously you've got to have money for emergencies, and I think that's I think that 30 percent.

Did Stan I didn't look at did he revise, I think he came out with a recommendation.

He didn't.

I haven't seen any revisions, and I know I know Dr.

Aikop's gonna talk about peer cities, and so maybe we would benchmark he's he ran his benchmark against the existing peer cities.

I think it'd be interesting to maybe run it against some of the cities that he's got same ratios, just do it against these cities and see how that because I know the the benchmark when we're talking about this against the peer cities he had was around 30, 31 percent, maybe, but I think Huntsville has like 56 percent.

And so it's really skewing, yeah.

Well, there was another one, another somewhere down in Florida, I think that really skewed it.

Point St.

Lucy, maybe I think it was Port St.

Lucy had uh really skewed really skewed that number.

You know, if you if you've got in as Kevin was talking about, you know, if you've got a bunch of average wage owners on the bus and a millionaire steps on, you've just increased the average of everybody, even though everybody's just average.

So, you know, I think I I think at some point, you know, we need to identify which cities that we want to have our comparables to.

And I'm hoping that we get that worked out, if not in this meeting, maybe at least one more that we can kind of look at cities that are very comparable to us and see what their fund balance looks like.

Because I I mean to me, I think 30 would be I think 30 puts us in a good uh a good position.

I think maybe no lower than 24, that gives us a pretty good cushion.

You know, if we went down to 24 and something happened, that still gives us a pretty good cushion, you know, not to even drop below the 17, get on those controllers not at least.

Yeah.

Okay.

So I had another on Dive A.

Oh, yeah, I was gonna mention briefly, and wasn't talking about this, but um, you know, it's a based on a research paper I did a couple years ago, I was looking at the making Pip County after they consolidated anyway.

Best practice is somewhere between two and four months, which is that sweet spot between 17 and 30-ish something percent, right?

And like comes by interesting mentioned, you know, you don't want more than that in the bank, you know.

You want to use your money or lower taxes or whatever you're doing, right?

Invested in something, whatever that is, right?

Um, so yeah, somewhere in that sweet spot is normal.

So certainly anything that's 50 or you know, something like that is probably usually definitely an outlier.

So and that's pretty much a universal thing, GFOA, otherwise, you know, the comp troller and MTAS and others might tell you maybe on the lower end.

Um, but also if you deal with with smaller cities, you know, they may have a harder time raising revenues, you know.

So it may be a little bit different for for smaller cities than than a Chattanooga that has maybe a lot more sales tax, a lot more other stuff coming in.

Um so it varies based on certainly economic conditions and everything else, uh, how how fast you could raise more revenue if you needed it.

Um but I think certainly somewhere in the 20 to 30 ranges is is in line with pretty much everything I've ever seen.

And then uh thank you so much about the A Cup and then Madam Chair, do anybody else have any questions after this?

Okay.

Um let's let's Weston, if you could um kind of game out how this 20 to 30 percent might work because I I'm thinking about it going a couple different ways.

That if we if we set the floor at 20, are we actually always gonna be at 20?

You know, if we set it does it would it not behoove a mayor to be pushing policies forward.

I mean, by the end of the year we're back, maybe, but then we skew it back to 20, which speaks to councilman Henderson's desire or suggestion to go to 24%.

Um talk me through, talk me through how we might flow from a 20 to 30 percent in a given year through revenue collection.

Sure.

So currently we might spend it down or spend it up.

Yeah, right now I we do have there's a city that does have a policy, it's 15%, it's been 15% since 2017, maybe it's it's been a while.

Never going below 50%.

And it's historically been within this range, if not over 30%.

I know in in the recent past, it's been 30 plus percent.

And so I'm not not to say it's so much couldn't do it, but it hasn't happened recently where people are looking at that benchmark of like, oh, we have money to spend because we're well over it.

Um so I'm not sure, not obviously anything could happen, but in my mind, I'm really I would really focus on the 30 percent as to Councilman Henderson's point, we don't need to just we're not a bank, we're not here to hold cash.

So really keying in on making sure we're not consistently way over 30 percent.

If you're 31%, you look to but there might not be enough increment to do anything with it.

But if you get to 35%, then okay, hey, let's let's take a look at that and get it within range.

What do we need to do if we could spend X dollar amount for the pension fund, that'll get us in that in that upper 20s.

Maybe we do something like that, or or whatever the project may be.

Um so yes, conceptually, someone could keep it at 20, but I don't think I don't remember seeing that in my working with the city, and I don't looking back historically, I don't see a whole lot of let's dip into fund balance because we're over 15 percent.

Um again, not to say that someone couldn't do it, um, but I've not I don't know that that would be a game plan.

I wouldn't think that that would be advisable.

Um I like being we're I think currently 28 percent somewhere in that range.

Um and so that's kind of a sweet side just at the upper end, but not not too much cash, but enough to hit some of these things, uh the mold remediation, or if you have these things that we just can't absorb um that we'd have to think about.

Right, yeah, thanks.

Thank you.

Um so yeah, I think you could set it at 24, and people could benchmark against that, but even at 20, even at 15, we're not going up against it currently.

So I think at 20, I don't think there would be a desire to like keep it at 20, definitely not on my part.

So I guess what I'm thinking is 24 gives you that six percent window to play with.

Is that practical versus a 10% window if we don't anticipate mayors getting into uh into a rhythm of we're gonna spend it down to the bottom that we're allowed to every year.

Yes, because I do want this to be a policy that streamlines our work that clarifies for everybody.

Here's a reasonable thoughtful choice on how much we should have in our reserve.

And then it wouldn't be such a question.

Yeah, so so is it practical to have a six percent window, or is it more practical to have a 10% window?

I think it's in my mind more practical with the 10%, just because in any given year, if you if we like did the pension true up and it got us down to 25% or 26%, it doesn't leave us a whole lot of wiggle room to do a whole lot, like because any given year it could fluctuate a couple percentage points, so it doesn't give you a whole lot of leeway to feel comfortable spending if you know if if you're at 32, then maybe you go down to 28, but maybe you really want to get to 26, but then next year if you have a slight down year or whatever, you may end up below um the ratio.

So 10% seems like a pretty fair range.

What do y'all think?

I like the uh ideal.

I like the 24%, but like you say, but also we recognize that we're a city.

I mean, you know, we're not here to hold cash.

So uh I like the 10% range, just gives a little more flexibility for things like you said sinkholes, tornado, it things happen, and it's just I don't want to encumber uh stop us from doing things.

Like if we need to jump on something really fast and it's something that's big, we need to jump on it and help fit because most of it is to me is just mitigating disastrous events, I guess, in a sense, uh councilman Henderson.

Well, a couple of things.

Number one, this is just policy.

Yeah, we have policy.

Well, as opposed to codifying it being law, right?

Even if we set a floor at 24.

That's not to say that with emergency comes up and there's a big sink couple that we can't.

You know, I I think the actual floor is 15, right?

17, whatever.

So again, and that's a recommendation.

The state will not, I I in my past life working with other cities, especially as Dr.

Jacob's saying smaller cities.

I mean, I I've seen it as low as eight percent and never heard anything from the com controller never said anything to me, and I they never city never told me that they got a notice.

Now, obviously, you don't want it there, and we tell them, hey, we need to but they have a hard time raising revenue, they have a hard time getting it up.

But the 17 is a best practice.

Yeah, and so you're never I don't know that we would get slapped on the hand if we fall for the colour.

So I guess what my you know, I guess my point is you know, it it is it's something that will guide actually this council because a next council and mayor could say we want something different and then change it again.

I mean, obviously, if we can do it, another council cannot do it.

So I think yeah, yeah.

Thank you, Fear.

So I mean, I guess it's just whatever this council feels comfortable with.

