Good evening and welcome to the uh July fourteenth, twenty twenty six meeting of the Manhattan City Commission.

We are having a special meeting this evening.

Uh Chelsea, will you please call the roll?

Mayor Adam Chak.

Here.

Commissioner McCullough?

Yes.

Commissioner Fox.

Here.

Commissioner Morrison.

Here.

Commissioner Von Lintel.

Here.

Mayor, we have five commissioners present.

The quorum of three is met.

Thank you.

Will you rise and join me in the Pledge of Allegiance?

I pledge of allegiance through the flag of the United States of America.

And to the Republic for which it stands.

So instead of being about a 6.7% increase, uh the increase in assessed valuation is now 4.4 percent.

Uh what that does to our revenue neutral rate is instead of being 51.056, our new revenue neutral rate is 52.210.

So we need to um like the mayor read, we need to repeal the resolution we passed last week and we need to um adopt this revised resolution that would say that we plan to um exceed the 52.210, uh, but we will not exceed 54.506.

Um staff has prepared uh those different scenarios that you all charged us with, however, those numbers look very different just because of the difference in assessed valuation, and we will be going through those after you have your first work session item.

Um happy to answer any questions you all may have.

Okay, doesn't look any better, does it?

Uh it did not make it look better, Commissioner Morrison.

It it definitely uh changed uh the budgeting approach that um staff had and that recommendation that we had to um take advantage of the savings that uh we saw with the Riley County Police Department and that increase in assessed valuation and plugging those funds into uh any of those additional revenues into our bond and interest funds.

So very similar conversation, um, just a continuation, but uh we will um dive into that a little bit deeper later uh at this meeting, looking at those debt numbers and what we need to do as far as stabilizing that bond and interest fund uh with mills and with sales tax.

So I'll go ahead and make the comment now that uh I've discussed with you.

I've been through this 85 to 90 pages of of proposed budget, and I've I've come up with a couple of modifications that in my mind would get us down to that revenue neutral mill levy.

However, that is subject to uh increasing the franchise fees that we have talked about in past meetings from four percent to six percent.

Now we have not agreed to do that yet officially, so I don't really want to uh go out on a limb and you know bet the farm that we're going to approve those sometime down the road.

So uh I'm I'm gonna be supporting the resolution tonight, but knowing that if once we approve those, I I have a budget that gets us actually a little less than 52.21.

So uh just a couple of minor changes.

Appreciate that uh Commissioner Fox, and we can certainly um we have additional analysis to provide you this evening, additional conversations to have with you all this evening, and we have another work session um scheduled for August 11th to continue uh working on these budget numbers and continue getting additional information for you all to make decisions uh when you finally adopt on um September 15th.

Still a lot more information and conversations to be had.

Uh one thing I was looking at was the eco devo 4.6 million.

Um so what I'm wondering is like what's staff's recommendation for using that money and why can't we use it for LeBond and interest fund in 2027?

Sure.

I think that is a really good conversation that we can follow up on, but does not necessarily relate to the resolution that is in front of you right now.

Um and after we pass this resolution, I will go back um to um my my desk over here, and like I said, we have a lot of additional information to share with you this evening, and I think that's a good conversation point um for our second discussion item tonight.

I would just add to that Danielle, we um we all have a number of things we'd like to bring up, and I think that's for item three on our agenda tonight.

And um, I would just like to move that we approve resolution 0714268, and um to um regarding the city commission's intent to levy a property tax exceeding the revenue neutral rate and setting the public hearing on September 15th at 6 o'clock at the city hall and repealing resolution number 070726b.

And then we could get started from scratch on the on the budget.

Thank you.

Do we have a second on Karen's motion?

Second.

Oh thank you.

Pardon me before we vote, the if we could request public comments.

Yes.

I have my sign.

Do we have public comment on this item regarding repealing the resolution we passed last week and coming forward with a revised resolution?

Good evening, Commissioners.

My name is Gary Oles.

I live at 3308's frontier circle.

I just wanted to give you some information that may not ever apply, but I just wanted to let you know.

Um two years ago, last year.

Previously, uh Junction City published a notice that they were going to exceed it.

And then they actually did not exceed it.

They went to revenue neutral.

And they canceled the public hearing.

So if by chance, and they said it's statutory, statutorily allowed, because they were at revenue neutral.

Just by chance, if you do hit revenue neutral, actually, from what I understand, at least according to the other side of the river, you actually don't have to have the public hearing.

Thank you.

Is there anyone else who would like to make public comment?

Seeing no one approach, we will close public comment.

Chelsea, will you call the roll, please?

Commissioner McCollow.

Yes.

Commissioner Fox.

Yes.

Commissioner Morrison.

No.

Commissioner Von Lentel.

No.

Mayor Adam Chack.

Yes.

Motion carries three to two.

Thank you.

We'll move on to the second item on our agenda tonight, moving into our uh work session.

Uh this pertains to uh a newly proposed subdivision and the potential uh request for workforce housing sales tax.

Good evening, Stephanie Peterson, Director of Planning and Development.

I'm going to introduce this item for you this evening, give a little bit of context, and then I will turn it over to Craig and Lindsay Laupi for them to walk through the presentation that was attached to your agenda item summary.

Uh what we're seeking tonight is some feedback from the five of you on using workforce housing sales tax in a new subdivision.

The subdivision is proposed to use a benefit district to pay for public infrastructure, as I think if not all, most of our subdivisions do today.

And the developers are proposing, and they'll speak more to this, they're proposing to utilize the workforce housing sales tax to pay back or to help pay for the special assessments that homeowners would typically have to pay.

So the workforce housing sales tax dollars would go to benefit the homeowners, um, not necessarily back to the developer.

There is a you have four housing policies.

One of those housing policies is for reinvestment housing incentive districts or RHID.

RHID was envisioned to be utilized in this way, where in a new subdivision, the RHID revenue could go towards paying for those benefits uh for those special assessments.

Um however, the RHID that was tried to be passed a couple years ago, that was unsuccessful.

And the county actually, Riley County actually wrote into their policy that they do not want to use the RHID tool for green-field subdivisions or for uh paying for infrastructure.

So that really limits us and the tools we have available, uh, which brings us to the workforce housing request that uh the developers will go through this evening.

As you know, we are working right now to update our workforce housing sales tax policy.

So tonight we would like to not only get feedback on their specific project, but if this is some if if this is something that you want to see worked into that policy, do you want to see uh workforce housing sales tax dollars being used to help future homeowners pay down those special assessments?

Um, of course, given the feedback that you guys have provided, there could be a restriction on what that home price is.

Uh there could be a uh some sort of threshold there, um, and making sure that that that benefit is uh going back to the homeowner rather than to the developer, which I know you've provided some feedback before on that.

Uh so with that, I would ask um for the developers to come up this evening and to walk through their presentation.

Okay, well, yep, I was gonna write it before that if there's any questions.

First of all, I mean I'm not sure I'm forward against it, although I'm in favor of trying to do something that any guess what specialists would be and any guess of what the request is for dollars out of the sales tax fund.

I'll allow for them to walk through their projects.

We haven't been presented with any uh specifics at this point.

It's really um the request this evening is if you're interested in this type of project in this philosophy.

Um we would work further with the developers to kind of put together that proposal with all those numbers.

Well, what that number is starts to change my attitude, yes or no.

I'm sure it does.

Are there any other questions for me on either the policy or the direction that we're looking for this evening?

And then after they're done, I'm happy to come back up if there's any additional questions that you have for staff.

Okay.

Thank you, Stephanie.

Good evening.

Good evening, Mayor, City Commissioners.

Um, my name is Lindsay Laupe.

We are here to talk to you tonight about House End Park, a potential greenfield subdivision in Manhattan.

Um I am co-owner of New Place Development and co-owner and designer of Gray Lane Homes.

I was born in Manhattan, raised in Manhattan.

We are raising our family here in Manhattan, and I'm excited to be here with you tonight.

Um I enjoy creating meaningful spaces for people, and um multiple projects of ours have won in Phil and Interior Awards from the Manhattan Riley County Preservation Alliance, and I'm also an accredited professional member of the Congress of New Urbanism.

And my name is Craig Laupe.

Uh I am also co-owner of New Place.

Would you like me to yell, sir?

Or do you want me to use my coaching voice, sir?

All right.

I'm not the same.

All right.

I'm more than happy to speak up.

Uh my name's Craig Laupe.

I'm also the co-owner of New Place Development in Greylane Homes in Graylane Homes is where I do hold my general contractor's license.

So I am also a general contractor in the city of Limits of Manhattan in the state of Kansas.

Uh I also am an owner of Cobalt Real Estate Management, which is a uh residential real estate management company that does fee management, and also uh we do manage 15 homeowner associations in the city of Limits of Manhattan.

Um I also own Titanium Painting Construction, which is another construction company that offers residential uh remodeling, maintenance, and paying services, and I also own Copper Dill Clean.

So the goal tonight is to gain feedback on utilizing Warforce housing and sales tax funds to be contributed to specials for the in-consumer for a cottage court in a green field development that also utilizes a benefit district.

Um so the first slide you're going to see tonight is the overall subdivision that features the 36 lots of the benefit district.

Those lots fall into two different categories.

16 of those are the single family home cottage court lots, and then the other 20 are single family home lots.

Um these are located in the Southwest Manhattan region.

On the next slide, when we get to the workforce housing sales tax, we'll talk more about the cottage courts, but right now I'm gonna focus on the single family home lots.

Um these are in the top left of the image, kind of that perimeter all the way down to the bottom left.

Um these are not going to be part of the workforce housing sales tax request, um, but they would be part of the benefit district because land development would occur concurrently.

The square footage of these homes would range from 972 square feet to 1,950 square feet.

They'd primarily be three, three or four bedrooms, two to three bathrooms, um, probably mostly two stories, where the cottage court would be more of a single story layout, um, but those floor plans would also be allowed on these lots.

The anticipated anticipated for sale price range would be 300,000 plus on these lots.

One thing that's not on here that I think is important to note a sale price of 308,000 still falls at the 110% AMI range, where 336,000 dollars falls at the 120 AMI, 120% AMI range.

So although we're not asking for workforce housing sales tax dollars in that request, it still is within your community's workforce housing sales tax brackets.

