# Committee of the Whole on 2024-04-23 1:00 PM - Budget Committee of the Whole - April 23, 2024 > Auto-transcribed civic record · April 23, 2024 - **Permalink**: https://meetings.lexingtonky.news/meeting/6096 - **Source video**: https://lfucg.granicus.com/player/clip/6096?view_id=14&redirect=true - **Date**: 2024-04-23 - **Last revised**: April 23, 2024 - **Length**: 13,272 words - **Speakers**: Chair, Mayor > ⚠️ **Auto-generated content.** Audio from the official Granicus video was auto-transcribed with OpenAI's open-source Whisper large-v3-turbo model, run locally by The Lexington Times. Structured facts were extracted with GPT-4o; the narrative summary was written by Anthropic Claude. Verbatim wording may contain errors. See [methodology](https://meetings.lexingtonky.news/about/methodology) or [report a correction](mailto:editor@lexingtonky.news). --- ## Meeting Overview The Lexington-Fayette Urban County Council convened on April 23, 2024, at 1:00 PM in the Council Chamber, with Council Member Brown presiding over the session. The meeting focused primarily on financial matters, with three agenda items addressing the city's fiscal outlook and budget planning for the upcoming year. Council members received informational presentations on the quarterly financial update and the Mayor's proposed FY2025 budget overview, while also conducting substantive discussion and approval of revenue adoption measures. During the session, the Council took one formal vote, which resulted in approval of the revenue adoption discussion item. No public comments were heard during this meeting, allowing the Council to focus entirely on the financial presentations and deliberations. The two informational items provided Council members with comprehensive updates on the city's current financial position and the administration's budget proposals for the next fiscal year, setting the stage for future budget deliberations and decision-making processes. ## Attendance The following members were present at the meeting on April 23, 2024: • Fred Brown • Sevigny • Wu • Worley • Lynch • Reynolds All members were in attendance with no absences or late arrivals recorded. ## Votes and Decisions The meeting included one formal vote on the fiscal year 2025 budget. **Budget Adoption Motion** [timestamp: 02:30:00] Fred Brown made a motion to adopt the total funds available amount of $500,011,034 for FY25 general fund budget expenditures. The motion was seconded, though the transcript does not clearly identify who provided the second. The motion passed by voice vote, with no recorded individual vote tallies or opposition noted. ## Quarterly Financial Update The council received a comprehensive financial presentation for the third quarter of fiscal year 2024 [timestamp: 00:01:00]. The update was delivered by key financial staff including the Commissioner, Director Holbrook, and Director Lueker. The financial report revealed positive budget performance across multiple areas. The operating budget showed a $21 million positive variance for the quarter, indicating revenues exceeded projections or expenditures came in under budget. Additionally, after accounting for capital fund transfers, the city maintained a $6.7 million positive variance. The presentation was informational in nature, with staff providing the quarterly financial data to keep council members informed of the city's fiscal position. The substantial positive variances suggest the city is performing better than anticipated in its budget projections for the current fiscal year. This quarterly update represents part of the city's regular financial reporting cycle, allowing elected officials to monitor budget performance and make informed decisions about municipal finances. No action was required from the council as this was a status update on the city's financial health. ## FY2025 Mayor's Proposed Budget Overview [timestamp: 01:30:00] The Mayor presented the proposed budget for fiscal year 2025, outlining a comprehensive $500 million spending plan for the upcoming year. The presentation highlighted several key financial projections and strategic priorities for the city's operations. The budget proposal projects a 6% revenue growth for FY2025, indicating optimistic expectations for the city's financial position. This growth projection forms the foundation for the proposed spending allocations across various municipal departments and services. A significant component of the budget strategy involves the strategic deployment of one-time funds to address specific municipal needs and priorities. The Mayor emphasized that these funds would be used judiciously to support initiatives that align with the city's long-term goals while maintaining fiscal responsibility. The budget places particular emphasis on two critical areas: personnel investments and capital improvements. The personnel component reflects the city's commitment to maintaining adequate staffing levels and potentially expanding services where needed. The capital investment focus suggests planned infrastructure improvements and facility upgrades throughout the municipality. Both the Commissioner and Mayor participated in the budget presentation, providing a collaborative overview of the financial planning process and priorities. The presentation served as an informational briefing to familiarize attendees with the proposed budget structure and key allocations. This budget overview represents the initial presentation of the Mayor's fiscal priorities for FY2025, setting the stage for subsequent budget discussions and potential modifications during the formal budget approval process. The $500 million budget reflects the scale of municipal operations and the city's commitment to maintaining essential services while pursuing strategic investments in personnel and infrastructure. ## Revenue Adoption Discussion [timestamp: 02:25:00] The council addressed agenda item III, the Revenue Adoption Discussion, focusing on establishing the revenue projections for the FY25 budget cycle. Fred Brown presented the revenue analysis to the council, outlining the projected income sources and total available funds for the upcoming fiscal year. The discussion centered on finalizing the revenue estimates that would form the foundation for budget planning and allocation decisions. The council reviewed the comprehensive revenue projections, which encompassed various funding streams and income sources anticipated for FY25. After consideration of the presented figures and methodology, the council reached consensus on the revenue framework. The council