This administration feels comfortable with.

I mean, I just heard Weston say he feels comfortable with the with a 10% range, and you know, we're recommending 20 to 30.

You know, I mean, that's I I mean I'm good with that, although I think you know, if we're looking at 24 percent.

I I I guess I'd feel more comfortable the 24 for 24 percent floor, you know, just for all those emergency type things that we could spend for and not draw below that.

But I mean, you know, I think if you know, if Weston, if you feel comfortable with 10 percent rates, then that's what's on our that's what's on our recommendation here.

So all right, so council with that, uh we'll go ahead and get ready to close this con.

Madam Chair, did you have anything additional?

No, I just wonder if our if our quiet colleagues are leaving y'all along.

Y'all see I ain't even asked out.

That's okay.

Yeah, but um they're good.

Yeah, if y'all I mean I'm willing to go sweat the difference with council and have the right point.

Oh, yeah.

But but your point about how and and Phil's joyful exclamation about it takes one vote.

You know, that my vision for us is that we do work that's solid enough that it does stand the test of time for a while.

Right.

Um so I I personally just want us to find some policies that that work over the long term and that you know really protect the the citizens of China investment.

Okay.

I mean I think 10% makes sense because we're talking about unexpected, unforeseen things, you know, and so I think having that that wider range as opposed to a narrower range makes sense to me given that scenario.

Okay, I'm comfortable with that.

I mean, I uh originally when we first started this conversation, I too was thinking, you know, 24 like meet in the middle kind of the 24-25%.

Um but I I think you know, 10% is a good cushion as well, just to I'm comfortable with with either one, but um, so I think since the recommendation is the 20 to 30 percent, it's fine.

Okay.

Let me see.

I mean, madam I have any uh thoughts about it, or you I don't.

All right, thank you so much.

Uh councilman Henderson, then we'll close this out.

I think historically we've been pretty conservative, especially on the lower end.

What I have seen is a lot of times we've had more than the 30 per we have we sometimes struggle with spending that extra that we have because we all you know, we've we sort of want to hung hold on to I think I think maybe setting the top end may be as important as setting that floor end so that we we know we've got a comfortable number of thinking, oh yeah, we've got some money in the bank.

Right.

We need to we need to get that out to the people, either in the form of lower taxes or projects that obviously we have all over the city that needs to be done.

Right so I think having that top end at 30 I think puts us in a good place.

Seems like the consensus is 20% for the bottom okay all right so with that council are we ready to move forward with this as a resolution um say maybe on our agenda upfield what is it like two weeks two weeks out weeks out maybe everybody okay okay so okay so we'll move forward with getting these policies on our agenda uh so thank you so much for that discussion the second thing I wanted to discuss uh very briefly is a um budget uh evaluation matrix and basically I don't have a slide for it anything like that uh because I was still kind of working through it I'll send it to Dr.

A Cove I think I sent it to West and I also got an abbreviated version I'm gonna send to y'all um but it's pretty much it's about a three or four page document I will send out to you as well and basically it goes through um various things that we should be checking off as well as the administration should be checking off before we get into the budget season well as we get into it but it's something that they'll know this these are some things we'll be looking for of course we'll be looking for other things as well because that is our job but these are some kind of top heavy things to include revenue stability um infrastructure and main infrastructure maintenance fund balances and reserves we'll be looking for these policies to be applied in our budget um capital improvement projects mandated programs uh and then we'll be looking at just strategy vision some revenue drivers core focus some core service focuses and things like that so I get that out to you all uh just so you can review it I have a long version then I now have a short version and then I have um and I did an example with public works so you can kind of see how that compares to how it aligns with the matrix I get that to you so hey I've been working on this y'all I'm excited yeah so that we can because sometimes you get in here and it's so much we go through each department of each thing and then sometimes we can lose sight of the bigger picture of we are you know our job we the fiduciaries of the city we managing not managing every day daily management but our our job is to oversee that budget and make sure is is in line with the things that we we need and so I'll send out the um I didn't get a chance to put it into a document uh but I'll send it out to you all uh in the next uh by the end of the week probably maybe tomorrow I'll send y'all the one I have now that I gave to Dr.

Acuff and Weston has a copy and then I'll send y'all that one the short version and then the it's like a 10 point test of like do we meet all these things you know or do we not or what what what is it and then we'll love your recommendations on what you think and then maybe that's something we can use in the budget as we close out this budget.

So yeah can I add one thing to that I'm not sure if this matrix is where it would go or if it would go into our policy but one of the things that when I had my meeting with Kevin that I wanted to make sure up front is that we were addressing salary increases.

Okay.

Does it it does the salary increases need to be in this matrix or would this need to be more in a policy that drives the budget so that we make sure that we're addressing sworn and you know uh non-sworn uh pay increases uh it is in here is personnel costs so are we addressing you don't have that that's why this is oh he's pointing to something again that I have that's the that's part of the matrix but it is personnel costs and how do we address that you know I would just warn and undress that I don't know what I'll say at the moment but I'll get it to you and then if it's not in there we can either if you see it and you think this should be added or if you like no that does need to be a separate policy that we are looking at that we need to address then we can do that too.

This is just uh just a kind of something that's to help guide us and and as the administration prepares to get the budget ready then we we can all be on the same page this is what we looking for that's all act accordingly yeah yeah so since we're talking about this I I am have been working for a long time on some sort of policy that guides us on a COLA for sworn um but also non-sworn as well but prioritizing this one yes um so I'll we can talk about that later but um I need to get with you um I'm starting to work with uh the unions and everything so oh okay finalizing what they you know I want to make sure they're taken care of before I you know talk about the details but I'll get with you and and we can let's talk about the policy here forward that's exciting y'all yes um when councilwoman coonrod was here we invested in an equity framework study and um going back to that thought of like wanting to do work that that goes beyond our given terms it I wonder if there's some way that there could that could be incorporated into this framework of can budget considerations.

You know, I don't know that we got the deliverables we really wanted.

Um in terms of a framework for considering policy, but certainly financial policy is is one of the most important that we can do.

So more of a investment injustice.

Okay.

Thank you.

Yes, thank you.

Any other questions or comments?

And I can see I'm gonna send you out what I got now.

And then I'll have Cody.

Uh I'm sorry, Councilman Harvey.

I apologize.

Councilman Harvey again with you about the sworn legislation and seeing, you know, if you want to add anything in here, or if you sometimes only stay, you know, however you want to do.

And then um as far as the equity framework within the matrix uh out of send out some notes and see how we can probably how we can get that in here.

So I'm excited about that.

That was just one of those things I know we had talked about.

Uh and another piece is just a side note.

Is physical note, uh fiscal note on our agenda.

I know that we've talked about it for a while.

Uh uh Dr.

Caraburz had mentioned it uh multiple times, and so that's something we'll be hopefully looking to do as well.

I had not brought that to the administration yet, but that is something that we had been hoping to do, and I think Councilman Elliott brought it up last week in that there needs to be something to show where this fund comes from.

Yeah, you know, and because when you look at state, when you look at when the state passes their uh legislation, it has that fiscal note on there telling you where it comes from, if it impacts the budget, what does it do?

And it's just a simple line, it's not a complex matrix of things, it's just a simple things, and this is what it is is what it comes from.

So that is something that we wanna look at as well as we close out this.

And we have been having discussions internally of how what that might look like and how do we take the state and kind of pare it down to fit what we need.

So we're we are looking at that too.

Okay.

Okay, so I I think that covers we got our policy review framework and then side note on a physical note fiscal note.

And now we will turn it over to Dr.

Acoff for his presentation.

And uh Phil, you wanna come up here?

What else?

Yeah, come on up.

Yeah, you know, we always need an attorney at the table.

I mean, we always got one.

Building.

Building, yeah.