Lindsay, can I just ask a point of clarification for both the cottage court and the single family homes?

Uh I presume they all have garages.

Um some of them will, some of them won't.

That kind of gets into the uh varied price point um of the projects.

Okay, and so are the the square footages that you're showing here.

Does that exclude or include corruption?

Um the upper range can include it, the upper range of the cottage court homes, the ele the 1,150 that includes a uh attached garage, single car garage.

Um, for the workforce housing sales tax requests, um, these are noted on the aerial of the houses that are sketched and platted in that cottage court surrounding the central green space.

Um these would be for home ownership and primary residency.

The square footage of these homes would range from 972 square feet to 1,150 square feet.

These would primarily be two bedrooms, two bathrooms, single story.

Um the anticipated for sale price range of these is 265,000 to 275,000 or 90% AMI.

Our requests for feedback tonight, and again, this is not a formal application, but we're gauging your feedback on funds to use uh to pay to help offset or avoid the homeowners having to pay specials.

Um this isn't not a request that would go to us.

This is to go for the infrastructure for the future homeowners.

Um, so here we have a Singapore floor plan financial estimate that we ran for you guys with three different scenarios.

This features a two-bedroom, two-bathroom, 972 square foot cottage home.

Um we were able to calculate the sale price.

We actually just got back our RFPs.

We are building this exact house in a neighboring community in the fall.

We are not currently able to find anywhere to build it in Manhattan.

Um, any greenfield lots, it doesn't meet the typical covenants and by laws, it's too small.

Um, so the only way we would be able to build it is if we were to find an infill lot.

Um so scenario A focuses on no workforce housing sales tax, but with a benefit district.

This is kind of the typical mechanism you see for greenfield development in Manhattan currently, and the ones that the single family home lots, those other 20 would follow.

Um zero workforce housing sales tax dollars were awarded and the sale price is two hundred and seventy thousand dollars by the time we take out principal taxes, insurance, and all that, they would still have to pay their 167 dollars in specials, and that would make that estimated monthly homeowner payment of $2,279 and 43 cents.

Below that scenario, I included it's kind of blurry on here, my apologies, um, the local tax jurisdictions that they would get from the sale price of that home.

Scenario B is no workforce housing sales tax dollars awarded and no benefit district.

Without the benefit district, we have to roll over the cost of the infrastructure into the cost of the lot, which affects the builder's input cost, and then raises the sale price of the home.

So that would raise that price of that exact same home to $310,000.

And although that owner would not have monthly specials taken out, their estimated monthly payment would be $2,429 and 16 cents.

Um scenario C is the workforce housing sales tax dollars awarded in for the 16 cottage courts as well as a benefit district.

If that 40,000 doll is able to go and pay off the infrastructure cost, the sale price of the home could say 270,000 dollars, they would not have the monthly specials, and their estimated payment would be the lowest of the three scenarios at $2,112.43 cents.

So taking these different housing tools and how they are used affects the in-consumers or the future homeowners' monthly payments that they would have to pay for the exact same product.

Um scenario B would cost the homeowner over a year's time three thousand eight hundred and seventy-six dollars for the exact same home, where scenario A over scenario C costs them over two thousand dollars a year.

So our goal tonight, sorry, um going to uh Commissioner Morrison's question.

So are you uh testing the waters here tonight to request uh workforce housing sales tax uh amount of 40,000 per each of the 16 units?

That's a great question.

So we are at the stage of the project where we're trying to get feedback on how we should proceed forward.

We're kind of at the stages where we're ready to kick off the scopes of work.

Um how we came up with that 40,000 is we took the last couple of developments that have been bonded and we assigned them a lineal square foot price based on the lot width.

Um we took that lineal square foot price and we averaged it out between those, and then we applied that to a lineal cost per a cost for the lineal width of our lots, and that's where we came up with the 40,000 dollars.

So again, that figure is very nuanced.

Um we really can't answer to the infrastructure costs based on detention retention stormwater that's so site-specific.

We're just at that stage where we're trying to kick that off, and we're just seeking feedback tonight on if this is how you want to use those tools for this type of development.

So we really tried to be specific, but unfortunately this is the formula we could come up with for tonight.

So ballpark estimate would be um a potential request of 640,000.

Correct.

All right.

So again, our goal tonight is for feedback of utilizing workforce sales tax funds to contribute to the specials for a cottage court in a greenfield development that also utilizes a benefit district.

This project fits the commissioner's desired for sales price points, desired AMI ranges, and would be the first single family home workforce sales tax project in Manhattan.

You're open for questions and feedback.

Well, since you're involved in a lot of businesses, construction otherwise, have you done any idea of what street sewer and water is going to cost to do this development because of the million four hundred thousand?

I don't see us spending that kind of money for sales tax credit.

So we we the past couple that have been bonded, we took those total infrastructure cost and divided them by the number of lots, so the the equal share per that lot, and then we assigned it a price per lineal foot.

But again, um those are those costs are such project specific.

Um this is what we felt like we could present tonight.

So let's assume that my math is correct and don't assume that.

I think it is.

If it's a million four hundred thousand, how much do you think is appropriate, if any, the sales tax cover?

I I have uh again what Mayor Adam checked uh shared was six hundred and forty thousand dollars.

That would be the 40,000 times the 16 lots.

If I did that correctly, what there's 36 lots, aren't there total?

So 20 of those were not seeking workforce housing sales tax for.

It's just you want to go back to the 16th.

It's just the 16 of the cottage courts.

So the ones that have the houses sketched on them.

The others would be developed at the same time.

Um they would be part of the same benefit district, but they would not be eligible for workforce housing sales tax, even though those anticipated ranges would fall within the hundred to a hundred and twenty percent AMI.

We're just trying to present you the houses that would fit in that 90% AMI range.

So in the previous projects we've done uh we've committed up to 25,000, but we've gotten 16, 1700 square foot houses, 350, 30 to 350.

And at least I've said that that that's not my goal for workforce housing supported by taxes.

It needs to be something less than in the range you're talking about here, 1100 uh down to 1,000.

Um, and clearly 25,000 isn't enough to uh get people to build the smaller houses like that.

So I I would support I think you're going in the right direction here.

These are these are the smaller homes that that uh sell for a lower price in the 200,000 range.

And uh I I think it's I think it's a worthwhile project.

Thank you.

Um we got quite a bit of push pushback on the $300,000 homes that we supported before.

And I know that people aren't really cognizant of what it costs to build something.

I am a little concerned about the density in the parking um in that these, you know.

If one of those places were to have a party, they'd have to park outside the limit somewhat, and I don't know what neighborhood it but that it might impact.

Karen, Karen, we we were really trying hard not to get into zoning.

You're gonna have a complete discussion about that separately.

Okay, I appreciate where you're going, and I'm sure that neighborhood does too.

Tonight is really about that financial piece.

If there's concurrence, this is all coming back from an annexation zoning petition and workforce housing sales tax approach.

So we we've got a lot of conversations, we got a lot of people to notice to have that conversation too.

Thank you, Jason.

Thank you.

Um, and I just keep um suggesting that we look at assisting with down payments so that people can have their first home and sort of get it under their belt.

That's just another way of addressing this.

But no, I think we should go forward with requests, but I do have some zoning issues.

I I uh I agree, Karen, with uh your comment of what whether we could be creative and help people with down payments, but I think um helping to eliminate or find another source of revenue to cover the specials is one way of having a direct impact on those home buyers that you know would affect their monthly bottom lines.

So I also appreciate that aspect of this.

Um I agree with Karen in that this is a fairly densely developed area.

Um we will I will look forward to future conversations about that.

Uh is this uh the small segment that's in orange, is that a park or community space?

What is it's to be determined?

We've gone back and forth on a couple ideas, whether we break it up into lots, um, we make it more of a green space or some other ideas, so we just left it out of the figures tonight for simplicity.

One thing that, you know, given that this is a fairly uh condensed or dense area.

One thing I might throw out if I can, Jason, is um, you know, there are some small communities that do reserve uh a designated space for visitor parking.

And maybe, you know, I don't know all your figures in terms of calculating out how this would uh be profitable for you, but you might want to consider having a visitor's lot in there somewhere.

We we are thrilled to be able to bring that to you in the future.

Okay.

Not that I have any design uh skills myself, but just to suggest.

Yeah.

I have a question for staff.

I understand most specials are 20-year.

Is there some way that we can stagger at 10 year part of it in the last half they start paying part of it?

Because at some point in time, reality is going to hit these folks, and by then I assume they either are going to be stable or otherwise, because I'm not sure I'm willing to spend 600,000.

On the other hand, if we could do some staggered, are we able to do that in our uh agreements with them on specials?

Let me make sure I'm I'm tracking where you're going.

Twenty years today obviously spreads out the total over that period of time, including interest.

They're asking for workforce housing sales tax dollars to be applied towards annual payments that would have per parcel.

Are you suggesting the city pick up more?

Or I mean if you narrow the time frame, you're going to increase everybody's costs.

Well, my concept was it's 20 years.

I understand.

Okay, and our Manhattan theory of specials.

But doesn't mean that the city under the sales tax would have to pay all of it, either up front or annually as it goes from sales tax.

And I'm just saying, can we stagger it?

Can we say five years free, ten years free that we should have in the last 10?

They pay half or a third.

There's ways to structure it like that.

Yep.

I don't know that we've ever done it, but we can do it if that's the plan.

It would be you, you know, there's some consequences of doing that.

People may move in five years, people may move in ten.

You would be placing that burden back on the 10 through 20 year of that debt.

There's ways to look at it, though.

I think we can give you some options to react to.

Well, I can you I'm pleased with the program, don't get me wrong.

It's just that I'm not sure.

Sales tax ought to pay $600,000 for it.

But on the other hand, to give a boost for home ownership and get them started.

I'm willing to do something if we can do other I'll just remind you this is the first um we're halfway through this year, and this is the first request we've had for these funds.

Second uh can you tell us, Stephanie, about what the balance is in the workforce housing sales tax?

Oh goodness.

Um, of course, I said I was gonna do that with every presentation.

Maybe it has it has not changed from the last time.

It is over, it's a 1.8 million, I think.

It's we have several million that have accumulated.

