Well, good morning.

Good morning to all of you.

And welcome to our annual budget hearing.

This is where the rubber meets the road.

And we're glad that you're here.

All the staff, thank you for the hard work you've put into generating your budgets.

Appreciate your professionalism and hard work you put in day in and day out to make sure Fort Smith continues to be one of the premier cities in the state of Arkansas.

Again, this is budget hearing on November 17th of the year 2025 at the Blue Lion here in Fort Smith, Arkansas.

This meeting is officially called to order.

At this time, I'm going to turn it over to the uh acting administrator, Mr.

Jeff Deem.

Thank you, Mayor.

And I echo the mayor's sentiments and seeing all the staff here.

I know everyone has a vested interest.

And this has been a uh a rough process for the last few months as we've gone through this.

And uh mostly predicated by the fact that you know, we're we we are we are overall in financially healthy shape.

However, if we want to maintain that, the overriding theme for today will be um making our operating budgets balance.

And that is not something that we accomplished for the 2025 budget uh when we adopted an operating budget uh with a deficit of 5.7 million dollars.

Uh and that is a that is a hole that we need to start climbing out of.

And so um some targeted steps for getting out of that hole for the 2026 budget um have been discussed with during our uh departmental meetings that started in the early September and then through for the last couple of months as we've gotten to this point.

So um I appreciate everyone's hard work so far.

Uh we still have some work to do, so that's what today is about, and I'm welcome the board members.

We've um spoken with most or all of you about uh different concepts regarding the budget and things we're looking at, and we appreciate the feedback that you've given us so far.

And at this point, uh, with that very brief introduction, I'll uh turn it to uh Andy Richards to go through the city's uh current financial condition.

Good morning.

So my plan uh to just start out with is kind of walk through uh what the financial conditions look like um in the proposed budget and you know some of the try to drill down to some of what what is the actual issues that that I see and that I've been trying to communicate with uh departments and administration here and so um so basically you know we're you know I'm gonna be focusing on the four main operating funds.

Um that is what is considered by city policy the legally adopted budget of the city is the four main operating funds being general fund street maintenance water and service solved waste.

Um so for general fund, and these numbers are on the sheet that I've the board has, and it's basically a re you know reformatting of the summaries, it's the same results.

It's not moving, is it?

Oh, sorry.

All right.

Thank you.

So it's the same results that's in the budget book, the proposed budget that's online from the summaries, but we've reclassified some of the expenditures.

The the total results are the same, but um we started looking at it differently than what has been presented in the budget in the past, and the key is to separate what is considered to be an operating expenditure, something that's a recurring day-to-day expenditure and revenues, things that we routinely count on and expect, and what is the level of those expenditures versus you know, we have we have a lot of one time projects, capital items, things that happen.

reclassified some of the expenditures the the the total results are the same but um we started looking at it differently than what has been presented in the budget in the past and the key is to separate what is considered to be an operating expenditure something that's a recurring day to day expenditure and revenues things that we routinely count on and expect and what is the level of those expenditures versus you know we have we have a lot of one time projects capital items things that happen um you know covet occurred you know back in 20 and then we eventually we ended up we were able to you know collect and record six million dollars into the general fund just you know those type of non-recurring things that happen you know every year it's something new um but we try to you know we try to flatten out the numbers so we can say trend as far as what is our normal trend and what can we expect and so the the deficit that pertains to our operations which is our day to day um in the 26 proposed budget is the four million four million eight hundred and forty six thousand if you looked in the budget the total deficit would have been about eight million so about three point two million of that was capital request generally at this stage we don't have these type of capital requests in the original budget those things typically considered later but this time around we wanted to put everything on the table all what all the needs were so we can prioritize what the needs are whether it's capital or operating uh type expenditures but this um and so the deficit that's 4.8 million dollars so that is a day to day overspending of what we do in the general fund so all the different departments that that make up the general fund are a part of this um police fire uh parks transit administration um management services development services planning development every you know everything that's part of the general fund that's all considered in what I'm talking about and so and if you look back at uh 24 an actual uh that there was actually a surplus in operations it was uh the the schedule that I'm showing you there has it shows 2.2 million dollars surplus um there is some the we did building roof repairs in 24 so it was a little bit of skewed there but we did have an operating surplus in 24 um and so but what if you equate this 4.8 million dollars that we've proposed that's basically what you're doing is you're just you you're burning up your fund balance your bleeding money to the tune of about 1400 a day out of the general fund and that's what we're and that's what this does um you know this is something that has over time with this situation is created you know we've had um you know you know we've we've got we've got sizable fund balance right now the projection at the end of 26 would be 11.8 million which is right at our 20 percent reserve policy um then that's with considering a you know total deficit of eight million dollars but um but it you know it's it's not just uh it's this we don't want to you know fundamentally we don't want to spend day-to-day operations we don't want to fund it with fund balance it needs to be it needs to be you know with current year revenues by and large you can have you know you can have uh cycles where one year you might be over or under but this situation is indicating that we have a structurally imbalanced general fund budget I do want to make mention of that if if you if you go back and look at our audits from 15 to 24 we're a positive fund balance every single year the 15 we were negative but 1617 1819 25 there were some big years nine million dollars one year in the general fund it was just 24 and 25 that we went negative so we don't have this long history of of dipping into the fund balance we we it's it's time for a correction for the last couple years but traditionally historically we've been extremely positive in the general fund so we just got to go back to that so I just at least want to acknowledge that in terms of you know where we've been spending and and how we've spent historically at least in the last 10 years so yeah so cyclically we've had increases and decreases in fund balance over time um but you know and you know I'm saying we had a we had a cert you know we had an operation surplus in 24 we still had an overall deficit of six and a half million dollars

So I just at least want to acknowledge that in terms of you know where we've been spending and and how we've spent historically, at least in the last 10 years.

So yeah, so psychically, we've had increases and decreases in fund balance over time.

Um but you know, and you know, I'm saying we had a we had a certain, you know, we had an operation surplus in 24.

We still had an overall deficit of six and a half million dollars.

Uh we did a lot of capital things.

Uh and we had the fund balance built up over those years to be able to fund that.

Yeah, at the beginning of 24, we had 41, almost 42 million dollars of fund balance in the general fund.

Um, which is about a you know, that's a sizable, it's over a 60 percent reserve.

But now two years later, we're projecting for uh 12 million dollar fund balance basically.

So um, but you know, a lot of that's capital investments, and that's what when you have when you have a reserve that large, that's what you should be doing.

That's that's the time to make one-time capital non-reincurring investments, but fundamentally for long-term fiscal sustainability, we have to look at the operations.

What does it cost to run the general fund of the city day to day and make sure that our daily recurring revenues can cover these daily uh incurring expenditures, and that's not what we're seeing in 25.

We're projecting a 3.7 million dollar operational deficit in 25.

And so that is that is the task at hand is to balance, you know.

You know, we say we want to balance the budget, that's great.

The real the real thing to focus on is balance, making sure at least our operations are balanced.

The operational budget is balanced.

Then you look at the fund balance and look at the reserve, having what the reserve level is, and that would be an indicator of okay, we've got money we can spend on capital.

We've got x, we've got enough fund balance to fund that.

You know, ideally we'd like to have you know enough revenues to cover all of it in one year, but that's you know, typically is not always gonna happen.

We need we're gonna need to replace capital and make improvements and and do those type of things over time, they're not gonna occur every year.

But if we're maintaining an adequate fund balanced reserve and keeping this operational budget balanced, we should be well suited to stain whatever capital needs that that are gonna come around.

So um so and you know, I did know you know that the government finance officers, you know, we talked about our policy 20%.

Um the government finance, they say a minimum of at least 16.7, which they say 60 days, so that's what it equates to.

Um that's the bare minimum reserve that they recommend.

And of course, you know, you've got to weigh your particular circumstances, um, whether we're plone to natural disasters or other um, you know, un you know, unmitigated risks that you could that you could be exposed to.

Uh, you might want your reserve higher.

So I think 20, 25 is the goal.

20 percent.

I think the I think the the board has set that fiscal policy.

I think that's that's uh that's where it should be, and that's what we should be you know, set on, and that you know, we want to be above 25 percent to be able to make investments and in the future.

Um just uh this is kind of shows the distribution of the operating expenditures in the general fund.

So this is personnel cost and operating cost together.

So in 24, you see, you know, firing police for um over 60 percent of the total allocation across the general fund, and then um and so you know, you're talking about um policy and admin six percent, non-departmental ten percent, and probably about half of that.

Well, a portion, a large portion of that non-departmental actually is funding uh police and fire pension contributions and the lofty contribution fund.

So actually, that would so part of that goes towards police and fire as well, but operational services 11%, that's parks and transit mainly, development services 4%, management services 9%, 6%.

So that was in 2024, and then so here's 2026, it's very consistent.

Um police is at 33 versus 34.

Um the one difference here is in 26 the dispatchers are not being part of the 26 general fund budget.

The they're being consolidated into the River Valley Communications Center, which is a separate fund.

So the million and a half that we spent towards uh communications dispatch and 24 are not part of this, but so they still remain at 33 percent, fire services of 27, policy and admin still at six, non-departmental is decreased some to eight percent, management services at nine, four for development services, and then um parts and transit and uh other operations of 13 percent.

So the actual, you know.

So we say like, well, we're looking at the allocation of the general fund resources and what we're spending it on, you know, compared to 24 actual and what we're proposing in 26 for operating, that's very consistent.

It's still this very uh very uh, you know, we we don't see one one area of our um general fund spending more than the others.

It's a growing level of cost across the board.

And then one thing I want to point out on this this handout that I have um in I've actually got personnel and costs separate from operating other operating costs in this uh handout.

So you can kind of see even even drill down further.

Um you know, our personnel costs are 37.2 million versus our other operating costs are almost 20 million.

So our personnel is in the general fund is particularly dominates our personnel are where most of our dollars is going.

And it also it looks like you know the other operating costs is maintained consistent from 24 because the other operating costs were 19.3 million in 24 compared to uh 20 million that we're proposing in 26, and then in 24 personnel was 34.4 million, and now we're proposing 37.2.

What's that?

Yeah, yeah, yeah.

That and then also the you know, we there's about there's dispatchers that were about 25 dispatchers, I think that were part of police in 24 that are not in the 26 budget.

So there's a little bit of reorganization there, but um, we're still showing, you know, our personnel costs are growing.

Um I think personnel counts have grown, as well as you know, obviously our salary adjustments and benefits, and then health insurance has been a big kicker for 2026.

Um you know we had the implement a 30% increase in health insurance payments are 26 based upon the claims projections.

Um so that was you know, that's another big part of that.

All right, so street maintenance.

Um, you know, they haven't they continue to maintain you know 50% reserve balance, and we propose that for 26, 6.3 million dollars.

Um, but they're actually showing an operating deficit as well, about 488,000.

Um, and then capital requests of 1.2 um in the 26 budget.

So um, you know, they're you know we do need to balance out operations, a one-year deficit and street maintenance is not concerning, especially with the amount of reserves they have, but it's something, you know, it's it's not to me as mission critical as it is, particularly in the general fund and then some of these other funds, but it's something that we want to to work to eliminate.

So water and sewer shows an operating deficit of 2.9 million with additional capital requests of 6.4.

So that gets us an ending working capital balance for water and sewer at 14 million dollars with a 17 or 18 percent reserve that's below the 20 percent.

So that's what's that's what's in the 26 proposed budget.

The debt service coverage is another issue that we have to pay attention to for water and sewer, and at that level, um, you know, I would that from this fund, it's 85% coverage.

So it's 85%.

That was what do you project into?

Yeah, based on that $2.9 million operating deficit, that would get you an 85% coverage.

Now, you know, the some of these projections are lower than what actually ends up being because we get to count some other revenues from our bond funds and our capital projects funds.

So like the 14 number was 100%, but we wound up with 114 coverage in the audit.

And that was because all the extra we had we had a lot of investment income that we got to you that got to go towards the net revenues.

And we're spending those monies down in 26.

So it's that's gonna be that's an that's another concern.

We don't know how much we're gonna get.

It's probably not gonna be as much as we've been getting because we're gonna spend the rest of those bond proceeds that we're earning interest on, as well as uh the the fund bount the the pool cash that's part of the uh water and sewer CIP, it earns interest as well.

And so that was those revenues get to come in and add to these operations when we get to the final number.

So, you know, it's usually you know, you're talking about another couple million dollars um, you know, any given year potentially.

That number could go down because our yields are going down as we spend our water CIP funds down in the rest of those 18 bond proceeds.

So that's another issue that so water and sewer, I think it's you know, we need to we need to focus on uh balancing that operational, you know, because we've we've got to be able to we've got to be able to service the debt and pay for uh operating the treatment plants and everything.

Um you know, we talked about water CIP uh week ago, and the fact that we've got priorities, you know, that's the other thing.

If we want to be able to issue debt to be able to um fund some of these things in the future, you're gonna have to be able to service more debt.

It's gonna require more revenues or net revenues from this fund to do that.

Andy, is it it's really only the operating side that affects our debt service coverage ratio?

Right.

So, like this $6.4 million in capital request, those are things that'll be capitalized as part of the audit.

And that doesn't go, it's only operation and maintenance expenses.

So we've got to get the operating deficit down.

Right.

So we or you need more revenues if you can't get the you can't get them the expenses down, you need more revenues.

So if I remember right, um, in the third quarter financial report, you were projecting 135% debt service coverage ratio, which is really good.

That would allow us to be able to issue new bonds if we wanted to issue new bonds, but you're saying from from then until you project in 26 going down to 85% or potentially lower than that, that would necessitate a water rate increase.

Is that true?

Yeah.

Okay.

So we that's that's really what we're fighting against.

Yeah.

Okay.

And um, but our revenues projections are coming in lower than what we were originally anticipating because we are seeing decrease of volumes.

So that's a concern.

Yeah, what it like to be able to say we're gonna have 73 million dollars.

That's I think that's what we budgeted for 25 that we were gonna um realize 73 million dollars in water to sewers revenue.

That's I think that's what we budgeted for 25 that we were gonna um realize 73 million dollars in water to sewage revenue, and it ends up being 67 for 25, and the projections um that were done um get us to 71 million for 26.

And I think that's you know, I agree with those projections from the numbers that I've seen.

Those, you know, those projections were done independent of me.

But I've looked at them and I was like, yeah, I don't, I don't, I would like to be able to increase these, but I don't see I don't see that as a right now.

If I look at the last 12 months of what we've been billing and collecting um 71 is so it would have been nice to have another two million dollars, but the volumes are down than what we were doing a couple years ago.

And you know, maybe that has to do with price of the services, and people are actually you know being more conservative with water about that may be what it is.

I think too, we saw record rainfall over the spring and early summer, and I know just from our own house, our uh June bill was significantly less than it typically is because we weren't watering.

That's right.

Uh and I know that would impacted Parrot Island with the rainy days.

I think that's something we should factor in.

If we have a drier, hotter year, I think we could see those levels return to kind of stabilize.

Right.

So some of you guys that have been on here longer, and we we've you know, we saw sewer rate increases back in 25, 26, or excuse me, 15, 16, and 17 due to the uh uh consent decree.

Did did we we saw a dip, but did we see those volumes returned to normal?

Every every time we've raised rates, you see a decrease for a couple years.

Happens every time.

Does it eventually rebound?

Is it eventually eventually part of it is because you got new development coming in?

Yes.

Hotter summers, it it bounced it balances back out.

Because remember, your your uh sewer rate is based on what you use in the winter, not what you use in the summer.

And so that's the other side of it.

So you know, uh, to Christina's point, I didn't turn my water circle on at all this season, didn't turn it on at all because it may need to.

It was so wet.

So it will bounce back, but it'll take a couple of years.

It happens every time.

Well, it seems like we did hear from people that watered their grass.

That would those were the people that really talked to us a lot about or communicated with us a lot about water rates.

I mean, I would say also to that point that I mean, yeah, there were wastewater increases in 15, 16 and 17, but there weren't water rate increases.

And I think when you start seeing impacts to volume is when you adjust the water rate, which we hadn't done since 2010.

Andy, I just want to ask for clarification.

I mean, it I understand that uh perhaps the amount that we wished to see uh over this period of time that has already elapsed is perhaps not there when it comes to the water rate increases, but it's an accurate read.

Is it an accurate reading to say that at the end of 2024, there was actually 31.4 million dollars collected in water sales, and the projection for next year is 38.4 million dollars for water sales.

So it's still a seven million dollar increase over what was being collected at the end of 2024.

So maybe not the nine or 10 we were hoping for, but it's still more.

Oh, yeah.

And so if you look at, you know, we've got a 2.9 million dollar uh revenue over expenditure when you talk about personnel and operating.

I mean, then you look down and you see projected, well, about 5 million more dollars spent on the personnel side, 26 versus 24 under this proposal, and about five million dollars more spent on the operating side.

And so, you know, we have more money coming in, you know, seven million dollars more money projected to come in, but those expenses are also projected to go up.

And so as we get here, I mean, like it's we have to remember more money has come in, and it's not just necessarily that when you have more money come in that you have to spend more, and I know that we're gonna dive in and we were taught we were getting 30 or 50 percent rate increase back in July of 24.

Well, that didn't equate to 50 percent more revenues, but it still did get us uh bump.

Yeah, and then you know, and we and but then we're also experiencing cost increases, particularly in the chemicals and things that are in our water treatment, which we've seen.

And I know that'll that'll be something we'll touch on.

But it is, you know, it's probably worth exploring when we arrive there and breaking down specifically how over the course of one 12 to 14 month period you can go from 21.7 million dollars in personal expenses to nearly 27 million dollars and from 42.8 million dollars operating expenses to nearly 48 million dollars.

So that's the kind of delta we need to look at particularly in an area where we had a substantial increase in revenue.

Again we could quibble about maybe not the amount we wanted but projecting seven million more dollars worth of revenue I got to imagine this is the only place in this entire exercise where we're looking at millions and millions of millions of dollars more over 14 month or so period compared to some others.

So thank you.

Yes.

All right so uh last the of the four operating funds for 26 is solid waste um you know solid waste is it is uh it's set up to where you know it typically does have an operating surplus and 26 is a 2.7 or almost 2.8 million dollar surplus in 26 um the key difference with solid waste is we do have to be storing away capital funds each year when we collect to be able to fund cell expansion and sell closure that could be coming up you know in the next two to three years and those are substantial dollars um that that the city historically is not borrowed to fund which uh we have is typically paid you know the revenues that collected are are transferred over to the landfill sinking fund and that funds um sell expansion closure costs that are you know expensive for uh closing different sales of the landfill and then also equipment so um so it shows the uh ending working capital or fund balance of 3.7 million dollars with this 26 proposed at 13 percent so solid waste we need we need there's more work to do here as well um so we're gonna pose some things um to try to help that so you know it's it's important to to not look at this one go oh well it's in the black you know we're operating in the black but we have to make sure that we're adequately capital uh planning for long range closure and cell expansion cost to continue the landfill so that's that's a key piece of those considerations and so now I did a little um this sheet has a 27 column on it that I've that I showed and I basically just rolled you know uh just a quick you know what if the 27 looks like 26 what does that mean um you know and and and I knew there were a a couple things that I knew that would be different that you know River Valley would have to be you know potentially funding the River Valley Communications Center which we don't have that proposed in 26.

So I factored some of those things in the rating you know and we've got another rate increase for sewer so up you know through some of those things that I knew that would happen but for the most part just kept the same level expenditures and expectations on revenues so in 27 we would spend down to five million dollar fund balance an eight and a half percent reserve it equates to about a um it's about a six million dollar or a five and five point four million dollar deficit and that's in and that's on the operating side so if we're up to the if we're up to the daily spend five or the 5.4 million dollars of recurring operating deficits and our projection is our fund balance will be down to five million dollars in 27 we're not gonna make it to the end of 28 continuing on this structure that we have so that is that is what I'm saying it is it is very important that we address this um soon and even you know if we can't get all the way there get it you know we need to do work towards this because you know um it's 2025 now and the closer we get to those numbers if we continue on this path the harder it's gonna be to correct and it seems pretty hard to do now but we're but we're working we've done some work on it but you know the sooner we address it the better off we will be um so that that is something that I wanted you know see is like this you know we cannot continue on this is not sustainable um not even in the near term you know forget about long term we're talking about 28 potentially having funds run out at this rate that we're going in the general fund

And it seems pretty hard to do now, but we're but we're working, you know, we've done some work on it.

But you know, the sooner we address it, the better off we will be.

Um so that that is something that I wanted you to see, is like this, you know, we cannot continue on.

This is not sustainable.

Um, not even in the near term, you know, forget about long term.

We're talking about 28, potentially having funds run out at this rate that we're going in the general fund.

But you know, street maintenance is still a spin down, it's all waste.

They will be out of money in 27 based upon these projections.

So there's definitely work to be that done there.

The uh two million dollar deficit funds um without some level of expenditure reductions or rate increases, and then the water and sewer reserve will be 16.7 percent.

Um there, but you know, I would say solid waste and general fund are the critical ones in the near term.

Well, water's here as well, just because of the capital needs that we have and being able to produce the funds to either service debt or um or or fund, you know, some of these needs that we've identified.

So those are the concerns there.

So Andy, I know we talked about eliminating the 57 open positions.

Do you have some numbers for us of what that'll look like?

Yeah, yeah, we've got a we've got a list of these things that we'll that we're gonna go through.

All right, let's get into it.

I think we're I think I think we're ready.

So you know, that's you know that that that is it.

I mean, that's kind of where we are today.

And like I said, the the goal here is to maintain our balanced budget.

It's gotta be structurally balanced, it's not you know, can't do it with one-time revenues or or um fund balances needs to be something that's a day-to-day is covering costs, and then just to make sure that we're gonna ensure fiscal uh sustainability long term.

Okay, thank you.

Um a lot of numbers, a lot of information.

Um scale of one to 10.

How would you place uh the city's financial condition today?

That's a question for you.

That's a question for me, yes, sir.

It would not be very high.

I mean, we you know, well, but oh hold on, hold on when you say financial condition.

I mean, if you talk about the our where we are as far as reserves now, today I would rate it high.

I'd rate it as seven.

Okay, but the trajectory is what we've got to deal with.

Again, we're talking about the last two years.

We went into deficit in 24.

We didn't really budget a deficit in 24.

25.

Oh we had some differences of opinion about the budget.

I think that passed on a four-to-three.

However, historically, this board has done a really good job of manage, especially the general fund.

I'm just talking the general fund.

I mean, we we we had 11 and a half million dollar revenue over expenses in 22.

5.2 million dollars revenue over expenses in 23.

In 24, we got a little off.

We had the resting gear.

There's a there was a there's some there's some big things that we purchased.

25 we got off, but 80% of the time we're uh we're a healthy fund balance if you look at eight out of the last 10 years.

It's just been the last two.

So we don't need to get all excited about we're in this bad trajectory.

Yeah, yes, we got these last couple years that are great.

We got to correct it this year.

We 100% have to correct it this year.

We're not the we're not the only city dealing with right budget issues.

So we just we this is every every you know, from the the ones that I've talked to, it's similar.

It's budget cutting time.

Right.

Are you saying in 22 and 23 there were balanced budgets?

We were or did administration pull back so that we'd meet those targets.

In in the um revenue expenditure and fund balance in in on page 162 of our audit, specifically the general fund.

Um we're in 2015, negative 814,000.

2016, positive six million, 2017, positive 4 million, 2018, positive 2 million, 2019, positive 4.5 million.