Oh, yeah.

Okay.

Uh yeah, thank you all.

So um I will not, you know, hopefully talk at you too much.

Um I'll just gonna update you on a couple things I did and then um obviously I don't have to have as long a discussion as you'd like.

Okay.

Um, so um be updates on the the bills we talked about last time.

Um kind of tracking those, speaking of fiscal notes, et cetera.

Um and the peer cities, I know you all wanted to get into.

And then I still have all the other slides from from last time I did this.

If you all want to read this anything, we can we can go back over it.

Um same caveats apply.

Okay.

Um so just update on a couple of the bills that we talked about with sales tax and and property tax limitations.

Um the the spoiler is both of these bills are effectively dead for the year.

Um, at least with sales taxes, uh well, and property taxes, too, I guess.

Um but I did go back, so um uh Chairman Hill had uh uh benefiting this and me doing this um um kind of dive into what this would impact Chattanooga.

Um so there was one option that was the healthy Tennessee grocery tax reform uh bill.

Um and that was basically eliminating the sales tax on board deemed healthy foods and increasing at least the state portion of sales tax on what we're deemed as unhealthy foods, um you know, candies and sodas and then stuff like that.

Umreos.

Right.

Yeah, no debt words.

Sorry.

Um yeah, you know, again, I'm not that kind of doctor, so um but uh but that but but on the but on the unhealthy stuff it would effectively not change the local option sales tax, it would stay in place.

Um and so you know, in in the report the update I gave you, I you know, I can go through the whole methodology, you know, later, but but basically I estimated um the the taxable sales tax base of the city of Chattanooga.

I took out basically based on on your labor statistics and census data and economic data, what was estimated to be groceries of that portion, and then within that, what's estimated to be quote unquote healthy foods.

So like census data has like uh basic breakdown of house households and what amount of percentage they spend on, you know, dairy and meats and fresh vegetables and all that stuff.

So I basically pulled all that out.

So for the healthy tax option, it would have been an impact of a little under six million dollars, about five point nine million dollars uh in in less in a reduction in revenue um had that bill gone forward.

I will say based on the discussion I watched in in committee, um there was a you know, I guess an effort to try to make this revenue neutral, like so basically Representative Kumar, I think is the the primary one sponsoring this bill in the House.

Um they were trying to get it to where it was basically revenue neutral and kind of trying to figure out where that balance is so that it wouldn't impact you know city to state, etc.

They just they just couldn't get there this year.

Um the the other one was on the kind of other end of the spectrum was basically just ending the grocery tax altogether.

Um so it eliminates sales tax on all groceries, state and local.

Um and so that would be uh just a little bit under 16 and a half million dollars.

And I was I was using fiscal year 25 as a baseline for what you all took in and sales tax revenue 25 as a baseline.

So, you know, again, since sales tax is one of your biggest revenue sources, you know, again, these would have a significant impact on the city.

Um so again, they're effectively dead for this year.

Um they've been put out the past year basically.

Um, but again, something to keep an eye on for these bills to come up again.

That's certainly something that could impact you know your revenues.

So there are those.

Um not if you have any questions on those, no pressure, but I can always come back to these things.

Um the other was the property tax cap bill, um, which again is is effectively dead for the year.

So um the Senator Watson went forward and uh believes state and local uh committee and and and effectively you know pulled his own bill.

They they sent it to the general subcommittee, which basically means that they're not gonna take it up this year.

Um so um, you know, again, Tennessee is one of the only states, you know, there's a handful of states that don't have limitations on this.

Um, but you know, I think this opens up a broader question, and I think um you all kind of touched on a little bit more, um, is you know, what does this mean for for incremental property tax increases versus these every as I call them the quadrennial every four year, these big 20, 30, whatever percent increases in property tax um the revenue increases.

So even though that building goes forward this year, again, you know, it may go forward in subsequent years, um, but I think again it opens up a broader discussion of um the historical trend that the Chattanooga's tended to take that that you only tend to increase those property tax revenues every four years.

Again, I think there's a there's a handful of years um where it was lowered over say the last 30, I think one or two years during recessions and things like that, uh, where the effective rate was actually lowered.

Uh but pretty much every four years, you know, you rely on that reassessment reappraisal.

Um, you know, it's the discussions relative to the the revenue neutral rate, the effective uh you know, rate that you're given by the um uh the assessor's office, and then you know, in those interim years between the next reassessment cycle is you sort of just capture that natural growth that occurs um in those sort of interim years.

So that's been kind of the norm.

Um, you know, that's not to say that other cities don't do that or whatever, but um, you know, because I think that's a discussion for for obviously those committee and for council to have um, you know, maybe not this year, but maybe in in previous, you know, subsequent years going forward, is is you know how y'all sort of plan these things out over these multi-year periods to to achieve whatever goals you're trying to get to.

So just to update on those.

Um Chris, could you give us a digital of this presentation, please?

Hey, what I'm sorry.

Can I get a digital of this presentation?

Oh, sure.

Yeah, yeah.

Um I think I sent it to the y'all being given yesterday.

We've got the budget analysis graph, but I don't think it's a good thing.

The old presentation is right.

Can I get these slides?

Yes.

I'm gonna send it out.

I'm gonna send it to the code.

Thank you.

Sorry about that.

That way I can take notes right on them.

So those are the updates on the two bills.

So I was I was kind of kind of keeping track of those as we went.

Um, and then the other under a big discussion you all wanted to have was over the um identifying peer and aspirational cities.

So um, so this is from the most recent um batch of peer cities from um uh Mr.

Sewell's office.

So here are the 10 that internal audit uses um to benchmark against on those um on those metrics that they use.

Um I know there's been discussion of you know how comparable are these, you know, are these the cities we want to look at, like those types of things.

Um, you know, I will say, you know, not not having talked to them, but just based on me knowing the data and and kind of looking at these, you know, generally the you know, the kind of the biggest, you know, I guess the biggest thing you look at usually when you're trying to benchmark a cities is population size.

Um and then within that it's usually geographic region, right?

We assume that that's that cities and states that are near each other or similar to each other, it's called the first law geography.

You only know that's a jeopardy question.

Anyway, um but but but nearer things are more alike than than further things, right?

So we're more like to Georgia and to North Carolina and to Kentucky than we are to Maine and to you know New Hampshire and to Washington State and whatever, right?

You know, so so usually you control for population size and then usually region and then other demographics and stuff.

So it looks like basically just you know, people within our population range and generally within our within our region, with the exception I think of Pro Ball uh Provo Utah, um, which maybe they have thrown in there for Javat or somebody previously, I don't know.

Um anyway, but you know, but the others are at least in the in the Southeast.

Um so those are the cities that that are included in those.

Most uh Florida.

Uh well, yeah, sorry, yeah, Florida doesn't.

Uh Georgia does.

Um I think they all do except Florida.

All except that's where I wonder.

Yeah, I mean these are hard too, like when I think about Alabama and the way that they fund roads.

It's so different than the way we fund roads, and so it will forever be apples and oranges, right?

When people say we want infrastructure, it's like we we build it, you know, we pay as we go, and these are hard.

So that's the you know, I guess that's that's the starting point of what you're currently using, um, you know, for and the and the measures that they use as well.

That's sort of the the starting point, I guess.

Chris.

Oh, I'm sorry, I'll go back.

Um one thing that I've in the reports that you sent out, um one thing it doesn't compare is size of municipal government.

Employee employees, budget, uh budget numbers.

I I think I think we need to capture that as well.

I mean, you know, what size is everybody else's budget because that affects how much your property taxes.

Um I mean, if they've got a much larger uh you know, number of employees than we have, or larger budget than we have, or way less.

So I I don't I never saw any of those numbers, you know, in those comparisons, but I think that I think that would be helpful at least to me to look at you know what size of their government that they're funding to know do we want to kind of match ourselves up with them as well.