The total fund will run out at 8 million.

I think we have over a million in a balance, but as far as running it out and giving you a balance, you're you're over six million dollars available.

So, Jason, you talked about even if we make this grant, we somehow have debt service payments.

Um it's my understanding if we're putting 40,000 into each lot, that's paying for it up front, and there is no debt service on the There's an education with specials.

Um people will come in and pay the off their specials.

That doesn't mean the debt goes away because you have to look at it collectively, and when we place that debt, we never really know who's going to pay off their specials.

So we issue that temp note and then we issue the permanent debt before really a lot of the lots are even sold.

So we do take that money, we take that property out of the mix in terms of being uh assessed annually from the specials, but the debt probably has a refunding eight years, maybe twelve before you can actually buy down that debt.

We'll hold that revenue, and if the opportunity presents itself, we will buy it down.

It is not automatically bought down.

We keep that revenue.

You just really made that complicated.

Yeah, I did.

You asked a very complex question.

I just wondered if you've ever thought about working with the Manhattan Area Housing Partnership and getting tax credits.

We've been quite successful with that.

That's I know it's complicated, it's very complicated, but they have they have managed to build almost 300 units using those things.

They're just finishing up that one on Grand Mirror.

Just thought.

Thank you.

Appreciate the feedback.

Um Craig and Lindsay, I think I can summarize for the commissioners that they are looking at your project positively.

Anybody shake your head?

Uh and so I think our recommendation would you would be for you to confer with staff about next steps and uh be prepared to come back before us in a couple of months.

So thank you.

Good luck with this.

Thank you.

Is there any public comment on this project?

All right.

Seeing no one approach, we will move on to our final and somewhat dense uh item for this evening.

Discussion of our debt mill levy and possible sales tax renewals.

And we will hear again from uh city manager Doolin.

Um so good evening again, commissioners.

Um when we had had our conversation um last week, you all had asked for us to come back with a revenue neutral scenario with a midpoint number um as well as the recommended budget.

So uh with the news coming from the county on Friday morning, we did spend um some time refiguring these numbers and recalculating, and so that is what we are prepared to share with you this evening.

Um so I'm going to run through what those mill levy analyses look like, and then um Deputy City Manager Hilders is going to run through how that impacts your bonds and interest fund, and then we are going to talk about the sales tax renewals.

Um, really this evening, we are expecting and hoping um to get a lot of robust conversation and amongst the commissioners, uh particularly on the mill levy analysis, where you want us to that mill levy to land, and then we can come back with recommendations on what the numbers will look like.

And then we also are hopeful that we can have a robust conversation on in direction on where that sales tax renewal you all would like to see uh the the amount uh the uh allocation uh projects um etc.

So we are um as the mayor said this is a dense conversation this evening, but we are very much looking forward uh to hearing where you all are at on these conversations.

So just a quick reminder uh 2026 City Commission goals was stabilizing the budget, uh working on the sales tax renewal, investing in infrastructure, and this uh communication um transparency.

And then you also talked about housing development tonight.

So we are really hitting all those points to this evening.

Budget strategy, uh, we had that June 30th budget work session, two revenue neutral rate resolutions, and then tonight we are with our uh again diving in a little bit deeper with this work session.

Those conversations that we had when we were putting together the 2027 budget development was creating a structurally balanced budget, mill levy stability, maintaining service levels, addressing our debt issue, um, and including increases for salaries uh and also being able to replace aging uh equipment and vehicles.

You've seen this revenue assumption slide, uh circled the mill levy, uh, the new assessed valuation from the county, and then diving into these additional scenarios that we put together.

So the first um one that you have here, um, and we did print out a paper uh so you can see them all side by side.

I think that that will be helpful, however, to put all of these on one slide in a presentation is uh very small numbers.

So I appreciate the patience on this.

Um but did not make so if we look at what our new uh mill levy going from 798,000 to approximately 780,000, uh, that new revenue neutral rate would be 52.210.

Uh, we did not make any changes um to the original recommendation uh to RCPD, those library funds or the library employee fund.

Um, just as a reminder, we are required statutorily to provide RCPD with their request.

The commission does not have any oversight or any input.

Uh, we are statutorily required to um pay that uh budget requirement amount um from RCPD.

However, the city commission can set the mill levy for the library.

Um so with the general fund, uh, if we went to a revenue neutral, um, again, we are lowering uh to reflect those increases in those franchise fees and using those to pump back into that bond and interest fund.

Um we in our original proposal, we had left uh the employee benefit fund, uh the fire equipment reserve fund, the Kansas uh police and fire fund.

Uh we had left those at zero, we had left them flat.

However, with the quick turnaround with the new numbers, we did not change the budgeted numbers, and we just raised uh that mill levy to leave those numbers um flat.

Um so what this would look like in total would be of course uh no increase in uh property taxes uh revenues generated from property taxes.

Does anyone have any questions about this revenue neutral rate that is presented?

So if we look at the uh recommended budget, so my recommendation, even with the lowered assessed valuation would still be to leave the mill levy flat at that 54.506 to be able to capture any increase uh that we've seen in that assessed valuation and be able to pump that into the bond and interest fund.

Uh we know that in a few short years uh with the additional bond uh general obligation bond payments that we have coming on with the reduction that we saw in that uh mill levy in the bond and interest a few years ago that we will quickly be spending through any balances that we have, and so we need to start um injecting mills revenue streams into that bond and interest fund.

Um Tuesday last week had asked to take a look at what a uh two mill decrease would look like.

So from that 54.506 to a 52.5.

Uh when I ran those numbers, um, that would have uh been about a 1.5 a 1.16 million dollar increase.

So when I backed into that with our new assessed valuation, that leaves us with 53.69.

Um again, uh you will the difference that you see here is in that bond and interest fund.

Uh we did not uh that decrease in your general fund is because of those franchise fees coming in and then trying to use any savings that we were able to get with our general fund uh efficiencies and cuts that we were able to make, and then also considering the additions that we had for those priorities that were identified.

Um we are still projecting um just a 2% increase in your general operating fund.

Um, but really the impact of this uh changes in the mill levy will be in that bond and interest fund.

Uh Commissioner Bon Lindel, I wanted to answer the question that you had raised um when we were talking about the revenue neutral rate resolution.

You had asked what about that 4.2 million dollars that's sitting in cash uh in a balance in the economic development fund.

That economic development fund is your 2023 sales tax.

So those are the sales tax that are being collected for jobs, and those are sales tax that are being collected for workforce housing sales tax uh for projects like you just heard.

So those funds are not discretionary uh and cannot be used for bond and interest.

Um well that's not what I'd heard previously, but interest those funds from that sales tax are already funneled into the bond in line item, Andrew, they're not separated out.

The 4.9 million is the balance of the 30 percent that's allocated for workforce housing and for job creation.

Yep.

So again, that's your half cent economic development sales tax that was passed in 2023.

70 percent of that half cent goes into payoff debt for the North Campus Corridor and in Aggieville, and then 20 percent is used for economic development, um, particularly jobs, and then 10 percent is used for workforce housing sales tax.

So that 4.2 balance that you see in there are commitments that we've made uh for PTMW uh for those jobs and those ongoing agreements that we have and for ongoing agreements that we have uh for other workforce housing sales tax um projects that we've passed.

In our conversation, we highlighted there's a payment that comes back to the city of about 457,000 a year, repaying the city for the construction of the NISTAC building, K S UIC.

That revenue is available.

It typically goes into the eco, the broader economic development fund.

It's probably a portion of uh a much smaller balance that we have, that four million, and when we talked about that, I did point out that is probably where the 20 percent and the 10 percent are, but there are additional revenues that come in annually.

We have taken some of that 457 and put it towards the Lee Mill Village development with Tyler Hollerman, and we have used it in other circumstances too, just to round out that conversation.

Andrew, are you are you clear?

Are you satisfied?

Do you need additional?

Well, I mean, I just I think we need to the way it was Rena's numbers was 4.6 million at the end of 2026.

So I'm just looking for ways that we can transfer some of that money to to free up space in the general fund.

And so hopefully there's economic development that we can do that can that general fund is funding that we can use to use that ecodynamic eco development money to replace.

I don't think I don't think there are other funds in the general fund that are being used for economic development.

It is that dedicated sales tax that is the source of the of that funding.

Am I incorrect?

We provided you all a breakdown of where economic development funds go.

Chamber of Commerce at 535,000.

There's 290,000 that goes to ATA.

Um, we provided you all a list.

That's essentially what I believe he's speaking to.

There's available revenue there beyond the jobs and beyond the housing sales tax.

Right, but the source of that funding is the sales tax.

It's tied to the question.

Not general fund.

Well, I guess I want to I just want clarification on what how much what number is actually kind of free to go to the bond and interest fund.

We can give you a full breakdown of the four million, and we'll provide that to you.

There's very little of it that's going to be discretionary that can be diverted to the bond and interest fund that isn't already going there.

I would also um share with the commission that economic development fund um occasionally the city is approached with opportunities to jump on economic development um opportunities that come in throughout the year, and that if there is any free discretionary money, I would not recommend um tying it up in a different way because we need to be able to have flexibility uh when the chamber comes to us with opportunities that we want to take advantage of.

Sure.

So you wanted robust conversation.

So to go back to what I uh discussed and the first topic.

I've I've made four adjustments to your proposed budget that get us to basically the same revenue as last year.

The first one being uh involving the franchise fees we talked about, you know, we we were sold on the idea if we raise franchise fees two percent, we gain about 1.9 million dollars.

Uh in your budget, you raised the franchise fees from 3.1 million to 4 million, a 900,000 dollar increase.

So I know you're being conservative, but you left a lot of money on the table there.

I proposed raising that line item to 650 or raise it by 650 up to 4.6 million and reduce the the Abdularm tax by that amount.

Uh number two, in your general operating expenses, you proposed in 26 we had a line item for cash reserves of 11 million five.

In 27, we have a line item for cash reserves of 14 million.

That's a two and a half million dollar increase in cash reserves.

Uh I've reduced that by 550,000.

So between those between those two, we still get a healthy cash reserve, uh, just reducing it by 550.

Uh I increase the bond and interest fund.

You had in there 2 million 331.

I just raised it 2 million 5 million.