2020, 8.8 million positive.

the um revenue expenditure and fund balance in in in on page one sixty two of our audit specifically the general fund um we're in 2015 negative 814 2016 positive six million 2017 positive four million twenty eighteen positive two million twenty nineteen positive four and a half million twenty twenty eight point eight million positive twenty one five million positive twenty two eleven and a half million positive twenty three five million positive twenty four eight million negative but is that counting covet dollars not not in 2019 not in 2020 well no i don't i don't think i think those those came in on the budget right like well the 1617 18 19 probably no covet dollars might probably when when you see 11 and a half million in 22 probably yeah that's what i was gonna say i mean those numbers that's what sort of changes some things there but the budget structure itself i mean i think this is a healthy exercise because it needs you think historically when you when on this particular day every year and you when we bring the original proposed budget and it gets passed that the general fund has been in the black it's been a you've we've had it we started out with a surplus we may have then we may have gone in and spent some funds on capital and or made adjustments and salary increases or whatever but the starting point still had somewhat of a surplus right and then I think in 24 we had a million dollar deficit about a million fifty two if I remember about the original budget was that before the new needs in 23 and then in 24 or no it's 24 and then 25 it was a 5.7 million dollar deficit deficit that was budgeted last year for 25 so that's was that including the new needs we got or was that that was before that was before okay you can you can look at where we came from in 2015 a fund balance and the general fund of nine million dollars and then now you know it's it's uh projected end of 25 35 million no sorry um 20 million um it's it's gone up to 24 it went all the way up I mean it went all the way up to 42 million dollars at the beginning of 23 and then it's we've we've spent it down in the last couple years but we just we've got to correct that well we gotta remember that's like six million is COVID money there was a schedule Andy that you showed um that in terms of the the general fund operating budget that got adopted each year from back to 2020 has been on the negative side 2019 I think was the last budget that we approved that adopted a on the positive side for a but that's just a positive that that's just the budget right and so when we got to the end of the year there was an unexpended dollars and it ended up positive each and every year right and so and and so that's that's what is different about because each of those years the other thing about looking at these operating versus capital because it's that some lot of times it's the timing we may get something appropriated and do something and it gets carried over into the next budget right and so and so but it's tip those things that are being carried over the projects you know a lot of non-reoccurring type things but even in those years when we had a a deficit budget to start with the deficit was a million dollars or less typically and so what is significantly different about where we are right now and I don't disagree with you I think I think historically yes we've been in great shape and you know particularly the last two years have been a problem but when we look at what are we going to do to fix the next this year the next two years that's where that's where our trouble starts and and I think it starts with the fact that we started with a 5.7 million dollar operating deficit for this year.

I agree okay for competent and capable of balancing the budget on the operation side I think the bottom line is that over the years we've we've managed to make sure that the essential services and those things that are critical uh to the public if they're being met it just calls for uh sometimes tougher decisions and calls for different strategies keep in mind these things are very flexible and dynamic so they're gonna change over time and so uh with these exercises just gives us an opportunity to make sure we're doing the right things that uh we can make sure the services uh that they are expected are in place uh for our residents okay uh director we go you reckon well andy i just have a question um you know as we dive into this you know if you look at because a lot of the conversation i'm i'm trying to understand from you or clarify from you a major concern that you have and please correct me if i'm wrong is that on the when we're talking about the general fund on the personnel and the operating side we can talk about personnel because it's a bit more uh than operating your concern is that structurally those two areas leave aside whatever fund balance may or may not exist those two areas as you see as

A major concern that you have, and please correct me if I'm wrong, is that on the when we're talking about the general fund on the personnel and the operating side, we can talk about personnel because it's a bit more uh than operating.

Your concern is that structurally, those two areas, leave aside whatever fund balance may or may not exist.

Those two areas as you see as they're set up now and looking sort of short and medium term into the future, you have a concern, correct?

That those are structurally costing more or look like they're going to cost more than what we project to have come in from the revenue standpoint.

Right.

So I understand that we have some vigorous debates from time to time about how we spend and how we have spent out of the contingency reserve fund, but when you're in 2024 and that fund is 57%, there's going to be spending that occurs out of that.

And so what your concern is is that even if there was more still in that fund balance, if we did not make structural changes to the personnel and operating expense side out of the general fund, we would still be continually reaching down into that reserve fund to make it balanced.

Right.

And so even if some capital spending had not come out of that fund, okay, the projection for 2027 would look better, but 30 would still be bad.

I mean, you're talking about a structural uh built-in challenge.

And so if you look at personnel, at the end of 2024, we spent 34.4 million dollars.

We're projected for 26 to spend 37.2 million dollars on personnel, so 2.8 million dollars.

Broadly speaking, how would you categorize that $2.8 million increase?

Is a lot of is a healthy amount of it, fixed costs, things like insurance and whatnot that we have very little control over, or would you say that from the end of 2024 to moving into next year's budget, we have added people or personnel.

Can you can you talk a little bit about that nearly three million dollar personnel?

So my view, it's a combination of all three of those.

You know, I don't I don't have it, I don't have those numbers quantified per se, but I do know that we have increased personnel in the general fund.

And you know, I think Eric has pretty good numbers on that that we can look at, but and then there's no doubt that our health insurance costs and our benefits cost is increasing, workers' comp insurance is going up.

That's part of it.

Um we've added personnel, and then we've also give them, we've made salary adjustments to try to stay competitive with the with the market.

You know, we do the we do the salary study every other year and and try to make adjustments where we can.

So I guess a better thing uh maybe to make a note to to highlight or for someone to provide to us, if you're talking about 2.8 million dollars in personnel costs, you know, over the last year, and about $600,000 is the operating number that's higher, 19 uh million 999,000 versus 19 million 319,000, that all goes into a 4.8 million dollar deficit on the personnel and the operating.

Right.

So that's about 3.2 million dollars of the 4.8.

Can you describe to us sort of briefly what is that what represents that remainder?

If there's 4.8 million dollars projected to be uh deficient and personnel and operating is about 3.2, where's the other 1.6 or so coming from?

Well, I think in in this case, it's gonna be from the revenue side, and I think that I think there is probably, you know, like I said, like for fiscal year 24, there's you know, it's not flat data.

There's some things, you know, the roof repair is a big expenditure in that year.

We got the insurance proceeds that are counted.

That's why you see a higher number, 55, almost 56 million in revenues in 24 compared to 52.3 that we're showing for 26.

So a lot of that is about 2.7 million dollars of insurance proceeds.

Sure.

And not all that was spent.

So that's part of that differential there that I could see.

Yeah.

So even if we were to you here it would magically wave your hand and say, let's just completely roll back personnel and operating to the number that it was at the end of 2024, there's still 1.6 million dollars or so in revenue that's lower now at this time than it was at the end of 2024.

So it's a combination of I mean, you're you're very clearly illustrating for us there's a structural um challenge with what we spend on personnel operating, and there's a revenue challenge as well.

We don't we're not consistently bringing in enough resources to fund what we're trying to fund every day out of the general fund.

Let's dive into it.

Well, I would just say to Director Um Rigo's point, we do have some data in the app for on how much uh employment has grown.

And if you look at um water and sewer, for instance, just from 25 to 24 over those years, it grew by 35%.

So I do think that's something we need to look at in terms of shrinking the size of our government.

Okay, thank you very much.

Mr.

Damon, you recognize thank you, Mayor.

Um so in terms of getting into it, um so the um just looking at the starting with the general fund and spending some time with that.

Um, and and uh I passed out a schedule um to the board here in terms of what I'm gonna go through right now.

Uh we show a an operating deficit of the 4,846,704.

And just going down the list that I've shown you in terms of options, the the we may have before us.

First of all, the option the the list I've shown you, the way I've got it configured, does reduce in an operating budget surplus of uh 242,632.

Now that that's take taking that's assuming a lot of things here, but based on this discussion upcoming.

So uh what I want to start with is uh the first on my list is a recurring discussion item that we need to make some get some clarity on regarding Fort Smith Cemeteries.

You know, there is been that that proposal to uh for the city to acquire ownership of the the three cemeteries owned by Fort Smith Cemeteries Inc.

And just going off the numbers that were presented to the board at the most recent study session in terms of the projected budget.

And that is uh um the project project budget for maintaining this those cemeteries.

I've included the number on this list is 45,000.

Um that does come with some operating revenues that were projected at 175,000.

But for in terms of my schedule, I have uh I mean this this is a discussion point for the the board of whether we want to include these numbers in this projected operating def operating budget or not.

Um, and as I said, we're starting with the 4.8 million dollar deficit and adding 405,000 and expenditures adds adds to that.

So but Jeff, I would say um I spoke with them last week.

One of the cemeteries has asked to be removed from consideration, and it looks like um with some numbers I think they're gonna come and present to us, it'll be closer to a hundred thousand dollar commitment from the city.

Which is what we approximately have been doing in the way of mowing service support.

Right.

I think I think over the last three years we've taken bids and then assessed liens in the area of $80,000-ish for maintaining the same.

And is it fair to say that from uh at least based on the conversations that you've had, that from an acquisition standpoint, there would not really be any cost to become the owners of the properties.

Is that correct?

Right.

I would propose if if if the decision were made to try to acquire ownership of those properties, then we would essentially um forgive the liens that are owed on the property and use that in exchange for property ownership.

And so then we could decide to what level we would wish to maintain, do maintenance in 2026, particularly.

Particularly, uh and so I mean, if that was just something where you know we decided that there just needs to be the mowing taken care of for next year, so they maintain sort of a baseline of uh decent and orderly appearance, you know, that would be somewhere more like eighty to a hundred thousand dollars as we've done in years past.

And I just think I think to remember it for consideration on this topic moving forward is we either I think be responsible and be in the driver's seat with this on the front end, or we have a potentially um challenging situation where a nonprofit uh you know steps away from something, you get the state, you get the courts involved, and then the city is probably certainly mandated on the back end of a process to be an operator of these properties, and then we have less control, or or or the county, probably the city goes in the city of the evidence.

Also, I I think a question I have for them would be I had a had a meeting with them and looked at it and on the financial sheet they had showed they brought it back up again.

And I said, But if Washington is out, then the number changes by 109,000 to to helping their their number sheet, and they were within 75,000.

My next question would be could you how many interments?

And I didn't get a chance to ask this.

I don't know they would have had the data that day right there in front of me, but how many interments do you have in a year?

And can you gain up that $75,000 loss of revenue by just charging a modest rate increase?

I mean, if somebody was to acquire that as a business from them, I know that they were approached by somebody, they felt uh unsecure with doing that idea with that person because they were going to charge way more than they currently charge.

But there's probably some middle ground here to be considered to balancing that that budget.

So I think there's just some questions I have, or even uh continuing to help support within the mowing.

Thank you.

If I might, um, just in terms of uh facilitating our discussion on all of these items, and I know we need to get to sort of a resolution on each one, but um I would kind of like to run through at least um a recap of what all of the proposals are here on this list, and then we can go back and revisit them as we go to sort of make a determination.

But I think you know, for the I mean the board has the the sheet in front of them.

None of the other none of the rest of the staff had seen any of this.

And so I think it would be good just to run through the list here and and uh and talk about each thing that um that I've got on here, and then we can go back to the top and start working.

Go ahead and do that.

Okay.

So then the Fort Smith Cemeteries is an additional expense to consider at whatever level we put it.

Um I know that the police department has included dollars, uh, 75,000 for the continuation of the spay and neuter vouchers.

That is something that we can um discuss.

That that is coming out of the police department budget for the animal control function.

So not only not only contributing a million dollars for animal haven, they're contributing 75,000 for spay neuter.

Well, yes, and also continuing the oper uh contributing the operating budget for the animal wardens.

I mean, that's that's all part of that uh animal program.

Uh the non uh all right, so the the budget that we've proposed does include step raises for uniform personnel and police and fire, it does not include any uh pay adjustment for non-uniformed personnel.

Um we've got built into these numbers anyway, a two and a half percent uh increase for non-uniformed personnel, and so um based on my numbers, I included the pay increase, but not the other two, and I've gotten to a uh revised deficit there.

Uh well, yeah, 5.1.

So then we start doing going down to the in terms in terms of identifying areas where we can increase revenues because you know, in a lot of sense, I think that we have done a lot of work with the departments on their on their budget line items to try to limit and control expenses.

Um, but I think that overall we have a revenue problem, not necessarily a spending problem when it comes to the operating line items.

But the business license fees is one item we've looked at for uh increasing revenue and not business licenses across the board, but particularly those business licenses that are issued to businesses that are that do not have a brick and mortar or a physical address and uh in the city of Fort Smith city limits.

Um another wrinkle to this is that our current policy, uh every business requires a business license, but the further and the business license fee is 100 for any of them, but the first year uh they do not have to pay that fee.

What we're proposing differently here is for businesses that are inside the city limits, all of that would still stay the same.

But for businesses that whose physical address is outside the city limits, particularly we have a lot coming from out of state and um those types of things.

We would include we would increase their business license fee to $500 and not issue a waiver for the first year.

And so we're proposing proposing that, and then based on the number of of those types of licenses that were issued in 2024, that would project 137,900 increase in revenue.

That's on our agenda tomorrow, correct?

Yes, that is on the on the agenda for tomorrow's regular meeting.

Uh we talked about some other uh ideas in terms of increasing business license fees, but have not have not suggested those for uh for adoption at this time.

Um the Fort Smith cemeteries, you'll see there is a a revenue there that goes along with it.

I mean, in terms of selling plots and interments and those sorts of things.

Um if if we take that on, then there will be there is a revenue component to that.

Uh the next item is a is a pretty significant one.

This is also on our regular meeting agenda for tomorrow.

Uh Andy mentioned that solid waste needs to address some of its operating um operating budget issues.

Uh, one of those things, and and this is this comes out of our discussion from our cost of service study that we had in study session a few a couple months ago.

Um looking specifically at the landfill disposal rate, the gate rate at the landfill.

Um ours is $36 a ton currently.

And uh it was shown that about 75% of waste that goes into our landfill each year goes through and pays that gate rate.

And our cost of service on the land on the landfill is about 47 dollars a ton.

So we are proposing to increase the gate rate from $36 a ton to $50 a ton with an ordinance this before you tomorrow at the regular meeting.

And that in itself is projected to um produce about 3.6 or $3.7 million worth of revenue, additional revenue for the solid waste fund.

One of the things that our ordinances provide that we are able to do with uh dollars collected by solid waste funds is fund animal control services, and so I'm proposing that we use a million dollars transfer from that rate increase and on the on the gate rate to the general fund to uh to backstop the the general fund expenses, particularly as it comes to animal control, and which that program is uh believe in the 1.2 million dollar range and covers the the shelter, the animal control wardens.

That's that's coming out of police specifically, right?

It is it is operated out of police, yes.

That would give police an additional million dollars back.

It would provide the general fund with another million dollars to offset general fund expenses, which part of it includes police.

Yes, all right.

So we just talked about how bad of shape solid waste is in by 27, it could be negative 7.7 percent contingency with the uh two million dollar negative working capital.

I mean, are those gate rates going to generate that kind of money?

The gate rates will generate an for solid waste.

If we're if we transfer this million, it'll generate an additional two and a half million dollars a year.

And I mean that the I mean long term, there's still a there still are uh things to figure out for solid waste, but uh you know this is this is starting to move in the right direction.

So on these operating revenues to considering the general fund, uh couple questions.

One, so I know you've got a mixture right there of yes, do this, no, maybe not right now, but in total, if we were to say yes to all, that represents nearly or about two million new doll two million dollars in new revenue, correct?

Correct.

And so Andy, could you remind us or Jeff the on the no the first few of those business license fees, what the numbers currently are for each of those?

Well, I know for that first one, um the current numbers is about 26,000.

Not what it generates, what the what the left side cost is.

So you're going from to a $500 annual fee for non-Fort Smith from what?

$100.

Okay.

And then for the other two.

And it's free for the first year.

Uh-huh.

And then what about the ones you said no on the business license fee, $200 annual fee for Ford Smith?

That's currently for it's currently free for the first year and then $100 and then $100.

Same with the no on that.

We're ARC.

I mean currently currently that is the business license fee is $100, regardless of who or what form of your business is in, and you in the first year is for free.

Sure.

And what's ARCU?

Uh accessory residential commercial use.

And that's currently zero.

Um it's currently a 100 fee.

What's the change then on number six?

Well, it is not it's not applied directly to them.

I I don't I think that I think you're right.

I think it is, I think we don't quantify that as a um business lesson.

Maggie, the accessory residential commercial use, we don't currently charge them $100.

Is that correct?

No, we can't forget about L E P they've gotten that's first year free.

If they don't have a bit and that they gets parts like that a dollar.

Okay, so with this with this, if we did something here, the any adjustment would be based on applying it to the first year.

Okay.

So it's with that 65 bucks.

Eliminate the eliminating the first year free essentially.

Um then the the next one is somewhat complicated.

The the uh based on the CIP discussion we had with the police department uh last Monday.

Um and the the worksheet um and how Chief Baker proposed the uh the use of dollars for capital purchases for um offsetting personnel uh costs in the general fund.

What is built into the budget here was a two and a half million dollars from the sales, this the police sales tax fund to the general fund to uh offset police department salaries, and the number that was in Chief Baker's proposal for Monday was 2.9 million three point nine million thirty thousand nine hundred dollars.

So this is that difference between what's already in the budget um and then the additional amount.

And then um there is a when we go through the operating expense reductions.

I've proposed some for transit, there's some offsetting revenue reductions that go along with those.

So then it reduces you'll see how it reduces the target, then that we need to cut to.

Um and then we start talking about proposals that we've I think we talked about at least most of these with all of you uh to some degree during our when we met with you individually on the on the budget, but um we talked initially about perhaps uh an overall cut to staff, non-uniformed staff in all departments with more than 10 employees.

I'm not I've not shown that as a yes on this option.

Um prefer not to do that because you know there are there are people in seats right now, and what um what we much would like to do is be able to get to any staff size reductions or right sizing of our staff without um lay laying people off or you know doing those sorts of things, and so instead we've focused on uh focused on vacant positions, which I'll get to here in a bit.

Um then some minor relatively minor things, you know, in terms of all of our budgets, we budget every every program here that has personnel in it, we budget for 100% expenditure in all of those funds.

Well, typically, especially in our larger departments that I'm I'm using 10 employees or greater, um there's typically is turnover on all of those, and so we we we don't always spend 100% of what's budgeted.

So I'm proposing that maybe we we budgeted at 95% on some of those instead of 100%.

budgets we budget every every program here that has personnel in it we budget for 100% expenditure in all of those funds well typically especially in our larger departments that I'm I'm using 10 employees or greater um there's typically is turnover on all of those and so we we we don't always spend 100 percent of what's budgeted so I'm proposing that maybe we we budgeted at 95 percent on some of those instead of a hundred percent or the next one is related to the amount that we include in the budget for vacant positions in terms of what our anticipated liability for medical insurance might be you know andy referenced our our health insurance cost increase have gone up to 30 percent so that means if if a a vacant a vacant position is filled person comes in and they select the uh essentially the most expensive health insurance plan that the city participates in then that is about 1900 per employee if they select to the and that's the city's cost on the planet they chosen and so we all we always typically budget that full amount that 1900 well you know most well and I don't think we say most but a lot of the employees that come in don't select that particular option they select somewhere that's less expensive so I've suggested that we budget less in in those vacant positions um for health insurance liability this next one we've uh there's been a lot of um uh communication about in the last few days I I have listed here as a reduced sp reduce the operating expenses related to miss loa's museum I know that there's potential discussion to to be had on that um the the next one is impact impacts all of the operating funds reduce vacant non-uniformed positions and this is currently based on 57 vacant positions that we've got across the city um and for the general fund that impact is 54500 and then we currently have vacant uh a number of a number of vacancies in the police department uh and uh I base these numbers on when we had eight positions vacant in the police department to reduce those eight vacant police officer positions and that that number is the 6700 similarly we have six vacant C's in the fire department uh coordinating um with the fire chief and how this might work um with the the the in terms of reducing those six positions that is that's the savings to the general fund of six hundred and twenty nine thousand and then for most of the operating expense operating departments in the general in the general fund um but many of these are allocated across funds when you talk to talk about policy and policy and admin and management services and development services but I've identified uh a number of uh operating cost reductions for those those departments and I typically have left those as unspecified if we um decide to say yes to these then an affected department head would go through and identify that amount to cut instead of trying to select which line items to cut for them but then cut to the target that is set for them um the there are four uh new position requests that are included in the budget okay um the first one here is listed as the uh military liaison position we also have a uh um an additional assistant prosecutor position for the prosecutor's office we have a A V person to uh operate our meetings that has offsetting uh cost we currently contract that service I think we would we get better use out of um those dollars if we have a full time position 21 was the right is a good I'm sorry yeah okay but you could call that the line up it too but you're not the benefit okay um the that's line 21 I think so yeah it is okay 5000 city admin personnel operating no actually the new person the new person is on line 22 of military liaison right but but but um the new A V person is further down its item it's number 32 on that list okay should rock slowly with just seeing that seeing that first one that reminded me of the that I wanted to mention that the the four new positions that were included um the and the fourth one is a uh neighborhood services inspector it's not on this list because it's not in the general fund that'll be the yes and two of them are allocated um two are allocated to the general fund

Um the and the fourth one is a uh neighborhood services inspector.

It's not on this list because it's not in the general fund.

That didn't open the story the question.

Yes, and two of them are allocated.

Um are allocated to the general fund.

The communications is 18% allocated to the general fund, as is the as is the uh military liaison person.

The is the deputy prosecutor is 100% general fund.

So Jeff, with the military liaison, would that be in addition to or in place of the Roosevelt group?

It could be either one.

Um I would suspect based on the budget needs, we either need to do one or the other.

Um and you can see the the numbers I've assigned here to uh the operating budgets for them to review.

Um not none of them are insignificant in terms of the size of the the budget programs.

Um specifically though, when you get down to item 30, uh information technology that is a sizable number uh to get to there there again that is allocated to the general fund.

Um and I did uh to the department heads.

I did I did look at these budgets and try to identify area a dollar amount that I thought uh based on the justifications listed in the detail book that we could get to.

Um when we get down to item 38.

We currently have a contract with the airport to provide airport security at one point.

I believe that there was offsetting federal dollars that came to us, and Chiefs.

I don't know where the chief went.

Okay, and uh somewhere along the line within the last four to five years that that offsetting revenue or grant, whatever whatever it was was discontinued, and so the city has continued to provide law enforcement.

Um there is a requirement for the commercial service that law enforcement be present to um back up the the TSA function when the commercial operations are happening right now.

The city is is paying all of that cost, and that is an appropriate cost for the airport to pay, and so this proposal um includes reducing that.

And there's like I've believed the the chief said that there is a uh current agreement in place that we would need to go through the process for termination.

Um then identified the fire department and just identified uh this number uh for reduction to 275,000.

That's based on numbers from the fire chief.

Um parks transit there and uh item 42.

There were um letters requesting increases from the the Fort Smith Museum of History, the Sebastian Retired Citizens Association area agency on aging, uh the dollars uh they increase they asked for additional dollars to the combined total of 85,000, which I've um said that we those numbers are in this budget, but um said that we should reduce those and then the reduce the non-departmental subsidy to the Fort Smith Convention Center.

This is an anticipation of uh potentially getting a naming rights agreement in place, and Shannon has reported that that is there's good news to share with that, so it's not pure speculation at this point, but I do have uh 235,000 dollars there to um reduce the in our budget.

I think we have 794,000 still budgeted as a subsidy to the Fort Smith Convention Center.

Uh proposing to reduce it by at least this amount.

And then the very last one is one that um listed last because it was one of the last things I would want to do is propose reduction.

This is the cost of what the step raises for uniformed personnel and police and fire cost.

Those numbers, like I said, are already in the budget, and I'm proposing that they remain better.

So based on based on all of that, then that projects a 242,000 dollar operating uh surplus.

But like this, like as you notice, there's a lot of discussion to be had on these items.

So we start at the top, we can start going through those.