Sure.

So I mean, so you teed it up, but but I did do that as part of this this update, right?

So I can walk you through that.

So you're fine.

Sorry, I wasn't trying to set you up.

I was just you know another another thing that I didn't have.

No, you're fine.

Well, no, I mean I mean it's in the updated report I sent out you know late last week or whatever.

So uh oh, okay.

It's um so you can look through it.

So here's so here's where I started.

Um I was trying to look for framework to to better compare you know apples apples, right?

Um not just population, not just say region.

Um so here's another you know, option of a of a starting point, I guess.

So um the Chicago Fed, the Federal Reserve Bank of Chicago had developed what's called the peer cities identification tool.

Um so um their um community development and policy studies division within the Fed of Chicago has developed basically these these four kind of themes.

Um and so I know I know equity is a 30 word, so we won't use it.

But but one is equity, uh, one is resilience, one is outlook, and one is housing.

And so within that they have all these data points.

Um so you know, they look at unemployment rates and labor force participation participation rates and um you know change in manufacturing over the last 50 years and um you know economic outlooks and and housing stock and all these other things.

Um and so within those four themes, they have a nice little website you can go and you can click on it and you can see see where it goes.

Um is they basically identify peer cities within those four four themes in that framework essentially.

Um so I started with that.

So I basically went in and pulled my own data.

So theirs is theirs lags a little bit by a couple years.

Um so I basically went in and and pulled the same data that they use to try to identify those.

And I basically collapsed all these into just one.

So I'm not separating these out by four.

So like for equity, Chattanooga may have you know 10 different peer cities they do for resilience.

They may have 10 different cities they do for outlook, et cetera, right?

We're we're um we're a little bit different on you know, housing stock versus on maybe unemployment rate or something like that, right?

Um so those are a little bit different.

But I basically collapse into one to say, you know, I want to find the the the closest 10 or 15 cities to us based on all of these measures.

And then I want to say further, because I'm a nerd.

Um sorry.

Yes, it's good.

And so based on our discussion last time and um I know Councilman Hill and Phil and everybody else wait on this and Councilman Henderson, you know.

So I took three other sort of um aspects of this.

One is geographic, both area population density, and then um I think uh Councilman Hill brought this up, was basic boundary stability.

And I think you know, Phil commented on this too.

Um so boundaries that change less than five percent.

So, right, so cities that haven't gone on annexation sprees or haven't grown significantly geographically.

Um I did a 10-year period, so I looked at um uh 2014 to 2024 is the most recent census date on that.

Um so so cities that were within or less than that 5% change, basically.

Um the other one was the government finance piece.

So uh the Census Bureau does uh census of governments every five years, and in the interim years, they do estimates for uh um state and local uh government spending basically.

Um so I looked at per capita revenue and expenditures, infrastructure spending, debt, um, and then looked at the expenditures relative to fire police, what they classify as highways, let's call it infrastructure and parks.

Um what portion comes from intergovernmental revenue and then the debt burden per capita.

So all those financial measures are in there.

Um and then the last one is government employment, which is another census uh survey and data point, um, total employees per capita, full-time monthly pay, uh police and fire share of the full-time workforce.

So obviously this is I mean municipality.

Yeah, this is of all, yeah, so all municipalities um above 150,000.

Basically, I looked at a range in 150 and 500,000.

So I was looking within a population range across the US within all of these metrics.

But when you say government employment, you just mean you just mean municipalities.

Municipalities.

Right, correct.

Right.

And not necessarily metro groups.

I wondered about that where the city and the counties combined.

Yeah, so that would be a measure I would probably kick out, right?

So like one of one of the ones that the stands office uses now is like Columbus, Georgia, which is a consolidated government.

Right, right.

So, you know, I would subjectively or objectively or whatever, you know, I would I would remove those that are metro governments because they have inherently different functions than then say we do.

You know, so where a metro government pops up, you know, we could scratch that one, you know, effectively.

Um same way we probably wouldn't compare ourselves to Nashville or something, right?

Right.

Um so anyway, so so I took all the pure cities uh tools data and then smushed it with all of this data and basically combined it into one really really complex fancy score.

Um again, I won't turn it into a stats lesson, but basically it it it finds the nearest cities closest to us based on all these data points.

Basically, if you look if you're thinking of like a big scatter plot, it finds all the data points that are closest to us based on all of our our outcomes and metrics.

And so that's the tables that are in the um the updated version um later in the report.

Um and so whoops, and so I didn't I did not put the tables on here just because they're crazy.

Um but you know, if you're if you're if you're playing at home, um so these are on the last couple pages before the references in that last uh update I sent.

Um it's on page 37, 38, uh 39 of the most recent report I sent you.

Um and so it has uh not all of them but most of the metrics that that I'd use.

So uh demographics and and educational attainments and you know, percent of people who work from home and labor force and all that other stuff's in there.

Um but it identified these these, these are the top 10 it gave me.

I I ran it for the top 15 again, assuming I was gonna exclude you know things like Columbus, Georgia, and some of these.

Um so we're gonna mark Columbus Georgia off this list?

Uh yeah, well, you know, if if you all accept the premise of what I did, then yes.

You know, yeah.

But but if you all would like to use this as the framework, um so I don't understand.

So this is what you're recommending except Columbus, Georgia's on it, or this is an old list and brand that there's another list.

This is the top 10 that it gave me.

Right.

So then I yeah, yeah.

So I'm just I'm just trying to be transparent about it.

Got it, got it, got it.

Okay, so this is what it kicked out, and then you used your brain power for the next slide.

Yeah, so you know, so I'll so I'll include the top 10 on here.

I could I could the top 15 are in the report, you know.

So if I excluded Columbus, uh you know, the next one down 11 is is Worcester, Massachusetts, you know.

Okay.

Um so you know, I would just I would just skip down one.

So you say no to Columbus.

Yeah, I I would scratch Columbus.

I mean, as you know, I've got this.

I've done way too much research on consolidated governments.

So I would say that consolidated governments are a very unique thing that I would that I would take out.

Okay, yeah, okay.

Yeah.

Um Chris, what's the difference on 39 and 38?

You've got to notice pure cities, selected measures, and then you've got aspirational cities, selected measures.

What's the what's the difference in those two charts?

Yeah, so okay, so yeah, so that's the next one.

So aspirational cities is on the next slide.

So um these are the ones within the same population range, but I look for ones with higher incomes, lower poverty, stronger labor market, and higher educational attainment, right?

So thinking those are cities that we may want to get to.

Like if you're looking for cities, yeah, you know.

If we want to step up, so yeah, I mean, yeah, yeah.

You know, and again, the caveat that that the city can't control all these factors, right?

You know, you know, macroeconomics and and big labor force things and big economic factors, you know, like those things, like you know, you can only control so much, right?

Same thing with like educational attainment, right?

You can only control so much.

I mean, you know, you can you can start with pre-K and certainly hopefully that outcome, you know, comes to bear 15, 20 years down the road.

Um, but you know, certainly you can't force those things.

I mean, through economic development other things, you want to track good high-paying jobs and industries and and those things.

Um, so there are some things you can do, you know, but some of these things might be identified.

If we get the Pentagon, we can become I mean, yeah.

So I mean again, if you look at those, right?

So it's like DC metro area, you get the space force with you know right, right?

Tell Charles Wood to go get that for so if you have a lot of the White House, right?

Bring Space Force here or something, right?

We could be the drone force, we have to get the um quantum quantum.

That's right.

Drone force so develop a logo.

So here's something that you're talking about closer is better than further, and most of these are further, right?

So I did not put a regional constraint on it, right?

You know, I think all those other structural factors.

I mean, if you look at demographics and housing and labor force and all those other things.