Uh that's a $2 million increase over last year.

Finally, on the library, they're proposing an increase of $244,000 this year.

Last year they got an increase of $261,000.

So between those two, that's $500,000.

They've increased their budget, their taxes in the last two years.

So I've reduced their requested increase in half, $130,000.

And if I make those adjustments to the budget, we get about the same income as we got last year.

Yeah.

And a mill levy of $52.207.

Thank you.

I'm trying to uh I'm not discrediting what Commissioner Fox is saying, please.

Um I don't want anyone to think that I've seen his proposal.

What I'm trying to do is just pull up these presentations side by side so we can talk about them.

So the one thing I would um I I appreciate that feedback, Commissioner Fox.

Um again, um, as we've talked about, um this is this is my recommendation to you all.

Um you all certainly uh take this recommendation and provide additional feedback back to us.

Um it's my job to put forward a recommendation to think through future opportunities uh and where we we may be in the future and just make sure you all are aware of those things.

So in regards to the franchise fees, yes, we were incredibly conservative.

Um, just because again, very similar to sales tax, we don't know if those revenues are going to come in.

So while we did budget that it would could potentially be a 1.8 million dollar increase, um, we wanted to be conservative.

Um I agree with you.

Uh we did bring our actuals in 2025 were 3.2.

Um, and so and we only budgeted 3 million in 2026.

So there is an opportunity for us to look at um increasing um that revenue stream.

However, I would again just cautious us to to be too reliant on unknown revenue sources, particularly in the first year that we are bringing it on board.

Um the second thing when we're talking about um those cash reserves, um the cash reserves that we are projected to um the again we talk about the it's not uh I want to make sorry, these are not reserves.

The city of Manhattan does not have a reserve policy, so these are cash balances.

Um the balance that we have in the general fund, uh, the reason it is so important for us to be able to have a healthy cash balance there is when if something were to happen and we had to, we had a flood on Wildcat Creek and we were not able, we had a tornado that went through, knocked out one of our big revenue generators uh, such as um sales action array such as a Walmart or our target.

Um I obviously don't ever want something like that to happen, but it would take a long time for us to start realizing those revenues coming back in to our coffers, but yet we would still have the expenses of needing to be able to take care of those things.

Um, the other reason it's important for us to have a very healthy cash balance is I hear this commission talking about how important it is to start using cash to pay for things rather than issuing debt.

The way that we can pay cash for things is to start collecting cash.

So that was the initiative.

Uh, that was the intent behind that cash balance.

But if the commission gives direction to uh not build that balance, we will certainly make that adjustment.

Just as a comment, I'm not unreceptive to Larry's comments of where we're at as to those items.

Um we still have to keep worrying about spending more than we've got.

And I think that is an issue.

Even if we have cash reserves and we're going to pay cash, we need to make sure we're making good decisions what we're spending it on and what the flexibility we have down the road.

And the other thing is that you've made me aware of, and I assume society understands, the legislature has tried to engineer what we do with income and expenses and how we do it.

And in their great wisdom several years ago when they took off this some of the caps did that when we have a new revenue, a new industry, a new construction, whether it be city sponsored or if the TIFF comes off, we can't capitalize on any of that money.

And that's stupid, because they've gotten free money for 20 years, and now they don't have to pay it back because the legislature put a cap on it.

And it may drive down the base revenue neutral number, but it doesn't help the city because they're stuck with the same money, and it's insane.

But that's something we really are going to look at next year when we have what 15, 20 million dollars coming back on the tax rule that we paid for for the last 20 years.

And so I think we have to fight while we're in now to keep it, and we need to be prepared how we're going to deal with next year in the future years when that stuff comes on.

So I I don't think we have a whole lot of choice.

Um I like Larry's comments.

Um the library, I uh they have needs.

Everybody that I've talked to has needs and wants.

Um needs have to be taken care of.

And maybe the library can't be open from nine to nine.

And if that's where their money is going for security for nine o'clock p.m., that may not be able to be done, or they may have to look at.

I know they have capital problems, elevators, roofs, those things, but so does the city.

Uh the laundry list that you have on CIP for needs that the city has for infrastructure is staggering.

So I think we gotta be aggressive on holding this and also being creative, maybe even going to the legislature and say they're idiots and change their policy about how they want to control property taxes and how they do that because they have left us no choice.

So editorial, Mr.

Seaton.

I think you're absolutely right with the state legislature.

They constantly harp on property tax, and hardly any of the property tax except for the school tax goes to the state, you know.

And so, but I do think we get hung up a little bit on what the mill levy is.

Um especially because the Mercury often prints things that say, oh my goodness, our mill levy is at such and such.

When they point out Parsons has a mill levy of a hundred and eighteen or something, that's because Parsons doesn't have any, their mill is not worth $2.50.

So they have to go to that kind of thing.

Um, I think we should figure out what is reasonable.

Um, how much is a mill if you have a $300,000 house?

I think your property tax will go up about $40 with one mill.

And so, you know, are people really going to they just if they constantly hear, oh my gosh, we got to keep the mill levy levy even all the time.

I think Larry has some good points.

Um I think the cash reserves we probably could borrow a little bit there because while we need to keep a decent level for sure, we've gone from about 10 years ago having two million to having 14 million, you know.

So it was really a yeah, yeah, that um the uh one-time um American Rescue Plan Act funds that the federal government um gave to municipalities and and other local governments uh is how we were able to increase that cash reserve from one and a half million.

So that was one-time money.

Um that's how uh we were able to do that in such a short time frame.

We also use that money to to buy to pay for some things that we're doing in the general fund.

Yep.

Now, the library, um, yes, we had to increase their staff to have sadly a person there to help with security, or three FTEs, I think.

I just got my print what two, one full-time, two part-time.

Well, that's what I heard, but then I heard three, okay.

Two.

Um I just went to the library and I go a lot.

And they said this year I have saved 62,000, no thousand four hundred and seventy-eight dollars by using the public library instead of buying what I wanted to see.

Over the past forever, I've saved 62,000.

So, you know, I think we're nicking people who don't have much money with the franchise fees going up with the sales tax fees going up, and they are all regressive taxes.

If you have less money, they are bigger impact on your selling.

One thing I wanted to ask about is um as I was going through all the different 51 pages of budget, um, I noticed that the IT costs, which we allow a lot to all the different departments, and then pay back and um you know for for various things.

Um, for example, the city manager in 24 they allotted 61 million and now it's 86 million.

I mean 86,000, sorry.

Um sorry, eight million small 86k is what I've got.

Sorry.

Um, but you know, when I added it all up in 24, we basically um billed all the differ different departments for two million, two million five seventy-seven.

But um this year we in the budget, we're billing all the people for two hundred two million six hundred and sixty-seven, but the IT budget six hundred six million.

I mean, it didn't it didn't look like cash in cash out like it usually does.

Um and and I just you know, also um some of that COVID money was supposed to go to IT to buy um all of our new stuff.

Uh are we not see still seeing some of that in our costs?

So I'm gonna have to spend a little bit of time trying to identify where you see that six million for IT because what I'm showing is our internal service fund for IT being um 3.396.

Well, I saw in IT the revenue was uh in 2024 was three million in 2027 is six million.

The services are 2.9 million in 24 and 3.7, and the contractual services are 1.4 million in 24 and 1.8.

So I just didn't know you know where that's all going.

Yeah, Rena, yeah, thank you.

Good evening.

That mic's all okay.

Should be on the good evening, Mayor and City Commissioners.

So, Commissioner McCullough, um, in terms of the IT fund in 2024, the expenditures were two, about 2.5 million dollars.

2025, about 2.9.

The budget for 2026 is at about 3.8, and then for 2027, it's about 5 million.

And part of that reason is due to the cash reserves building.

So the So that's the detail sheets.

So when you're looking at that particular set of spreadsheets, actuals.

Thank you.

Yes, ma'am.

The budget.

So the budget for 2026 and 27 does not include the reserves.

And so for the past two years, that's how the budget has been presented.

It's just what we need to operate, the revenue and the expense, and then the reserves are backed out in the cash, beginning cash balances backed out as well for all funds.

But even with the 3.396, I show IT funds going to various departments at 2,667 when I go through and add them all up.

I just you know, it just seems to me that when we have these billbacks that we have, it's hard to know what the dollars, you know, because we're we're building the fire department for IT, and then IT has it in their budget, and so it's just complicated to me.

That is um sorry, the turn this one on.

Thank you.

So we're gonna share one microphone.

We need an IT or IT.

So um, so this is something that uh is unique to me.

Um this is not something that I've experienced in previous organizations.

Um this is not something that I've experienced in previous organizations, um, but with these two internal service funds that we have um fleet and IT, um it is my understanding that this was a way for um us to have a comprehensive idea of what fleet and what IT were costing the organization as a total, and then having those fees charged back to the departments.

So ultimately um it all does come out of that general fund, uh, those revenues.

Um this is just a way for us to track it.

Um then when we talk about what those cash balances are that you saw, um, I know that there are um purchases, large purchases again, um equipment servers, um other network equipment, uh being able to keep our laptops and our computer systems um on a healthy uh replacement cycle, which I believe we are at 10 years.

We replace laptops every 10 years?

Five every five years, sorry.

We replace laptops every five years.

Um so again, this is our strategy to keep this organization healthy.

Um and the conversation that um with Jared being sorry with um uh our director Wasinger being in this role, one of the things that he did bring to management's attention, he does feel like his uh reserves are healthy, and so we would not be uh adding any in the next several years, um, assuming we didn't have any uh big purchases or emergencies that we needed to purchase.

Well, it just surprised me that um in 2024 it seemed like cash in, cash out for IT.

And we um and then in 20 in the new budget, it looked like there was a lot more cash in.

I mean, a lot the the IT budget was much larger than the budget throughout the whole on paper, and when you look at these numbers from a big picture standpoint, it does kind of look alarming and and different over years.

We established this fund in 2023 for the first time, and really we were only accounting for hardware, so those laptop and computer replacements that were being uh replaced.

In 2024, we added software, so we added almost a million dollars in software that was being paid for and other department funds that are now into the IT fund getting charged back to it.

So that's where you see that incremental increase.

And then we also added staff in years 2025 and 2026.