approved the revenue projections, establishing a total funds available amount of $500,011,034 for the FY25 budget. This figure represents the aggregate revenue expectation that will guide subsequent budget discussions and departmental allocations throughout the budget development process. The adoption of these revenue projections provides the financial parameters within which the council will operate when making budgetary decisions for the upcoming fiscal year. With this revenue baseline established, the council can proceed with confidence in their budget planning activities, knowing the scope of available resources for municipal operations and services. --- ## Decisions - **Motion** — passed (0-0): Adopt the total funds available amount of $500,011,034 for FY25 general fund budget expenditures --- ## Full transcript Music Thank you. Thank you. Thank you. Thank you. Good afternoon everyone. I'm going to go ahead and call this meeting to order the Lexington Fade Urban County Council committee of the whole FY25 budget Cal for April 23rd at 1 o'clock p.m. we'll go straight to our agenda the first item on today's agenda is the quarterly financial update so Commissioner I'll turn the mic over to you good afternoon everyone I'll be speaking quite a bit today so we're going to mostly have this presentation with Director Holbrook and Director Luker but we'll get started this is our third quarter performance review these are the financials through March 31st our revenues continue to run positive to variance and Wes is going to go into those more specifically and our operating budgets currently showing a 21 million dollar positive variance again as we've talked the last couple of years the transfers that we are the last couple of months, sorry, the transfers that we've made to the capital fund for that large capital reserve are impacting the way that the financials look. And so just as a reminder, when you remove those, we are actually at a $6.7 million positive variance for the period ended March 31st. And just as a reminder, we're getting ready to go into April. We're actually right here right now opening tubs of mail as we speak. With our highest revenue month of the year, which is April, we recognize all of our net profits collections in April and in May. So we are running a positive variance for the year, about $7 million going into the highest revenue that we're going to see all year. And as you can see, our expenses go up a little bit at the end of the year, but they're actually lower than the rest of the year most of the time. With that being said, I'm going to turn it over to Director Holbrook and we can go through the revenues. Good afternoon, Council. So first we're going to look at our payroll withholding actuals, and this follows a similar trend to what we've seen for the past part of the year. You can see in most months our 2024 collections have exceeded our 2023 collections, and have also exceeded budget. So we're continuing to see that overperformance slightly, but it's running about $4 million above budget right now and pretty well about $10, $11 million over the prior year. And so you can just see it's followed the trend that we typically expect. You do see some variance on the first month of the quarter. It's the first dot of each triangle, and that's just because the due date for those payments is the last day of the month. And so some years people will pay on the due date or prior to it. Some years they'll pay after it, in which case it gets recognized in the following month. But overall, we're tracking very well with payroll withholdings for this year. Moving on to net profits, through the first half of the year, like we've discussed, we really did not see the net profits exceed budget or even prior year with the exception of September. And that's only changed starting in January. and running through March we've we've really seen net profits start to run about what it ran in prior year which was our highest year on record but we still have a pretty significant hole both compared to budget and compared to prior year to work our way out of as we get into April I can report right now collections have been very strong and and we're still seeing that move on track to what we've seen prior year we've also realized some efficiencies in using some of our lockbox processing through Fifth Third Bank where we've had about six million dollars of checks and envelopes that in prior years we might have had to open by hand and then put in our system and process now it's going through Fifth Third Bank and so that saved our staff a lot of time and efficiency but we're still working through the tubs and tubs of mail we've gotten so we'll see what that ends up looking like at the end of this month But right now it's tracking fairly well. Moving on to the rest of the revenues. Insurance is the other revenue we've really seen as a strong over performer for this year. To budget, net profit looks good, but just as a reminder, there was a very large one-time collection earlier in this calendar year that's driving a lot. That was about $1.5 million, and so we're really only over budget by about $150,000 when you take out that collection. fees has lagged behind just as we've seen for for the remainder of the year and then in charges for service one of the areas that you really see pushing that higher is the supplemental payments that we get from the state for for Medicaid EMS runs we participate in the ambulance provider assessment program and that's given a seven several million dollars that are not native to just our runs but go through a process with the state that we participate in other than that everything our revenues overall look look strong again interest is something that we've seen continue to perform well and that's driving up a piece of that some of that is our adjustment cost to market we've talked about before but overall 16 million dollars above budget today looking through year-over-year you can see the strong performance in payroll now one of the things we've talked about before is you see stronger year-over-year performance because we did have a stronger payroll budget as we as we went to 2024 and so this is really this really shows how much we've grown but we're only four million dollars above budget so that's that's a large part of why that isn't what that number isn't showing up as much on the budget side it's just because we've we've had a better payroll budget this year net profits this is where you can really see how we're compared to prior year and the impact of what the first part