Yeah, everybody.

All right, good morning, everybody.

And uh we have a similar all of our team and council members here to uh begin our budget retreat and uh spend the day working on you know going through all the priorities that uh we have for us.

Uh so before we get started, I'm gonna ask the clerk to call to roll.

Councilman Bowman, present Vice Mayor Brown, Councilwoman Campbell, present, councilwoman Faraby, present, councilwoman Harper, present, councilwoman Muggler, and Mayor Gray.

Present.

And uh just as a reminder, um all your mics are hot, your red lights are on them, so just uh be mindful of that with all you know your sidebar conversations and everything.

And so with that, I'm gonna turn it over to uh the city manager to uh introduce uh you know the people that are assembled here this morning and uh get us ready to get started with the first item on the agenda.

Thank you, Mr.

Mayor.

Um you all are old hats at this by now, you did it last year.

Um so I don't need to do a lot of introduction about what we're trying to accomplish today, but we do appreciate you dedicating a full day to your annual budget retreat.

Um we will be doing um some polling throughout the morning as we go through different presentations.

You have the polling devices at your locations, and as you know, we reviewed with each of you in advance how we would do the polling.

I do want to stress for the public that may be attendance or subsequently watch our video tape that when we do polling, both here and in the public, it's preferential polling, it's not voting.

Uh we don't want people thinking you all are voting absolutely on the budget before a budget hearing or anything like that.

Uh we are one of the few localities that does a lot of extensive outreach to the council and the public before a manager's recommended budget.

Some cities just put out a manager's recommended budget and then the council and the community process it after that.

But we've long believed that we build a better budget for you by engaging you all up front and involving the public up front, and we take the preference polling we get from all of you, um, that being the council and the community to try to bring blend a city manager's recommended budget that will best reflect the priorities that you on their behalf and they have reflected to us.

Uh we care deeply about these priorities.

I want to be clear, this is not a waste of time, but we have to be clear for the public and for legal reasons that you are not voting and making decisions on the budget at this time.

You're giving us guidance so we know how to shape the budget in a way that you all are most excited about.

Um as we've discussed um in advance, we have a variety of presentations today, some of which will require uh polling questions, some of which are just for informational purposes to give context.

We're gonna kick off that context with the presentation by Deputy City Manager Brian DeProfio just to remind you and the public of some of the issues we're facing this year, and then we'll roll right into starting to look at our real estate and personal property and other revenues.

So with that, I'll take it off to Brian.

Thank you.

Um each of you just before I I get started.

You all have a uh binder in front of you.

Then the binder has all the presentations that we're gonna be going through today, and in the front cover, it has the detailed agenda for today for today's meeting.

And so if you want to follow along or refer back to any of the information that's presented, it will be in your binder.

Um with that, I'll I'll get started.

I'm gonna go through this relatively quickly.

As Mary had said, um, I'm gonna basically um do a high-level overview.

There's some additional detail under tab one, um, which is where my presentation is, some of the information that we went through last year.

Um we've updated all of the numbers that we went through last year, um, but you know, they really hadn't materially changed, and so we didn't feel the need to go through them again this year.

And as Mary said, y'all have been through this before and and and you're familiar with that information.

Um, but today's agenda includes I'm gonna go through as Mary said, uh some brief background, and then we're gonna turn it over to some other presenters to go through the property tax, real estate tax programs, and and information on those two taxes, the property tax and real estate tax, of course, are our two biggest uh local revenues for our budget.

Um, and then we'll turn it over to our our interim director of public works to take us through the public works fees, um, and then we'll be going through some other program fees, more specifically the the school age program, and then we'll be doing uh we'll we'll go through compensation and employee benefits, and we'll be asking you to rank some of those options, and then we'll go into the variable that you wouldn't need to in the budget.

So that's the agenda for today's meeting.

Um the key challenges that we we anticipate having this year that we see having this year are whenever we have a new governor or new administration coming in, they have new priorities, and so there are some things that are coming out of uh the current um administration and and what the General Assembly is doing up in Richmond that may have an impact on our budget either in this year or in future years.

One of those is collective bargaining.

It looks like that one the greatest impact may be in future fiscal years.

There may be something that we might need to do this year in preparation for that.

Um and we will uh work through that as we go through our budget process this year.

Um they also are looking at things like medical leave and uh you know paid medical leave and and zoning impact.

And so there are a variety of things that we're monitoring at the state level that may impact our budget, and we'll we'll we'll address those as they come uh as they become more solidified.

Um we also each year, as you know, we deal with various state unfunded mandates.

The one that has been growing most aggressively in recent years is the disabled veterans tax relief program.

This year, as you'll see in some of the later presentations, it's looking like it's going to grow by about 3.4 million dollars in terms of the impact on our budget above what we budgeted last year.

And that's equivalent to roughly two cents on our real estate tax rates, basically uh about uh three percent um civilian wage increase, a little bit more than than that.

And so that's um that's a big impact that we're going to have, and the full cost of that is going to be 13.7 million dollars.

I think this is a program that everybody supports.

We've been working to try to get the state to help provide some funding to offset some of those impacts that we feel locally as a community where we have a lot of veterans who come here and then retire here, it really disproportionately impacts the city of Hampton and many of the localities in the Hampton Roads region.

Um we also continue to have federal policy tax impacts to our budget.

During the course of fiscal year 22, we've seen some decrease in federal travel, which has impacted some of our revenue streams.

Um then, of course, you know, the key pillars of our local uh regional economy are federal um installations like NASA, like Langley Air Force Base, um, and the port, which of course, you know, with with the tariffs and the changing in trade policies uh may be impacted.

Um then uh some other big drivers in our budget really are our compensation.

Back in January, we uh made um significant um increases to our public safety pay scales in order to make sure that we can continue to retain um high quality staff there and be competitive amongst the other cities in the region.

Um we also need to continue to provide competitive wages for our civilian workforce.

And we've seen health insurance uh and and Carl Daughtery, our chief financial officer will go through the health insurance impacts.