2026 specifically, uh, was the first full year that communications, which used to be staff budgeted in the city manager's offices now, budgeted out of the IT fund as well as GIS, those four employees in GIS were originally funded out of the public works department, are now funded in IT as well.

And I do want to reiterate just the the importance of the cash reserve.

Umly there's a lot of things that go into play of why we I believe we need a cash reserve from emergencies uh for one thing, but then there's the unexpected rise of cost in certain hardware.

Um you also may have even if you've bought a personal laptop in the last year, that has skyrocketed exponentially.

We had just one example of uh we needed to replace a specific server for our camera systems here at City Hall that jumped over a hundred percent within the span of two months.

Uh so that's just one example of a purchase that costs ten thousand more dollars in the course of three months because these uh costs for hardware and hard drives continue to just rise exponentially I'm not um doubting the need for dollars.

There's not at all.

It just seemed to me that the revenue in 2024 was three million and then they've gone up to six million, but I didn't see that much charged back to offices.

And I I can understand you need a cash reserve, but in some ways, shouldn't the whole city have a cash reserve that anybody can sort of excuse me, dip into um and and I think for the public it would be really good if they knew the total cost of IT because you know we're trying to we're trying to um defend public spending, and you know, we it's hard to say to people well the concrete's more, the oil is more, the gas is more, but if we can really point to the fact that we have to spend two million a year more on IT, that sort of you know really does help things, I think.

Well what I've proposed in our our uh technology and communications budget for 2027, that 3.3 million is the cost that it takes to run uh the organization from personnel to the contractual services uh and then can the commodities that we talked about when it comes to software agreements, hardware purchases and replacements.

Yep, and I believe Rena's gonna explain that revenue side of it.

Okay.

So the six million dollars includes fleet as well.

So there's about two million dollars in fleet, and then the IT fund has the remaining balance.

And you're combining fleet and fleet is that was a combination of both of our internal funds, yes.

Okay.

So then when you compare the actuals from 2024, 25, and then the budget again, that's excluding any reserves to balance the budget.

But that is as Jason, I mean Jared mentioned the increase for software and then staff over the years.

That's where that's coming in at you can see.

Um it's rather unclear.

And I mean, when you explain it, it's very clear, thank you.

Yes, ma'am.

But when you go through and look at certain things, and um, you know, just thank you.

Basically, I think it'd be clearer if we had a uh a number for ID.

Uh the 3.396 is the number, the number for this particular year.

Um just for folks who are um in the audience and for um anyone watching at home.

Um we did share um detailed um budgets with um commissioners, and so we are getting those pulled up so that we can talk through those and point to those.

Um I think it would be easier if we could all be looking at the same and and Karen can direct me to which page she's looking at.

So I'm asking that.

Okay, I'll get I can't get it up here, but I'm gonna go.

Okay, all right perfect.

Will you click on the budget?

Um yeah, Jared's working on it, we'll get it up.

Um again, um, to answer the question the uh IT cost the organization 3.3 million dollars.

So are there other questions from commissioners about that I can answer?

I turn um I would we're we've kind of strayed, but we this part of this was precipitated by talking about the reserves or the uh cash balance and what we could how we could reduce that and utilize those funds.

I'd just like to remind the commissioners of the importance of maintaining um a very healthy cash balance vis-a-vis our bond ratings and our credit ratings for uh for our overall health.

Uh that was something when I first joined the commission was an issue because the reserves had been allowed to uh dip quite a bit, and it was affecting our larger uh financial perspective.

And so I'd like to just remind us that there is you know, we're not just sitting on that cash for for the sake of sitting on cash.

It it is serving purpose in its uh contributing to our financial well-being.

Yes, and our bond rating went down, but now we're up and now we're up again.

And I do think it's important to have cash reserves.

I'm just questioning as Larry as perhaps like what level is good for our bond rating.

Quick clarification on our bond rating.

Uh we did drop.

Um, we had uh we went from a double A to an A with a negative outlook, and we are now an A with a positive outlook.

So again, I would point out I'm not proposing using the cash reserves, I'm not proposing keeping them the same.

Uh I proposed limiting the increase in reserve just slightly.

From 2.5 million to 2 million, so increase.

Yes.

So the um and again, just for clarification really quick, um, we are going to end, uh we are projecting to end 2026 at 12.6.

You may 12.6.

We ended 12.6 in 2025, and so we are hoping not to have to have any reason to spend that this year, but that is why that increase looks um so high, is because it was higher than what that budget was.

We ended higher um than what we thought we were going to in 2026.

So your point is uh very well taken, Commissioner Fox.

All right.

Um Mayor Adam Jack, I would recommend that um we have deputy city manager Jason Hildures come up and run through his um debt presentation.

Um I will leave all of this up here and we can continue to talk through specifics, but I think that that debt presentation is important.

Um I would recommend that we get through this debt conversation, do public comment on the mill analysis and the debt, and then we can talk about the sales tax renewal and do public comment on the sales tax renewal separately.

Thank you.

Thank you, Manager Doolin.

Uh, mayor, commissioners.

I want to provide you an opportunity to dive a little bit deeper into the debt.

There are a lot of details in our debt.

Um we're gonna get into a certain level today.

There's obviously a lot of data and information that are behind this.

We have current and past debt.

Our past debt is really everything up until 2026 that we have serviced.

It goes all the way back to 2006 because as Commissioner Morrison pointed out earlier, we have about a 20-year run on special assessments.

Current debt is comprised of 88 projects.

It's really the past debt.

Sorry, I say current, but that's our our 2026 debt service is 88 projects.

Part of that debt total that you all will see here in the next slide.

We have 44 projects that are currently part of temp notes.

These are projects that you're either actively seeing under construction or have recently finished construction.

We have over 20 revenue streams that go into these 132 improvements and projects.

Eight major categories of revenue sustain the bond and interest fund, and a lot of them you're very familiar with because we talk about them a lot.

Uh their sales tax, special assessment revenue, storm water, wastewater, special revenue funds from both street and park, and the bond and interest fund has a category that's a combination of a lot of different revenue streams, but property tax does feed into that.

This year, our annual debt payment will be over 22.7 million dollars.

That is servicing this picture of your debt.

There is a top-down way to read this, and there is a left to right way to read this.

I will start left to right with general obligation and special assessment bonds.

When you look at that 140 million in GO and the special assessment at 46, there's 186 million dollars, almost 187 being serviced in those two categories today.

It's comprised of city at large, utilities, and specials.

Next one down, temp notes.

These are the projects as I mentioned, either under construction or have recently been constructed within the last three years.

That is almost another 110 million dollars.

We have not issued GO for these yet or special assessments, but we anticipate doing so in the next two to three years.

All of it.

As we covered earlier tonight, we still have another year to pay off these bonds.

Um we have that revenue that'll come through based on the valuation this year, so that revenue will be realized in 2027.

We have a TDD bond that's also been issued for the northern end.

We have Department of Health and Environmental Loans, uh, 29.5 million.

Lease purchases are comprised of our last debt instrument at 1.78.

All total 334 million dollars in debt service.

Keep in mind 110 of that has not been formally issued.

It has been issued by way of temp notes, but not in general obligation debt.

Any questions on this slide before I leave it?

Rena provides this multiple times a year.

You get it sent to you, we put it on the website, we get it, we analyze it, it's constantly updated because those temp notes will convert to GO bonds sometimes twice a year, and we issue temp notes sometimes four times a year.

Jason, two questions.

The the third line, the subordinate lien TIFF special.

Yep.

Almost three million dollars.

So this is the last year of payment for that.

It's a TIFF B bond.

It had an original structure of 4.1 million dollars.

TIFF A paid off a couple years ago, and we've been realizing revenue to support the TIFF Bond.

It ends next year.

That valuation that, yeah, the valuation they just thought we had and you just took off, it will be there next year in that analysis.

And then all the temporary notes, the 102 million, some of those will be paid with sales tax money that's quite a bit of that 102 million that's part of the 2023 sales tax.

Anything associated with Aggieville or North Campus will has a dedicated revenue stream.

And I'll show you that here in a second.

Any other questions on the debt and how it's categorized?

So some of the conversations we've had, there's been a question of the 22 million.

Let's get past water, let's get past utilities, let's get past these other funding streams, special assessments, and let's understand the bond and interest.

That 7.4 million that's part of this year's annual debt service is something that has been in existence for quite some time.

It's supported probably about half traditionally from property tax.

The other half comes from a variety of revenue streams throughout the organization.

That 7 million is 30 projects in our community.

The next slide highlights them all, but before I get there, it's roughly 70 to 80 million dollars that is supported in that bond and interest category.

We currently have 0.66 mills or just under a half million going to support that 7.4 million dollars.

Just over 6.5%.

We are relying on other revenues currently to support debt that used to have a four and five mil dedication.

Annual debt payment, property taxes are 2.2% of the annual 22 million that we make.

These are the 30 projects.

A lot of these projects you will recognize throughout our community that have been built in the last 10 to 15 years.

There are some of these that are stretched out 15 years, some 20.

And when they were put together, there are reasons we stretched them out that long.

You can see the first four are associated with fire stations.

It has been a while since we've constructed a fire station in Manhattan, yet they are still active in our debt.

They were structured in a way long term to try to allow the growth in the community at which most fire stations are constructed to accommodate over time to realize and help with that debt service.

Discovery Center exhibits.

This is a $7 million in debt we issued back in 2010, 11 that allowed us to pay for the exhibits that were not star bond eligible.

We built the facility for 17 million.

We issued debt for 7 million in exhibits.

We're still paying the debt service on that.

Downtown parking garage.

We issued $6 million for the construction of the downtown parking garage.

$3 million of it came from Star Bonds.

$3 million bond and interest fund.

Conference center, $9.5 million project.

Completed 2011-2012.

That has a long-term debt service associated with it, over 20 years.

We had a 30-year lease with HCW to operate it.

Again, allowing revenues to come in associated with conferences to help pay for that over time.

But the bond and interest picked up a portion.

West Anderson before that would be my last one, I swear.

West Anderson was a six to eight million dollar project.

Stretched from Annenberg all the way out to the roundabout.

We anticipated growth and expansion at the roundabout.