So no you don't have any travel um reductions on here.

I didn't I didn't specify um like within the operating departments where they would get those operating reductions, I would leave that to them.

Okay, I think we need to look at that.

So you're what you have listed uh yes next to represents three point eight million dollars worth of proposed cuts to operating expenses, correct?

That's correct.

And if you included the things you put no next to, that's an additional over two and a half million dollars, and so there's six point four million dollars of operating expense reduction on the screen for our consideration right now.

That's correct.

To go against the four point eight million dollar current uh deficit.

Correct.

Well, thank you for putting things out there for us to consider.

So even with that, you're still projecting out of the general fund a million dollar deficit.

That's if we purchase capital.

I mean, up this is not operating.

This is not an operator that does not this is an operating excess.

There's a surplus for operating.

If we add capital to that, then you know, of course, then we'd be using general fund reserve, but that's what the reserve funds are for.

So that right there where the cursor is hovering over represents the three point eight million dollars in operating reductions that you talked about, and then adjusting the capital credit requests down from the three point two million that's in the budget proposal presently down to 1.2 yes.

And and also we have to also include those revenue because revenue changes as well.

That's correct.

And also, yes.

And you know, the I do have on the last page of that uh handout sort of how I've broken out the the uh capital request the same way.

Um but the biggest part of that uh is it relates to the capital items that were requested by the police department suggesting that they uh be moved to the sales and use tax fund and not in the not from the general fund reserve.

The other thing is Andy, how on these revenue projections coming in for 26 on the sales use tax.

Would you say that you are modest?

Are you conservative in this?

Or are you are you stretching and saying, no, I've built in and thinking about growth.

I mean, could you kind of comment about the revenue side of it?

I've just kept everything flat as like within whatever we've collected in the last 12 months.

That's what we're projecting to get.

You know, there's you know, we we obviously have signs of growth here locally, yeah.

But we're also we're also seeing pressure just from a national level of tariffs or a lot of a lot of uncertainty and economics.

So I mean so I think one approach to this the best the best approach I could take is just keep it flat.

I think one of the things that we did it for the 25 budget was we estimated some increase in sales tax revenue.

Um, but we're not seeing it.

We're seeing sales tax revenues come in at fairly equal to what we got in 24.

Are you even just a little bit behind even?

So I think budgeting those those revenues flat is is a conservative way to do that.

Because you're projecting us to bring in in 2026 a million and a half less dollars in tax revenue than what we expect to collect in the next six weeks left in this year, right?

Okay.

So my thought was no way of looking at this the the pro of balancing the budget and maybe delaying a quarter or two into the new year.

Uh and sales tax does grow, that gives you an idea of some capex possibilities.

I th I think if the operating budget is balanced, then the capital reserve fund is I mean, you have a projection as what if we cut the 4.8 what the what the reserve fund balance would be.

But I mean it's about third, you know, it at this level of cuts, you'd have about a 34% reserve.

And that would at the end of 26.

And that and that's what you use to buy capital with so we can make those capital decisions if our operating is right.

That's that's exactly what I was saying.

Yes, that's a big well that's yeah, that's the other thing.

If you if you can reduce your operation cost, then the the percentage policy, the reserve level is a lower dollar amount because it's it's based on 20% of annual operating cost.

So to be able to reduce that and shrink government requires less reserve and then opens the opportunity for more capital.

And I'll say too, you know, the I mean we're talking about the general fund now, but you know, one of the other, I mean, the water and sewer fund was showing a 2.9 million dollar deficit.

And you know the the idea of reducing 57 non-uniformed personnel, I mean, that's across the city, and so 23 ish of those 24 are in the water and sewer fund.

So that is a significant savings to the water and sewer fund, which helps that operating budget as well.

The concern I have on that would be the any progress that we're making within the streets department, because this is a little different scenario than when I talked to you all about.

Because I know they have some vacant spots they have yet to fill that would almost be needed to fill out the five crews, if I'm understanding that correctly.

Perhaps, but it also I mean it also sets a number of personnel.

It doesn't we can we can ship those around to where the vacancies are in different positions than what are actually vacant right now, but it sets a new overall head count goal.

And as long as we're working within the headcount goal that gets set, then we'll be okay.

The future of water leaks being at a minimal and then working on water line in-house or things like that, I think are gonna be important to have a fully functioning public works.

Agreed.

And I'll just remind that the you know successes that they've had here recently have been with these vacancies.

That's not that it's easy to do.

I I recognize that, but still.

So just kind of level set here.

If if we were adopt to adopt all of these revenue and reductions, it's gonna leave us with 978,000 dollars that the board's got to figure out that would be a reduction of 978, whatever that I can't see it, not 170 some odd thousand dollars, not 17%.

Instead of $8,000 having an eight million dollar deficit proposed for 26 and lowering your fund balance from 20 million dollars to almost 12 million dollars, you only have a deficit of a million dollars, and you're maintaining your 19 million dollars of fund balance versus but the operating portion is got a budget surplus.

The operating portion, the 4.8 million, the problem that we have has a 242,000 surplus.

The million expenses is capital.

We go from 4.8 in the negative to 242,000 positive.

Yes.

Okay.

And this is including eliminating the 57 non-uniform positions that are vacant.

Yes.

And and well, and also the eight uh police officer positions and the six funder positions, the 14 uniform positions.

So we're ending up about where we typically are at this time.

Right.

We typically are about a million dollar deficit, is what we show, and then we always come out in the black.

Yes, minus the last two years.

But in the but also in those last two years, even though it's been on the deficit side, that's really just been operating costs because we have not we have not provided for capital expenses, especially especially in the general fund in the last two years at all.

So all of that negative, all that negative in previous years has been operating cost.

Yep, whatever to the term back money.

We buy the term back every year with maybe the three to well, it is general fund money, it doesn't belong to any department.

Once it's not spent, it goes back into the fund reserve.

It was not your market of the police department.

No, it could be spent on anything.

Yes, and go and that and that's what contributes to the the growth of the general fund reserve.

When when dollars in the general fund are not spent, they go back into the general fund reserve.

And then for the next year, when we budget, we budget, we should budget against that year's revenues.

And so all of our expenses need to match that upcoming year's revenues.

Then you should you actually saving three.

Yes, but it shouldn't have been budgeted in the first place.

So when dollars are not spent in the budget, it goes back into the reserve fund.

That's how the reserve fund is supposed to grow.

In the general fund, it's can you which three million?

Can y'all enlighten me on this three million?

What we're talking about.

I'm I just jumped the term back money.

But you mean you mean what uh PD doesn't spend it and it goes back into the is that what you're talking about?

Yeah.

I mean, I don't know if it's three million or not, but whatever that number is, if it's in their budget and they don't spend it, it goes back into the general fund reserve.

Yeah, okay.

And then the next year we budget the whole general fund based on the revenues the general fund is supposed to bring in.

Yeah.

Okay.

Next we'll go to the next direct regal.

I just had uh some more clarified questions about the uh expense reductions proposed.

Um it's a multi-part question.

So if you look at 28, 29, 30, 31, 39, 40, and 41, those are all it says for finance, purchasing, IT, communications, building safety, fire, parks, and transit, and the amounts vary, but it just says reduce expense unspecified.

Yeah, talk to us a little bit more about the the vision behind that.

Is that going to be you know, this is a number that that has been put out there?

Department heads, you need to find that number, you need to hit this number in a reduction.

Uh, you know, is that a process that'll be ongoing?

You know, what what's how do you envision those working?

Yes.

So for instance, number 28, just picking one, reduce finance additional operating unspecified at 30,000.

That means I would turn to the department head and say, find 30,000 in your operating budget to reduce.

I mean, and not the point being let them pick the the line items that they can reduce to hit that target.

Okay.

And so that might include the traveler expense or conference or seminars or office supplies or whatever or materials purchases or small equipment or whatever it is, but let the department head choose from their budget request what they can what they can reduce.

38 says police discontinue contract to provide provide airport security.

You talked about that a little bit.

How realistic is that?

I I think it's realistic.

I'll have to defer to the chief a little bit in terms of the agreement uh reminder that's a good idea.

I mean, is that something we are permitted to discontinue?

I I think it is not the the commercial service requires law enforcement presence to be there, but it doesn't require the city to provide law enforcement, and so I think by agreement we have done that, but I think the airport, the airport would have to find alternative means of law enforcement or pay for it through uh off-duty function.

I'll turn it to the chief to me.

My my question is not uh necessarily in the space that you know we shouldn't look into this, but um, and it probably goes without saying, but I would hope that we're not we don't do something uh if we proceed forward in that avenue that ends up from a like legal side costing us more to adjudicate and try to get into a um we you know argument about basically with another entity.

We have we have no uh legal requirement to provide police security at the airport, federal law requires the airport to provide security when commercial flights are going in and out.

Uh how they choose to do that is on them.

I believe the agreement was in 2007, where the uh Fort Smith Police Department, City of Fort Smith agreed to provide police security, but it at that time was subsidized by federal funding.

That funding ended in 2024.

Um conversations with city administrator at that time.

Um expressed my desire to end our um presence at at the airport, and he said we should continue uh at the expense of the city.

So that was budgeted in 25, but uh we have no legal obligation to provide the police security at the airport.

Okay.

Thank you very much for that clarification.

Have we had any discussion with the airport?

Gee.

I did have a brief discussion with the the new um airport director uh the other day just to let him know that this was a an item we were talking about.

And I mean, there's not not a resolution to that discussion, but I bet he's a he's aware of it.

Do they have the funds to provide security?

I'm I believe that they do.

I mean, Andy has is um provided their well, I think they all are provided in monthly financial reports to in terms of their financial condition.

What is their financial condition?

I mean, uh they they have roughly about a maintain about 11 million dollars in unrestricted funds.

There's a lot of that they do have some funds that are restricted for capital and certain FAA things, but it it appears like they typically maintain about 11 million dollars on restricted funds, but I think so they can afford it.

I believe so.

Okay, let's let's make sure that we have solid answers on that because the worst thing could happen is we're not provide an airport that's providing the necessary uh services uh to protect our city's interest.

That's correct.

Thank you.

That's correct, and we recognize the importance of the airport and the and those services, but uh anyway, that's just it's an item for discussion.

And then uh the two other quick clarification things I had.

Number 34 says city services allocate solar farm lease by percentage of utility expenses.

Yeah, I guess could you elaborate on that a little bit?

Sure.

Uh currently in the proposed budget, there is a 500 $500,000 payment for lease of the the two uh large solar farms, and that payment is consolidated in this in our city services program, which is 100% uh funded by the general fund.

Yes.

The idea being that um this that $500,000 should be allocated across all departments because each department will re receive energy cost savings when they pay their utility bills.

So all of all funds will get benefit of that um reduced energy cost.

And then on 15, the reduced operating expense for Miss Laura's museum.

So this was in December, December 17th of 2024.

We voted unanimously uh to take on this particular expense on the city side.

Um what is the vision of and I recognize that it's a not insignificant number?

What happens if we were to decide uh you know less than a year later to say uh never mind, we don't want to do that.

Is it a situation where the building just sort of sits there empty and you know nature takes its course or what I mean, you know, is that what's contemplated by this action?

I yes, I think potentially so.

I mean, the city owns the property and the building.

Um the the operations within it uh the have been funded by public sources, not the general fund in previous years, and I recognize you know we had voted to add that to our uh operating expenses for this year.

The initial numbers uh were at one level, and when we applied the the staff there um to pay them at the within our current city pay scale, then that it increased the operating cost a bit.

The so that that's part of the increase, but there is there is still a need to um do some repair to the structure.

But I mean, there's it's still the those needs that were identified last year are still present, and so um yeah, I mean the the operating cost is is one part this is that's the significant piece that I'm talking about here.

The uh cost of owning and maintaining the structure is is not really contemplated here, but it's not funded necessarily either for 26.

So that's a different discussion.

Thank you.

Director good uh turn that off there you go.

Yeah, while we're on the Miss Laura's topic, uh I actually took took the tour and looked at the condition of the building uh and talked to the manager of Angel Tracy, and she provided me with a lot of good information.

And I don't know if you guys have had a chance to speak with her or know what's going on.

But if if we could now could could you speak to the condition of where we're at and what we're looking at if we decide to keep this open or and fund it or or not because either way, it sounds like it's gonna be uh an expense that the city's gonna incur.

Thank you, Angel.

Thank you.

And if you don't mind, I'm gonna start.

Um, I tried sending you guys an email on Friday.

I don't think it went through.

So I resent today.

Um those numbers.

When we look at what the request is, Angel's done a phenomenal job of going back in and readjusting those budget numbers.

So we have a reduction of about $60,000 that's taken place.

Um, and the expenses, she's also added some additional revenue.

Um, but two things that I want to point out, and Jeff has uh the wages of the staff is your business biggest expense when you operate a museum, it's gonna naturally happen.

It's about half of the budget um that's been adjusted.

The other piece, and I will also say if there's gonna be no layoffs, then that means those people will adjust and go somewhere else within your budget.

So this is not necessarily a cost saving measure, it's just a movement measure.

The other piece is the building.

You guys own the building.

Um, it does need restoration.

AML did come through who handles your insurance.

Um, at the time they said it, unless something happens, it's gonna be hard to insure the building.

Um, and it's an historic landmark.

Um, so that we would obviously want to see that happen, and and Angel can talk more.

Um, but the building direct costs within that budget is just over 64,000.

So you have a remaining $57,000 is what's being asked to be funded.

If you take away the staff and you move them somewhere else within your budget, you have to cover the building $57,000 to have the number two.

Uh yeah, the number two attraction in Fort Smith up and running.

Um, also in that is if it you decide, hey, this doesn't work in the budget.

We do need to cut Miss Laura's.

There is a decommissioning cost that goes along with it.

There's how many artifacts in the building?

Uh 1,400.

1,400 artifacts in that building that do not belong, all of them to us.

Um, so that's also going to take time.

Um, Angel has gone through and done a decommissioning budget, um, and you're actually going to be spending more to decommission the museum than it is to keep it open.

Um, a lot of that is having to pay to mail freight those items to people that no longer live in Fort Smith, but we're so generous to provide those because they felt like that history needed to stay here.

Um, so I I wanted to point that out before Angel came in is that you know, yes, there's those cuts, but within that budget, you've got a hundred and sixty six thousand dollars that actually doesn't get cut unless you sell off the building or you demo the building, which I would never advocate for.

Um, because of just you've got to upkeep a building and you've got to keep staff, you're gonna have to ship them somewhere else.

So essentially all you're actually saving in your budget is $57,000.

Angel.

Uh Director Christine for Savage, and then we'll I would just add to you when I was on the AMP and we were you know looking because the AMP budget is so tiny, looking to move this off our books to the city.

The intention was not the intention was for the city to take care of it and continue with it, not to shut it down.

Um I looked, looked over the budget.

We've had a lot of community input on this.

I've received a lot, I think we all have in the community.

This is something the community desires and that they really want.

So I reached out to Angel yesterday and I said we're gonna have to make some cuts, I think is the budget's proposed.

My goal would ultimately be to get it off the city's books and in private hands, and that was um you told me your goal as well, and that you have a plan.

So I was hoping you could share that plan with us.

Yeah, absolutely.

Um, you know, we kind of had like a you know, in December, we agreed, you all agreed to a five-year agreement.

And part of our goal is to establish a nonprofit similar to parks partners, uh, and then to have that ultimately take over ownership and stewardship of the building for preservation.

A nonprofit is eligible for many more grants than a municipality is, and so that makes a lot more sense, um, especially as it pertains to preservation.

Um, our goal this year was to get the museum uh curated and up and running so that we could start charging admission, which in my mind was the most important thing is to start getting that revenue coming in, um, which we did, and I think we're sitting at $37,000 that we've brought in uh and we just started charging admission in June.

And I think we're sitting at $37,000 that we've brought in and we just started charging admission in June.

Uh so we don't have your gift shop up and running yet.

It is, yes.

It's been open since June of last year.

How's it doing?

It's doing great.

Yeah.

And we we've kind of uh changed a little bit with what we're offering, and we're trying to promote other local Arkansas businesses.

And also within that budget, um, Christina, to your point, Dr.

Catado says the gift shop revenue offsets the gift shop expenses.

So certain lines within there are complete washes, and we did that purposefully to make sure that the gift shop could stand on its own.

And if it was to continue on or whatever, but it was it was meant to be a wash, similar to what the CBB's gift shop is as well.

It's meant to be a wash on our budget.

And we do share that expense of that system so that we can save, yeah, save a little money.

Um, so and did I answer your question?

Yeah, I think so.

So the goal's not for the gift shop to be profitable, just to be self-sustaining.

It's meant to be profitable, but we're because of the way the financials are set up within the city.

Um, we've got to make sure that those are funds are frozen.

Um, and I know that that's a hard part where we can freeze it on our side for the AMP for ours.

Um, right now, a lot of this revenue is just going back into the general funds.

So I think that's the nonprofit is yes, allow the gift shop to make money, help offset itself.

But right now we just got to freeze kind of the two lines within the city's budget.

And with the um with the reduction or with the increase um uh for the admission, have you seen a reduction in visitors?

Slightly.

I don't think it's all necessarily due to us charging admission.

I think that there's a big part of it with the airline issues, you know, people are scared to fly.

Um, and you know, just a reduction in travel in general.

And I I think that's kind of been the case.

And a bus tour traffic follows a similar trend.

Yes.

What's what's the admission cost?

It's eight dollars currently.

I intend to increase it to 11 in 26, which will also increase our revenue from 57,000 to 67,100.

Okay.

Amenities draw people to your city.

And if you don't have those, people are not gonna come visit.

We have one of the most iconic historic places in the nation right here at 45.

One of nine, right?

One and nine nationwide, one of nine in the whole United States.

Yes.

And if anything, we should be upscaling it.

And making it even a more better attraction.

So I'm strongly encouraging the board, take care of it.

At least give them an opportunity to establish something that can take care of it.

Uh, but just at this point, I don't think we should pull the rug from under this iconic tourist attraction that we have right here in our city.

I would like to speak a little bit um about the numbers, just because that's what we're focusing on.

Um, so what I would like to talk about is I've I've actually got a bit of a proposition to cut our budget by about $50,000.

That would include a reduction in staff.

Um, obviously that's not something I want to do, but with staffing being the most expensive thing, um, I think it's important to consider.

Uh, if it shutting down is what you all ultimately decide, the the de-accessioning cost for the museum is to the tune of $520,000.

What?

To deaccession.

So to read $520,000.

If you decide to shut it down and just keep the building empty, um, just know that it is another $253,000 in addition to that for the year.

I know that there's explain that number.

What do you mean by the additional $253?

Thank you.

Yes, absolutely.

So to ultimately deaccession the museum, it would require a lot of shipping, still need to try to do some maintenance to the building.

You would end up still having to pay staffing costs, right?

So we, as Ashley established, those staff members get absorbed by other departments.

That's still a high cost.

Um, there's unknown expenses as far as things that we would have to do, uh, you know, whether it's trying to get the artifacts appraised to know what to sell them for, you know, the ones that we do own, uh, which is a little over half of the artifacts.

Uh, I can tell you that we've not spent more than $6,000 on the things that we do have.

Uh, I can tell you that we've not spent more than six thousand dollars on the things that we do have, so just know that's the extent of what we would be bringing back in for what we sell that we do own.

Uh a lot of the things that we have are in partnership with other museums, so it we would just need to get those things back to them.

Um, we would still have to incur the cost of insurance while we're doing that, which is pretty pricey.

Um with an empty building, the city is still required to pay things like utilities and you know, perform maintenance on the HVAC system.

If you just turn everything off, you end up with more problems than you want.

Um does the city have to maintain Ms.

Flores as a historical building.

Are there certain uh qualifications it has to meet?

Yeah, I mean, if we if we choose not to do so, we could lose our national registry plaque.

That's a that's but there's not specific maintenance items that we have to do.

I mean, there's things that it needs, that's for sure.

Correct.

And you know, I'd say you know, a lot of I mean, I don't discount that there are costs involved with all of what closing it down.

I mean, a lot of that is I mean, a lot of the numbers are speculative in terms of in terms of how that actually gets applied and what happens actually happens to the artifacts and such like that.

But I mean, I don't don't disagree that there's cost to closing it down, and yes, those need to be recognized, but in terms of the building itself.

I mean, and um director Samus, you'd asked me about the potential grant that we that we turned down, and that was that was a grant that would have provided some dollars towards the exterior maintenance that needed to happen, the siding and and the the physical items that needed to happen at the property, but um that the easements that go along with accepting a grant like that are really restrictive in terms of what you're able to do in the future, and so we didn't feel that the dollar amount that we were getting justified that perpetual type of easement.

So is there a possibility to negotiate?

You know, like we'll accept your grant money, but we don't accept these conditions, we'd like to accept your money, but these are the we did ask that question, and they said no.

So I mean that I mean that's a it's a grant from the state historical preservation office, and so their their goal is to keep it looking historic.

And I mean, ours would be two, but it's a matter of standard and and the options of what we would want to do at our own pace versus being required to do something that matches the crap.

I I just think it's important to note that you know, even if we were to shut it down, we'd still be responsible for maintaining the building, which is a large portion, whether it's open or closed.

Correct.

And I do want to address you know, the possibility.

I mean, you mentioned potentially selling the building two years ago when I applied for that grant.

I had to have the property assessed, and the fair market value of that house is 590,000.

If you factor in the cost of deaccessioning the museum to be able to do so, you're looking at you know, another 520,000 against that cost of of selling the house.

Um, the building needs at the bare minimum another 109,000 if you're really doing everything that needs to be done, it's another 234,000, and that would end up costing the city 164,000 to sell the house.

It's not a profitable thing to do.

Okay, yeah, but there again, I mean if the city decided to sell the I mean, we are looking, we have looked this year at excess property for sale.

And so there is there is the possibility for sale of the building, but just I have a couple questions.

Um it was minors saying that Miss Lore's house.

When did the city take it on as far as its budget expenses and things?

Last year.

This was and then before that, uh the AP did it.

Yes.

And then before that, how did it maintain?

It was a social club, so it was actually a pro restaurant.

It was a restaurant.

Okay, so it was a private Vindy OK.

Um and then was there ever a time where Ms.

Lore's house ran?

Um, because it seems like there's people that are interested.

Was there ever a time it ran with volunteers?

Uh there was, and it was extensive.

Most of them are aging.

And the thing that I have seen over the years and reports from our population here in Fort Smith is that oftentimes when they came in, the upstairs were closed.

So they weren't actually able to see any of the major exhibits.

Um, and so we have tried on multiple occasions, both with the CVB and as us as the museum to contact some of those former volunteers.

And I can say that it has been venomous, the response to being able to get some of them back.

We have put some effort into trying to get volunteer recruitment, not just for ourselves, but with our partner sites, the historic site, the Clayton House uh Museum of History, Regional Art Museum, all of us have gotten together to try to do volunteer recruitment ourselves.

I think last year uh we were able to retain four volunteers and within six months they were done.

And then when we talk about being the number two attraction, can we run through the list of like maybe the top five?

What are you thinking?

Like, what's number one?

The Marshalls.

Marshall's Museum.

Okay, and how many does it have?

Either we have an idea, number wise.

Uh sorry, they're rated how many visitors?

Oh, good question.

Way more than us.

I mean, we don't fund the Marshalls Museum.

We don't, yeah.

I'm just asking when it's number two, like number three would be so no, and all of this remember is you're you're based on TripAdvisor, you're based on Google reviews, you're based on people coming out and saying you should go visit this.

So when you're, you know, the Marshalls Museum's brand new, shiny, it's a national museum, it's the only one of its kind.

I expect that they're gonna be number one.

Um, the historic site was number two for the longest time.