of the year and its lower collections has done and then going down you see a reflection here on the year-over-year of of the rest of the revenue sources so that's in summary what we're seeing on revenue things are looking looking strong compared with prior year the 15 15 million dollars of a prior year 16 million dollars above budget and I'm happy to answer any questions that you may have or passed on to director Luger thank you director any questions I'm not seeing any good afternoon we'll look at the expenses now here is our personnel actuals to budget chart you can see the gray is the FY23 actuals the orange is FY24 in the blue is the FY24 budget so you can see month after month we have been right at or above or slightly below budget on personnel for FY24 we're within 3% of budget on personnel for the first three quarters of the year which is pretty fantastic you'll see it's not evenly spread there we have some months where we have three payrolls. We have the sick checks that get expensed in January, and we also have some months where we have larger payouts due to retirements and people leaving and getting paid out for the time that they have accrued. So you'll see it's not even throughout the 12 months. It's slightly different than the operating. The operating is a little bit more evenly spread. Here's the operating. You can see we have the budget has some peaks at the beginning of the year and toward the end of the year but for the most part it's around that eight million dollar mark a month unfortunately we have not been spending budget we have a large variance in our operating as the Commissioner stated earlier about 21 million dollars some of which is encumbered to be spent later on in the fiscal year and some of it we've used in our projections looking forward at the mayor's proposed budget for FY25. So here are the numbers. As I said, we're within 3.2% on personnel. We've seen savings in our full-time salaries. We also have some savings, and I know they're excited about it, at corrections with the higher staffing levels there. They're spending less on their overtime as well as with fire. With the addition of those 21 firefighters through the SAFER grant, they've been able to cut back on their use of overtime compared to what they had budgeted and also compared to prior year they've really been spending less and so we can see the impact of those additional ones that we received through the grant on operating you'll see the 21 million dollars there about 11 million dollars of that is encumbered so some of that encumbrance will be spent out in the later three months of the year some of it we're still waiting on supplies I had a conversation with somebody today and they placed an order for an HVAC in March of 23 they just received it last week so we still have some of that going on where we're waiting on getting supplies not all as drastic as that some longer than that but we are watching that and we're mindful of that as we move forward with the budget we've also got some savings in our repairs and maintenance which includes some software maintenance savings, some vehicle savings. As you all know, we had a pretty mild winter so we have savings in salt as well and so we're going to use that to help us in FY25. We have the partner agencies there. Those are, we've got three agencies that the payments were spread a little different than what they're being spent and so that will be paid out by the end of the year. And then with our capital, where capital is harder because it's a one-time item typically, it's harder to figure out the spread on those so people are spending on their capital projects we keep track of them on a monthly basis we check in with them where they're at and so we're watching that capital line but you can see within our personnel we've got our expenses we have 32 million dollars of savings to budget for the first three quarters of the year here is our comparison to prior year as you can see here we have spent more in every category than we have prior year except for debt service which we just issued the bond for FY 24 so that's a little bit delayed but you can see that personnel cost is it's increasing in three quarters of the year we've spent twenty point seven million dollars more than we did for that same period in the prior year so you can just see those costs rising even though our operating is underspent we've still spent four million dollars more than we did prior year so while we're under budget you can see we're still spending more in each category than we have in the prior years are there any questions you do have a few questions first up is a council member Fred Brown thank you chair going back to the slide to one more slide that one right there I'm looking at yeah okay I really go need to go back one more now it's the actual versus budget thing on expenses or revenues that's the one right there I want yeah that's it the capital item there's a reduction there about 2.2 million is that just from not being able to spend the money on those capital projects you know some some capital projects take time and so the budget spread on the capitals a little bit harder to predict because they're they're larger items their projects you've got to do an RFP to get the capital project started you know that they take a lot more time than just ordering copy paper ordering salt things like that so it's expected to be spent all projects you know we track them monthly and so we ask them month after month where are you at with the project so it's just some things are just taking longer you don't anticipate any lapsed funds in that particular line item no and we and we've discussed with people if they have a project that's ongoing and we need to preserve those funds about doing a budget amendment to get it moved over to our capital fund so that they don't have to come back and ask for those additional dollars for the for a project and then the other item up there on the personnel being under budget by 7 million is there any specific reason for it being under budget then I noticed that the next slide is personnel where we are over 20 million from the previous year so about correlation on that no we're I mean we're we've tightened up our budget on personnel we've we've looked at the attrition you know we budget that by division so we look at their history we discuss with them are there any upcoming retirements that they know about in order to get the attrition budgeted but we're seeing about a million dollars of that seven is in savings and corrections and fire in overtime and so that