We haven't realized that growth and expansion like we anticipated.

There are transportation development districts surrounding that roundabout that in the event we do get some retail, we will be able to capture some sales tax to help pay for this debt, but the bond and interest is picking up its fair share.

The desire is to return to that past rate established and really left off in 21 and 22.

A sustainable and reliable revenue stream goes a long way with the rating agencies.

It goes a long way with covering those expectations that were issued so many years ago.

We don't have that currently happening.

We are under a half million dollars supporting that bond and interest payment of over $7 million, and it is causing a reduction in a cash balance at a very fast clip, and it's putting more pressure on existing revenue streams and the bond and interest to cover that debt.

One mil, approximately 780,000 now.

That slide did say 798, but we had to change it as of Friday.

Five mils would generate roughly that 3.9 million.

We get into a lot of sales tax questions too.

Do we want something to go out later this fall that would allocate some of the sales tax towards debt service for every 0.1 in sales tax, it generates approximately 1.6 million.

Quarter cents gonna generate real close to four.

City manager Doolin's recommended budget, you would have had close to 4.9 mils in the bond and interest, and it would have closed the gap in a hurry.

We recognize 4.5 to 5.5 mils will do that.

They're consistent, reliable revenue streams, those are what the rating agencies prefer.

Commission discretion, you have control over mill levies.

You don't have control over sales tax.

You got to go ask the voter.2 and 0.25 in sales tax, what we referenced here previously, get us to that three and a half to four million dollar range.

It is financial support, it's just an inconsistent revenue stream that has its own volatility in our community.

And we have a pretty well documented past.

It is not always three, four, or five percent that we've been experiencing the last three or five years.

And as I mentioned, voter discretion is what you're waiting on if you go with that route.

So for the past five years, this is what our bond and interest fund payment, beginning fund balance, total resources and revenue, total expenses, and our ending cash balance.

It's no real mystery as to why in 24 and 25 we lowered the mill rate.

That's a lot of cash.

But that cash was purposefully set in that fund, and we mentioned it.

The 2023 sales tax kicked in, it's over six million a year, dedicated to Aggieville and North Campus.

That money started accumulating and it became attractive to lower the mill support in those funds.

If we remain at 0.66 mills through 2034, you'll run out of money in that fund midway through 2031.

We highlighted this in a graph chart with our Baker Tilly consultants and Ben Hart.

This really starts to put numbers to his charts in terms of where the revenues are, where the expenses are, and I would highlight expenses pre-2026, that gray line in the middle.

That is reducing from 25 to 22 to 21 to 19 to 18 to 14 over that stretch of eight years.

That is us bringing that existing debt down roughly 20 million dollars at a time, two to three million dollars annually.

That pays down that debt that we currently are strapped with.

Expenses post-2026, they start to climb from the 1.6 all the way to the 13 million.

That's how our total expenses really crest at about that 32 million dollar per year debt service number in 2030 and 2031.

That is a bulk of that new expense that we're realizing in districts where we were trying to stack cash and absorb that debt and ride that wave out.

We had a good strategy.

You start reducing revenues in the bond and interest, it starts impacting that strategy.

Trying to get back to four or five mills, levels us out.

If you go back to the presentation, City Manager Doolin just gave you, and you look at those different mill levies in the bond and interest.

This one references the high end.

This is the 54.506.

This is the 3.799 mills in 2027.

And it remains at 3.799 mills thereafter.

We've moved the negative balance from 2031 to now 2033.

Which tells you even taking the recommended at 54.506 doesn't clear it up.

The 3.79 million, 9 mils will not clear up that debt service gap.

If you go to the 53 mil scenario, that's where you'll see the 2.9 mills, roughly the 2.3 million in the bond and interest.

Your negative number shows up a lot more drastically in 2033 in that scenario.

And it holds it.

It's the 2.9 mils in 2027.

We would need to grow it by another mill in 28 and another mill in 29.

You can see we stay out of the negative numbers in that scenario.

We obviously have revenue streams.

You have time.

Trying to find out where you'd like to go on the horizon with the debt.

I know a lot of you would like to see all 132 of those projects.

I'm happy to get that detailed out for you and show that debt all the way through 2042.

Um, and we can get you those projects and show you that debt schedule.

We thought we'd give this to the community and you all tonight and see if we can get some direction on where you want to go with the mill rate and where you want to go with the sales tax discussion.

Questions?

Go back to the chart right before we hit when you have post 26 expenses.

Explain the increase relevance.

Where does that come from?

A lot of it is that 110 million dollars in that temporary note.

That's debt that will be realized permanently in the next three years.

So it's just an expression of additional debt liability.

Once it goes beyond the temporary construction phase to the permanent phase, yes.

And currently on the temporary, we only pay interest, is that correct?

Jason, what about future things?

Like Danielle was kind enough to give me the CIP out till 2031.

And the fire station move and various things is 26 million.

It is should have a note on it that either says future revenues, or we we really need to get into a mode, either not issue notes anymore and dedicate the revenue streams, or not issue the debt for whatever it is without having the dedicated revenue streams.

What happened at 23 and 24 is a good example though.

You can't bind in a future commission for making a decision and taking advantage of a situation.

You can't you can't undo it, you can't prevent it.

You can adopt policies.

It really takes that stewardship from every group to look at not only what's ahead of you in the next year or two, but that three, five, seven-year look, especially with debt.

CIPs.

There's a lot of things we need.

There's a lot of things we want within that list.

New approach to debt.

You get into a situation much like we did with the rec centers in CECO.

You accumulate cash and you pay for it.

You get a sales tax out there and you start talking with the public about that.

We're not interested in issuing any more debt.

We're gonna accumulate cash and we're gonna approach our streets that way.

We're gonna approach our facilities and our projects.

We're all on board with that.

These conversations are not easy, catching up later.

We want that, we'll figure out a way to pay for it later.

It's not where we want to be moving forward.

You can see what that's doing to this discussion.

Yeah, I think sadly in 23 and 24, there was such emphasis on the mill levy and where it was, and could we lower it?

Right.

And then of course we had some COVID dollars we can we could stick that again.

And so we're kind of back to where we were per, you know, with inflation and that kind of thing.

But um, yeah, if you look at the the CIP, there's some giant tick, you know, things, just the airport.

Um yeah, anyway.

Um so there's there are really there are different strategies out there.

I think Ben Hart with Baker Tilly forecasted some of those too.

You know, when we go out for revenue streams, we don't spend those revenue streams until we're ready to complete a project.

I the best example I can give to you the last 10 years with those three projects.

And and it it I was I was approached multiple times, and I'm sure past commissions and past staff were too.

In 2017, people wanted CO done right away.

And we're like, yeah, it's gonna be about eight years.

And people are like, what are you talking about?

We gotta let the money accumulate.

There are certain projects that we may feel like we can do that with.

There's certain projects we may feel like we can.

Eight million a year dedicated to our streets.

There's a pretty comprehensive approach we can put together.

Five years from now, it'll probably shift.

That's just that's just the picture of the beast.

I think too, um, you know, uh what we've done with the north entry thing, um, having no property tax coming in from the majority of of those buildings out there, that kind of thing.

And I think people are very upset with us for allowing development without property taxes and that kind of thing.

You know, that's there we are.

Yeah.

So to answer your question on the CIP, we're not gonna do any of those projects if we don't come up with funding sources.

Um I think I've made my stand clear on the on the bond and interest fund.

I've proposed uh a certain amount in the in the budget along with my other adjustments.

Uh we've got a uh proposed sales tax uh renewal question that we're looking at.

Uh certainly it would be dependent on how that comes out.

Uh if we don't get that, then you know we're gonna have some hard questions to answer.

So um I think for next year we we start working on it.

We don't have to solve it all in one year.

Uh we've got the TIFF coming off next year.

That'll help with the assessed valuation.

Um so we can't do it all in one year, but get started on it.

Yep.

No, but we do are a bit under the gun with the fire station things because we have to be out by 2035.

You'll have that update on August 11th.

I think the university is willing to extend beyond 2028, 1231, 2028.

Um still need some feedback on just exactly what we want to improve, status of the current facilities, what are the next steps in the next three and five years that we do want to take.

We obviously own the land down at Amherst.

If they give us 10 more years, what's the approach the commission would desire at that site?

So we don't feel like we're under the gun to make that decision, but but MFD owes you some information on their current facilities, some of their new um plans and opportunities, and really get some feedback on where we want to go with that.

But we do we are in a comfortable place with K-State, they're willing to grant more time.

Good if we need it.

They were just Mayor Adam Chak, oh they were just wanting the salt storage out of the way still.

Yes, at this time.

And it blew away in the last storm.

We gotta do something with it anyway.

I saw that.

Mother Nature gave us an assist on that.

Uh mayor Adam Check, demolition fees.

Demolition reduction in demolition.

Yeah, yeah.

Yes.

Yes, thank you.

Mayor Adam Jack, I recommend that um you all take public comment on the mill levy analysis and um the debt presentation.

Um then we can get into more discussion.

Is there anyone who would like to make comment on the mill levy discussion and the uh debt analysis?

Okay, going once, going twice.

Seeing no one approach, we will move into the third uh part of this, which pertains this discussion, which Andrew.

I was just gonna comment that I think during the recent campaign, pretty much all the candidates weren't really selling the community on build this or build that or do you know.

I think the community realizes that we're we've got to be more financially responsible and that we've got to you know put off some of put off all the projects that we can and really focus on debt and property taxes.

I don't disagree with you uh commissioner on the focus on debt and taxes, but I also uh don't think it's appropriate for us to stagnate and to not take on any new projects given uh the uh age and uh deterioration of some items.

I'm thinking specifically about some of the park infrastructure that was identified in move MHK.

We know that our park system is well used by the community.

We don't want to have uh a dangerous situation emerge where playground equipment is uh to the point of of uh rusting apart and becoming a hazard.

So I would just uh uh would not have us go down a path of saying we're absolutely not going to take on any of the CIP improvements or other uh projects that contribute to the livability of our community.

Well, my observation is where we've been the horses out of the barn, so now we have to deal with do we find the horse and do we fix the barn?

And that's what we're doing with financing.

We're trying to figure out how to dig us out of a hole.

And that old cowboy saying was if you're in a hole, quit digging.