The work of the museum and the changes pushed them into the number two spot, historic sites now below just slightly.

Then you've got Museum of History, and then I believe it's the Clayton House behind them.

So that's kind of you're in that history range.

So you mean for attractions it's number two, is what you're saying.

When you say things to do in Fort Smith, Google were the number two.

Yeah.

Out of 116 listed things to do were number two.

Yeah, and I think for me, it's not the question of whether Miss Laura's house stays open or not.

It's a question of how much of the city's dollars are going towards a museum if we're or maintaining our property.

I mean, I know the email uh pulled up is like 64,000, 163 is tied to operating the building for the year, or even exploring some expansion within the privatizing of it.

Um there's such a uh an interest to it, maybe there's a way to up the game by removing the city out of it as much as possible and expanding your efforts within the privatized.

Completely agree.

And that's where Angel wants to go with the nonprofit status, but that requires time in which to go through the legal process of that.

Um, and also making sure that you know the nonprofits set up.

I mean, you run a church, like that whole side of it has to be done.

And in this year one, it was more about how do we elevate Miss Laura's?

How do we separate it from the CVB and it being a visitor center and allow it to stand on its own and be seen as the history of part of the history of Fort Smith?

So the budget number of 268,000, you're saying you would not need that.

What would you need to write in on the so it's now been cut down to 228,000?

But again, 102 of that is personnel.

102?

Yes, sir.

Uh 120.

Sorry, 120.

120.

Sorry.

Yeah, I'd venture to say that what is the charge for Miss Hours?

It's eight dollars currently, and then in the new year, we plan to bring it to 11.

People laugh about that because they say it's low.

Right.

I would imagine for every eight dollars they spent, they spent 10 times that much into the local economy.

Well, yes, yeah.

Yeah, that's a good point, Mayor.

I was just gonna say, like, that's the that additional spending, given that it's a tourism attraction is not something that's represented uh in this sort of XL exercise.

I mean, the the most folks I would posit that are coming to and deliberately and intentionally visiting Miss Laura's and then writing a review and these sorts of things are people that are coming from elsewhere.

And then since they are coming from elsewhere, they're probably eating, doing a little shopping, etc.

Yeah.

We actually have a lot of folks who come in that say we were just passing through on our way home, but you know, we pulled up Fort Smith and saw that you guys were there, and we just wanted to stop in before we headed home.

We hear that a lot.

Again, if anything, let's be looking at the potential of upgrading Ms.

Law Rush rather than shutting it down.

I just want you to question.

Okay.

All right.

Well, I know a lot of this is focused on tourism, but there is a large uh segment of the community has a lot of local public pride in this building and the history uh that goes involved in Miss Laura's, and it's just not the brothel aspect, it's the women's history.

It's you know how the local police department and constables uh interacted with the community, you know, what those laws were at the time.

I mean, this stuff is absolutely amazing.

So there is not just the tourism dollars that we're looking at.

We're looking at our local taxpayer dollars.

They want to invest in this, along with a lot of other things that people come to the board to talk to us about that they support.

You know, it might not sound like it's a lot of people supporting you know, animal welfare, Miss Laura's the homelessness, but these are things that people have a vested interest in, and they want their tax dollars to go towards.

So we need to find a way to make those tax dollars work for our local citizens as well as our tourism business.

Thank you.

Director Seven.

I would just say it's you, I was um curious when I read that 30 of these were once operated in the red light district.

And so I looked up when Miss Laura's was built.

The population of Fort Smith was about 12,000 people, and 30 of these were operational and profitable.

So it it is a significant part of our history, and I think um uh speaks to entrepreneurship and uh women's history as well.

Women owned businesses.

Okay, thank you.

Okay, thank you, ladies.

Thank you.

Yes, why don't we take a we need 10?

Uh let's take a 10 minute break.

Uh as suggested by Mr.

Settle.

I mean, I think we're well on track to finish at a good time today, so let's let's continue that effort.

Okay.

Thank you.

Mr.

Dingman.

Yes, sir.

I I would just uh I have a question on the um personnel side here in the general fund um expense-wise that I would like to just uh have a little clarification on or um some more information for all of us on, you know, when we're looking at you know the 4.8 million dollar deficit that we're trying to attack on the personnel operating side in the general fund, and thank you for the list and the exercise, and it was very beneficial.

You know the the personnel expense from the end of 2024 to what's projected for next year is 2.8 million more dollars higher.

And so I just want to dive in on that a little bit more, understand, help hope to understand a little bit more the particulars of that, because I think it's fair to say that particularly when it comes to the general fund, we did not go on any sort of hiring binge in 2025 or add a lot of personnel or positions or things of this nature.

So, you know, Mr.

Dingman, you know, Mr.

Richards, Eric, you know, is there a way to sort of talk to us about tell us the story of how in you know one year personnel costs went up three million dollars because that represents a huge portion of the 4.8 that we're trying to reduce, and the operating expenses were actually fairly flat, you know, around $600,000 from the end, you know, over the last year.

So clearly the people that were in the positions were operating, very similar to the way they were operating in 2024, but it's costing 2.8 million more dollars to have the employees that we have.

What are what of that would you say is you know driven by numbers that we don't have a direct control over, things like health care, workers' comp insurance.

Because is it accurate to say that we did not hire you know numerous new people in the general fund in 2025?

Correct.

Correct.

No, I understand your question.

And the first thing I would point out is that the 34.392 uh million dollar number for the end of 24 is an actual number.

It's based on what we actually paid the people in those seats.

And so presumably, I mean, right now we we've talked about 57 non 57 vacancies and non-uniformed personnel and and you know, number of vacancies and uniform personnel.

And so similar if those similar numbers happened in 24 also, we didn't pay people.

I mean, we didn't pay all those positions for the times that they were vacant.

And so the one of one difference will be is that the 24 is an actual expense number versus the 26 number is all of those positions filled 100% of the year 100% of the time.

And so that's it's a it's budgeted full expense on all of those, which is was going to be a significant difference, but there are other factors in play also.

So this 37.2, even though we've gone through preliminary exercises, this 37.2 on this paper for personnel expenses projected in the FY26 budget, still includes unoccupied positions.

Yes, sir.

And so that number of reduction was about $545,000 on line item uh 16 on the list of the.

Okay, so you're still looking at two little over $2 million worth of the city.

Well, it's it's a little more than that because the 545 was just the non-uniformed.

We also would have had a number of uniform personnel, and I think there's there's between police and fire, there's 14 on our list that adds up to 1.2 million.

I guess let me frame the question slightly differently.

Because we're because some of this exercise, as Andy said, is about being more structurally healthy and looking trying to look into 27 as well.

What is that amount that you've seen over the last year, Eric?

I suppose from the personnel expense side, you know, what kind of increases have we seen on health care insurance, workmen's comp, this kind of stuff we can't control.

Sure.

Uh one of the things that Andy mentioned earlier, like I said, health insurance increases went up by 30%.

Uh so that's roughly about two and a half million dollars to all of the funds.

If you back out 30% of that roughly, it's just a rough number uh to the general fund, that's about a half million dollar increase right there.

Uh workers company or similarly has gone up about 400,000.

Uh so if you did the same thing.

I was doing that while he was mentioning work scop.

We trace down a bithouse.

Correct, yeah.

Half a million, 500,000.

For health insurance hits.

So general fund.

And you said workman's comp was it probably about 150, 150, yep.

And to your point, those are control, those are fixed costs that we don't have a lot of control over.

We've seen a large increase in uh prescription costs.

We've seen that we've had a couple of large uh claims due to transplants uh that really hit the plan.

So uh those are the type of things that are negatively driving uh the need to increase our insurance premiums.

Thank you.

So I mean it's so it's it's reasonable um given particularly what direct uh Mr.

Dingman said about you know they're not really being numerous new folks hired uh in 2025 as it relates to the general fund.

I mean, it's something we have to be very cognizant of that keeping the level of employees working funded out of the general fund, providing the services that we come to expect as a community that there are going to be it would be reasonable to be mindful of not insignificant fixed costs associated, uh adjusting upwards on an annual basis, or say every other year at the war at the best, even if we want to maintain the same level of service that we currently provide.

Yeah, we've already looked projected into 27 and 28 what our health insurance costs are going to be.

And we we forecast, or at least Andy forecasts on take credit for his work.

Yeah, you got a mouse in your pocket.

Um, but Andy's forecasts and looking at at double digit increases potentially into the future as well, uh, based off of just projecting the direction that things are going because of inflation, higher insurance cost higher uh uh uh prescription costs, those type of things.

Okay.

The uh the health plan was was kind of had a similar experience to what we were what we've been seeing in the general fund the past couple years is it had a healthy fund balance because we had we had good ex good claim experience in the past, and we and we had built up funds, and so we had several years where we didn't we didn't raise insurance premiums, and at some point we even had some premium holidays to give back to the employees.

Meanwhile, the claims each year were outpacing what we were collecting.

So we were the health plan was was in a similar situation the past two or three years where the uh there was an operating loss every year, it was eating in to the balance, and so all of a sudden we're like we're we're projecting this out.

It's like okay, now we're now that the claim spiked.

So the compound of the issue, and now we're having to do this 30% increase all of a sudden to get back up and to get, and we didn't do it all at once.

I mean, there's potentially you might need more in the future to get where our claims and our premiums are coming in or level each year.

Are we providing the same level of coverage we always have?

Because I was thinking that it was increase, especially the prescription drug benefits.

We have the same the same coverages today that we did for the last two or three years.

It covers like Ozimpic and things from weight loss, whereas most healthcare plans don't.

I wondered how much that contributed.

It does contribute a portion to the to the increase.

Now there are additional things that people benefit from having lower lower BMIs, that type of thing that help the plan long term.

But yes, we do have you know parameters to allow for those weight loss medications, and we actually have uh higher restrictions than what the uh most insurance companies have as far as those BMI restrictions.

I got I got a question on the workers' comp.

So usually workers compared to the municipal league was real close, and now you're saying it's a 400,000 dollar increase.

Have we gone and looked at different options for workers' comp, mispolig or other items and other companies to see if we can find a better rate of workers' comp.

Uh we we've gone through um uh Philip Mary, and I know that they've gone and compared that when we renewed that.

I believe AML was one of the ones they looked at that I'd have to verify with them.

Is it a is it a three-year three year or is it every year by year?

It's a year by year, and our our I'm gonna bring it uh here in a few weeks, but our excess insurance actually is held flat uh for 26, which I was very, very surprised by, but I was glad to hear a four thousand dollar increase in workers' comp is kind of high and and what that is is the largest driver to that is is honestly one claim that we've had that is is driving those costs.

Well, that doesn't mean we should stay with somebody if they I mean you can shop around if it's a year by year, right?

Yeah, because just like with health insurance, we we are the self-funded workers' comp plant.

Like I mean, I think it just gets to what Andy was saying when he used the word structural.

I mean, if structural challenge, if we didn't, and we didn't add a whole gaggle of people working funded at new positions funded out of the general fund in 2025 and this year that we're approaching the end of, and we're projecting 3.6 million less dollars in revenue for 2026 than we collected in 2024, and the personnel and operating expenses are 3.5 million dollars more projected in 2026 than at the end of 2024.

That speaks to a structural challenge, as you were saying, Andy, because it's not like we did a hiring binge in 2025 that led to this imbalance between revenue and personnel related expenses out of the general fund.

And so we have to think about it structurally, and I think the revenue questions that are both on the table and contemplated for the future are something that needs to be, you know, we need to take seriously and mindfully if we wish the same level of service to be um provided moving forward uh to the community across various departments.

If if we agree that we do have a structural problem, how do you fix that?

Well, we either need to reduce the expenses or increase the revenues.

I mean, and doing a mixture of both as we've talked about to our to the best of our ability as described here, um is is how we fix that.

I mean, we have to we have to get to a point where and and I I don't think you know, service delivery-wise and the types of programs we want to do and the types of services we want to offer.

I don't think we have too many employees really in any department for doing that, but I do think that we have more employees than we can afford based on our revenues, and so if we're looking at a structurally balanced budget, we have to reduce the thing that costs us the most, which is the number of employees.

Will reducing the number of employees, what impact will that have on the services that are expected?

It could potentially have an impact.

And I mean, that's you know, focusing on vacant positions is one thing we typically have a number of vacant positions, and so uh even if we reduce the staffing levels, there will still be a number of vacant positions that we have year over year.

Uh, but I think that uh I think that we have to get to a point where the the dollars that we allocate for personnel for operating, those ongoing costs are fit within the revenues that we project to have.

And like I said, with limited options for increasing revenues in the general fund, then we have to take it as it is.

I mean, there's you know, like I said, there's a there's a few items that we can do to impact revenues on the general fund.

And you've seen, I mean, aside from the the transfer, the million dollar transfer from solid waste to backstop animal control.

I mean, the things that we can do are relatively small in terms of impact to the overall revenues.

And so that that just it just underlines the fact that we need to reduce our expenses to meet those revenues.

Thank you.

Because I think based on what has been brought up about health care and insurance, the the part that's um, you know, the part that's concerning is that say we do most, if not all of what's proposed here, you get a little ahead, you know, 242, and I'm not belittling that at all.

But then if you move forward the next year and the year after, there's still going to be capital equipment requests that the employees are going to need that are going to require resource.

And even if you kept employment levels flat, we heard the the projections around half million dollar, you know, in greater insurance needs.

So then the the surplus that you were able to get to of 242,000, even if you kept the number of employees the same moving forward into the next year or two, then where are your cuts coming in to account for the 400, 500, 600,000 that are coming back to you for health and insurance that are projected based on the same number of people uh working.

And so that's what's the challenge around just doing this on the uh demand side versus the supply side is you cut and you have a good list here, you know.

What's the list for 2027?

What's the list for 2028 that are when you know that there are health and insurance costs that are coming for you that you have no control over whatsoever?

I'm not, I mean, I just wanted to really illustrate a bit more uh some of the numbers on that personnel.

Here uh you could this this 10% reduction chart um that we what I had gathered in budget talks with them when you talk about 10% for hold on 10% of non-uniform in programs with 10 or more employees.

It was that shared with everybody.

I don't know.

Okay, I just I asked for it and I got it.

So this represents item 12 of the line items.

It's okay, it's a lot items yeah.

But what it what it represents is so it'll represent a total of 78 employees.

So I mean maybe it's not a down this complete list, you know.

You look at some of this doesn't feel doable, but some might be like building a safety, I don't know.

That's two people, it's two and a half or two and a quarter to city administration, two and a quarter to district court, you know, some of that that district court might be hard.

You know, that you start looking at the list of where that the numbers when you finally see what that looks like, and potentially, you know, if if you needed more, maybe instead of such a drastic thing, perhaps there's a more measured I think I think another approach that we've talked about in terms of what happens in those subsequent years, because you're right, our are even if we reduce the number of employees, the cost for those employees that we still have will still continue to increase to some of the degrees you're talking of.

And so we have talked also, in addition to these, having a determination of where we want our head counts to be.

And so even if with the employees that we have remaining, you know, set staffing staffing goals for each department to where when they work through attrition and they get down, they get down to that number, that's where they stay.

I mean, I don't anticipate laying those people off.

I mean, that's I mean, that's uh a lot of what you talked, and that's why I didn't put yes on that line item because I don't want to lay those the number of people off.

But we could build build our budget, our staffing levels to where when those when that attrition happens, we can let it deplete our staffing level to a uh a goal that we set for each department.

Well, also it's expensive to lay people off.

It certainly is a big cost of that.

So I think I I'm glad that you brought us the 57 positions we can eliminate through attrition.

I think we need to look at that, and that's a cost savings on down the road as well.

But the idea that we just need to lay people off, I don't think that's something we should be considering right at this time.

I agree.

So just just real quick, is this is line 12?

Does that take all positions that are currently open and freeze them and then reduce it and then gets us to uh we we let attrition take its course and we don't fill those positions?

Correct.

Yeah, that math includes vacant positions as well as what would be filled positions.

Not line 12.

Were you asking about line 12?

I was asking for line 12.

Yeah, no, that that is those are that's just a straight cut.

That's a straight cut.

Yeah, it's a straight now.

You you could also look at doing that over time through attrition.

Right.

So what what Jeff was talking about of setting a par level of uh, you know, I'll pick on the human resources department instead of anyone else behind me.

Uh, you know, set the the level at 10 instead of you know set the level at 10 put personnel instead of 11, which is what's budgeted, and so it would be up to the department through attrition when time goes by um to to make that decision on what that looks like and not actively trying to lay some.

Would you say that's the most cost effective way to shrink?

That is a long-term solution.

That is a two to three plus year process whenever you whenever you go through attrition.

Well, I think that speaks to what Director Riga was talking about when we're looking at 27, 28.

So currently 16 is what I was talking about.

That's that's reducing vacant positions.

That's that's any open position, we don't fill it.

Correct, yes.

That would be eliminating uh 57 vacant positions uh across the organization.

Okay, and that accounts for 545,000 dollars uh basically 546.

It really applies to 16, 17, and 18.

And that included the health care, correct, Aaron?

Correct, yes.

That that that math includes uh health insurance workers comp, uh FICA, that type of thing.

And another point to make on that when I was asking them about it too, those sort of show that was the for this to talk about the the 545,000 vacant.

The reason why I think that's such a good move is if you were to try to go going through looking at it a different way.

You don't really gain dollar for dollar back because we would have a lower health care cost for filled positions than vacant positions.

Is that correct?

It was like we have to budget the full amount because we don't know what the actual cost was going to be.

Right.

That's one thing we've always done that we've we've been discussing through this budgetary process is where do we need to set that number?

We have always set it as the worst case scenario.

What is the most expensive scenario that a new employee can start with the city and what it would cost the city for that?

And so that's full family coverage at the $2,000 deductible, full family dental, full family vision, all of those type of things.

And do we look at maybe reducing that to $1,250 rate or or our middle ground rate so that we're not budgeting quite so much?

Uh, because I can't because it's also based on 12 months for that position filled, correct?

Yes, yeah, that's six months, right?

Any other questions for HR?

So we we could potentially do a combination of 16 where we're where we're we're not filling any positions, and then 12 where we as positions come available.

We don't fill you definitely could.

Yeah, I mean that would be it like that's not we're not necessarily saying make a cut, but we're saying as attrition happens, just don't fill the spot.

Yeah.

So to Jeff and Andy's point from earlier.

So you set a level and say, HR, you now operate with 10 personnel.

What it what is our I don't know the term that's it's not a vacancy, right?

What's the turnover turnover rate?

Yeah, uh it usually between 18 and 22 percent.

We lose probably about a hundred and fifty to two hundred people per year uh through turnover.

Okay.

And so the the challenge becomes are you losing those people where you need them?

If we're losing them in water plants, that's a problem as opposed to ancillary function.

Right, and I think we have we have to look at that as well.

Sure, you know, we've got some strategic priorities around certain things.

Well, if we lose somebody in a the water treatment plant, gotta feel it.

Gotta fill that, right?

But if we lose somebody somewhere else, I don't want to you know identify where that would be.

But if we lose somebody somewhere else, can we can we afford it?

Right.

And I think that's the discussion point is and something to work with administration on setting those levels of saying, okay, this is the new number going forward, work with the departments to set that for future years uh to work toward those numbers.

It'll help us in 26, but it'll also help us in 27, 28, right from a budgeting standard.

But what was the place white walls apart?

Yeah, up the spark number two eight.

Yeah, eight, eight positions.

I believe it was the number in 17.

Yeah.

Well, those are vacant positions, but yes.

I'm sorry.

Those are vacant positions.

There's no one in that position today.

It won't be built.

Correct.

Correct.

What about the airport?

I mean, that's that's part of our that's part of ours.

Our police officers cover that airport shift.

Yeah.

Well, there has to be a law enforcement officer, yes.

It doesn't necessarily have to be funded or provided by the city, but that's the way it's been.

So that would provide a handful of personnel that are currently working out there that could be reallocated somewhere else by the department for sure.

If that's what you're asking.

So what agreement you've got to draw on step rate.

Agreement about what?

Step rate.

Uh-huh.

Yeah, that's that's still they'll they'll still receive their based on everything Jeff has, they'll still receive their step races.

But no pay.

I understand that the chief wanted a 10% pay raise.

Correct.

Yes, you want to increase to the to the cost structure.

That's not included in any of this.

And yeah, okay, we're just how much will that say by not doing the tech percent?

Um what is the step increase?

Two and a half percent.

Uh it's between two and a half and five percent, depending on department.

Okay, good.

I believe it's about a million and a half dollars.

I'd have to you know the dollar number off the top of your head 1.4.

But I'm not gonna get the deficit income.

Correct, yes.

Is it is that in is that in our point four million is not in there.

That's that's that is correct.

That is the number that math is not included.

Only the step raises are included, not any conditional raises over the steps.

So, what does administration need from us as a board based on this discussion?

Well, to identify, I mean I mean, starting with the list that I've got here.

I mean, going through the list and identifying which ones that we're going to do or not do.

16, I'm good with I did have one more question about this.

So obviously, Andy, uh, to your point about structural challenges.

Stomach step up.

Because to me, when I to me, when I think right here term like structural challenges, I think about like a house.

And if you've got a good revenue stream and you've you know, you got money coming in, but you're just spending a ton of money on paint, you're just repainting rooms in your house a bunch.

That's not a structural problem because you're doing you can stop, you've got revenue coming in, you're not spending more than you have, you can just stop spending as much money on paint.

Structural problem is uh there's a crack in my foundation, or sinkholes opened up under my house, and this is existential.

I have to I have to address this.

So these exercises here that we've talked about, feed uh answer the XL challenge for this year, you know, barely, and I don't say that pejoratively 242,000 to the plus.

Yeah, does does doing all these help the structural problem for 2027 and 2028?

Or if you do this, is it just going to be uh we're probably right barely there?

As we've gone through this exercise and different ideas were proposed.

That was a question that I kept bringing up and thinking about okay.

What kind of reduction is this?

Is this uh we're not gonna do this this year, but maybe next year, and I kept reminding all of us we need forever cuts.

Things that are things that are not gonna be in this budget this year, next year.

If you're thinking, oh, I just I won't do this.

I was gonna I was we were gonna do X, Y, and Z this year, we just won't do it this year.

That's not the kind of cut we need.

That's not the kind of cut that fixes a structural budget problem.

It's the one that says we're you know, we're gonna eliminate eight positions, and we're not gonna have to pay those people, and because you know presumably uh sales tax is gonna grow, we're gonna get some growth, but so you're seeing it doesn't get any cheaper, it just keeps getting, you know, we're gonna do the expense is gonna grow.

So by making things cutting things that are uh that are gonna be cut out each year, reoccurring.

That's what would those all these things I see in here are for what I was coining forever cuts.

Okay, so conditions change, but to structurally balance, that's what we need to do.

Right, and that point that Andy just made, I mean, we talked about that even with some of the the department has, you know, these are these are perpetual cuts, they are permanent cuts to these positions until such time as we can justify the revenues are increasing to where we need to increase them again.

I mean, in that sense, they're not permanent, they could they could be restored, you know, two, three, five, ten years down the road when revenue support that.

But for this discussion and for the at least next year and the year following, we're considering them permanent cuts.

Do you ask that in the spirit of you want to say yes to other items on year that have been said no?

I mean, perhaps it's just more this notion that I think the uh the fuller realization that we can have around the idea that the the twin ideas that there are huge personnel costs that are going to continue to be huge and that are a healthily majority driven by the public safety functions that are funded out of the general fund, that we have got a revenue challenge on the side of in addition to to some extent spending challenges, but there's a revenue challenge.

And if you talk about a forever cut to let's just say fire department, that says, and there's a yes next to it, that says reduce one engine company.

So that would say to us that the math says, hey, keep your ears open.

You guys cannot be in the business of funding an additional engine company and six fire department positions right now because of the structural challenges that we have.