that's a big part of it and about half of it is in just our regular salaries okay and just one last thing about the personnel what percentage are we doing dealing with in the new budget in that we don't have all of our positions funded I believe I believe overall we're in the mid 90s we're around 95% but it varies by division you know we have a higher attrition rate for police than we do fire because the number of vacancies we you know we're talking with Corrections we've looked at their hiring is stepping up so we can't use the last three years as an average to get theirs you know because they're becoming fully staffed they're getting up there and so it's kind of a it's a mix throughout we have some divisions that are small and they don't have any attrition budgeted we have other divisions that are budgeted at a 90 percent attrition so it's kind of all over the place unique to each division yeah yeah well I understand we don't have all of our positions full but you're still budgeting based on the the number that we're we should have so the way we do personnel is we budget all of you'll see the salary dollars in the salary lines and then the divisions will have a negative amount in an attrition account and so that's where we back off the five percent or four percent or ten percent or twelve percent whatever it may be for a division this is what we did last year too, isn't it? Correct. Okay. All right. Thank you. Thank you, Council Member. Next, we have Council Member Sevigny. Thank you, Chair, for recognizing me, even though I'm not on this committee. Thank you so much for this presentation. Oh, Committee of the Whole. I am on this committee, by God. Thank you. Bless you. Bless you. All right. I just have a few questions on the revenue side of this. And really, actually, it's probably more about the fund balance, too, so you might both one step there. So I'm basically nine months in, $49 million fund balance approximately, okay, from the numbers presented. I think on the revenue side, we've collected about 32, 30 to 32 of 62 is the budget. So we have about a $30 million hit that we're going to get income-wise in April, if I'm counting, if we're on our budget number, right? As far as net profits? Yeah. Yes, sir. Yeah, we typically collect about half that budget, which is around, let me see, $64.2 million. We typically collect half of the net profit budget between March, April, and May. Okay. Okay. So I'm kind of, and I'm just doing some rough math, like I'm seeing about somewhere between 70 and 80 million dollar, like for us to finish, we might finish at 70 to 80 million dollar to the good. Does that sound right? Like the revenue run rate? Is there something that's weird about revenue? Or actually the expense side in the last three months that's going to drive it up besides pre-funded items? So in the mayor's proposed budget for FY25, we have it calculated by reallocating $30 million of current year savings into a pre-fund for FY25. So $30 million will come off of any fund balance we have as part of the budget. But it looks like roughly we could have between $30 and $40 million surplus beyond that. There's a couple of big factors that go into that. I mean, I don't think there will be no fund balance for sure. But one of the large things that we look at is our payroll accrual. That's at the end of the year. If you're one-day payroll accrual versus 14-day payroll accrual, that's significant to the tune of $8 or $9 million. So there's some things that happen at the end of the year that can be very large swings. Also, one of the other things I wanted to keep in mind that is of the $21 million that we're showing in operating variants, last month there was $11 million of that that was encumbered. So those are contracts that are going to end by the end of the year potentially, or, you know, there's really not a good way for us to gauge. Some of those are like animal care and control. We know they're going to spend those out. But some of the others that might be law, professional services, or engineering, we don't know what those are going to spend. So we have to make sure that we're leaving room for those, and then also they can roll those encumbrances should they need them. So do you let us know the encumbrances, like, before the end? because one of the things that generally concerned me is when we jump to the budget concept is that, like, moving into bonding, because I think if we know we have a reasonable surplus, sometimes we can, it's like we don't have to go down the path of bonding certain things if we actually have the cash for it, right? Sure, and one of the opportunities that we had this year we maybe addressed a little late in the game, but would maybe have the opportunity for next year is with us not going out to market until later in the year, we have the opportunity to know where we're going to be with fund balance in November and then maybe make different decisions if that's something that we want to do, that you all want to do, not what we want to do. Thank you very much. I appreciate it. Thank you much. Thanks, Chair. Thank you, Council Member. Are there any other questions for Wes or Melissa? Not seeing anyone, so thank you. Thank you all. All right, going to the next item on the agenda, but before we do, I'd just like to give the mayor an opportunity to address the council, because the next item is the mayor's proposed budget overview. So mayor, would you like to say a few words? Well, thank you, Councilmember Brown. I appreciate just a couple minutes, Councilmembers. And the first thing I want to say is to thank our budget and finance team. They start work in December every year for the budget. So they basically worked about five months of the year each year on the budget. And I also thank CAO Hamilton, my chief of staff, everybody's in when the budget starts. And just to, many of you have heard me speak, I think this was my sixth budget, about some of my foundational benchmark principles that I use when I'm budgeting. and one is the stability for our community through a good solid balanced budget that meets the needs that have been brought forward by not only the community but our divisions every division as you know because you've been on the budget hearings and understand the requests that they've put in I am fundamentally always supportive of keeping a low cost of living here in Lexington. That's what allows people to be here and enjoy the amenities. And from my perspective for the budget, I don't have a tax increase in it. I always try, depending on our economic situation, to