And that's my concern.

We need to quit digging the hole for debt.

And so that may mean a lot of projects get delayed for a period of time, or we don't do, and we are going to be lucky to maintain what we've got until we figure this out.

Um we've got tax exemptions we've given out that aren't gonna come back to help us for 10 years or more.

We have this TIFF issue that doesn't help us with our praise valuation goes up, but we can't levy taxes on it.

So I mean, those are issues that we can't ignore.

And so I don't care how we got here, we're here and who did it, why we did it, was it smart.

I mean, if you look at the projects that Jason uh read off, um there's a whole lot of streets improvements and stuff that today are very expensive that we're paying for.

Doesn't make any difference.

We gotta deal with how we're gonna do it.

And I think that's the thing I'm concerned about with the sales tax.

If our community does not look at reality, which is debt needs to be paid, our sales tax will sink the ship, and I don't care how many rusty trucks you got and park deal, there won't be any money if we don't come up with a strategy and a plan to take care of these debt.

And I don't know if that guru in the first of the year that told us that our sales tax hadn't been fairly stagnant, slow growth, is the harbor what's coming.

Um, you know, it didn't take one big downturn to put us in a tail spin.

And so all I'm saying is the reserves are necessary, we've got to do those things.

Do we add to it?

Do we fund more?

I think Larry's approach is intelligent, but we've got to figure out are we going to be a leader in this thing and fix the door, find the horse, and take care of our debts.

And so I'm more concerned right now with the sales tax than I am with our property taxes because without it, we sink.

Pure and simple, in my humble observation, we sink if the sales tax isn't adequate and it doesn't pass.

If the sales tax isn't adequate and it doesn't pass, and of course, that's to the whim in the community.

And that's why I fight for the responsibility of the budgeting for the property taxes, because I want those people to realize that is a responsibility.

So sorry.

I think you make a lot of good points.

And I I am also kind of concerned about sales tax.

I think it'd be great if we could figure out what's going on with Fort Riley.

We have thousands coming, thousands going, some at the borders come in Poland.

What's our total trip number there?

I've heard we've gone from 15,000 to 9,000, but it's really hard to tell because as I said, people come back.

And if we've gone down that much, that's going to hit us in the sales tax dollar at some point.

So no, Danielle, if you could maybe connect with them out there and let us know what's going on.

Yeah, of course.

Danielle, do you want to proceed with talking about the sales tax, please?

I will.

So again, just very quickly a reminder of where we currently sit.

Our current city sales tax rate is 1.95%.

We know that we have two sales taxes, uh, one that expires in 2026, one that expires in 2027.

Um, and that is really the impetus behind this conversation regarding a renewal.

Um, our total sales current sales tax rate in Manhattan Riley County is 9.15.

Our current sales tax rate in Manhattan Potawatomy County is 9.45%.

Um we've been talking about needing two to three million in our bond and interest fund this evening, um, seven to eight million for street maintenance.

We know we have a need for that fire training facility.

Um we have some other um projects that we desire to do um at the zoo and cemetery, as well as Mayor mentioned earlier um improvements and investments that are needed in our parks uh for move MHK, just as a reminder, this does not include indoor aquatics.

Um 200 million dollars in deferred maintenance, and you all have that capital improvement um project list um in front of you.

And I have it pulled up so if we talk about it, everyone in the room will know what we're talking about as well.

Um, again, considerations.

Um we have had success with these dedicated sales taxes, um, particularly when they are time bound.

Um we mentioned earlier uh really having that 10-year runout allows us to do planning with those uh revenues that are coming in.

We have success when we identify specific projects.

Um we know that we have that pull factor where 30% of the sales taxes that are paid or generated in our community are from outside of our community.

Um we've talked about the possibility of repealing that quality of life one year early to provide more clarity and transparency in what their sales tax is are going towards.

Um then we've talked again tonight about the combination of a mill levy and sales tax that's needed to stabilize that bonded interest fund.

We've put together three different scenarios uh amounts for you all.

A half a penny or a you know, half cent uh would pretty much keep us even.

It would be a point zero zero five uh increase.

Um that three quarter penny per dollar uh brings us to nine four-five in Manhattan and nine seven five in Riley County and nine seven five in Potawatomi County.

Um, and then that one cent puts us at nine seven in Manhattan Riley County and ten percent in Manhattan Potawatomi County.

Uh these slides have changed a little bit from what you originally saw when we talked about this last week.

Um with the change in the assessed valuation that we had been working towards and and putting our our numbers together.

We talked about the possibility of capturing all of that in property tax revenue and potentially not needing to use any of our new sales tax for debt.

Um, I have deleted those scenarios.

That is no longer a possibility for us.

We are going to have to use mill and sales tax at least for the first couple of years.

Um this half centario that I put before you uh this is looking at that three million dollars that we need um in our bond and interest fund, and then taking the other the remaining eight million, which would be a five million, um, and putting that toward streets.

Um still below, sorry, Mayor.

So Danielle, this is implying that we would be dedicating part of the economic development sales tax from 2023 for debt payment as well as this one.

Yes.

So this we look at this five million dollars for streets.

We know from Director Johnson that we have a six to seven million dollars to catch up on our street maintenance issue.

So we will continue to fall behind if we only have five million dollars to inject into our street system.

Um that we see in that industry.

Scenario B, which would be a three quarter cent, which would bring our total to that 9.45 in Riley County and 9.75 in Potawatomi County.

Um this would and again these are suggestions.

Um these these divvying up, the only thing uh we're going to need to be pretty firm on is that $3 million for debt.

Um otherwise we can move these numbers around based on conversation that you all are gonna have this evening, but just wanted to put something out there for you all to respond to, react to, and provide feedback on.

So this scenario uh gets us to six million, so we could start to catch up on our street maintenance.

Uh we would have the ability to start one uh you know putting cash aside for that fire training facility that we know we need to build, uh, and then also having funding for deferred maintenance that we know we have.

Um I'm gonna show the next slide just for perspective and just for conversation piece for the commission.

Again, just something for you all to react and respond to.

Um, but this would be a one cent increase.

Uh this would be eight million dollars uh for street maintenance, that three million dollars that we need to stabilize bond and interest.

Again, we would be able to have two million um to start stacking uh the funds to build that fire training facility.

We would also have cash for deferred maintenance and other capital needs, and then we would also have uh one million to try to dedicate towards uh investments in our parks that were identified in that move MHK.

Um I have had uh conversations with folks in the community as I'm sure you have and have shared these scenarios and presented them.

Um I I hear support um I hear support for streets, I hear support, um, I hear that folks understand uh the challenge we're up against with our debt, but I also hear um the the challenge of creeping close to that 10% total in a sales tax number.

So I wanted to share that with you all as we start to have these conversations for you all to keep in mind.

Um we've put together that's based on the feedback that we heard from you all last week.

Um we need specifics on capital improvement when you say other deferred maintenance, what are you talking about?

Um so we have revised this capital improvement um sheet, we have reduced it, we got very serious about what our needs are.

So um you will see some projects from the last several years have have been cut because we want this to be very specific and very realistic when we go out and we start having conversations with our community.

Um kind of walk through folks through how to read this.

We have our different departments over here on the left-hand side.

Um we talk about what the name of the project is, a very brief description of what the project is, how much it costs.

So some of these projects you will note have cost in multiple years, but then we total it out, and you will see very similar to those bonds uh sheets that we show how expenses come on throughout the next five years or so at the bottom.

Oh Jerry, this is the wrong one.

Um it's okay, okay.

Um at the bottom of the one that you all have in front of you that we distributed, you will see a total for each year 2027, 2028, 2029, 2030, and 2031.

And we also identify when there is um when we are planning to pay cash, we also identify when we are planning to use grants or private funding.

For example, the zoo.

Uh we know that a majority of that is being paid for with private funding.

And then um we've also identified when we don't have funds for these projects when there is no dedicated funding or when we are looking at future revenue, such as the sales tax that we are getting ready to discuss.

Um the other thing that we put forward for you all is identifying which projects would be debt funded and whether they would be utility or general or um again those unfunded or future revenue streams.

Department directors are prepared to talk about any of these projects um that you all want to dive into this evening.

Um but I think I will at this time um let Mayor, I don't know if you want to have uh public comment on the sales tax now or if you want to have discussion amongst commissioners.

Um that's your discretion.

Uh let's hear from the commissioners first.

Thank you.

Well, the one that you have up now is not acceptable to me because we're losing ground on the streets three million to the debt, possibly some amount, but not necessarily three fire.

I'm not sure we can do two million.

The other the city infrastructure is failing, so I don't know we have a choice.

I would be the other design would be more acceptable to me, which would be um the eight million getting close to the street and the rest of divide the pie out.

Um the 6.3 is what is the MMK?

I can't remember.

Move MHK.

Move MHK.

So that's your big zero for me at this point, quite truthfully.

I think they've they've had their Waterloo, and we need to cut some of that off.

I don't want us to go in the hole, but I think within our internal budget for a parks and rec, they have enough to do maintenance, and I don't see any need for quote new construction until we have figured out where we're going to be in three years.

So far as I'm concerned, that 6.3 million can be gone.

Other, if I just look at our parking lot sidewalk getting in here in the handrail, it's rotted off on three of the four places I come in.

It's offensive, but we have to live with it maybe.

Um I think that's only in the one standard six I would not agree to.

I mean, three quarters is acceptable.

If you had said point eight, I would not have probably argued, but three quarters is by I think a reasonable sum.

And we have to make sure the public understands these are not frivolous items, and that's why I think we have to find support for the three-quarter cent sales tax.

And I do agree with undoing the uh park and rec one year, but I know we have to obligate the funding to cover that one year sales tax that they're counted on, which I assume has been spent.

We haven't received it, so we haven't paid it yet.

Correct.

So we have to maintain that dollar amount, but I'd call that a dollar amount, not a percentage to be in the future.

That is correct.

So just to summarize, make sure I heard you correctly, Commissioner Morrison.

Um comfortable um at that three-quarter cent, but would like to see the dedication uh to streets closer to eight million and then divvy up between debt and fire, and maybe a smaller portion to other, but definitely nothing for move MHK.

Accurately stated.

Thank you.