And if that were if the situation were to change, you know, if revenues were to go back up, anything that we're thinking of as a forever cut, I think without a real clear sustainable revenue path, you'd have to be very thoughtful about reintroducing into the equation.

And so I just think we've talked a lot on the on the uh expense reduction side.

I don't think we've talked uh commensurately about the ways either presented or unpresented that we would like to see more revenue come into the community, because if 60 plus percent of general fund spending, as was indicated in some slides early on, is driven by the public safety functions of this community, those are all public safety functions that all of us want.

We want to have the best fire department, the highest uh uh best police department, the highest staffed police department, the best fire department, the highest staff fire department, the fire department that keeps the qualifications that keep our property uh taxes low, the police levels that the experts tell us they need to keep us safe.

There are costs with that that I just don't think that it's um I don't think it's understood not necessarily by us, but in general, the genuine revenue needs that exist to provide the public service function that our community has grown accustomed to, and that we all want.

And so I think whatever we do over the next six weeks for the next 12 months, we need to start having really um meaningful conversations about how our public safety needs are funded in general across the board, what additional revenues, yes, to include types of taxation that might be required to provide sustainably the public safety needs that we have in this community, because I mean, we've reached a point where our chief financial officer is saying forever or for the very foreseeable future is sitting behind a recommendation that says there's eight police positions you can't afford, and there's six fire department positions you can't afford, including one engine company.

And I'm not being critical, I'm just saying this is we need to be really cognizant of all that right.

And if I might just speak to that a little bit, you know, the the revenue I revenue sources we've identified are like I said, of are relatively small.

And you know, the fact that our general fund uh expenses are largely driven by public safety functions, and like I mean, just to reiterate the points you just made, those are important functions for all of us.

Uh, there does exist, and we haven't put this really in the mix because it is a I mean, there does exist the potential, the I mean technical potential, whether it's politically feasible or you know, the community could stand it or not.

That's that's another thing.

But there does exist, we have another sales tax penny that's available to us.

I mean, the the state law provides um provides up to three percent local sales tax.

We've enacted two percent local sales tax.

That additional percentage we could either ask the voters to approve a portion or whatever of it for public safety functions.

Now, now you know, we saw not long ago in October meetings when we read up reauthorized our annual property tax millage.

Well, those mills, as we all recognize then, are capped out capped by the constitution.

I mean, we can't increase property tax ad velorum tax millage.

The mechanism that is available to us as a local government in terms of addressing fluctuating revenue needs over a period of time is the sales tax mechanism.

That is that is what is afforded to us to be able to set for ourselves in terms of meeting our revenue objectives for the services we want to provide.

Now, that like I said, that does require a vote of the of the people, however that means.

But the revenue that it could it could generate to do uh, I mean, I and I know we're already using that.

We're already using an eight cent for police and an eight cent for the the fire department and for parks also, but for public safety functions, those dollars are significant.

If if we didn't have those dollars in play here for things like fire, you know, appar fire apparatus and and capital needs and person and salaries for the police department, we would have a bigger problem here today.

And so I think because we've made been able to make use of those, the community has authorized us to make use of sales tax to fund those functions.

That has relieved some of this burden.

The opportunity does exist to ask for additional relief from sales tax.

Not that I'm advocating at this point, I'm just saying technically that is available.

Thank you, Director Christine.

Yeah, I think we're hearing two different things because what I'm hearing from our finance director is that we need to cut spending.

So Andy, I'm wondering if you can speak to this.

Are you seeing more that we need to cut spending or that we need to add additional taxes?

It's one or the other.

I mean, it's it's it's what both it's yeah, probably both.

I mean it do you, you know, we we gotta do one or the other or both.

I mean, are we at to the to the point where you know to me we should always err on the side of cutting spending?

Right.

And that's so that's what our lean is to, you know, to do.

And that's you know, that's what we don't, you know, obviously the the uh or at sales tax rate increase that would cut, you know, that that requires a vote of the public.

So I guess this is the what we can do in the meantime to right size.

My question to my other directors is I feel like we have a spending problem.

Does anyone else share share an agreement with me on that?

I do well, I I definitely do.

I mean, I know we're talking about all these cuts and how drastic they feel, but let's be reminded that it still includes one point one million six hundred and sixty-one thousand dollars in pay raises for existing personnel.

So I mean, we we're we're not you know, out of the general fund, out of the general fund those raises.

So I mean it's not like this list is crazy.

The only thing I think I've seems that maybe the kickback is on the Miss Laura's house, and I don't know the sentiment around the table.

I was for these cuts as they're proposed, um, at least at the minimum, because uh to go from five, you know, 4.8 million dollars to a surplus of 242 makes sense.

I mean, if you if you kick back out or adjust item 15, you're only gonna be 22,000 positive.

But it's not a obviously, I think the long-term solution is us at least starting with this, and then in the future, maybe maybe next year pay raises are not a possibility.

I don't know, or we see where the personnel and how things moved around, and was it able to do what we thought you could do there?

Did it was it in the appropriate places, or did it, you know, gosh darn it, it hit us in the place we can't do that with.

Um, but for me, and as far as that's why I was asking what administration needs, I'm for this sheet.

Um, obviously, if we need to make an adjustment on some of it, so be it.

But I mean, it still includes pay raises.

Yeah, so I want to speak to what you're talking about, uh, Director Sabbath's about do we have a spending problem?

You know, one remind my fellow board members, and I know everyone listening.

Um, a lot of the spending we do is not just for the sake of spending dollars.

These are initiatives that you know our taxpayers want.

You know, I'll I'll give you a couple of examples.

You know, we're talking about um not spending more, but that's exactly what we're doing when we talk about continuing our efforts with Ms.

Lawrence.

That's exactly what we do when we talk about other initiatives, particularly when it comes to either homelessness, uh pets, parks, you know, these are initiatives that our taxpayers want to spend their tax dollars on that they see value in.

So it's not like we're just spending money to be carelessly spending money.

Well, I don't disagree with that.

To me, it's more of the empire building all the property we've bought, because we've bought over the past few years.

I've been here, we bought a lot of property.

I mean, millions and millions of dollars worth.

Yes, that's where I'm coming from.

Okay, and and I definitely can get that, but from a from a guy who's been on the board for a number of years, that has been a goal.

Um, uh, from the board, you know, do we continue to spend money on uh renting properties or owning these properties where we invest?

And of course, you know, we can change our our view or what we want to do with that, owning more or getting rid of more, getting rid of more.

But again, that's all been board approved over the years.

Right here.

I'll take you in next to yeah.

So uh I think really the the key thing lies not necessarily in what's in this book, but it's going back to our proposed budget in 24.

That's really the that's really where this where this lies.

So if you if you compare the budget, not actuals, but if you compare the budget of 24 with the budget of 26, you see uh 13% increase in policy and administration, a 28% increase in management services, which equates to 1.1 million dollars.

Um development services, 16%, 5% increase in police, 16% increase in fire, 21 in uh percent increase in operation services.

Total, that total increase of 24 budget and 26 budget is six point five million dollars.

If we could get back to that 25 budget or the 24 budget, not the actuals, the 24 budget, we solve our problems, and we have money left over for capital, whatever we need.

So I would encourage, I would encourage folks to and that's that's just on the on the uh on the general fund side.

Um but that 24 budget was the was the last, you know, we had a we we ended up actually going into actuals went uh negative and then 25 actuals are negative again.

But that 24 budget is is good.

And if we can get back there, we're back on solid ground uh with money to spend on the capital side.

Or the big differences there.

Do you happen to be?

I mean, it was 420,000 for policy and admin, 1.1 million dollars for management services, 307,000 uh for development services, 940,000 for police, 2.2 million for fire, 1.5 million for operation services, and then non-departmental was actually less this in in 26 than 2020 uh 24.

And this this is not to be argumentative, but the largest number you just numbers you just said were around three million dollars for police and fire.

So percentage-wise, it's it though those are the two smallest ones.

Yeah, but the number the dollars is what matters, not the percentages.

If you're talking about going back to 2024, I mean, should there be three million less dollars spent on the budgeted to be spent on the public safety component of this city for 2026 as opposed to what we budgeted in 2024?

Maybe not.

I mean, you you you can look at the growth of general government in our uh in our audit from 24 general government in 2015 was 126, it's 174 as of the end of 24.

Uh police has grown by five.

Fire, firefighters have grown by one.

You're saying percentages.

No, I'm numbers, numbers of staff.

So I I look at what I really looked at is policy and admin minute management services, development services.

Those are areas that we can get some dollars back if we if we get back to right sizing where we were in 24.

How about that?

You know, setting a budget is one thing, but as the year goes through and we hear from our citizens that we need this, we need that we need you know additional uh police downtown, we need uh downtown liaison, whatever whatever the need is, you know, we address that, and we have to use the budget process to fill those positions from what we are hearing from our citizens.

So when we when people come and talk to us about what they need, what they want us to do, of course, staff great example.

Um Chief Baker will come to us and talk to us about you know what this extra extra position is gonna cost and what it will do addressing this community need.

Those are the things that that we combat when we're talking about setting a budget.

We can set a budget just to maintain a budget, which is great, and we should, but what happens when those needs occur?

Do we not address those needs?

Do we just stay right where we are and and not continue to grow?

You're talking about where we are right now, 2025 and 26th compared to where we're 2024.

Well, look at the amount of services we provide, you know, the community from the police department.

Look at all of the extra things that police officers do other than just drive on and put patrol cars and give tickets and our investigation.

We do so much more community efforts now, and that's been a plus.

You know, that drives down crime, it builds confidence in the community and the police department.

So what do we do?

Not grow?

Do we not supply those needs when when we are addressed with them?

Well, I think we need to I do think we need to look at them.

Um, you know, I I looked at a couple things on the the management.

I mean, management services has risen quite a bit.

Uh that's IT, that's HR, that's you know, a bunch of different things.

Um, you know, you can start looking at some line items and and various things.

I I looked at something specifically in IT that was hardware replacement, that was about 420,000, I think.

Um, you know, you start looking at those and and and looking at what what is that those are those are PC replacements and things like that.

You know, you start looking at what what is our replacement strategy?

Are we are we if we've got uh you know 420,000 and we've got a you know a thousand uh people that work for us is are you on a five-year cycle or on a four-year cycle, you're on a three-year cycle for for uh uh replacing the women.

Um, and and and that's just that's just one thing I think we look at, but I think that that growth of the non public facing things of the city is it that's what's grown more than police and fire and um sanitation and we all we all know water and sewer, but those things are are things that we have to have.

It's kind of this general government that's where we've we've grown that's just not seen by like nobody knows what kind of computer you have or how many monitors you have.

Um I probably don't really care much.

They want him to be able to do his job, but they I think you look at that, and that that's where I see growth that we can potentially pull back.

And I don't and I don't disagree with that, um, but I think at least some of those increases to management services or policy and admin, may not at least some of those have to do with reallocation for how we're structuring the budget in terms of trying to socialize all of the um software licenses and IT and all of the equipment places.

Believe me, that made it difficult to kind of look through here.

So that's some of the challenges associated with it.

But um, you know, I think we can I think we can look it through some of this stuff.

And if we get parameters around it, I think we can get we can get there.

So I guess I have a like a statement and then like a different way into the question.

I mean, in what Director Kemp's asking about in an attempt, and I appreciate it to move us forward.

I mean, I think I would be in support of virtually all of the expense reductions proposed.

If there's a handful that I would, you know, pull out probably for more information or separate consideration.

But if you look at the revenues over expenses projected, you know, non-capital, 4,846,704.

The question for Andy is how much of that 4.8 million dollars reflects actual spending that is occurring now and that we expect to occur carried over into 2026, budgeted for 2026, versus what is vacant that has been budgeted for that were contemplated rolling back, because I I'd like to know the actual representation of how much further, how over we are year to year on what we're actually currently spending money on now, because it's one thing to say, oh yeah, we've got the budget money set aside for this vacant so-and-so position, but and you should pull those things back in.

But that doesn't represent a spending problem.

We're not actually spending that money.

I mean, I'd like to know how much of the 4.8 is made up of about 450 vacant, unoccupied Eric.

Yeah.

Yeah.

But but that it can't be that low because in these exercises you put the exercise you put in front of us, you talk about reduce vacant non-uniform positions, 545,000, reduce vacant police department positions, 670,000, reduce vacant fire department positions, $629,000.

Um, reduce budget vacancies and medical insurance, reduce those $37,000.

Like how much over our revenue that's coming in is actually money that we're currently spending, not just what we're budgeting for for vacant things or and those things should be pulled back.

I mean, the number that we're actually spending to the question of spending is not four million dollars over what we collect to operate on a day-to-day basis.

We're setting aside but look what we're doing for 25.

I mean, it's a similar the the 25 projected is assuming an actual realization for the rest of the year, but it's based upon filled positions and not open.

So look at 25 numbers in which 3.6 with the 3.6 uh loss, but you know, you're looking like like the personnel cost 36 million point 36.4 million compared to 37.2.

Um, but then you also factor in the factors about a million dollars in salaries from the um communications group that's not in 470 uh the general fund in 26.

So there's your, I mean, that that's more of an indicator.

Um, there's step raises in there.

So it's I think I don't think the I don't think the the vacancy hit unless the 450 is non-uniform.

545 is five or just no there we go.

Um yeah, five hundred and forty-five.

And and so that I think the to answer your question, I think the numbers that are are for being proposed to be cut from the general fund, that's what that is is is those vacant positions uh that exist.

And so if you were to pull that out, that's what that math would be.

So you'd basically pull 545,000 dollars out of this 37207.

Yeah, yeah, yeah.

Okay, well, sorry.

Anyquare?

I mean the vacant police fire the same way, right?

Yes, so that's actually okay.

Correct.

So uh my question to Jeff and Andy and Eric is when you factor in the positions that you potentially are going to cut.

Did you factor in the overtime that somebody might want to have to take that position back?

So you're gonna refill back with overtime options.

I know in the past, and director did it probably can speak to us before some of you all here, we had a policy, we were trying to reduce overtime, so we put more people in to reduce the overtime.

The question is, is by doing this, are we going to create more overtime?

And is that what maybe those departments want or some people want is overtime?

You know, because with overtime, you don't have to worry about the benefit side, you got other things that fixed costs that are already there.

So that's my question is did you factor in the overtime cost that's gonna be put back into here?

So you're gonna save X for whatever, but then there's gonna be an overtime to fill those spots because some of those spots you have to refill.

I'd say in these numbers we've not uh contemplated.

I think that I think maybe that's some of your discussions is what's what's the overtime cost?

Because sometimes people want overtime.

They they and sometimes sometimes it is cheaper to have overtime than it is to have people, but sometimes it's not.

And so those are the questions, those are the calculations and equations that you need to be doing is you know, if if you have a position A that you're gonna say we're gonna we're gonna do with overtime, then what's the overtime cost versus the fixed cost and say what it is?

Director Kill.

Thank you, Mayor.

I I just coming back to the spirit of this.

But what I don't want to do is continue to ride the roller coaster of it.

What I like right here is this will allow us to hopefully enter fiscal year 26 and not have to have a 4.2 million dollar budget cut when we had to do that in the middle of the year and everything, things of that nature, and it allows us to put the priorities number one in a balance, and then as the revenue comes, hopefully we we see that we we do better than even we thought we would do.

And I think it's administration's job.

I think we should be tasking them as a policy level, and I think they're catching this.

If we want them to hit these certain targets, I think it's our job to put that onus on them doing the day-to-day operations, and then show us how they did it, and I think that's good.

But this right here is a balanced budget.

So I come back to again.

What are we after today?

I mean, I want to.

I know we have other budgets we'll need to look at, but I mean, do we want to do is there is there to my colleagues?

Are there ones that you want to pull out that Jeff said yes to that you would say I I would want to pull out?

Or add to 15 miss Laura's you want to pull it out or just reduce well, I just think there was significant enough difference on that to for that to be considered.

It's a yes here.

He's got it as a yes here.

So that means include it in the budget.

No, no, yes, means make those cuts.

Oh, they only asked for 220,000, not 268.

They proposed budget cuts.

Oh, sorry.

You you're saying that are there other colleagues that want to pull other numbers?

Jeff, that is that correct that yes up there means yes, go ahead and cut that number.

Yes, okay.

Yes, is there any other item you'd like to pull?

Well, I I mean, I think we need to look at 12 and and not necessarily as a cut, but let attrition take its course.

I did have questions about the internal audit cuts.

Is anybody on the same page with that one?

But that comes back to if we let the administration know that's what we're looking for.

I mean, I don't think it's we won't be able to catch it nearly as quick as they can on the day-to-day.

Right.

So I I mean, I I would be I think we've got to.

Okay.

But but what 12 represents if you changed a no to a yes on 12, Jeff is cutting employees currently employed right now.

Yes.

Okay, and and and that's not what I'm saying.

I'm just saying as I it's not on here, make it 12A as attrition happens, don't fill up the spot.

Yes, I've yes, I follow that.

Does anybody have any issues with that?

No.

I think I think that would uh put on us the uh, like I said earlier, a um establishing staffing levels that we want and targets that we want to hit for each department, and you know, they may be overstaffed based on that number for um a year, two years, whatever it takes for attrition to work, but once it gets down to that level, that's when they stay.

Right.

Okay, thank you.

I'm gonna recommend that we break for lunch.

It's been here for a while, and we don't want it to uh get cold on you.

And we will take uh 45 minutes.

Yeah, but uh I talked to them, and this is why don't we go ahead and reconvene?

Um Mr.

Dingman, you're recognized.

Thank you, Mayor.

Um so we we talked so far, uh concentrated on the general fund.

Um I'd like to move towards um discussion on the other three funds, which I uh display having the same sort of discussion.

Um just before we go there, I'd like to final tie on the general fund.

I'm sorry, I would like to I want to have one last thing on the general fund discussion.

So a lot of discussion was based on 24 actuals 286 budget and the personnel areas.

I'd like the the board you guys to come back to us with a detailed description of why the funds changed from 24 to 26.

What caused policy administration to go up to 214,000, management service go 540, operations service go up a million dollars.

Tell us in detail why those things happened.

You're not today.

You're one the actuals of 24, not the budget of the 24 actuals to 26 budget.

What caused those increases?

Was it overtime?

Was it wages?

Was it blank blank blank?

Bring that to the board at a very detailed description.

The other thing is briefly brought it for a second, but the lofty contributions for the old plan has been a very topic on this board.

Come back and show us where we were in 2015 all the way to today, and what do we think that fund's gonna be going forward because that is a lot of money for the old plan that just discontinued in 1982?

Don't need discussion today, bring it up, and we need some information on that.

That's all, Mayor.

Thank you.

Thank you.

Uh second.

We're good.

Okay.

Thank you, Scott.

That would open the part.

Okay, so starting with the uh the streets maintenance fund.

The projected revenue for the street maintenance fund is 10 million nine and sixty-six five hundred.

The proposed operating expenses from the street maintenance fund is 11 million four fifty-four nine sixty-six, which produces a an operating deficit of 488,466.

Um the adding to that, uh, if we leave in the uh non-uniform pay increase, the two and a half percent, that uh is an additional 107,76 for a revised deficit and then and a target for cutting of 596, 172.

Um the amount that I'm shown here as and Andy mentioned the earlier the health of the street maintenance fund and the 50% fund balance, recognizing that the deficit budget is still a deficit budget that eats into that.

Um, but I have included in the reductions uh part of the 57 positions that we spoke of earlier in context of the general fund discussion.

Part of those employees are those those vacant positions are in the street maintenance fund.

Uh so that amounts to 227, 791.

And then I also um assigned a five percent uh unspecified uh operating expense reduction.

It doesn't it does result in a uh still an operating budget deficit of 241,746.

And I left the their capital adjustment on for the most 40 ones.

Jeff, this is a this has got 50 percent fund, but this is the the gas tax, right?

Yes, and this has got a 50 percent fund balance.

Yes, so we have policies that say once you get a certain policy numbers, you gotta spend down.

Yes, so that's what we're doing.

Like we've done in previous years when we were at 70 and 80 percent, we're just spending down 100% the fund balance.

Correct.

Okay.

Okay.

Any other questions on that?

Well, I mean, again, since since this one, even with your uh uh you know, cuts proposed uh here of you know 354,000 dollars, you know, there's still a deficit contemplated.

So again, I think it would just be worthwhile uh highlighting for us, you know, how what goes into the operating you know, expense being you know 1.4 million dollars or so over what's projected to come in.

You know, again, similar to director sells question a little bit ago, conversations we had earlier.

Are there fixed costs to this?

Did we add people?

You know, because it's one of these things where if you if you look, and this is you know a simple one fund, you know.

If you look and say, oh geez, we're going to be bringing in uh less than projecting from the year before, you know, why or how are the personnel costs a million dollars?

I think one thing that's kind of unique to the street maintenance fund is included in the operating section and not capital is the capital maintenance of the streets and sidewalk construction, and so that kind of lends itself to spend those funds down in the operating section.

It's you know, and and so even though accounting-wise it qualifies as operating, it's more of kind of a capital maintenance type of expenditure.

That's where a large large amount of their dollars is spent versus just straight up salaries and and um you know things a lot of a lot of materials and and that type of stuff that goes into it as well.

So um even on the personnel side though, I recognize that I mean the point that you're making, the difference between the 24 actuals and the 26 budget.

I do think a lot of that is in uh what we actually paid employees that were in the in the spots at that point and not vacancies.

That's why 24 numbers are but to the same similar point that's been made.

I think we'll um quantify that for you.

Yeah, because in actuality, you know, the on the at the end of 24 versus what we're projecting for 26, the revenue expected is essentially um the same, and we're very very close, but there's a 1.3 million dollar or so um excess expense swing.

And so again, just a little bit more you know, narratively or pulled out what goes into that, and of course, with a 50% fund balance, you know, the situation is a lot healthier in this bucket than what we spent before lunch talking about.

But to your point earlier, Randy, about structural nature.

I mean, this is probably another one where you'd want to we'd want to catch this earlier on in the process so that we don't uh go three or four years living with a difference like that, pulling out of the balance, etc.

So a little bit more context about the the change there, indeed, because we're projected to even end this year with a five hundred and fifty-three thousand dollars in um to the plus.

And so looking into twenty-six, how are we you know five hundred thousand under on the projection?

So just a little more context uh on that would probably be helpful.

Understood.

I'll bring it up because something you said gas two years ago was a lot higher than it is today.

So the gas tax will start coming down.

Have we factored that into the 26 and 27 discussion compared we were in 24 or 23 because the gas prices are coming down?

And so if the gas prices are coming down, the amount of tax you're gonna generate would be less.

I mean, the the turn back numbers.

Um I don't know how I don't know how they exactly how they correlate to the pri the actual gas tax of the price of fuel, but basically it's distributed through a formula by the state and AML actually gives us the rates to use to project.

I just didn't know if that's been we we thought about that was we project 27.

Yeah, yeah, no we which question gas tax is not gonna change, right?

It's it is what it is.

But the amount but the wouldn't that wouldn't that leave?

But the cost usage of gasoline where that would well but go up but the tax is usually a percentage of the gross sales, right?

I thought it was I thought it was a seven per gallon.

Yeah.

I think it's I thought it was X.

I think X.

I think he's right.

Yeah, maybe maybe so that would that would have the opposite though.

It's like as it goes down the more dollars we would get.

More usage would be yeah, but don't I think we gotta I guess understand that we gotta clarify I'll just look at okay.

Questions or comments on the street maintenance fund goods okay.

Similar um discussion on the water and sewer fund the um projected 26 revenues, 71 million 32,06.

The projected operating expenses 73,951,526, which is which proposes an operating deficit of 2 million 919,520.