Um, but I will say, and this was kind of the the follow-up questions kind of on the next slide, I guess, um, was those are just based on like the 30,000 foot view of these cities, right?

These are based on census data, these are based on BLS estimates, these are based on the big, you know, like looking down from the you know from the satellite view of the US.

Um identifying peer cities, sometimes there's also some subjectiveness to it.

There's some qualitative measures, right?

We might want to come up with.

Hey, that's a really cool city who's doing really awesome stuff, right?

What do we want to look at?

Um, or maybe that we decide, you know, I don't know, you know, I'll pick on a you know an aspirational city.

Um, you know, maybe we don't want to be like a city that's in that's in Washington State, right?

We don't think that we're structurally like them, we don't want to borrow their ideas, whatever, right?

We could kick them out and we could look further down the list.

Um so I think there's also some aspects that that aren't in there, and again, you could add a thousand more measures, but but it could be you know, cities that the you know that have you know really great downtowns that have really great amenities, that really you know, those types of kind of more qualitative things that you might want to look at.

So what I'm I'm curious the aspirational cities, what was it about those cities that made you include those?

Like when you looked at it, what made it well, we might want to be like that.

Yeah, so that's so that's what I'd chosen the um ones with with with with fewer of the bad stuff and more of the good stuff, right?

So like what well, so like so higher incomes, lower poverty rates, stronger labor market, meaning higher labor participation rates, higher educational attainment, stuff like that, right?

So if you're looking at you know, tax base and economic development and growth and all those things, right?

Those are things you might want to look at of like, hey, what are these cities doing to attract all these people, right?

Is it quantum, is it space force, is it something, right?

And that's when you get into some of those subjective measures of okay, what are those cities doing that we want to borrow or want to look at or what makes them unique, right?

Um so so when I ran it, is basically the same data, all the same stuff I talked about before.

It was just that it then basically was looking for cities within our within our group that that had these like you know, higher incomes and higher educational attainment and lower poverty rates and stuff of that nature.

So part of our work would be to decide together what matters to us about a pure city and who do we want to start tracking.

Yeah, that I mean that would be my okay recommendation requests, whatever, you know.

Yeah, yeah, start okay, cool.

Well no, and so we're okay, just to be clear, we're doing this for budgetary purposes, right?

To compare what should our unreserved fund balance look like.

Not just for budgetary purposes, but just generally across the city.

I think we've had uh for instance human resources has a peer cities that they use that may not be the pure cities that we're seeing.

And so being able to have a standard set of peer cities that we are tracking, and that can always change.

I guess like feels that one vote, maybe two.

We can change they you know, the next group can say, okay, well, the cities reached this aspirational city.

We we've tracked that now.

We want to move somewhere else.

But it's for us to set us set the tone, and is it's across the board.

So every department can use this as a peer city.

Every that's why it's important as Madam Chair said what matters to us, what matters most, and really determining what the are those benchmark criteria we're we're looking for in a city.

So it's it is for our budget to say, you know, how do we compare across our peer cities, but also it's for uh city departmental use as well to say, you know, if we're recruiting like Figancy, and y'all know I love Chief Chambers, he gave uh amazing budget presentation last year, but you saw how many peer cities he had.

He had about because you know he gonna he's gonna give us more than enough information every time.

And so we had about 20 cities on there.

So now they will have a set standard of these are the peer cities that we're looking at.

So then again, what matters to us, you know, what does what do those what do their municipal counterbacks to what you were saying?

is for uh city departmental use as well to say you know if we're recruiting like fancy and y'all know I love Chief Chambers he gave uh amazing budget presentation last year but you saw how many peer cities he had he had about you know he gonna he's gonna give us more than enough information every time and so we had about 20 cities on there so now they will have a set standard of these are the peer cities that we're looking at so then again what matters to us you know what does what do those what do their municipal counterbacks to what you were saying so what does their not just municipal budget but how do that how does that municipality work in a sense of how many offices do they have what is proportioned to their budget like those type of things so being able to really I mean this is definitely something that we'll get done hopefully by the end of the year because it's very detailed in how we want to look at that yes I'm sorry I mean how our government structure that all comes back to budget basically it does right I mean that's where he's not said you know this is for budgetary it is basically what is it that we want to what do we want it to look like and what do we want it to do okay and that has a dollar figure assigned to it yeah so that was sort of my my last question on the on the thing up there was yes I'm so sorry yeah Councilman Harvey before you continue I wonder if it's prudent for us to consider two different lists of these cities one for budgetary purposes and one citywide when we're considering you know being aspirational I I guess my question to Dr.

Acuff would be are the aspirational cities are their budgets similar to ours or are they more because I don't want to include the aspirational cities in our budget talks if their budgets are nowhere near ours.

Does that make sense?

Yeah so um you know so again the the aspirational cities are cities that are near us but all those other things are are are factored in more prominently I guess right so I would say if for so you know this would be this would be my suggestion is for budgetary purposes and maybe just for this year you know going forward the next you know two months or so is look at look at the peer cities and and look at their you know look at their metrics um and then I think based on previous council discussions and and discussions with y'all et cetera it seems like there's a you know there's a desire for or longer term a larger view of performance measures and outcomes and things of that nature you know related to to pay to HR to city beautification to whatever that is right land use I don't know whatever you know all these other things um and so I think you can come up with a comprehensive list um that meets all those goals but I think just within the budgetary time frame of of this budget year um I think certainly just starting with um you know if this is a pilot project or whatever right just starting with the you know a list of the peer cities and just seeing where they stand budgetarily okay that was my main concert and then I think going forward there's a larger discussion and that could be a separate project of more comprehensive measures for the city more comprehensive lists of aspirational what we want to be type city that that's what I was going to again I don't I don't want to bring in one of the aspirational cities who's you know spending twice where we are right yeah and then excuse our budget completely so I just wanted to make sure that okay that that makes total sense yeah if yeah okay and that's what I'm saying I had not gotten that far yet I that was kind of just me running that budget coming from but I think for I think for for this budget year for this budget cycle is if you're wanting to look at you know because again the the the internal audit um you know those metrics again those are good those are fine those are those are important to look at right you know but I'll joke I do this in class like I'm I'm not a CPA right so you know so these metrics are good to look at the comp process at them bond rating agencies look at them you know but I think for for policymakers you all may think you know in a different framework of like what you want for your district what you want for the city what we're spending on certain services those types of things right and those aren't in there and so that's why you know I suggested coming up with some other metrics you know even some baseline stuff of just expenditures per capita revenues per capita and some of those easy sort of things to find from other cities yes that don't take you know flying to Provo Utah and talking you know you know I mean like and experiencing the city you know whatever but um but yeah so I would say I would say for for for the budget year you know I'd say maybe maybe do look at you know just the peer cities and kind of what they're doing and then I think uh you know a longer term conversation is more of like from a the city as a whole including administration and other people is what makes sense to us from from HR from police from council's perspective of what we want to be as a city you know I mentioned this last time you know thinking about more strategic planning framework of like you know where you want to be in 10 years you know if you know when I hang my hat up at the end of my term what do I want to accomplish you know what what how much do I want to move the needle on these outcomes right um and I think that's uh that's sort of a separate process you know I would say thank you thank you so much Councilman Harvey any other questions we have oh count uh council and it's a question I I maybe the Weston or Chris either one um can we can we do a study to find out how many residents we have in Chattanooga that are under what we might consider underemployed so I mean we have income data we have I think there's you know there's questions from the census on like hours worked and stuff like that I mean so I guess I guess it would depend on how you I guess how we quantify underemployed is people not working enough hours people having work two jobs people not making enough money all the above I don't know um well

So I mean we have income data.

We have I think there's you know, there's questions from the census on like hours worked and stuff like that.