honor our employees' hard work with a pay increase. And we do that through the general fund with our non-sworn employees. And so those are some of the kind of basics. We have, since I became mayor in 2019, we have had some wild economic swings and some fairly, I think it's fair to say difficult budgets. When I came into office, I learned immediately we weren't going to make that budget, so we take action and make these things work. We're very strict on one-time money being spent for one-time expenses. It's a basic budgeting rule that we do not, we try not to ever cross that line because it can get us in trouble. There have been, I think, a couple of times over the six years when we've had very minimal one-time expense that may have gone toward some recurring, but not much at all. And so I appreciate the hard work that you all do and will do in the next couple of months to bring a good solid budget that I can sign in June. So thank you for your hard work, and I appreciate it very much. Thank you. Thank you, Mayor. Let me back up for a second just to remind committee members, council members that the ARPA information is in your packet for information only. And so with that, Commissioner, we'll move to the next item on the agenda and that's the Mayor's proposed budget overview. All right. Well the Mayor did a lot of my thank yous. So thanks to all the people that she thanked, I wanted to start with that. Unfortunately these folks have had to live with me for the last five months, so I really appreciate their time and effort. Some days are easier than others. So I'd like to just take a moment to remind everybody when we sat down in January at our joint budget retreat, we really focused on perspective and trying to maintain the fact that we have immediate needs and immediate wants that we need to address, but we really need to be intentional about the decisions that we make impacting us in the long term. We need to make sure we have a short-term focus while maintaining our long-term vision. At that retreat, we asked quite a few questions. What do we have to work with? What are our constraints? What are our opportunities? And through this budget process, we've been able to answer a number of those. We know that we have available resources in the 24 budget to be able to supplement the 25 budget. We've been able to do that the last couple of years and we're going to be able to do that again. That's to the tune of about $33 million and we'll get there in just a minute with the different pieces of that. We also are expecting some moderate revenue growth. Traditionally pre-pandemic our revenue growth was about 3 or 4%. actually expecting about six percent next year which is still strong for us but not the eleven twelve percent that we've experienced over the last couple of years so we're really returning to our normal course of business we do have some constraints in this budget our operating and our personnel requests continue to outpace our revenue growth as you all know there are a lot of different things that we want to do we have big vision big goals and we try to accomplish that but our revenue just doesn't keep up with that ability to request and we know that we have our personnel pressures our cost of health care is increasing exponentially we've covered that for a lot of years we're continuing to try and make smart intelligent decisions about what we can provide our employees while recognizing that's an important factor for employment here and we've also seen increases in our pension costs so those are putting pressure on the budget as well we have some opportunities that are not typical for us we have earned a significant amount of money and interest this year and you'll see that applied in the budget that's not typically an environment that we're in necessarily and we certainly haven't been able to earn it on our grant dollars so in addition to the federal dollars that have come in we've been able to earn interest on that which is not typical for grant funding and that has been just an added bonus really icing on the cake for this budget our cost of borrowing is declining from a high watermark we saw that go up very quickly with inflation and we're seeing it just slightly decline we did our bond issuance for the 24 budget in March and our interest rate was actually lower than we expected so we were really pleased about that and then another opportunity that we have is we've just been through the ARPA experience where we've heard from the community exactly what they want and we've been able to address a lot of those once over the course of the last couple years we're going to continue to address those through 26 as we spend out those arpa dollars so we've really had a lot of community input other than what you guys hear every day through surveys and focus groups that have really given us an idea of where the city would like us to go we have some commitments our level of service post pandemic is significant you all have heard me talk about this quite a bit we have additional expectations and we're meeting those expectations head-on we have our new ordinance driven investments in affordable housing esr and office of homelessness that are far above anything that this government has ever invested in so that is really you know we saw the needs coming out of the pandemic the the needs of of the most vulnerable of our population and we're meeting those and addressing those head-on we also made a commitment to maintain our taxing levels we need to be able to provide a good employment area for our employees so that they are able to be here and provide the services that our residents are expecting we are committed to all of those things in addition to what the mayor had just mentioned so what needs to change in order to get where we want to go we've continued to talk about the operating variances running significantly higher than we would like to see them so we are going to right-size we did right-size in this budget are historically underspent operating dollars at a division and departmental level we're laser focused on limiting our recurring cost to match where we think our revenue is growing is going and then we were very strategic in the use of one-time funds for one-time investments so all that being said what do we have to work with the 24 budget as you all just heard is doing really well revenue over budget and then we're running under in expenditures we felt very confident in pulling 30 million dollars out of the current year to address those capital items that were requested in the budget we