So trying to so then addressing also uh additional expenses to consider with non-uniform pay increases that adds 469,092 to that number.

So the revised deficit number to um target is 3,388,612.

The total amount that I've identified in terms of um operating expense reductions, the reduction again in the the 57 vacancies we spoke about earlier, these are non-uniform positions, but the reduction of the portion attributed to water and sewer fund is 1,955,934, and then a five percent reduction to the various operating fund off operating programs from the water and sewer fund.

And so that that did target the when I initially did this at targeted night the two million nine hundred and nineteen thousand nine hundred and thirty-four in reductions, and so the operating deficit then lies in the non-uniform pay increase amount.

Isn't this one in May Mayor?

You know, it seems like there's a little less specificity for expense reductions as opposed to the page we saw on the general fund.

And so uh in and uh that comment has not been anything by that comment, other than so you've got five percent targeted across these different lines, and you know, it leaves us still you know underwater by near half a million dollars.

Why not seven percent or eight percent, you know, make I think it's very important to make this number um balance.

Yes, I mean certain certainly could, and and frankly, I did the those reductions before I added in the impact of what the the pay increase would be.

And so I did that initially, but then I needed yeah, so certainly can adjust that so that it hits the 468.

Jeff, when you look at the budget comparison summary we've got for water and sewer, same thing happened here on the we did in the general fund.

Uh actuals in 24 to budget 26 personnel jumped over four point four point seven million almost operations went up uh almost four point seven, some so four point five maybe billion.

Yeah same thing.

Can we get a detail of why those increased by the you know each of those line items where the where it hit us at?

Because uh see operational services operating went from 39.6 to 43.5 we had 305 positions last year or in 24.

Yeah, I mean that this budget has been adjusted and and redistributed a little bit.

I mean, we didn't hire that many more staff.

But also it does it count.

I mean, there are it's almost two million dollars in vacant positions currently that we are budgeting.

I get to what you're talking about, but okay, take the two million out, but where's the rest of it?

So I'm just wondering why does it go from 21.7 to 26.4?

How do we go from 42.8 to 47.34?

Kind of like I asked for the general fund detailed items.

Where are we seeing increases?

Insurance, is it wages, is it operations, is it uh cost of chemicals?

What what is it that's determined that?

Yeah, and I think Dirk Sil, if I may, to that question that we've had across a few different buckets now.

When you prepare that for us, you know, and and indeed for anyone, you know, not just the well, it's these six line items add them up.

No, a little bit of the the why or the the justification, if you will.

Yeah.

Um so in terms of with these changes here, getting us with an operational deficit of 468.

Um, how does that compare to or how does that get us uh or where does that put us on our debt service coverage ratio?

Can you do that math quickly, or is that something you requires a little bit of review?

I can do it quickly.

Okay.

Because really that's the that's the key.

So if we're we're still operating, well, we're budgeting a half million dollar deficit.

I think that gives us a little wiggle room.

But with the bonds we just issued, we do not need to have any issues the debt covers.

Right, right off.

It's up to land number 468.

Right.

468, 678.

It's 98% coverage.

Compared to like in 24, yeah.

When we had an actual 114 coverage in the audit, this set of numbers would calculate 100% debt service coverage.

So using the 468 deficit in 26, I calculate 98% coverage.

So it's not far off from but the difference is this two million dollars from 24 was it in addition to uh the the actual operating fund, it was the investment income that we got to recognize that we brought in.

So how much of that are we gonna am I gonna be able to bring in another two million dollars?

So 26 is a little bit of a concern.

So we've got a hit 110.

That's right.

Well, if not exceeding it, I mean minimum the floor is 110.

Yeah, yeah.

So we're 12% off of it.

Yeah.

Are you telling me there's two million dollars in vacant positions budgeted?

Yeah.

Did y'all do the same thing we did in the general file?

Like you say everything is at 95% full versus I mean, I got the vacant positions, but is that everything's you are saying everything's full for the year at the highest insurance, or did you go back and recalculate for water and sewer?

We haven't we haven't extended that yet.

Yeah, really.

I think that's something we should be doing because here we are trying to make a decision, and we should have that as a impact.

I mean, because that's gonna impact at 98%.

It will I guess I I guess here's here's my concern.

Um, you know, as as we got closer and closer to ending 24, and we were okay, we're gonna make it we we made it, you know.

We we had we had our 4.2 million dollars worth of cuts, and we um we we were like 12 percent or something like that.

I can't remember where we ended up.

Well, we ended up over that 110 threshold.

Then in 26 or 25, when we got our third quarter numbers, we were at 135% debt service coverage ratio, which is really good.

That's like where that's ideal where we want to be.

So how do we how do we go from how do we get to where we're not we're not thinking in our heads, oh my gosh, how do we how do we get this additional 12% to budgeting ourselves in such a way where we don't have to worry about debt service coverage ratio?

Well, I mean at the rate we're going, the revenues are just barely providing enough to cover operating and debt service costs.

Well, I mean, they're they're they need to be providing an additional amount to cover future capital or future we've got.

I mean, we've got them higher than we've uh what I would say higher than we've ever had them, and because we just did a water rate increase and we just did a sewer rate increase.

So that that gets those revenue and 71 million dollars.

I don't I don't believe is a is a I mean that's just naturally you're gonna get I think you're gonna get more revenue, especially when you do when you do rate increases.

So we're we're not we're at a very high revenue, yet we're still at 98%.

Like I would I would I would have expected that to I wouldn't expect it to be at 98% and trying to play around with how do we get to 110?

I would expect that okay, we got that that rate gave us the the cushion that we need.

And you know, if it if expenses rise over the next few years, we could kind of play around with that, but I would expect it to be budgeting at a 98% versus you know, I figured we'd be 115, 120, those kinds of things that make you know extension.

I thought so too, because we cut out that I think last year we budgeted a million and five for the credit card fees we were covering.

We're not doing that anymore.

Any what is that 468 number gonna be to get that to 12?

That's can you use the goal seek function?

Or do you just it's gotta be you gotta add another 2.4 million dollars?

So if you so make that two million dollars up there, so 468 make the two million straight up to two million dollars.

So we did take those credit card fees out of the the budget for 26, right?

Okay, so maybe that becomes sorry.

That's it.

Okay.

Are these vacant positions critical positions, and why are they vacant?

A lot of them have been vacant as long as I've been here.

So when do we not just do what we did with the general fund and reduce?

That's what we're proposing here.

That's what we say right there.

But but we're still short, but it's not enough.

Okay.

My opinion, it's not enough.

That's what you're saying.

I'm sorry.

Well, I think this is where we start talking about cutting travel, because I know last year the for utilities the travel budget was 427,000.

So maybe we need to get in there and look at that.

So, in a in effect here, you've got two based on based on what we see in this that spreadsheet right here, this spreadsheet.

We got another two and a half million dollars we've got to we gotta get to yep, andy and Jeff to start the discussion rolling.

Since we're just talking about cuts, how would you recommend finding two million dollars out of this bucket?

Two and a half million.

Is that for Andy or Chip?

No, I say for which whichever one of us comes up for the because this I'm a I'm of the belief that this is a bucket where the conversation is going to have to be over the medium term moving forward is going to have to be both a spending question and a revenue question.

And I think that it's I mean, you know, if there's just some sort of uh I mean, the the revenues collected have to be able to provide uh the service.

And I mean, it's I think we're kidding ourselves to an extent if there's just this sort of semi-arbitrary belief that we're never gonna have to adjust the water and sewer rates again.

Revenues are up, Jared.

I mean, we I know it's it's still not enough.

Well, I think that's pretty strong language.

I'm not proposing anything.

I'm just saying for me what if we're proposing because if we're seven million dollars up and we're still two million dollars in one.

Well we cut expenses there.

Of course.

And I would love to hear, which was the spirit of the question, what the two million dollars worth of expenses needs to be cut to make it work.

Right.

And I, you know, I didn't specify again in any particular items in their operating budgets for the for the water and sewer fund.

Um we certainly can do that in terms of trying to you know increase that percentage in order to hit the right mark.

Sure, which is what I said.

You just put a bunch of lines in here that said reduce by five percent.

Yes, reduce them by eight, reduce them by ten.

I mean, what you know, more context about what that means.

Right.

And then what what impact then does that have on the operation and providing of the services to where it starts we we need to find additional revenues to instead of uh operating reductions.

And you know, and I I fully understand that you know the the discussion has been um even in the context of the rate increase that we did, you know, in 2024 is that we need to make sure that our spending levels are appropriate before we then you know start contemplating uh uh rate increase again.

Well, I I don't disagree with that.

I think that I think that we are getting very close to that.

I think even with the five percent, you know, that I've proposed here, starts to starts to cut into service delivery and you know, timeliness and the ability to to do the maintenance of things, and so um you know I don't know that there's a lot left to cut on the operating side in order to keep those things in place.

And so um I think we're getting very close to where we need to consider rate increase in addition.

And and that's and not not and that doesn't even really get to the discussion we had the other night on the capital needs for water, which was hundreds of millions of dollars with of need with no funding whatsoever attached to it beyond the year after next.

But the I think the the key thing there is you know, I I don't based on what some of these some of these capital projects that we've got are such the nature that we can't do a pay as you go, so they can't they can't come out of an operating budget, so it would have to be some sort of bonding of dollars.

You can't bond dollars if you don't get to can't bond dollars if you get to 130, can't do additional bonds until you get to 130.

So until we get that up, we can't get the bond dollars to be able to do any of these capital projects.

Oh, sure.

I mean, it all that capital work is gonna have to be bonded.

Right.

And so you're gonna need revenues to go into that right-hand column that has the two million dollars now.

Yeah, and to more need 130 percent.

You're gonna need 100%.

Coverage or 125%.

So that's gotta be three point something.

Yeah, so or two and a half, three million, whatever that is up from a from a cuts perspective, which you know that's that seems to be probably the first thing I think the board would do, just just sitting around being with you guys for four and seven years.

Um first thing we would do is is try to cut our way into it and um and see where that gets us.

Well, yeah, so it sounds like there needs to be three and a half million, three point something million dollars to get to one thirty to be able to bond to do the work to keep the system functioning, all that.

So that's the question.

Are there three point something million dollars worth of cuts as to what you know what's currently proposed that's sustainable and that doesn't impact service delivery that currently exists?

Well, there is a what is that a four million dollar personnel difference between 24 actuals and 26 budgeted?

4.7 yeah.

And we need to know understand that more, obviously.

And four 4.6 on the operation side.

Okay, so of which two something is vacant.

Obviously, we've we've we've got something there that we've we've got to investigate.

Is it worth that's that's what I would I would have to get that answer before any other is it worth bringing up some departments so we can have more robust conversation of this no, let's just talk about our sets.

No, let's just talk about ourselves.

Then I think it's they go find it and report back to us.

I mean, I we can we can circle the right as much as we want.

I mean, it um to your spirit, I agree with you.

I mean, I don't I'm not advocating for water rate increases, but you can't go 11 years and not increase it again.

Uh we know we can't do that, but I think at the same time, it feels very bloated, but I don't do the day-to-day of the water.

I'm not out there in the day to day.

And do we also do we also revisit the outside the city of Fort Smith Grace?

Because you know where I'm at, because I'm I I agree with you.

I agree.

I think we just we disagreed.

Uh some of the I now I didn't talk to everybody.

I know Kevin and I disagreed on uh or disagreed with what the what the guy came and talked to us about saying this is what we calculate those outside.

I'm saying they need to pay more.

That that's the the water's the commodity, the water is the commodity.

So I feel like and and he said it, he said it.

If none of these people outside the city of Fort Smith existed, we weren't selling that water, we wouldn't have a water issue in the city of Fort Smith.

Yeah, I want to just make sure that we that I know we know, but because we're talking about let's let's put it out there that we're not even talking about rate increases to make this budget work.

You know, rate creases.

We need to be pro the cost needs to be provided for we they people need to be paying.

We all need to pay for what it costs to provide the service.

So we're just not talking about rate increases to meet this budget.

We're talking about it because it's a pop, it's a need.

So whether we address it now or whether we address it later, is something we're gonna address.

So everybody understands my position is it's our water.

We should be able to we should be able to charge whatever we want.

Our citizens have stepped up and built that for us.

It's our water, we should be able to do what we need to do.

I know what some consultant would tell me, but I know long term we should be able to charge what we should.

Well, I agree, and ultimately we're in control of that.

Well, they they they threatened bring it so bring it.

That's what I say.

I'm threaten me all you want.

Take us to court, we'll hash it out there.

I'm tired of living in fear of this.

Yep.

My question for Andy and Jeff is, and and help me out here, guys.

Then then hold on, real quick.

Then what is the number relative to what it is now?

What's the Goldilocks magic number to charge the outside customers that solves the problem?

Because you would certainly not wish to risk costly litigation and not appreciably help your budgetary challenge.

42% of the water we produce is sold to outside the city of Fort Smith.

So that residential water users inside Fort Smith only make up 33%.

So we need to be looking at industrial commercial, we need to be looking at outside the city.

Raising raise getting the making those rates higher.

I mean, how much of a rate?

How much of a rate increase do you have to have to get three and a half million dollars more?

We'd have to sit down to the house.

I mean, also too, just looking through the budget.

I mean, just utility administration alone, software licensing fees almost 700,000.

Um, within technology within utilities, over a million dollars and outside services, uh consulting services, 245,000.

I mean, there's places we can make cuts here.

The outside services is the lagoon cleaning.

But just I think the the spirit here is start walking through it and start figuring out where we can where we can get two and a half.

Yeah, I mean, it's not all dollars.

It's not all lagoon cleaning.

I mean, that's a big chunk of it.

Big increase was the lagoon cleaning.

Was there travel in there?

There's travel in here, yeah.

There's um maintenance equipment alone, just uh looks like for technology is six hundred and fifty-six thousand.

I mean, we just need I think we just need to go through it line item by line item.

So is the ask of administration uh to get us at a minimum an additional two and a half million dollars in cuts or see what two and a half million dollars in cuts would look like from waters and sewer?

Is that the ask?

Or at least to the spirit of the general fund, as we have scrubbed that general fund, this bucket should be scrubbed at the same level of intensity, and tell me what you can bring forward knowing knowing that two and a half million from this negative 500,000 just gets you to 110.

Just gets you to 110%.

They're gonna come up with two and a half million.

I'd be awesome if they did, but but scrub it with the intensity that the general fund was scrubbed.

Yeah.

Is the hydrogenerator included in this?

Well, where's that coming from?

That's in the capital.

Um, that's not in the operating that would be a one-time expense.

Yes.

Are we in agreement on that?

Is the board I mean?

I'd certainly like to see more specificity and a you know, harder scrub.

But so 750,000 for the hydrogenerator repairs is in operating.

That's what I'm seeing here.

I think it would be one or the other.

You're talking about the generator hydrogenerator in the in the dam.

Yeah, I mean it's listed under it's listed under operating hydrogener on-site anticipated repairs, 750,000.

If you're looking in that line, so if we're looking on the capital side to replace it, then there's 750 we can scrub from the operating side.

Okay, okay, that's a def towards our three million.

Let's go.

With uh with page not that, Kristal.

Uh page 680, Jeff.

I lands.

We've already we've already reduced that out of these numbers because you'll see the very last line in that budget detail for the 915 budget meeting.

We reduced 750.

We already took that out.

Okay.

So that is not that's not in these numbers at all.

And we've got 3.1 million for treatment supplies for chemicals.

You know, what could we get that down to if we started uh if we redid our bidding process?

I know when we were looking at the liquid chlorine, I talked with one of the companies, they said they won't participate in the reverse bidding process.

Could we look at a different bidding process that would bring more vendors in and get the cost down there?

Yeah, I think we did a traditional bidding process after that, and they didn't be bid on that either this year.

Look, I but certainly Jeff, you could show us more options kind of in the spirit of number one up on that XL spreadsheet, the general fund tab, as opposed to just kind of the general five percent sort of reductions that are up there.

Okay, thank you.

Very good.

Um, are we ready to move to the solid waste fund?

Yes, okay.

Um the anticipated revenue and solid waste fund 22 million four twenty-seven zero ninety-nine proposed operating expenses nineteen million six fifty-four two thirty.

The proposed operating um excess of the surplus of two million seven hundred two eight sixty-nine.

Uh, the problem we get in with into with uh this particular fund is when we start talking about our our capital expenses um and the amounts that we transferred to from operating fund into our sinking fund for as Andy mentioned at the start for uh future expenses related to sell landfill cell construction and closure and postclosure costs, plus also the uh equipment uh replacement fund.

Um the two and a half percent uh non-uniform pay increase portion does apply to solid waste.

We spoke earlier about the um adjustment to the landfill uh disposal rate, the gate rate, and also the commercial collection rates.

Um that is anticipated to be a three million seven hundred and fifty thousand dollar increase in revenues.

Uh, as mentioned that particular ordinance to affect that change is on tomorrow evening's regular meeting agenda.

And then it and can we ensure that Fort Smith residents don't get caught up in that gate, we call it a gate fee or a tip?

Yes, yes, and and the the provision that they can bring a pickup load full of trash with the you know with their ID and their address verification through.

They have to show themselves.

Right.

That's it.

That's a 10, it's a ten dollar flat fee that we used to do just on Saturdays, and Dwayne is proposing that we do that whenever they whenever they can come.

So this would be 3.7 million.

And again, I I think as we look at as we look at this and we look at water, um there should be incentives for living in the city of Fort Smith.

Yes.

And people coming from outside, especially waste management or cards, should get a benefit of using the resource that Fort Smith is paid for.

Right.

And and even more so, perhaps pay for to help offset cost and subsidize, if you will, services that we provide to our own residents.

So the benefit of living in the city is cheaper landfill rates, cheaper water, all those different things.

So that's that's really our the focus.

The focus for me is not generating revenue, it's benefiting the citizens of Fort Smith living here.

Yeah, and one of the benefits then to the citizens is to help offset our general fund costs by a million dollars for animal animals, right?

Yes.

May I ask uh Andy, just kind of like in your general opinion.

Um, you know, we look, we've looked at the kind of the big four buckets, and alone amongst the four buckets, the solid waste side on the personnel operating, you know, side as it relates to revenues is two point seven million dollars to the good.

Can you speak a little bit to you know what's kind of the what's kind of the secret sauce in that bucket, or what are they what are they doing well there that perhaps you know can be uh replicated or practices-wise, you know, because it's I mean, not only are they 2.7 million to the good, they're you know, fairly consistently um to the good, which me speaks to me that there's some things that are aligned really well.

Well, the rate, I think the rate structure is established at a point where it provides more than just operations and it cash funds the capital expansions that it is playing.

So the rate structure is the revenue transfer size to the need every year, and so yeah, they're gonna be they're they're they're they're gonna collect more than what their than their operating costs are because they're they're trying to plan for the future uh costs.

And I'll say also that you know Andy also mentioned that our intent is to not issue debt for the landfill.

Well, they there was a time when we did carry bonds for landfill construction and such.

Uh when we were able to pay off those bonds, we then turned that sort of debt service for the for paying of those bonds into funding appropriately their um sinking fund, and then we continue to do that, and we made and we have made sure that the sinking fund is appropriately appropriately funded so that they can replace equipment and such, which doesn't hit their annual operating budget as hard than when they need to replace you know a number of the 400 400 to 500,000 you know collection vehicles and such.

And so I think that also helps, and that's not something that we're able to do in the general fund for anything else.

Well, I mean, because we're not, I mean, we're not directly setting a rate as it relates to the general fund either.

I mean, we there's a sales tax rate that is in effect, but there are macro forces that play into that versus we can charge directly what we wish to for services like solid waste and and his point, we're very right-sized versus the expenses and the revenue there, director Newmore from a non-departmental um where we're we're transferring money out of the solid waste fund to the sinking fund of the demo fund.

What's the reason for a nearly two million dollar increase uh for the transfer out to the sanitary uh the the equipment sinking fund?

I'll say that number generally comes out about the eight million dollars a year in prior years.

We have we have intentionally reduced that.

So we have sent we have saved less than we should have in prior years.

So in 24, we we put 3.3 million in 25, we put well just for that particular equipment fund 3.3 million.

Yes, and now we're going to 5.4 million.

Typically, what we've done typically the all of those are 8.8 million dollars, or or some other number, but what we what we usually have done is once we get to this number where we show that $8 million or whatever that number is for that particular year, we back off that amount so that the contingency reserve percent gets to the 20%.

That's what we've done in the past several years.

Oh, the the here on our oh okay, our ballots.

Yes.

Okay.

We have we have sort we have artificially made that reserve fund at 20% by reducing the amount of transfers out.

So in theory, um we would do the same thing in 26 if we if we didn't do any cuts or anything with their capital of 8.649, and most of that is depart uh non-departmental, we would drop that to where we would hit 20 percent.

Correct.

So but that's actually more than you'd have to drop it significantly more than well, yeah.

You do I mean we'd go from 38.9 percent with 39 percent to 20 percent basically.

So we we we drop that amount somewhere less than eight point six million dollars.

Yeah, and the impact of that is that at some point when it comes time to build the the new cell, we have to wait another year because we didn't transfer as much during over the course of the intervening period.

The um but we should the estimated cuts that are proposed will increase the uh reserve to almost 39 percent.

So these these spreadsheet here that I'm looking at that shows all those cuts should leave us a budget deficit of 311,000 dollars, right?

Which will oh barely reduces that 9.5 million.

But that is a little bit skewed also because it includes that capital number and that capital number, most of that comes from the sinking fund, which is not really part of their operating fund.

Well, and then also if the board chooses to change those tipping fees, you now have an additional three point seven million or three point four million, whatever on top of that.

So you're um that's included in that's that's included in this list, yeah that's included in this budget here.

That's included in the no, not in that one, but in the sheet that I gave you.

Okay, I mean my my revenue my revenue matches what I'm budgeted here.

I mean the the 24 to 26, 24 actuals to 26 are you know million three more in 26.

So that tells me that's not factored in my am I wrong on that?

Yeah, the other this this says revenue of 224 27,099.

Yeah, that's the same thing I've got here, yeah.

And then I added, and then in the middle of that sheet, I show revenues to be added three three million seven hundred and fifty thousand okay camp.

So just so just clarify things I do appreciate the comment that he had asked earlier, uh Director Martin did so.

We will be doing it when we talk about this increase uh adjusting the uh landfill gate to rate and commercial collection rates.

If a fortune resident shows an ID, we're considering then to make sure that they're not charged the additional yes.

Right.

This that's correct.

Great.

Thank you.

Anything else on the sideway can we do the same thing we did on the water sewer?