I mean, so I guess I guess it would depend on how you I guess how we'd quantify underemployed is people not working enough hours, people having to work two jobs, people not making enough money, all the above.

I don't know.

Um maybe maybe people having to work two jobs and why they're having to work two jobs.

I mean, like, you know, why are they not able to because like we hear that a lot?

Uh-huh.

We heard a lot with the fire department, you know, they're having to work two jobs.

Um I don't know if that's you know, would be considered very important.

Some maybe maybe how many that are on some kind of government supplement as opposed to just being able to support yourself.

Maybe maybe we look at that.

How many residents in Chattanooga are are on some sort of government supplement, and what would that look like to be able to help them rise above that?

Sure, yeah.

So they have um so for instance when you look at like poverty data, is they'll have like household characteristics, it'll have like you know, single female or single male headed households or married households, it'll have number of children, like those those types of things, you know.

So, you know, you could you can get at it on it.

So it would be the maybe with the poverty rate for Chattanooga would would be maybe have the percentage of people that are I guess under underemployed.

Yeah, would that would that be like United Way would have some of that?

I was gonna say that the chamber somebody would have that data for sure.

Yeah, that's really because it depends on because then you go into the type of supplement, you know, social security is a type of supplement, you know, so there are different kinds of government subsidies or supplements that are given out.

So then you have to be kind of specific about what do you mean by pilgrimage supplement uh and things like that.

So I don't I think it's a good question.

I think it's just uh the details of how to get the information.

Like I it you you're showing our poverty rate at 16%, and there's there's some cities, you know, that are I mean, there's one at 6.6 percent.

This Vancouver, Washington.

How in the world, how did they get yeah, and that poverty rate sounds really low because I feel like we've got a solid 30% of children in Chattanooga that live below the poverty line.

Um that's so that's by how that's households, so it's not like population, if that makes sense.

So it might be a different end.

You gotta get your data apple, apple, apple, apple, apple.

I mean, there's really only one city on on here that's on the peer cities that their poverty revenue poverty rate is higher than ours.

So I guess my question is what are these other cities doing that they have a lower poverty rate than we do?

Wait, are you looking at okay?

You're looking at page uh 38.

38.

Okay, I'm with you.

On 38, the our our poverty rate is six, you know, 16.5, and nearly everybody on this pure city tab is lower than us, except for um Cincinnati.

So like I'm quite sure.

What are the what are they doing and and you know how do we attack that?

Because obviously that's gonna the percent uninsured is interesting, thinking about 10 care expansion that it didn't happen.

A lot to take apart, yeah.

Because that drives poverty, right?

So that's yeah.

I mean, there's a there's a lot of there's a lot of information just right there that I feel like we need to address, you know, as a city yeah, and and and you know, that's again obviously while pausing for feedback, you know.

So stuff like like poverty, you know, I could change the data point to the percentage of of you know all the population in poverty and not just like households, like under the poverty threshold.

You know, the the the pure cities tool, I think used the the household survey data as the baseline, so that's why I just I just use the same one.

Um but but certainly you could look at uh the number of individuals or the percentage of individuals you know below the poverty rate, like those data points are both out there from the census.

It's just is is there a way well I guess there is um one thing.

Can you go back and um you know I I wouldn't be interested?

Huh?

I can flip that sideways.

the household survey data as the baseline so that's why I just I just use the same one um but but certainly you could look at uh the the number of individuals or the percentage of individuals you know below the poverty rate like those data points are both out there from the census it's just do is is there a way well I guess there is um one thing can you go back and um you know I I would be interested sideways for you huh I can flip that sideways can you you know I'm not I'm not that advanced I thought you were gonna be sideways he's got the volume turned off for me so I thought of that I'm not in the never mind I can't think here I just for you okay it's one thing that's not on here that's where we rank in education all these pure cities I mean I guess my question is is there a correlation between our education rate or you know and what where we rank in education and where these other cities that are lower in poverty rate rank in education and is that an indicator of you know something a little bit larger that we need to address.

I I mean I like I said I look at these numbers and just you know I think there's a lot of information right here that we need to really dive into that go beyond budget kind of well I mean I guess at all budget numbers but you know that that you know those aspirational cities that you're talking about getting to you know like where do they rank educationally and what are they doing educationally that because I really do feel like that's sort of is your first indicator of the health of a city is how well are you educating the your population yeah and you know a lot of these factors correlate obviously education and poverty there's a negative correlation between them you know the higher educational attainment generally lower poverty rates all those types of things right um Alexandria Arlington and Huntsville got the the median person has a master's degree right or whatever right you know it's yeah so um you know and again and again that's why there's I mean and not even higher education but even yeah even our lore in skilled the skilled skilled labor I mean all of that I think you know plays into you know that the poverty rate I mean you got welders making a hundred thousand a year I mean I mean I went to the wrong field for sure I mean yeah but you know but I mean but at that point it could be welders and cups of coffee but but you know to that point I mean there could be and again you know maybe a longer term look at this is a more nuanced view of even educational attainment right it's you know because I mean there's data on people with associates degrees people with some college people with certain trades per you know professional degrees all that type of stuff you know there could be again some composite measure within educational attainment that's people that have some degree beyond high school or some college beyond high school or something like that you know and the only reason I bring and the reason I bring that up I mean I know that we're not in charge of like education in the schools but there are things that we can do to help I mean just like the construction and trade school that we have I mean we could have gotten a little bit more involved in that had we chosen to um and there's probably other things that we can do as a city to help train to help educate to to get our skilled labor up.

Because I think in the next probably 10 years skilled labor is going to be at a premium because all the old knuckle draggers like me are getting out of it so you know some well and again on the back end it's what industries are you attracting as a city right like what industries you bring in here what employers do you have that type of right I mean again they were looking at economic health in the city.

Yeah so y'all that is uh the first section of the presentation so we so we um so what we'll do is we'll take this and get back with Chris and we'll do one just on peer cities but to to counsel and Harvey's point of you know looking at the budget for budget purposes looking at our pure city um metrics so is that something Weston or Chris how do we you know if we use our matrix is that something we can put I mean I guess I'm asking even I'm doing the matrix but that's something we put into the matrix uh and I'm just talking it out I guess um how does that look compared I mean is that something you all can do with it.

Yeah if she guys once you guys kind of set what you want the peer cities to be we can certainly run a number of different um benchmarks uh okay and or whatever you guys want to see from those cities and then if some of them were socioeconomic things Dr.

Akeff may have to get his help with because he's got access to certain data that I don't but just from a peer budgetary size of their budget what are they spending their money on we can do that um once we have the list of cities and what you guys want to know okay we can pull that together.

I was gonna have one of the caveats is that with even with the government finance data, again, those are surveys they do of cities, and and every five years they get it from us.

So back in 22, they got the data from us.

Um but there's nuances in there, right?

That's why you have to dig into the audits and things like that.

That's why the 30,000 foot view is sometimes a little more nuanced.

Because you know, for instance, in in the census data, and I mean we do this in our in our Act for two, but but we classify most of our sales tax revenue as intergovernmental revenue, right?

That's how we've categorize our sales tax data.

And so on the census data, it's look it it looks like we're getting, you know, 23 whatever percent of the general sales tax from the county or the state or the feds or something like that, right?

So it's it's getting a much larger percentage.

So there's that's why there's nuance in this.

Once you get into it, you really need to dig into the actual budget and act first to do that.

Okay.

So oh yes, council yes, okay, councilman.

And welcome councilman clerk.

Thank you.

Yeah.

I think one thing that would be helpful to me, and and you know, I'm I I'm thinking about peer cities strictly enough in in relationship to budget, but I think it would be helpful if we're gonna establish some peer cities.

If I understood all the applications that we use to apply to that, like HR, like what what applications when do they look at peer cities for what?