also went back through all of our previously bonded projects and if we had items that have closed out and left a little money left over we recaptured all of those in order to provide for additional capital that was about two and a half million dollars so all told about 33 million dollars between additional revenue underspent expenses and those recapture of the bond funds from 24 will help supplement this budget for the 25 revenue you all will recall we had dr. Clark come in we give him numbers through December and based on his December estimate and how we have seen the revenue grow we actually felt comfortable in being able to add to his revenue estimate just a little bit for our payroll withholdings based on the additional information that we've been receiving and then again we've discussed the interest earned you guys are going to see that in just a minute we have about seven million dollars six point eight million dollars that was earned on the ARPA investment to date and then we also had some money that you all recognized already through budget amendments from the emergency rental assistance that's going to further those rental assistance priorities in the office of homelessness next year in the list for pre-funded items you guys I've we've put in the packet the entire list of those items that we're proposing for pre-fund and then also the list of the bond reallocation items it's really important on this list to remember that if we're going to pay for it with bonded funds it had to have been eligible to bonded in the first place so we're really intentional about the different items that we put in what different buckets and how we pay for that as west noted we adopted a budget for fy 24 461 million dollars we actually closed last year at 482 million so better than we expected by a significant amount we are adjusting up this year's revenue to 479 million dollars which helps us really be confident in our revenue projection for next year of 492. That 492 plus the interest earned brings us to our total revenue that we have available in next year's budget for $500 million. So then what are our commitments? Where do our resources go? You all should be real familiar with this format. This is actually the front page of the budget book, but this is the format that you see month over month in the financial reports you can see the largest portion of our expenditures goes to personnel but we're going to walk through all those just a little bit so we know what's in there in the FY 25 budget we plan to spend 319 million dollars in our personnel we're using that for our public safety increases for their contract steps and their colas there's only one contract currently being negotiated and the others are still in place so we know exactly what that's going to be we have a three percent salary increase for all non-sworn personnel in here as well as as the mayor mentioned really being intentional about our recurring costs and trying to to keep a cap on those and so we only included 13 positions with general fund impact as additional positions in this budget added to those items we have the continuing cost of health care and pension that are driving this large amount of personnel we've actually increased over 40 million dollars over the last two years just in our personnel category alone the next categories are partner agencies we expect to have about 24 million dollars for partner agencies of which almost 23 million is for the lexington public library that's through our ad valorem the other partner agencies that we directly fund through the budget are listed in the table and then the ESR partners who are indirectly funded so they apply for a grant and they receive that ESR money they're actually pre funded we did this a few years ago and it's been really helpful being able to ensure that continuity so our partners are able to go ahead and continue on what they're doing if we're able to get them the funding faster so there's not a gap in their services our debt service is expected to be 52 million dollars that is a net of some debt falling off as well as some new debt the bond package is a little larger than normal but it does include that senior and therapeutic center so the total bond package proposed is 46 million dollars and we anticipate as I mentioned earlier to councilmember Savigny we anticipate a late fall or early spring issuance again we have enough cash flow to help us be able to get on track with some of those capital investments that we planned and so we anticipate going a little bit later, which will give us the opportunity to make any fund balance decisions that we want to make or any different adjustments. That being said, with our increase in revenue, some of the debt falling off, and then the partial payment for only having a half of year on the new debt service, our debt ratio is actually about 10.5%, which is lower than it's been. We We have benefited from those increased revenues over the last couple of years to really drive this down a little bit currently. In our operating category, it's $78 million. Our major drivers are professional services, about $31 million. That is really anything that we contract as a government. So that's everything from mowing to additional legal services or engineering services, really anything and everything that we contract. We have our occupancy costs, just like everybody else. We rent some space. We pay utilities. We also have repairs and maintenance. That is on our buildings, but also our software maintenance is included in here. We have a significant amount of software costs, and so that is included in our software maintenance line item right here. We also have a significant amount of fleet. So our vehicle fuels and maintenance is about $10 million every year above acquisition. And then everything else in that category, if you combined all of the other items, we also have an offset in the operating, which is where the other funds help contribute to the cost. So a really good example might be for our Microsoft licenses. The full cost might be up there in your software maintenance, but then your sewer or your urban services fund would pay back the general fund. So you kind of see that net effect happen in the operating accounts. The last category is our capital. This is our CIP and operating capital. It's about $6 million in the budget itself, and that is on top of any FY24 contribution or bond reallocation for capital items. So when you step back and take a look at everything we've accomplished, we've been able to listen to our residents, to the council, to