Understand the personnel change for 24 to 26 and the operation 24 to 26.

about this increase uh adjusting the uh landfill gate to rate and commercial collection rates if a fortune resident shows an ID we're considering then to make sure that they're not charged the additional yes this is right this that's correct great thank you anything else on the side of wave can we do the same thing we did on the water and sewer understand the personnel change for 24 to 26 and the operation 24 26 yes thank you said excuse me um so the last two pages on the on the small packet that i gave you um is the distribution of the capital requests this does include all of the all of the items the the other packet that I gave you that has the blue lines on it that shows the complete capital request the second the second part of that does represent the aging report back to 2020 to show items that have been requested for multiple years and but uh I'm as I've gone go down the capital items on this list yes for standing real quick so second page here um the one the aging requests going back to 2020 yeah so there are if I'm reading am I reading it correctly to say that there are nine pieces of capital equipment looks like vehicles mostly that have been requested consistently since 2020 yes okay I mean I think we should probably seriously consider either funding those or not consider them again moving forward because it's kind of that interesting like five six year threshold of you know we should probably get this taken care of or seemingly they're doing the job without it or or with it in an in a untenable um unsustainable fashion so with with this there are capital included here are those the capital items that are included yes okay so um how can how can I take this and determine what's included for for water and sewer like what is there a is there like a I know some some of these like was requested in 2020 and 21 and then requested again in 24 25 and 26 like is that one of those that's been included or like can you can we can you tell me which ones are included I think they're noted on the sheet that you provided for the the spreadsheet that's are they oh they're noted on this yes okay there's a note towards the bottom starts water and sewer okay so I have to kind of cross reference yes but I did I did intend on the like the description or the note like the water and sewer the seven passenger SUV 2024 request replace existing asset and so the one right below that is a 2020 request I mean I mean so it's been requested each year since 2020 that's I tried to I tried to make note of that in the note that I included on this so across the four buckets there's 17 point six million dollars worth of capital equipment requests for 2026 and that and that's the sum total on the back of the blue sheet that's that is the total of requested sure and I think actually I don't have that so on here but I think the actual numbers that I put yeses on adds up to more like 14 million the yes the pre-binds but I don't like this whole price yes but when you I guess the better question is if it's a capital request on your approach that has a yes next to it is that the number that is like let's use the general fund for example where it says capital outlay FY26 budget 3.245 million dollars does that reflect the ones that you have put yes next to or is that number uh older do you know what I'm saying well the three point the number that's at the bottom of the water sewer column is adds up to 1.2 million the the biggest components of the general funds 3.2 million capital request uh there's 1.9 million in the police department that has been moved to the sales and use tax and then a few other ones that I've indicated no against like for instance um well parts and recreation I mean they they did request two identical of the same vehicles I I said no to one and yes to the other for instance and so you some of so it looks like the general fund in your model

Uh there's 1.9 million in the police department that has been moved to the sales and use tax, and then a few other ones that I've indicated no against, like for instance, um well, parson recreation.

I mean, they they did request two identical of the same vehicles.

I I said no to one and yes to the other for instance.

And so some of the so it looks like the general fund in your model.

If you flip it over, it's one point two hundred one million two hundred and twenty thousand seven hundred and thirty-seven dollars of capital equipment out of the general fund that you preliminarily indicated your support for.

Yes.

Okay.

So what and so that number the three point two million here, like on these type of forms, though those capital numbers are not necessarily current they don't they don't reflect your preferences.

Correct.

Now what the number that I have at the bottom of the front of these pages, like that one million two hundred and twenty thousand, that's the number that I have there.

Okay.

Yes.

Uh Jeff, do you propose in the ideal scenario on these CapEx ideas and buying is there a timeline that you think that they would more appropriately fit?

When would you propose these things up?

These pieces of equipment.

I mean, you mean throughout the year or yeah, would you would you like to was there is there an ideal flow of that?

Not not specifically.

I must more focused on the the items and their cost relative to the overall budget.

Now I mean to be in terms of you know, put in purchase orders and contracts the first month of the year.

I um typically we would on a lot of these because the money is budgeted, and a lot of times these things have a lead time that were you ordered them in January, you may not get them till the last part of the year anyway.

So um there wasn't particular particularly thinking about the timeline.

I was always gonna ask is since they were gonna be related to putting things at deficits.

I think maybe the timing of that's a very important is there any you said earlier the sanitation is gonna be coming out of their sinking fund.

Is that correct?

Yes, well the general way you could put on here which one's sinking fund, which one's straight off the top.

Solid waste and streets both both operate off a sinking fund, and that is that is noted on this page here.

Which badge is that okay.

The front the front page of the one with the blue bars on it.

I mean, it for the capital replacement plan purchase from solid waste.

You'll see you'll see those items.

Uh typically the the replacement of the carts and the uh disposal boxes and such they put into their operating budget and not necessarily out of the capital replacement plan because they essentially buy those every year.

Uh but the but that and then the streets and traffic control, you'll see that those are capital replacement plan purchases also.

The the vehicles that we're replacing, um basic stuff, the trucks, the cars.

Can we get the age of the one replacement from yes?

There, yeah, and those are typically included in the detail book because they typically will I I know I know, and we can we can summarize it.

Yes, we put it on this, something that's very simple.

Here's here's here's where this is a 2020, this is a 2015, 25, whatever it is, just something right.

I looked at some of these things for transit.

That's something that kind of stood out to me as we were looking at the capital request.

Um, we rarely say no to transit.

Um, but if we're looking for things, I think we need to take a look at some of these specifically.

I don't know what this pocket mark is, I know there's um you know there's a the 20% cost of the general fund is about a hundred thousand dollars or actually uh I'm sorry, twenty-five thousand dollars.

I think we need to look hard at some of those things.

Um can we get by without filling these?

I mean, it's about two hundred two hundred and fifty thousand dollars.

Yeah, can't we're I mean, we're replacing uh another fixed route bus.

Um I mean we're busy replacing buses pretty regularly.

That's a big hit to the general fund.

I think we need to take a look at some of those.

Yeah, and the the rent money well, yes, the it there is offsetting uh federal dollars for a lot of it, but there but uh there is still a to your point, it still is a hit to the general fund.

The pocket park uh item is uh I want to tend to come up and answer that one.

Yeah, if you don't mind I'd like to know what because he knows the details.

Explain the parking park a little bit to us.

I made it oh yeah, I could you call Chris turn that up, turn that on up top okay.

There you go.

So it was tap it.

Is it on?

There we go.

Explain the parking park.

Okay, the pocket park is essentially the curb cuts that we had talked about before, um, creating kind of a curb cut for the buses to pull off on like Rogers Avenue or um certain places, particularly along the the highways, um, to kind of give the bus a way to get out of the traffic line of traffic, and that's what we had factored in for those.

That that's something I asked years ago.

And if you look if you go on major roads that they block, you know, block the road, and you got people backed up and it causes issues.

If we can start looking at like big cities pulling out off the road and pulling talking to Rogers Avenue, yes.

And one we looked at was on Rogers Avenue uh out by the super center, another one was by the mall, and another one uh was out on highway 71.

Where are they playing it on widening Rogers?

540 to 74 street, 540 to 71st.

That's probably the busiest part.

Just so that we understand what a pocket part of the pocket park uh the it's interesting terminology.

What you're actually describing, because we here pocket park talked about is like along Garrison there where there's like the mural uh etched into the brick on the north side of Garrison and a small little space.

So you talk about pocket park here on this line item, you're talking about a few strategic uh bus pull outs at bus stops that's correct to get the buses out of the lane so when the bus is stopping to pick somebody up, the traffic can continue to flow by the bus with amenities, yes.

Well, yeah, there'll be a nice bus stop, etc.

And is it correct to say that it's only 25,000 of the general fund?

That's correct.

But I I think I think we gotta look at I think we gotta look at some of this.

I mean it that's a couple hundred thousand, two hundred and fifty thousand there.

I think we gotta look at but it's only five percent.

I I I 100% agree.

It's all I I one I agree with that.

We don't ever we don't we rarely say no to train rate.

I I know that, but this is this is one of those things that it does impact a major thoroughfare in the city, and if you haven't seen where they back up, a lot of people get upset behind them is uh again.

Where are we talking about so the the one we're looking at more specifically is along Rogers Avenue?

That this is one.

This is one.

Okay.

Now when they go to widen uh Rogers, is this in that widening park?

Anything we do, we would have to coordinate with uh I would this be in the area of us they're playing on Walmart.

This is 74th to 540s with the widening spot.

Oh, but where's the where's the cut at the cutout would be off along Rogers Avenue 70 we're at Ken?

This is about the Walmart on 70.

Oh, does this wall?

Is that is that where the on Rogers, yeah.

Is that where the where specifically on Rogers by the Walmart or by the mall?

By the by the one.

Well, we've identified five different areas that we would like to put these.

Um but the first one we're looking at would be along Rogers Avenue in front of uh the Walmart Super Center at the intersection of Mazar.

Yes, is that where is that where the widening ends?

It's not going that far.

The widening is only going from 74th.

74 to Waldren.

That's dumb.

Yeah.

So you know, the air you live around 74.

I'm right there.

I just see the that's going that's dumb.

Not not taking it to Mazark.

And these are issues of safety and traffic control issues, not uh fun and games.

Well, I've just I I just say we maybe maybe that one we don't have that, but yeah, these but I understand these other ones.

We we we look at that to the spirit of what you're talking about.

That's why I think the timing of these things are important.

Okay, you know, I don't know about upfront loading the top of the year with this.

I'd like to see how the sales use tax actually comes through.

So he's saying like maybe do like a what's you for capital, and I know that unlike years past, we asked to see all the capital requests on the front end versus doing a supplemental, you know, in the springtime.

But is your thought, Director Kent, maybe you know, we decide amongst ourselves, you know, we we perhaps approve some of these on the front end and then you know reserve uh the others for later on in 2026 or or resume the old way and push all of them in the middle of the year.

Originally, although this turned out better than I thought it would looking at these sheets.

Originally I was saying don't do any capital till six months into the year.

Obviously, the things are looking better, things would be better, maybe prioritize the ones that we know we need to put up to the top of the year.

But I would love to see at least Q1 or Q2, it would have been great, but Q1 at least, so I can get an idea how things are turning around, and some of the revenue that we think will be increasing, opens up, you know, the businesses that will be opening and things open up more at like May and that part of the year.

So we're not gonna see that in January and February and March.

We always have the option to not approve them when they're brought to us.

So we budget for them and then they come to us at meetings and we either approve or push back.

But I think and that may be the point.

I just wanted to know if there was a spirit to establish so that we didn't feel like we're always telling them, you know, hey, take it back, take it back.

And I think you know, I think particularly the ones that are like little solid waste and um streets that have the the dollars already saved in their replacement funds.

I think those make sense.

Those are good priority.

I think if if we want to defer the ones based in the general fund or even utilities to after we have our uh quarterly budget review in the spring, you know, I mean that that type of thing makes some sense as well.

That does.

So just just to kind of go back on our on our transit discussion.

Um so they were proposing one point seven million dollars in capital.

We we're through your efforts.

You're putting this you're you're getting us down to about 250,000 total in capital.

So am I am I seeing that right?

Am I reading?

I'm basically taking this, which is their summary page, transit spent summary, which was five five point zero five five million of that is one point six six nine billion in capital.

You're changing that to roughly two hundred and fifty thousand, yeah.

And that's based on general funding.

That's based on the net cost to the general fund of this requests.

Okay, and then well, okay, never mind.

Go change chair, correct.

Don't know where to go next.

He come back.

Sorry, yes, sir.

Would you like to check the break?

I opted in the middle of the other.

Well, we take a 10-minute break.

Okay, thanks.

Uh therefore returning to your places.

Uh this time we're gonna go to sort of a follow-up session.

Uh to ask any questions, and we're gonna go to Mr.

Dingman.

Thank you, Mayor.

If if we might start with uh fire chief Darrell Clark.

Um, you know, I think there's been some operational questions as to how the proposed reduction in um number of fire positions and the I mean the reduction of an engine company as to how that works or what that means.

And so I'd like for uh Chief Clark to walk through that a little bit.

I appreciate the chance to speak to y'all because I wanted to um I had digital copies, but it wasn't working, so I ran and made some prints at lunch.

Um because I wanted to talk uh basically we're unique from any other department um with our the six vacancies that they say were browning out or eliminating.

We staff those every day.

We have our minimum staffing every day of every year, and those spots are filled with overtime now.

So what I I mean, what I have proposed is a staffing reduction, which is huge in our department.

We have not done it in my career.

Um, it's always been talked about or threatened, but I wanted to answer you know some questions, give you get make sure you guys have all the info.

And I also would like to know if that's the route we're gonna go because I now have promotions to make new hires to offer jobs to that I will have to reduce, and this all starts Wednesday, so I need to know how to proceed.

Basically, could we can we start by there was I have a brief conversations with uh with uh Mr.

Dingman about this one engine reducement?

Um what can you speak to that?

What is that?

Was it is there?

Is it one station that has two trucks?

And you're trying to go to just rolling out one truck of the station.

Can you speak to that?

Because that's what um I had initially looked at a different station on the north side after some research on our sales tax revenue, how we use it, how we can use it.

Um I realized I could shut down Pumper 11, which is by far our slowest truck.

Um both trucks at station 11 don't combine what one of any of the other companies singularly runs each year.

Um it's a large geographical area, but this way I can keep the same funding pretty close as I can out of 4803, give the benefit to the general fund, and I keep all 11 stations open and staffed.

It's just there will be a single company at this station now, and we'll maintain it'll be a ladder company because the ladders are where they're at for the maximum ISO points.

What does that impact our ISL rating?

I have I'm pretty confident we would keep our one, but I can't guarantee it.

Um the scoring I I poured through one of our our 2016 or 14 audit that I found in the chief's office.

I've talked with Chief Richards, Chief Waters.

Um the scoring is really hard how they do it.

Um and I can't guarantee it, but the water system plays a big portion of this our score, probably close to 50 percent.

I know they've made improvements since our last audit, so losing one pumper.

I would hope we would overcome that.

Plus, we have a larger reserve fleet than we had.

We get a fraction of a point for each reserve.

Um, and this would add a newer apparatus to the fleet.

Pumper 11 is a 22 model, and I would put it in and replace an older frontline truck.

That new that for old frontline truck then would go to the reserve fleet and would be our nicest reserve.

And then I'll I also wanted to clarify it's actually seven positions for the number that was on the spreadsheet.

There's a command staff, the one that you referenced that we've gotten in recent years.

I had offered that one back up too.

So it's actually seven positions to make the 629.

Dude, um have you been thinking about this before?

No, never have.

I uh Andy gave us the presentation at the last staff meeting, and I didn't realize I knew we'd operated at some deficits, but when he kind of laid it out there, so you guys you guys ever had Chief Christensen, no Chief Boyd.

It was always talked about when I was brand new.

They always talked about closing station three.

Um, it has the smallest district, and it's overlapped a lot more.

I guess maybe what I'm talking about is is station 11.

Oh no, it has never been discussed.

Never never been discussed.

You got well, okay.

Just make sure I'm I'm with you here.

You we have two companies out there.

You're talking about with with these six removing one of those companies.

Yes, right.

So y'all had never talked about that before.

No, wait, which it's a relatively new station.

We opened it in uh 13.

Okay, 13 or 14.

So I mean, it's obviously our newest station, but I actually have nine personnel on that truck on the company assigned on the three shifts.

I am gaining a couple of small silver linings, our heavy rescue that we try and add captains to every year for several years since Chief Christensen, Chief Waters.

Um, we haven't been able to do it.

I'm keeping the three captain positions and moving them to 4802 on the heavy rescue so that then all of our companies will be staffed with three personnel.

And that's not that hasn't always been the case.

No, that one runs with two, and they run in Oklahoma and they run in out into the county.

And that truck, if you saw the amount of equipment on it, I've always had a goal of making it a four-man company before I leave.

So this allows you to make it three.

Three.

Okay.

So it's a small silver lining.

I gain the new pumper.

I will gain a staff vehicle that I can use for, like we've discussed, trying to get them for medical response or to move to another, replace an old one that we're trying to get a new truck for.

So I mean, there's a couple of benefits, even though it's made me sick be able to consider reducing staffing, but I don't think the citizens will see any negative impact.

Um it's our slowest area with hopefully maintain our ISO one.

So we're I'm trying to.

My goal was to keep everybody I have on the job.

Right.

Right.

Not reduce rank pay, any of that.

We're doing some other steps.

I'm reducing the number of people allowed off on vacation by one each day.

That will reduce our overtime.

How to quantify it is really tough.

But repeat that part.

Right now, we allow five people every shift to be off.

We have a vacation schedule.

They have to pick it ending of November, early December, usually each year.

Goes by seniority.

We've allowed five off for a few years.

Does create more overtime.

I've reduced it down to four.

Everybody still gets the same number of hours of vacation.

It's just the younger guys will have far less days to pick from when it gets to them.

The grant that you guys did receive, yeah, but $800,000.

About $700.

Well, $700.

Yeah.

Well, uh, when does that come to you?

Well, we they have accepted it after y'all voted on it and the government reopened.

I believe they've gotten on there.

I've seen the traffic between Chief Vaughn and Poover.

Um we are doing demos right now.

It's a it's a lengthy process because I mean that's a huge purchase, us replacing all of our SCBAs for the entire department.

So we don't take that decision lightly.

We've got two manufacturers, SCBAs now that are on our busiest trucks um to be assessed for the guys to, but it'll be 27 probably early in the year before we know what the final price will be at the volume we're buying, and then work with them on negotiating the price.

Um I I heard you mentioned ISO rating.

Uh we don't want to do anything to impact a town class one rate.

No, I don't as well, but I'm I'm trying to do my part so that I'm not having to do something that's mandatory next year and where I'm firing guys or laying off guys that are on the job.

Um I will end this process.

The numbers have varied a little bit in mind in HRs.

Um, because I will for a while, I will have three extra drivers, but they will just fill in the positions.

I have three for sure retirements in 26, but I have two more that are really strongly looking at it.

They should be absorbed through attrition by April-ish.

So I won't have it's a sliding, you know, reduction in the savings that we've put up there, but it won't take us long to realize the full amount each pay period.

Yeah, to the board.

Let's make sure the decisions we make do not have an adverse impact on that ISO.

Um, going from a town class one to a town class five, uh, would be significant to all of our property owners in the city as they pay insurance premiums.

Well, Record Rigo, thank you, Mayor.

I think I'm certainly not saying this to be disrespectful to the fire department or the police department.

I think what we're talking about right now, and then another thing I'll point out, speak very clearly, you know, because Andy I'm sure is trying to approach and Jeff the recommendations that are being made, you know, dispassionately.

It speaks to a then a huge driver of expenses out of the general fund are public safety.

I mean, if we look at the two things that Jeff recommends to us in this sheet that we cut, I mean, it's $629,000 of removing these vacancies in the engine company has just been described, plus an additional line 39 fire reduce additional operating expense 275,000.

I mean, the biggest chunks that are recommended are uniform public safety.

I'm not saying that I agree with that, or that that's where we'll eventually are going to land, but it speaks to that notion that we really do need to do the things that we can over the short and medium and long term to make sure that our revenues, all revenue options are right sized for the level of public safety that we desire to provide to our community because the biggest recommended cost reductions on this list come out of that uniform side because they are the biggest um drive.

And I think the residents appreciate that.

And so I think we have to remember that each and every year, a very healthy portion of the spending that is excess over revenue, like a the driver is a desire that we all have to provide the best, best, best public safety.

And so I you know there's work that we need to do, obviously, but we just need to be mindful um always that sometimes there are very legitimate reasons to spend and spend on public safety, and that's what we've been doing, and we have to really be cautious about that moving forward.

Thank uh Director Neil Morton.

Um looking at lines 17 and 18 on that document, the budget worksheet that you put together.

So reduce vacant police, reduce vacant fire.

Is this is this a freeze or is this a reduce?

It's a reduction.

You said forever cut, yes, this is forever.

It is not a freeze, it is a reduction in the number of officers.

We would be at 143 uniform personnel after this when we're at 150 right now.

And same thing on the on the police side.

Could you speak to the tension that these are obviously they're not conversations we all want to have?

I mean, ultimately, I would I would rather just do none of these cuts and continue on.

Uh, but you just can't.

There's the money's not there.

But it are the raises are important, right?

I mean, I think that's I mean, would you see the because I mean I feel like the idea of what Jeff has come up with here is to protect pay raises and taking care of who we have versus you know, and doing the other one, or would you could you speak to that tension?

One of the documents I set around is just our current pay scale.

Um I'm we're protecting the step raises.

The guys and gals don't consider that a pay raise.

A pay raise is adjusting that pay scale.

I know it's not a promise, it's a year-over-year ordinance, but when they make rank or take the job, they look at that pay scale and look at you know, my next evaluation.

If I get a good evaluation, I'll get a small bump in pay to this.

That destroys morale.

We've opened this.

I know in some of you are here, director good and settle and administrator Dingman.

Last time we opened this box, and it it was really bad on morale.

I would imagine so.

Yeah, because they they look at it as a promise to them, and you know, I consider that too.

That's that was the largest part of my goal, like I said, to keep the personnel, their pay, their step raises, um, and not have to be in a worse position next year, make mandatory cuts and layoffs that may be even worse if we can correct the course now instead of having to try to do a 180 next year.

And one thing that uh this is relevant to this question, um, there are a number of, I mean, that if the step raises are included, there are a number of officers both on the fire department and in the police department where those individuals have reached the top of their step.

There's the step process.

So I think there's the numbers I'm gonna get wrong, but maybe 40 or so on the police side and 35 or so on the heavy fire side that are at the top of their steps, so would not see an increase in pay.

So you're saying that the numbers when you see that it's one one 1.4 million, you're saying it really wouldn't be 1.4 million, it'd be less.

Because they no, it would be 1.4 million.

Oh, okay, but it does not apply to folks that are at the top of their steps.

Okay.

There's personnel that won't see a pay increase because they've reached the top on the steps there that are outlined.

So this is this is what 25 years 25 steps here total.

Like when I when I look at this, does everybody go through firefighter has six?

But you can they all go through six?

No, you can promote to driver.

Okay.

Um you're eligible to test after you've been on for two years.

So uh the expectation is max.

I go I go step six, and then I'm I'm gonna get driver and still have test four to test for yeah.

So but in reality, the expectation is I'm getting a uh a step raise every year, yes, until you've topped out until you've topped.

So if I get to step six is a as a firefighter, I can't go any higher.

I can't, I don't get any of this two pay increases then is the only thing a colour and adjustment to the pay schedule.

Okay.

So trying to understand your question, yeah, statement you made earlier and understand your documents.

So on this document right here, which I guess is the current yeah, explained.

So there are the six vacancies.

So, like say right now on on uh pumper six, there's a vacancy currently on the A shift for firefighters that correct of these vacancies, and you kind of mentioned some personnel stuff coming up.

I mean, because what you propose with the reorganization is this no vacancies, you take away pumper 11 and all the spots are full.

So by doing away with the six vacancies, how does that two-part question?

Number one, are you close to filling any of these?

And how does doing away with vacancies impact the natural sort of uh you know academy classes, regular old sort of attrition?

Like, is it gonna is taking away these vacancies going to impact your overall you know, pipelining ability into the fire department?

No, it um there's other small added benefits.

I mean, as well to the reduced and uh reduced number of staff because we have 12 guys in the pipeline right now, as we have proceeded how we would normally with our current level of staffing.

Um they've done their polygraphs, their physicals Wednesday we are supposed to meet and do conditional offers of employment.

Um the 12 is normal, we usually do plus three, so I have six vacancies, I have three confirmed retirements next year, and then my plus three.

Um I have to buy bunker gear for each one of those guys at five thousand dollars, another twelve hundred dollars for their boots and helmet and hood, uh their structural gloves, and then we pay them while we send them to the academy.

I would, if we do this option, which administrator Dingman hasn't approved yet, I want to still hire four.

Um, and that will cover my retirements for next year.

I have the list already since they've already started the pipeline, and we actually we had a really good list this year, which I hate to not use at all, but so under the current setup, you have 12 people that you would like to hire in the near future.

But if we make this change, you're wanting that would lead you to hiring four.

Yeah, that that was my plan that I had outlined in the memo.

We could reduce it to three, but um I have two additional people that are strongly looking at retirement that they've even asked about the process and what they need to turn in.

So I'm in past conversations with them.

I'm pretty confident I'll end up with five.

Thank you.

Any other questions from Chief?

Um the to the board's preference.

Um, any other um department heads that you'd like to ask questions of or hear from it's probably similar questions with Chief Baker, right?

Sure.

Yeah, uh Chief Baker.

After now, hello.

I think probably just any thoughts you have, uh, sort of in the similar vein of the questions that you know we asked of of the fire chief, you know, what how does an eight slot reduction you know impact your pipelining?

What's your current pipeline look like?

Where are some of these vacancies occupying right now?