The police department is looking at pure cities for what.

I mean, I think it would be helpful if we're gonna if we're gonna identify pure cities, we sort of need to know what all the applications that we would need to use them for.

Okay, you know, instead of because I was thinking strictly budgetary, but I'm but now I'm thinking I'm understanding that there's more applications that we use peer cities for than just budgetary.

I wonder if it might be useful for us to have a a city council share drive that Nicole manages with resources like this, so that every council person would be able to access here's our peer cities list, and here's how all the ways those peer cities are listed.

And here's the the budget framework that we you know, something like that.

Okay, just that's not specifically for you, Madam Chair, but just thinking out loud because it's really good information.

And I did take uh Mandy, uh Chief Green, to ask her, you know, kind of what she thought about it.

And she said, for instance, they use Tallahassee, but it's not on the list.

Um so it goes back to that criteria piece, like what are the criteria?

Yeah, why do they use Tallahassee?

Whereas you know, they may use a couple that's on here.

So it'd be good.

I think it'd be good to kind of pull in a little bit the administration a little to see what peer cities are using the property for department.

Yeah, like I I know police.

I think Chief Chamber is in talking with him during the last discussion.

I think they kind of pull out Huntsville because they have federal law enforcement resources in Huntsville that kind of help supplement the city, right?

So like there are at least like caveats to these that each department may have thoughts on.

Yeah, because we won't find a perfect peer city, we're just looking for just understanding what we're doing.

We have a group, right?

Right.

Yeah, so I'm at it, some at it, much the group ahead of something.

And I will say not to complicate it, but you know, these you know, but these data points, I mean, the data is updated every year, you know.

So think about you know, maybe we set peer cities for you know, say the next four years or whatever that is, and then after four years, maybe then you reevaluate it and look at you know, because again, every city changes, you know.

So um the other caveat is that the data lags usually by about a year or two on those surveys, you know.

So this surveys from 2024, right?

It's it's 18 months behind where we are at the present, you know what I mean?

Because that's when the census data is released, and usually the the one year estimates are released in September, I think, of every previous year.

Well, theoretically too, if you're using aspirational, maybe in four years you hit it and it's time to move.

You know, but you know, yeah.

Yeah, and you know, like like UTC does the same thing.

I mean, we're trying to move up in rankings, and once we hit that, then we reevaluate, oh, okay, now we're at this level of what what's the next or maybe instead of focusing on the particular city so much we set benchmarks in each of these areas, like we were talking about with our fund balance, you know, and that range we were talking about there.

Um you know, and that way as Dr.

Acuff says it's kind of a moving target when you're looking at cities because the numbers change, but if we have those benchmarks, if we can look over a period of time and say, okay, this is where we need to be in each of these areas, if that makes sense.

It does.

Yeah, I would say yeah, there's two ways you can approach it.

It's either you know, on the front end you identify cities that are like you, and then you look at outcomes, or you look at outcomes and you figure out who's doing that and how you get there, you know, if that makes sense, you know.

So you can look at either side of the equation, you know, probably not both, but but you look at one side of the equation or the other.

It's these are the cities like us, what are they doing, or what are these cities that we want to be doing, and we figure out who those who those are.

Okay.

So with that, again, we'll circle back to Dr.

ACOF, uh, in regards to the peer cities and uh Madam Chair.

Yes, I'll start with the city.

I have a question.

Um, in regards to this, um, I've been listening, and it's been some pretty interesting conversations, even as we know I'm not saying this outside is that trust me, I was like Holland County is not.

I want to be a home stamp city, but it is the piling count is green mucus everywhere from the pilot.

But what I would be interested in the last question of this, and it's been some great conversations around this, because we oftentimes look at pure cities, even when we're researching legislation.

Um I know Henry has been working with you on some uh pure city legislation in regards to on street parking.

And so I think this is really good, but what I would be curious to know, and this is just a question for later, like what cities are looking at us.

Uh what cities consider us pure cities, you know what I mean?

Like, you know, when I hear cities like Columbus, South Carolina, I think brought their police department here to look at ours.

Is there a way that we can you know reverse engineer that question?

Like who considers us a pure city?

Do you know Dr.

Egg?

Well, I mean, so the the Pier Cities tool, if you heard that conversation I was introducing earlier, I mean you can look at you know, not just our pure cities, but also what other what other pure cities we align with.

So you can pull it from that.

I guess that's the opposite, right?

Yeah, it's just the inverse, but the you know, to what you know to what cities use us for for budgeting or other agencies.

Well, I mean, even when cities come in and interact with our chamber, like I wonder if we could do some more in-depth research, uh, madam chair, and just kind of putting out filters into the community and saying what communities are coming looking at our foundations, what communities are looking at our school systems, what communities are looking at our chambers.

And what would our um intent be with no knowing that?

Say a little bit more about that.

Well, I guess I our intent would be is how we come up with the a universal criteria of other if our peer partners that we work with in the city, like who is Carter using as a regional transportation agency, pure city, right?

So to your question, the intent would be like, well, why are you all looking at those cities?

And then you're coming to interact with this council.

Well, but that's different, right?

Because you said uh, and maybe this is a conversation for the pure city conversation, but um if Carta, like we are talking about streamlining our or or solidifying our pure cities as the city of Chattanooga, but then like a carta, like you were saying people coming to look at us versus who Carta looks at.

Well, I'm just using an example that we might be able to discover who our what criteria is being used if somebody else has already discovered it, like if organizations like Carter have a certain algorithm that says, well, this is our pure city, so we're looking at New Orleans.

I I don't know, it just I'd be curious to know who else in the community, what other organizations, what criteria they're using as a um as a pure city formula like the ones that like the biggest.

Yeah, that come here to study us.

Who the foundations are looking at, who what was coming to the school system and and I was just throwing out examples.

I mean, there could be a variety of organizations, but yeah, I bet they all have them.

Yeah, so okay.

Thank you, Councilman Clark.

Thank you, that's all.

And so y'all would not drag me into Pier Cities one more time.

So we can move to the next the next thing uh to the next item, which is a general fund uh revenue and expenditures all of you.

Oh, I'm sorry, yeah.

So the everything, everything else in here.

I told you I'm like actually keeping a line.

I was just doing that.

Right, right.

Um all the other stuff is or is the stuff I covered from the previous session.

So it was just if you wanted to revisit any of the stuff I talked about in the last uh that last meeting from whatever month or so ago.

Um yeah, I yeah.

I mean, I I've not updated projections, there's no new data to use, so you know, but um, but I'm happy to revisit that now or in later meetings.

Oh so the one slide that you didn't have or we didn't have in our report that you put up on there the board was sort of projected um projected expenses versus projected revenue, and I'm assuming that projected revenue was just growth revenue.

Oh, I'm sorry, it was this one basically just general fund revenues and expenditures or so you so did you not have one that showed the gap that between projected expenditures versus projected revenue of just growth.

Oh, like this one, sorry, property taxes.

Well, see, that's no, but that's I thought you actually had one that's expenditures and revenue.

Okay, but that revenue assumes property tax increases, correct?

Uh so the the blue line, the one that takes a step up is the one that tracks basically your historical trend of leaving it the same for four years, increasing it.

Okay, so that's increasing.

That line is the property tax.

The green line is just projecting.

The green line is the revenue neutral every year.

If y'all just adopted a revenue neutral every year, just then kind of natural growth that would happen.

So the difference between the what is the the Navy is the Watson tax.

Yeah, this one is the um yeah, the property tax cap maxing out the property tax cap base.

I was kind of giving you a range of options to look at.

So this is this is if you increase the property tax cap maxed it out every year.

This is if you basically get it neutral.

And then this is the trend you're generally followed, is that it increases here and keep the tax and okay.

So you've got so the gap.