our divisions and departments, and we set our priorities based on that. We've been able to address their needs, maybe not every want that we had, but certainly our needs. We've been strategic in using our one-time resources to make some big investments, and we've approached our recurring expenses cautiously and responsibly, recognizing that our revenue growth is returning to normal for us. So if the budget is a monetary reflection of our priorities, it certainly reflects an intentional balancing of needs versus wants and accounts for the things we need today and where we're going in the future. So we have just two more slides before we wrap up. These are everybody's, I think, favorite slides. I'm going to say it's because they're so colorful. But everybody does like to know where exactly it is that we category-wise spend our dollars. We just went over the 64% in personnel. That's the significant driver. Operating at 16 and debt service at 10. and then also our general fund by department. Public safety is obviously the driving force. We have almost half of our personnel in the public safety area, and you can see the little extra pie that has been listed based on request for where exactly that is in public safety. And with that, I'm willing to answer any questions you may have. Thank you, Commissioner, for the overview. and looks like they're signing in first we have council member Fred Brown picture I want to go to the debt service schedule probably first I see the 45 million that were addressing there and I realize the debt ratio we still have a goal to reach ten percent or below yes but you're you're reaching that ten percent pretty easy because of our revenue revenues going up and and that percentage so it it's kind of a misnomer there to some extent it's not what we wanted the overall debt to be and I think the overall debt is probably a ballpark it $400 million. Is that ballpark? Sounds about right. That's for council members. This legislative body or this government is $400 million in debt. But we have a means to pay for it, thank goodness. But that doesn't mean it's not there. And as we do our debt service each year, and I think we just need to acknowledge that. And looking at the new debt service, the $2.44 million anticipates late fall issuance. Have we included that savings anywhere in the fund balance? I mean, is that going to be a fund balance savings? So the current year debt service, where we went late this year, has been included to help the pre-fund. And next year, we just didn't budget for the full year. We only budgeted for half a year since we anticipated we would go very late or early spring. Yeah. And leading into that, the pre-funded transfers and capital, $30 million that we used pre-funded, that's not something we're going to be able to use every year. That's correct. You know, so things could tighten up a little bit when you can't use $30 million to balance your budget. And I do want to commend the finance department and the administration on the bond reallocation capital. I didn't realize we had $2.5 million that maybe this council could have probably gone in there and looked and said if we could spend some money on our own projects or on projects in our district. But you obviously, through the budgetary process, beat us to it. but i told you we were cleaning things up uh pardon i said i told you we were cleaning things up yeah i i realized that and that's good but i think that two million five or that we have on bond reallocation capital and there's a list of uh of the items in there is that we still probably through the council action could switch some of that stuff or if we wanted to move some stuff around, I think that's still a possibility. I'll just throw that out because we don't know what's coming out of the links and what we want to do there. But there is some leeway there, I think, that we can do as a council members on budgeting. I think that was the, oh, the ARPA interest items of $6,800,000? Yes. Now, that's going to go away. That's correct. Yeah, so that's, I mean, that's a revenue source right now. Right. It's similar to, if you will recall, every fourth year we have excess fees and collections from the sheriff's office and from the county clerk, and we only budget those every four years. So there's, we have a few different items that are not typical for our revenue sources, and this would be one of them. if our our interest earning continues to do really well we could either bring that forward during the course of the year we could bring that forward as a piece of next year's budget but the interest rates have to be favorable and we have to have the cash to and to invest that's all I have right now thank you I will note before we move off if you don't mind Councilmember Brown there are a number of different items in different ways as far as the buckets of of funding things where you can move. The one thing that I would caution is that for the items for the 24 pre-fund, those items have to be moved off of the general fund in order to be able to complete that task. You cannot use 24 money. You can't push revenue forward to 25. You have to bring an expense back to 24. And then those funds have to move off the general fund. So it would be to affordable housing and homelessness or those kind of items. So there is a little bit of constraint as far as that goes. Thank you, Commissioner. Thank you, Councilmember Brown. Next is Vice Mayor Wu. Thank you, Chair. Thank you, Commissioner, for the report. And I always do appreciate you all making a very complicated situation much more easy to understand. In regards to the revenue growth, we're talking about 6% for this year versus kind of a peak in the last couple of years. Do you attribute that sort of unusual spike to post-COVID recovery, essentially? I think there is some of that. Also, historically, the city has tended to hold growth, hold growth, hold growth, and then see a spike, if you will, and then hold, hold, hold, and then kind of stair-step almost in our revenue. We do have some historical basis for that growth outside of the pandemic, but I think the pandemic certainly helped. I mean, you've seen, you know, wage inflation and prices of everything go up, and, you know, some of the entities that we rely on for net profit are figuring out ways to cut their costs, and they've been a little more profitable than maybe they expected as well. And so I do think we're seeing some of that post-pandemic effect. Thank you. Looking forward to the next few years, are we expecting 6%? Is that the new normal? Are we