Those sorts of questions.

Well, first I need clarification, uh, because this was the first that I just have seen these numbers.

Um are we talking about eight or are we talking about 11?

Because when I proposed removing the officers from the airport, I assume that that would be included in whatever personnel cuts were made.

Uh, but as it was presented, it appears that that's three additional um positions.

I'm just talking about the eight vacancies.

Okay.

So well, but that is a good question because for both the police and the fire, there's two separate.

I mean, if we put that uh spreadsheet back up, lines 17 and 18 talk about eight reductions for the police department, six reductions for the fire department, both over $600,000, and then further on lines 38 and 39, there's an additional uh over 250,000 aggregated for police discontinuance of the contract with airport security and fire reduce additional operating expense unspecified.

Are you like if those aren't separate, they shouldn't be separated.

If it's if it's 600 something's all in that realizes, I mean I'm just talking about the eight vacant positions that are currently vacant.

The if they're presumably if there are three or so officers assigned to that airport function, then they would rotate back into the regular police department.

Does that actualize into two?

So not sending three police officers to the airport.

Three.

How how many?

Three.

Three, yeah.

What did I say?

Two.

Oh, three, okay.

So three not going to the airport.

If they're going into the police force, does that still save us 280,000 dollars?

No, and that's my point.

Yeah, I mean, it shows an additional this shows more money being put back to the general fund.

If I mean, as it's presented, you are essentially showing 11 cuts at the police department.

Three clear probably pay control five years.

Right.

That's your that's that's if they pay for them, if they pay for them, correct?

Like that's a different there has to be something.

There has to be stuff that I'll be right.

Mr.

They wouldn't be going back into the police department, they'd remain, they'd just be paid for out of a different fund.

Correct.

Okay.

So we're talking about eight positions that were cutting from the police department.

Um, let me I would like to begin by saying that if I knew that we would be talking about cutting positions from the police department, I would never have uh broached the idea of a raise this year.

I apologize to my people for doing that.

Uh I did not realize that we were going to be talking about this at this point in the budget year.

Um so I I mean that's my fault for getting their hopes up uh and then uh not delivering.

So uh I do apologize for that.

I want to thank you for considering not cutting the step raises.

Uh as uh Chief Clark indicated, that would be a terrible thing for the police department and the fire department.

Um we have some of us have lived through that before.

It's uh demoralizing.

And uh the I'm glad that that sounds like it's off the table.

Uh as Jeff alluded or stated.

Um we do have people that have topped out of all of their steps, uh, so they will not be receiving uh a pay increase in 2026 if the raises are off the table.

The police department, like the fire department views the officers view those step raises as a guarantee.

Um, and and I don't have the pay scale in front of me, but I believe that there are now 10 steps uh in the basic police officer rank.

Uh the next step sergeant.

I believe there's four or five steps there.

Uh we did rearrange that pay scale when we gave the 24% raises in 2024 to help manage some of the increases that were going to result from that.

Uh and tinkering with those those pay scales can can get tricky in and of themselves.

But so we realize that I mean, we're we we've got a few we've got 40 people that are not gonna have raises unless we can figure out some way to fund that ourselves.

Um just to give a little bit of history about the personnel situation in the police department.

Uh in 2017, we had a uh mass exodus from the police department.

We lost probably a third or more of our authorized strength.

Uh we worked to build that back up.

And then the flood, COVID-19, social unrest that took place in 2020, a lot of negative things evolving law enforcement in the country.

And we saw another large exit from the PD.

It was also becoming very difficult to find and recruit people that were wanting to be police officers.

So we completely revamped our hiring and recruiting processes.

We worked to market ourselves better and across the nation.

We filled the police department up.

And we got some frozen positions back as well at that time.

And I told the previous city administrator that he was going to have to stop counting on the salary accruals in a police department to fund a general fund deficit or spending out of the general fund.

And I was given every indication that that's what everybody wanted me to do, fill the police department to keep it full.

And so that's what I have done.

Obviously, that has attributed contributed to more money being spent out of the general fund.

And if that contributes to the situation that where we are today, I'm not going to apologize for that because I believe that's exactly what I needed to be doing.

That doesn't change where we are right now.

That is true.

One was the SHILD Our Youth Officer.

We had a grant that we had secured cured for that, and when I presented it to the board, the board said, why don't we just fund this ourselves?

We don't want to have to be coming back to the table to ask for for more funding when the grant funding runs out.

So that position was added.

That's one of those five.

We added three crisis intervention unit officers through a grant.

Currently, two of those three positions are filled.

The grant actually expired or expires the middle of this year.

So we had to we had to budget for uh continuation of those positions.

So the five additional were added with some type of other funding, with the exception of the SHILD Our Youth Officer.

When we started 2026 out, and we went through the budget process internally.

We did our due diligence to trim any excess that we possibly could from our operating budget.

And then we had a review process with administration and finance and in September.

At that time, the capital improvement plan that I presented last week, and that I guess you're going to be looking at again in December.

We uh we're looking at turning back two point my 2.9 million dollars from our sales and use tax fund uh to help offset the uh officer salaries.

So I say all that to say that we absolutely do not want to lose any positions, but I can't set up here in good conscience with all these other departments looking at me and say the the police department needs to not come to the table and and providing relief uh to the situation that we're in.

I didn't expect eight, but I think we can live with eight, um, especially since we're talking about you know we've added five positions uh through other funding means that won't be a huge hit to us.

Um I personally I think we need to be trying to find ways to add police officers.

That's been my goal uh since day one and have not made any secret about that.

Um I also want to do my part to contribute everybody's gonna have to uh give something.

I've instructed finance and Jeff to cut my salary by taking the car allowance away.

Free up about $7200.

I know that in the grand scheme of things, that probably not that much, but I want to do that to uh to contribute to the cause.

And I'm sure there's a lot of other things that I want to say, but refrain.

Gee, how often are y'all providing police escorts and can you provide a dollar amount associated with those?

Oh I couldn't, I I mean, I haven't totaled uh an amount of police escorts.

They have kind of subsided a little bit, but I mean, they were we were doing them pretty frequently.

Uh in the early stages of the foreign military sales mission, um escorting dignitaries around town.

No reimbursement for that.

No.

Thank you.

So, Chief, I wanna commend you as always for always supporting your staff the way you do for you know falling on the sword to try to give up some of your own personal you know benefits, which we're not asking you to do, but I want to make some comments.

Um, you know, there's a benefit of being on this board for a number of years, and I can tell you that Director George because Sabbath and I have always said, you know, to the police department, let us know what you need.

George Director George Sabbath was adamant in very many meetings saying, tell us what you need, how many people do you need, we'll get you what you need, and looking in the audience over the meetings over the past years, you know, when it's come to the number of officers that we have.

I can adamantly say that we've had a lot of citizens in the audience shaking their heads saying, yes, we need more officers.

So all of this is very difficult because the board looks at administration to find these cuts.

You know, I look throughout this room and look at a lot of our staff, and people are wondering how are we gonna make these additional cuts.

You know, I understand that this is the first time a lot of these people are seeing these numbers.

You know, the question is, how are we gonna get there?

You know, honestly, if we we can't just blanket uh admins recommendations.

You know, I'll give you an example.

One of the things that we haven't taken into consideration that has been a board uh task for for staff, you know, we were looking at additional fees, you know, a couple of years ago, um, like tap fees.

You know, we talked about you know some of the other fees that that we're not collecting, and we talked about not having our citizens subsidize with their rates.

Well, unless we look at all these other options, you know, to increase our revenues, we are shooting ourselves in the foot, and we're doing the same thing with our citizens.

So this is gonna take more than just I'm sorry, blanket uh proving what we have up here because that's not gonna get us where we need to be.

We have a service level that's expected of our citizens.

You know, we talk about right size in government, right size in government just is not gonna include the number of personnel we have.

It's gonna it's gonna have to include the rates and fees that we charge to have the right size of government.

You know, are we too big?

I don't think so.

Years ago, absolutely.

Yeah, I I remember you know going back to before Chief Baker was our police chief, uh, even before Chief Clark.

You know, thought we were a little bit heavy on the uh admin side in the police department.

We made those adjustments.

You know, uh the citizens and board were we're talking about having more police officers, you know, boots on the ground.

We did that.

Yeah, I just wanted to make some comments because this is this is really hard.

And I'm looking at our staff out here.

What we're asking them to do, we have to do, of course, but is it gonna be as simple as just having staff make additional you know, 20, 30,000 cuts without addressing some of the other issues?

Another issue, but we're talking about water rates for people outside the set of uh outside the city of Fort Smith.

You know, there's been conversation about Act 605 and you know, arbitrary and capricious or capriciousness, you know.

Are we setting ourselves up for a lawsuit?

You know, we want to say we're not afraid of those things, but we should be in a way, you know.

We don't want to, you know, kick the can down the road by not doing what we need to do.

This is it, I'm just saying all this because this is all very hard, and there's so much more to take into consideration than just what's being presented.

Jeff, Eric, um, and you really appreciate all the work, really do.

And it's it's great information, but it's gonna take more than this, and the board has got to realize that it's gonna take more than staff cuts, it's gonna take more than cutting.

To to some of those points, I mean, we have continued the discussion with the department heads about the fees for service that you mentioned.

Um, you know, some of those were brought in mass at one point, and you know, it was a it was kind of a sh uh sticker shock that we have discussed even recently about working those up incrementally to the types of service levels and the fee schedule that we need to have in place so that we can cover our cost of providing a waterline tap, right?

Where right now we don't charge enough to cover our cost of installing that.

And so we have had those discussions.

We've had the discussion even of uh impact fees because you know, when you when a new development goes into town, you know, fifty fifty uh 50 house subdivision on the south part of town.

Well, they have water and sewer tap fees, right?

But they all they also that that new neighborhood also has an impact on the police department, on the fire department, on the general government.

And so, you know, those are those are the types of fees that our neighbors and to the north to the north of us are are doing those types of things to uh have their developments help pay for themselves and help pay for the city services that don't otherwise have a revenue stream to fund them.

And so we have we are having those discussions.

We are looking at what those numbers mean and trying to evaluate when is the right time to bring those to the board for consideration or further discussion because all of those things we recognize we need to do.

Director Camp and then Director Rico.

Yeah, I just uh I appreciate Director Goods uh sharing your your art and your passion on it.

I just wanted to make sure and and clarify though, and I think I think I heard the spirit of it, is that you know, administration has done with this document after meeting with I think essentially any director that wanted to meet with them.

So it's not like this is what you know, Jeff and Andy just sat in the back kitchen and said, This is what we'll do, you know.

They this was this has been deliberated over.

This is not something that uh the police officers are just as much as Jeff people as they are Chief Baker's people.

I mean, he he I don't think anyone enjoys talking about these adjustments.

I mean, they're not comfortable adjustments at the same time.

We we we cannot spend 4.8 million dollars in a deficit.

So we have, I mean, we we have to we have to live within our means.

And I but I just wanted to make sure there wasn't like you know, the administration has done what they've been tasked to do, which was tell us how you could balance a budget, help us see that.

And I really appreciate the hard work that Maggie and Jeff and Andy and Eric went through and trying to figure out how to after meeting with all of us and coming up with ideas that they had to come up with this master sheet.

This is well done.

Um, but I know it's definitely a weighty conversation, but I want to say thank you to them for the effort they put forward, and I want to agree with you, um, Director Kemp.

Um, a lot of work and effort has gone into this document.

And I'm sorry, uh Ms.

Rice, I did forget to include your name as far as the people that we met with.

Um but in saying and mentioning that the difference to me is that our department heads aren't directly affected with what the board tells administration to do.

Administration is if you look at every time something happens, we go to our administration that the board holds accountable.

We don't do that with our department heads for the most part.

Administration does that with department heads.

So these four folks that we've been meeting with have a heavy heavy burden to address our concerns and our issues, more so, I and I hate to say it, they yes, they these are their people, but these folks are the ones that take direct direction from the board.

So it's without saying it's harder on them, it it affects them more so because they are impacted by what the board wants and how we direct them.

I can appreciate that.

Okay.

Well, hope that I didn't give the impression that I felt like administration was at fault for this.

I mean, that's not what I was trying to no sir, not me.

And I hope I didn't mean that take that.

I mean, I just I was addressing the well, we don't need to just blanket cover what the administration says.

And I'm like, well, this is not this is not even what administration has said as much as what directors and everybody that looked at it trying to figure out how to balance a budget, you know, and all that knowledge that was collected came up with the collective IQ of this page.

So it's not like we I don't want to, I want to be a team city here, is what I want.

I don't want to see the here's the board, here's administration, here's department, and it's we need to sync up, and so that way there can be no blame games in the public on Tuesday nights, you know, and it's like, well, if you wouldn't have done this and this and this, this is about us coming together, living on a balanced budget, working together, and not shifting blame.

Director We go.

Chief, what is the current authorized strength for your department?

168.

168.

So this here, line 17 would represent a authorized reduction because these are eight vacancies, would represent a reduction to having 160 that's correct.

Authorized positions.

Yes, sir.

Okay.

Sort sworn police officer positions.

There's additional two additional non-sworn positions included in that.

So can you speak a little bit to uh you know, Chief Clark did a little bit as well?

What's your current pipeline situation like?

How perhaps how close were you to filling um some of these aid vacancies?

What's the academy you know next group look like?

Can you just talk a little bit about your um current hiring pipeline?

Okay, well, uh we actually have 13 vacancies today.

Uh we are in a hiring process.

I I mean, I don't know what the list is going to look like, but I uh from from what I'm hearing, we would likely have enough uh candidates on a certified list to fill all 13 of those positions.

I put the brakes on the hiring process uh last week when I found out that we were looking at potential cuts.

Uh there weren't to be any conditional job offers made until I knew how many positions that we were gonna have funded.

So at the conclusion of this, uh I assume whenever decision is made, uh if if eight uh is the number, uh then we will make um complete our our hiring process, uh, application background process and and hopefully make uh job offers to uh five people uh for police positions.

Is that what you're asking?

Yes, okay.

I would just say going forward to speaking to Director Kim's point, it's not necessarily what's budgeted that gets us in trouble over the past few years, it's what has not been budgeted that this board has approved that's gotten us in trouble.

So, you know, I'm not putting it on Chief Baker, I'm not putting it on Jeff.

I would say the blame lies lies with this board.

I mean, you look at how many land purchases we've made, uh, you know, things that were not budgeted for, it's a lot.

So I think that's something we need to be mindful of going forward uh throughout the year as we're making decisions.

Any other comments?

Chief, you had to you had a chance to to look at if if there were uh positions that were frozen or cut.

Have you had a chance to look at where those would be?

Uh yes, we started uh war gaming last last week uh on Friday.

Um obviously the airport are my top three choices, but if that doesn't happen, then um we'll probably uh start with the uh bicycle unit uh followed by the uh crisis intervention unit um desk, the front desk.

Uh we will look at closing at that, closing that down and and moving those uniform personnel uh to other assignments.

Uh again, I I thought the number was was five, not eight, but um I'll have to think about where additional three positions would come from.

So that's that's five right there.

Is that right?

Yes, okay.

Well three three from the airport, um, one bicycle, one uh crisis intervention is five, and then if we close the front desk, that would free up three police officers and a sergeant.

So that means there'd be nobody manning the front desk.

No, sir.

But is we can't we can't leave it open with uh non-union.

Well you're talking about personnel crisis intervention.

You talk about bicycle.

I mean, is this conversation not around vacant currently unfilled authorized police positions?

Yes, that's where we start.

We had it so we have uh three vacancies, three sergeant vacancies right now.

We just did a promotion to lieutenant, so that opened up three sergeants' positions.

Uh there are uh two or three that were on the initial eligible uh the testing with the initial testing phase for sergeant.

Uh I think two or three of those officers that uh are eligible to move forward the promotion process are in special operations, either the CIU or the uh bicycle unit.

So I I mean I fully anticipate there to be some vacancies there as they promote um as we promote those three sergeants.

Um I but I and um uh forgive me if I'm being thick, but this is sort of being this is being presented as if there are eight vacancies at the moment that just do not you know do not try to fill those moving forward.

This is not I mean, could could somebody clarify that?

I mean, you're we're talking or we're seeing language talking about vacant positions, don't fill them moving forward.

We're hearing conversation about adjusting positions that are occupied versus for instance within the conversation we have with the fire department.

It was hey, here are my you know, vacancies that I currently have across these things.

We're going to rearrange so that there aren't any vacancies in these spots anymore because those six slots go away.

It seems like it's a little bit of a different conversation.

If we cut eight positions, and we're not talking about freezing, we're talking about eliminating those positions.

That's eight jobs within the police department that we will no longer have.

I cannot and will not take them from patrol.

Sure.

So I have to look at other functions in the department that are currently have people in them or positions that we are actively trying to fill uh to eliminate.

So you don't have eight open spots right now.

Yes, we do.

We have 13 open spots.

Yeah, 13 open spots.

They are spread all over the department.

We have some are in patrol, which you just said you are um so uh how do we how do we get is it possible to get to eight?

Is it possible to reduce eight?

Saying that I mean he's got eight positions to open, and we're saying eliminate those.

He's got 13.

But he's gonna actually transfer people into those positions and eliminate other that could happen.

Yeah, it's kind of you're kind of reallocating, but you're yeah, still getting rid of eight total positions.

They just aren't necessarily ones that are open right now.

That is correct.

So we have we have we have 13 open positions, so we would continue to fill five of those and not fill eight of them.

Correct.

We would could not we would cut eight, right?

There'd be no positions to fill.

Right.

Um and you know, so when you're talking about bicycle and crisis intervention from desk, it sounds like um if I'm if I'm hearing this right, that it sounds like those positions are filled.

Some of them are, some of them some of them aren't.

I mean, we have one vacancy in the crisis intervention unit currently.

Okay.

Um I think bicycles are filled, but as I said, I expect one or two of them will probably promote to sergeant, so that will open up a slot there.

Got um that's primarily for our downtown the bicycles, yes, sir.

So we're not losing personnel, right?

Oh, we will be losing eight personnel, yes.

But not any but they're not.

I don't know, existing employees.

Right, okay.

But no existing personnel.

Yes, that's correct.

We will not be losing existing personnel.

How long have would you say these positions been open?

Which one there's I know that you talked about 13.

How long have those 13 been?

Uh I'm asking you just off the top of your head, I know you might not.

I mean, we lost five in the last two months to other agencies, primarily state police.

Um there's been so a few others that have gone to other agencies.

Uh I mean, we we have done a uh a really good job of um filling filling vacancies as they occur.

I mean, it's obviously uh it's it's a lengthy process, it takes a long time to uh find somebody, go through the application process, do the background investigations, and then get them hired.

Um we I think we have six in training right now.

Uh so but that doesn't, I mean they're already included in our FTE count.

Uh so that I mean those 13.

Um it's it's been it all 13 I would say we have been in within the last six months.

Okay.

Any other questions for the chief?

Director Savage.

I would say talking about this, how are we gonna afford the River Valley Communications Center?

I mean, I know we've got the 911 funds are about what 1.8 billion.

And I'm not asking this specifically to the chief, but to anybody, how are we gonna afford that?

Because that's not budgeted for that went from 1.8 to 4.3.

As as we were talking about the the plan for radio equipment replacement and the building structure, I think we've decided we're gonna revisit all of that to see how that translates into a 2027 budget when we absorb essentially all of the dispatchers and and do the consolidation.

We'll we'll talk about alternatives for where that consolidation happens and how we outfit it and such.

But um, you know, the the ideal scenario, I mean, if we take out all of the capital requirements and however we end up doing that, I mean the turnback money from the state will go towards offsetting that operational cost.

And it you know, it won't it won't necessarily be the 4.3 million we had in the in the numbers the other day, but it will be some number and it will be our operating costs will likely be more than the 1.8 million we get from turn back.

So there will be an amount for us to put into our non-departmental to transfer into the ri River Valley Communications Center fund that goes to offset our portion of that cost.

The county will have the same.

And so um that that is still to be determined.

I mean, that's those numbers aren't in here because they're they aren't needed to be yet.

But uh I mean it's a it is a it is still a problem to figure out.

Okay, just be mindful of yeah.

And that that's I saw it in with the police, but ultimately it's a general fund expense.

Is that right?

Yes, there will be, I mean, it will be moved out of the the programs that the police department supervises or manages, it will be entered and inserted into its own fund, its own operating program, will have its own source of revenue, but we will have to backstop it with some amount of general fund money.

Okay, yes.

And that is mandated, right?

The consolidation is, yes.

Okay, right.

The consolidation is mandated, but how we do it is pretty much up to us.

Yes.

So doing it is uh cost effectively as possible, I think should be priority.

Absolutely.

Anything else for the chief?

Thank you, Chief.

Thank you.

Uh at this point, are there any any other uh particular department heads that the board would like to ask questions of um outside of that?

I I mean I I would be remiss if we didn't acknowledge the finance department staff sitting over and especially these three ladies sitting over here.

Every time we come up with a different idea or a permutation, we say, hey, can we get a report or hey, can you make this adjustment?

And they make all that happen.

So thanks very much.

And just one more time to the staff.

It's amazing the work you do day in and day out.

And we've got one of the best.

Uh and we really appreciate the work you do, even in difficult times like this.

Thank you.

Any other comments from the board?

Can can we can we give a got get kind of a next steps of of what we've asked over the course of X number of hours?

Um, and what will be coming to the board so we can get an idea.

Well, the the main thing I have got for each of the four departments is uh a comparison or explanation of the difference between the 2024 um actual personnel numbers versus what we have budgeted for the 26 numbers, uh and included in that the uh the difference in the loft fee amounts for the police and fire.

Uh those are the those are the main things uh overtime water and sewer um the water and sewer kit yes, yes, the overtime the how does overtime impact the savings that we think we're gonna do here, right?

So there's there's three things there, three things, yeah.

So we'll we'll turn that information back around to the board.

Um for as for as soon as we can.

I mean, probably by hopefully this week sometime.

Meeting, can we get a modified budget comparison?

Is that oh yeah, yes, that would be that would be the output of yes what are these modified budget comparisons with all these personnel and um uh capital needs taken care of.

Yes, then we get that, and then what is the timeline in which we are needing to pass a budget?

We are anticipating bringing the budget for adoption at the December 2nd regular meeting.

December 2nd regular meeting.

Okay.

Is there anything else you guys can think of?

When you have to have one done by what's it's the end of January, right?

Well, I think technically yes.

But but if that's the case, so we would have a we'd have to deal with January specifically.

Maybe I'm sorry about the state state law says we have to have a budget passed by February 1st.

Yeah, if we decide to go into January, we do have to uh uh pass a budget amendment to cover January's mayor.

I did have one request to the colleagues here since we're all here together to uh to make a motion to call an executive session for us to review the applications for the city administrator search and talk about next steps for that.

And I'd like to call that after the regular meeting on December 2nd.

Second okay.

Thank you.

What day?

December 2nd.

Tuesday, that's the regular meeting.

And then the the board was given your make sure you know your binder that HR was provided.

Let's go, thank you.

Right, you good just a question for for uh Mr.

Dingman.

Um previously our previous uh city administrator uh had had made uh comment that our transit meetings um he wanted to be held here.

We wanted to take advantage of using this facility facility.

My my question to the board is and the and to administration, um I I would very much like uh to make the recommendation that we continue the transit advisory uh committee meetings, the TAC meetings at the at the uh Jenny Lynn location.

You know, for me personally, I like to attend those.

Um, when we were over there, I've uh had the opportunity to attend a couple here.

More people seem to attend over there on the Jenny Lynn location, and it's you know it's right there at at the facility, and so I think it will be easier for staff.

So, whatever conversations need to be made.

Okay, we'll evaluate that, sir.

There's nothing else motion to adjourn.

So moved.

Thank you.