Okay, look at it.

And that's what we'd be making.

2026 to 20.

So that's about 10 years?

Yeah.

Okay.

And the gap is what is the gap?

How much is the gap?

A hundred million?

No, not that much.

I'd have to look at it.

But a lot of that gap between here and here is you know, things like like transfers that you did this past year.

Right.

So I was using I was using a combination of fiscal year 25 and the proposed 26 budget as a baseline, basically, and that includes salary increases, the the transfers to the reserve funds, stuff like that.

Right.

So again, you will assumably not put as much in reserve, or have to put as much in reserves this year if you drop it, you know, if you adopt that this new policy.

Um certainly the the pay increases will stay, you know.

But yeah.

Well, I guess what I'm trying to get at is in 10 years, like if if we just if we could figure out what that increment is and cover that every year as opposed to the every four year thing, if that's what I'm trying to figure out is what that projected difference is, but I is it not a hundred million?

So each each line is a 50 million.

Yeah, but what I'm I'm looking at this.

Oh, you're looking way up here.

Oh, I'm sorry.

I'm looking at it.

I'm talking sorry, I thought we're no, sorry.

Uh yeah, roughly.

Well, then you're no, you're looking at the red dot.

This is the growth.

Okay, this is expenditure, right?

Okay, you know there wasn't these two.

Okay.

So the difference between those in 10 years is 100 million.

Is that what you're projecting?

Yeah.

Basically.

That's with you never increasing the property tax rate.

That's what I've got.

Yeah, yeah.

And so then you can backtrack it.

Backtrack back to see over 10 year period.

What is that difference?

But instead of doing the step, do an incremental.

Right.

So that blue line becomes blue.

So basically, we're straight.

Yeah.

Move into a place where our and again, the caveats of some of these expenditures, some of it is, I mean, a lot of the expenditures were for COVID money or one-time things.

Again, you know, so there's nuances.

But yeah.

Well, that's the biggest thing that's one of the biggest things I wanted to get to in that chart is to figure out what that spread was between growth revenue and expenditures for the next 10 years, so that you know, we we and assuming, and I don't know.

Did you take into account and and this is something that I learned at the uh pension board the other day at the that we sort of figure six percent increase every year?

So like in six, seven years, 2033 when he's projected it to go down.

Our our uh contribution is gonna be like 40 million dollars.

Yeah, yeah, so this would just be general funds, so not fiduciary funds, um, which would be a separate thing.

But I mean, you know, well, the general fund, I mean the fiduciary is in the general fund.

Yeah, but I guess my question is was that taken into consideration?

No for expenditures.

Right, yeah.

So no, this is this is mainly just like departmental spending.

It would be in there a little bit then because it we're talking about the benefits portion, so like fire and police has a in their expense in their budget, there's a line for pension.

Yeah, so like and this is assuming that's the same.

The year's amount of growth that we've kind of historically had yeah, so that would be included, right?

The year-to-year contribution is included, yeah.

But like the one-offs and some of those types of things.

Basically.

Yes.

Well, you know, any I don't know if that'd be right.

No, it'd be 10 million.

I mean 10 million a year.

Not necessarily that that percent.

It'd be 10 million a year.

Over it'd be 10 million, which is basically 3%.

Right, right.

Yeah, and that assumes sales tax collection says that the same.

Somebody had only suggested that last year.

I'm just saying.

We had to give us over the home.

Now we can suggest it.

would be 10 million a year 10 million not necessarily that that percent it'd be 10 million a year over it'd be 10 million which is basically three percent yeah and that assumes sales tax collection says what you say somebody had only suggested that last year we had to get us over the home now we can suggest it's like we're gonna yeah I mean I I'm excited that we're headed toward that conversation about what it looks like to look at incremental every year right incremental growth so that we can I I don't personally I don't ever want our firing police to be used as political leverage again I think that is not a responsible way to to set a city budget and and so I think if we end up having some type of legislation that separates that that requires that payment and then are able to do incremental revenue adjustment I you've got my support to figure that out for sure all right council any other questions about uh the it's the expenditure part portion of this uh presentation so I know coming back uh just a so quick recap so I don't find my notes uh you all the as far as the four financial policies we'll have that on the agenda in the next two weeks uh for one vote is that right feel because it just needs one vote so we'll have those with the updated uh uh those have been updated so we'll have those out the framework I'll send to you all I'll send y'all a long form I send you the short abbreviated form and then an example of what that looks like that's very interesting uh and then um you should have already uh the code uh once I figured out what I sent her and what I didn't um the whole sent you all out the presentation so you'll have that so some follow-up things we'll be looking at is the fiscal note which was um recommended by well we've been wanting to do that for a while Weston's been working on that uh as well a fiscal note on our agenda on our yeah agenda so we'll know what fund comes from and that was something and I always have the Reverend Dr.

Carol Burrs because that's something she had uh wanted to work on um and then outside of that um then we'll come back again separately um to discuss the pure cities the and actually honing in what that looks like and just that like and get digging deep and getting in there and figuring out what those look like and um to councilman clark's point you know what other cities are looking at us I think that's that is important because at the end of the day you know we we always looking at externally but we are a great city as well and people look at us too um so that's really core and important so looking at that and maybe giving a little survey since it's still a couple of foundations just a couple of pieces there and uh I think that and then councilman Harvey is working on uh the legislation for the sworn and so we'll look at that as possible in in the matrix but absolutely looking at some legislation for that as well uh and what else is there I think I covered most of it so for this budget coming up outside of the matrix we'll be looking at potentially these the pure cities that are listed uh that uh Dr.

A Cob is listed and then West they can help just uh just general 30 foot view of what our you know our budget looks like to theirs and then uh we'll get into the weeds in the long-term planning of that for the second portion of that so we have a lot to do as the uh fiduciaries for the city and so looking forward to that so those are that's everything I think I got covered yes one quick question yes um so potentially so next time we come back and whatever I give you an update is potentially looking at other measures of poverty and or unemployment or underemployment and educational attainment yeah yeah okay that's good yeah so I can play around with that and give you maybe some different scenarios and kind of what that looks like can you give me the slide out I may have that slide I yeah sorry the the numbers are in the porch it's not the image but I can I can I can I can add that image to it yeah it's about this one right here it's in the new is in the one that Nicole just sent back out the new this one is this in your presentation yes is it the one that we just sent out that slide is in yes yes it is yeah okay not in the old stuff you know Chris as we look at the at the pure city size uh sector and I would love the can of worms again the more we can have the more we can have the same criteria in the in the matrix the better just for at a glance so you know our peer cities we have poverty rate we have etc but our aspirational cities we have median income we have home value so even if it means that chart gets wider or we have two like to be able to see all that for all those cities okay yeah so so all those data are in there it's just I only pulled out some of the selected measures I figured yeah I mean you can only fit so much on a page okay yeah or I could I mean I get you a spreadsheet too if you want to pull it up and you can scroll and sort and whatever you know well yeah when but we as we move toward which ones we're gonna use I think to be able to have it all same data for everybody it was I think there's you know 40 or 50 data points or whatever so I just got thank you sorry madam chair you are fine it was quick that is that's just quick uh so that is it so hopefully everybody got that notes if not y'all please go back and watch it because it's a bunch of information and I appreciate you coming out at 9 a.m this morning to have this budget working group and so we'll start back again and again thank y'all enjoy the rest of your morning reclaim your 30 minutes oh I thought we were going till 1045

So hopefully everybody got their notes.

If not, y'all please go back and watch it because it's a bunch of information.

And I appreciate you coming out at 9 a.m.

this morning to have this budget working group.

And so we'll start back again.

And again, thank y'all.

Enjoy the rest of your morning.

Reclaim your 30 minutes.

Oh, I thought we were going until 1045.