All right, it's April the 14th, 2026 on our City Council work session night.

Mr.

Manager, would you please present another edition of our operating budget for twenty twenty-seven?

So uh appreciate the the time today.

So um at the last work session, you we sort of ran right up to the wire in in terms of time um uh going through the budget, and uh so I wanted to begin uh with where we left off in that work session, which is some of the impacts that are still unknown um regarding state legislation.

A lot of things happened in the General Assembly this year, and um it's starting to become more clear, but but um but actually some became a little less clear uh yesterday, so I'll touch on that.

Um second, if you recall from the end of the budget work session and then into the council's regular meeting, we had a series of uh budget requests that we that staff take a look at.

Um and so we have taken a look at those, and then I've got a few um um from council members since that time.

So I want to touch on uh where those requests stand, and then obviously um any other items that that we should consider as we continue um through the the budget uh process ultimately concluding an adoption um sometime in May.

Um so legislation passed by the General Assembly.

The big unknown when we did the work session on um on March twenty-fourth was uh collective bargaining.

So at the time that we made the presentation to council, um the legislation that had been approved by the General Assembly um required localities um to approve collective bargaining at the request of employee bargaining units, if you recall the current law is at a localities option.

Nearly every, if not every locality in Virginia opposed the legislation.

They the um they wanted to leave it as uh a a local choice.

However, the General Assembly did approve uh the collective bargaining mandate.

Um and I mentioned that uh 2028 was the uh projected start date.

The governor, I understand, made dozens of amendments to that legislation yesterday.

So all of us are still digesting um that legislation, but I understand that the one of the most significant um amendments that was made was delaying implementation until 2030.

And so that has a material impact on this year's budget, because that would delayed implementation would delay when we would need to start bringing on in-house labor relations specialists, in-house attorney contract specialists, and others.

So that's something that I'd like to talk to you a little bit about when, when would we like to start those discussions?

As we mentioned to you at the budget work session on the 24th, we estimate that the upfront costs, so labor relations staff and contract specialists, at least in the short term, would be about a million dollars.

So that would be the administrative cost to stand up that program.

Depending on how many bargaining units we ultimately would have, that program would grow substantially.

But the administrative costs upfront we estimated about a million dollars.

And then the overall costs are unknown because we have no idea if any units would organize and what um what those asks would be.

So that's a it's a very the cost to all localities in Virginia is well into the hundreds of millions of dollars in in terms of the likely impacts on all localities.

We don't know what the localities, of course, in Chesapeake would be.

So we'll continue to track that legislation and see where that goes.

The second was prevailing wage rate for um for public works contracts.

And so if you recall our contracts right now, they're market-based.

So we we solicit uh proposals for projects, we award a bidder and it's um you know its lowest qualified bidder with with some caveats there.

Um prevailing wage would would set um requirements about the wages that those contractors could pay.

And based on our experience historically, uh that would significantly drive up the cost of um public infrastructure projects.

As an example, uh what we the Federal Government already requires this, and there are times when we turn down Federal money because the value of that money is less than how much it would increase the cost of the project to have to pay prevailing wage.

If you put any Federal money into a capital project, the entire project is what we call federalized and prevailing wage applies.

And so it's a significant cost impact.

If you just look at our capital improvement project right now, we're estimating that prevailing wage, if it had to apply to public utilities projects, would cost uh uh 40 million dollars over the five-year CIP, and for our public works projects, we estimate an additional hundred million dollars over the five-year CIP.

However, we understand that there has been very significant changes made to the proposed prevailing um wage bill, and possibly that it would exempt localities.

So we're not sure yet.

Um, but this would, if it if it if it goes into effect as the General Assembly intended, it would have dramatic impacts on the city, but we're not in a position today to be able to tell you what those impacts would be.

But I bring it up to you today because as you are considering additional spending, I want to make sure you're aware that these items are still on the horizon, um, very significant expenditures that are mandates, and we're just not sure where the General Assembly and the Governor will end up.

Likewise with paid family medical leave, um that's a very expensive uh program, um originally intended to begin in April 2020, I think seven been pushed out to 2028, and our estimate is uh over $8 million annually based on existing um family medical leave usage.

So that's another one that we will continue to track.

Um I mentioned there was a bill put in and this actually this bill actually is specific just to the City of Chesapeake, and it would require that the City of Chesapeake, uh, we would not be able to use volunteer signsweepers.

So you know we've used a volunteer scienceweeper program for a very long time.

Um this would require us to hire either employees of the city to to pick up signs or use contract employees to pick up signs, the contract employees would likely be um significantly less expensive.

And so we have an estimated cost of about 200,000 annually if we use contractors.

Um we have found that there is a problem with the bill, and although it was intended to affect Chesapeake, the way it's written, it does not affect Chesapeake.

So it actually affects no locality in Virginia.

So we have a choice to make, and I I want to be sensitive.

We have one of our um members of our General Assembly delegation that represents Chesapeake that put this bill forward and I I want to be sensitive to what you know that delegate was trying to achieve so do we I ask council do we choose to you know do we choose to do it even though we're not required to or or not.

So that that will be a question that I will ask you later in the presentation.

Another one is absentee voting in person would be available the second and third Sunday before all elections we're required to cover the cost of those elections.

Again we're unsure about what this cost will be but that's something that we will have to absorb so we will keep tracking that.

On the cannabis control legislation, as you will recall localities will be required to permit locations for retail sales and as we've discussed a few times in the past we intend to implement the highest tax rate permissible by the law but we understand that the Governor's amendment moves that out I believe one year so to when the that we would have to begin permitting those locations for retail sales.

So questions regarding the legislation before I move into council requests.

If the collective bargaining legislation were indeed to go into effect in 2028 I would have recommended that in the coming fiscal year we begin to hire labor or labor relations team.

Given that the governor has amended that bill to push that out to 2030 my recommendation is to monitor.

Let's wait and see what happens and we still have plenty of time to bring that staff on board if need be.

So that would would be our recommendation there.