Danielle, I think it would be helpful if we did have an idea about some of the deferred maintenance as well.

I mean, I'm not sure one million doesn't seem like a lot to address some of the things that might need to be done.

So I think at some point to see what yeah, let me see that.

Thank you.

Yep.

Thank you, Jared.

Um so uh Mayor Adam Chak, we did identify um our deferred maintenance, our priorities for deferred maintenance in this list.

So when we are um you know, um uh I'm I'm not sure that a 10 page uh number six font list is telling me what the priorities are.

Is there an indicator in here somewhere?

So we we list them as by year 2027, so those would be the ones that we would want to tackle first, and then pushing those out ones that we think are less emergent would be in 2031 versus 2027.

Thank you.

Um I just come in here to be clear.

We're talking about the two sales taxes, the total 0.45 right now.

Redoing those, and we want to redo them at 0.75, 0.8, 0.85.

No, we've got to increase uh tax to take care of our streets.

We've got to deal with debt, and we've got to deal with fire.

Those in my mind are the critical issues, and then somehow tackle this CIP project list that uh it's mind boggling.

Um I could I can certainly support anywhere from 0.75 to 0.8, 0.85, but uh far as streets, my number has always been about six to seven million because history showed us that we're probably gonna make more than that.

Um but six to seven, you add that to what's in the the general fund budget gets you to the eight million uh that we need for that.

Um so that would be my thought that we certainly don't want to hit ten percent on the total tax, so we need to keep it at three quarters to 0.8.

Yeah, to your point.

Try to do as many projects as as we can, just kind of spread the yeah.

Um just to your point, you're absolutely right.

We do have a conservative S total estimate over the 10 year run out at the bottom.

Um again, very conservative.

Um, so about a 1.75% increase in sales tax over that 10 years.

But you do see that total investment.

So you're exactly right, those numbers would increase over the course of the years.

Um of the other conversations that we need to have this evening is really talking about um the language, the ballot language that we have in trying to strike that balance between specif specificity and uh general um general generalities.

And so again, feedback that I've heard um from community members um is that they want specific projects, they want to be able to point to those specific projects and um but also uh recognizing that um things change, particularly when we talk about priorities and emergencies and things have to be um forwarded and pushed up.

Um so that is um it would I would appreciate some feedback from commissioners on where they are kind of falling on the specificity and general generalities of the sales tax language, and we will try to strike the balance um for you all.

You all will have language um to respond to at the August 11th meeting.

So, in my opinion, what has been successful in the past uh with the parks and rec, you know, it was like 95% parks and five percent trails, something like that.

Uh in the last one we did the uh economic recovery, you know, 70% debt, 20% economic development, 10% workforce housing again, percentages that are very clear and understanding.

So my opinion, we've got to break it down into uh percentage, not dollar amount, but percentage.

Um Commissioner Fox, I was trying to take notes and listen um at the same time, but you said your priorities um you're comfortable between that three-quarter to 0.8 range, 0.85 range, but your priorities would be streets, fire, um, and there was another one.

Debt service, debt service, and was there a third.

Well, I have pet projects, but you know with zoo, okay.

I um I appreciate you saying it.

I just want to make sure it's it's out there.

So deferred maintenance.

Let's make that one of them deferred maintenance.

Okay.

Um I'm leaning towards the three-quarter sales tax um language.

I think I don't know if we need to put a percentage to fire, but just say we're gonna build a fire training facility with uh but you know, I don't because I'm wondering if we'll have extra money at the end and in 10 years, but well, I still argue do we need a fire training center that we have or that we want to have.

Is there a cooperation between five regional towns?

Because I'm sure our office uh firefighters would like to have one right next door.

But is that a daily training exercise, or is it periodic and can we not share with other cities?

And for 18 million dollars, I would like to at least explore the probabilities of that.

And I don't know who our bird dog is on that, but I assume our fire chief.

Yep, so fire chief French is preparing a presentation to update you all on that fire training facility at our August 11th meeting.

And he just groaned in the back.

I know we're all looking at him.

I think um the um hitting 10 percent is probably a psychological um denial because it's just you know, even 9.75 sounds better.

Um I would point out that um I really think we need to have a good discussion of why we have park and recs, what the whole point of having um places for people to exercise and be healthy and be busy, that kind of thing.

And I'm concerned, I'm very supportive of park and recks, but I'm concerned that our mentality now is to make everything pay its way, and sometimes you have to subsidize those things.

And I think the uh what I've seen, the number of people using the gyms is down pretty significantly since we started charging for them.

So at some point I'd like this commission to talk about that.

You know, what is our feeling for that kind of thing?

One other thing that's just off the wall is um there are elections going on in November, number of people running for state.

Um, and the state has um taken eight billion dollars of sales tax off of various things.

Be wonderful if some of our representatives would um look at that list and see maybe if they could put a few back.

Danielle, do you have sufficient guidance to move forward as you prepare like language for sales tax question?

Yes.

Um I do, I'm hearing that we are going to be between that three-quarter um cent.

Uh Commissioner Von Lintel, um, you mentioned the fire training facility, um, just based on conversations that we've had.

Um you and I have had, um, I know streets are also a priority for you.

Yeah, yeah, I think the what you laid out, I think is pretty much where I'm at.

That's the six million.

Yeah, so just um.

Yeah, I just I was I'm just trying to think of ways like at the end of the 10-year tax, like not having money left over in some of these accounts and having the flexibility for the next commission down that road where they can use it.

Appreciate that.

Thank you.

I find it hard to imagine that there would be money left over.

Particularly when it comes to streets.

Yeah.

So uh, but we will um I understand um the conversation that we've that we've had is um, you know, if I'm gonna pick on the fire training facility.

So if we have a dollar amount, we know we want to spend up to um you know a certain dollar amount on the fire training facility, and we are stacking that cash over the course of few years when we hit that dollar number, we'll know.

Um, and I think that that that point though, if we dedicate a percentage, um, we could end up in if we have that growth and we have that percentage that's dedicated for that fire training facility when we really wanted just a dollar amount.

Is that kind of where you're going?

Danielle, I would and Andrew, I don't want you to feel like I'm countering everything you say, but I spent a little bit of time this afternoon looking at McCown Gordon's second quarter 2026 construction economic insights, which has an even smaller font than your CIP list does.

But I I would be, and I'm not trying to be fiscally irresponsible, but I'd be reluctant to put a dollar amount to a construction project at this point in time.

What they are stating is just in the first two quarters of this year.

Um tariff and trade, global supply chain risk, construction pricing, financing, and labor conditions have all impeded the act the construction industry over the list, just in this last six month period.

And given what we know in terms of materials for road construction, uh, given what we've been hearing from developers in terms of housing costs, um, I I think that I wouldn't want to hamstring us by stipulating a uh a fixed ceiling to a building project.

I I don't want to have that, Scott.

Don't want to just give you a blank check, nothing personal, but um I think we need to be cognizant of factors that are influencing our decisions that are way out of our hands.

I think in the past we've done both.

So percentages are often found in our questions.

But when we educate, we try to make it at least relatable.

So we have forecasted.

Um this is how much it can change.

But at one point it was eight and a half million for one of the rec centers, eight and a half for the second recenter, and eight and a half for CECO.

CECO ended up being 16.

It tells you just how far that price point can go, but at the same time, 27 and a half million dollars, 29 million and a half dollar estimate originally turned into 40 million.

So you can do it by percentage, it gives you that flexibility, Mayor.

But for education, it got into this is what it would be today.

And gives people a frame of uh reference.

I think you know, anyone listening to the news today would was not surprised by Jared's comment about uh a 100% increase in computer equipment in the course of three months.

We know what's going on in the computer chip industry right now.

Um we would be negligent if we are not cognizant if we don't take into account some of these global influences.

May I call for are sorry, are you um uh yes?

I I do want to come back up and have a few closing comments though.

Is there anyone who would like to make a public comment on the sales tax proposal or these initial discussions about sales tax question?

Don't go too far.

All right, seeing no one approaching, we will close public comment.

Uh Danielle, your closing comments.

Sure.

So just wanted to to wrap up and give the commission a couple of things work that we need to do and decision points that need to be made.

So we will um we have refined this capital improvement plan, we brought that back to you.

You all have that.

I know you all will spend time with it.

Um you can zoom in when you are using looking on your laptop.

Um, and uh we also are going to be working on that ballot language.

We will have another budget work session on August 11th, but we will have to take action on this sales tax uh passing a resolution to repeal with our intent to repeal that.25% quality of life, and then also passing that ordinance, adding that question to the ballot, we have to take action on that on August 18th.

So that is requirement for us to get that to the county in time so that um the county clerk can get that added to our ballot.

Um, other um items that we are tracking is again, we will have another uh budget work session.

I'm very appreciative of the commission for the feedback that you all gave on the mill levy analysis, um, the time that you all have spent um looking at those budget numbers and the feedback then direction that you provided us and for the seriousness and the consideration that you've all given to the challenge that we have with our bond and interest fund and our debt service payments.

Um the one thing so we will take action on the budget though on September 15th.

Um the one closing comment that I did just want to kind of leave you all with is that this commission will be the same seated commission who will be developing the 2028 budget in 2027.

And I say that um just as you are going home and as you continue to reflect on the challenges that we are up against.

I do think that we will be in a better position next year to look at lowering that mill levy.

We will have certainty with our franchise fees.

Uh, we will also have certainty with our sales tax and where we're sitting with that sales tax, and then we will also know that that downtown TIFF is put coming back on for 2028.

So again, um this will be the same seated commission, um, the commission that had all these hard conversations about our bonds and interest uh conversation.

Um you all will be the ones who are um determining that budget for 2028.

And I do think that we will be in a better conversation to make some of those reductions to the mill levy then.

So uh we will take everything that you all gave us this evening, um, and we will uh continue to work um on these budget numbers and continue to crunch them, which just as a reminder that means they're going to be different the next time you see them.

So we appreciate your patience.

I know sometimes that's frustrating, but we continuously work to um we continuously work on them until September 15th.

So thank you.

Thank you, Danielle.

Move we adjourn.

All in favor, please say aye.

That was way too quick, Commissioner Morrison.

We are adjourned.

Thank you.

Thank you, Gary.