back down to the 3% that you mentioned? What are your... So when Dr. Clark was here, he was anticipating around 3.5% to 4%. And I think that's where our team is looking as well. One of our, you know, with net profits being such a volatile revenue source and not getting it at the end of the year, that's not something you want to get wrong and then not have the ability to adjust in May and June. So I think that, you know, we have tended, and this year was a little bit of an exception because we went a little bit higher than his anticipated revenue. the revenue. But I think we've tended to err a little more on the conservative side historically, just because when you have a significant, when you don't meet your revenue and you have two months to go in the year, there's not a lot of adjustment that can be made. Yeah. And then one more question about revenue. That 6%, do you all have a sense of how our our revenue increases track with population growth. And so my question would be, for example, and you tell me if I'm off base with the way I'm putting this, if our revenue is going up by 6% and our population growth is also going up by 6%, then we're kind of on that even keel versus, let's say, if our population growth was at 3%, our revenue growth is at 6%, to me that would say we have increased profits, increased payroll, right? Do you have a sense of where those two lines lie? Wes may have a better. Sorry to put you on the spot. That's okay. As far as on the whole, I think it's made up of so many different pieces. You may see some version of that, but even whenever we talk with Dr. Clark, one of the things we look at is what percentage of this revenue increase might be attributable wage growth and then what part might be attributable to employment growth and so we don't necessarily see just because we have six percent growth in population that doesn't necessarily correlate to six percent growth in our workforce because we do have so many people that travel in and out of Lexington to to to go to their place of employment you would see you know as more people move in if they buy homes that's going to increase property values more homes are built that's going to increase the you know the property tax base and then insurance and franchise fees are really based off usage and how much insurance people buy so you would you might not see six percent but you would see that activity drive it some and then there are a lot of other economic factors that might might create some noise that would not make it quite six percent or could push it above that thank you director commissioner of the 15 new staff positions it said that 13 were paid out of the general fund how are the other two paid they're out of the water quality funds they're water quality employees gotcha and then kind of two follow-ups on council member fred brown's question about debt ratio what should our debt ratio be what's a good range that we should be living in council has set a goal of 10 and so that has kind of been the rule of thumb for us we were trending a little higher than that historically but the increases in revenue have really helped to kind of offset offset where we are i think the the question really kind of is back to you all this is 10 off the top of the budget that we have to work with and so really there's an opportunity cost that you need to decide is Is it better to borrow or is it better to pay cash? One of the things that is in here is the senior and therapeutic center. I don't know that anyone would really go out and pay cash for a house necessarily. So when you have these longer-term investments and things that the future generations are going to get the benefit of, that might be something that's more reasonably bonded than maybe some of our other repairs or maintenance or things that are going to be, have a shorter, useful life. Great. Thank you. I have more questions, but I'll sign back in. Thank you, Chair. Thank you, Vice Mayor. Next is Council Member Worley. Thank you, Chair. A few questions, but just as we talk about our debt ratio and our bonding, this 10.5% ratio, you're using, to come to that calculation, the same general calculations we've been using even when we were at 12, 13. Right. a little bit so I do think it's great that we are coming down and getting that down particularly since our borrowing atmosphere while still good is not quite as good as it's been in the past couple years but I will say and councilmember Brown Fred Brown I would never discount any of his calculations on debt and because he's right with the numbers that he uses but I would say for the public that hears it into our colleagues as we look at the budget debt is also can be characterize as an investment and a tool and is not just saying we're incurring something that we can't afford because we are affording it and we're doing well and I think that the what the Commissioner said to things like the senior therapeutic center at 24 million you wouldn't buy a house cash necessarily if you had other costs businesses also often incur debt to be able to expand their workforce so I think we got to keep an eye to it and you have been a great steward of that but I do they want to just make sure we don't characterize debt entirely negative because debt in a sense can be an investment in a positive tool when it comes to revenue the 6% and you've got in there as compared to 10 to 15% actuals that we've seen but as a budgeting mechanism though this is still a higher revenue increase than I remember in my time on council is that that correct yes I and we've typically projected more around three and some years we were significantly lower than that but we've always exceeded and I think budgeting conservatively is good but I think that that actually while you compare it to higher peaks speaks to the overall health of our economy in Lexington that we now are projecting oftentimes double what we project in budgeting so it's certainly good to always have cash at the end of the year that we can say we we did better than we budgeted I just I want to make that comment that this is this is creating a bigger budget and a bigger investment in our community than we have in in my time on council and I think that speaks favorably and also is a better budgeting tool because some of our fund balances have been a lot that we could have blended back into the budget earlier on. But that's my comment to that. It looks like you have some response you'd like to say. I'm not sure what it says about me, but prior to me being here, we really didn't exceed our revenue projections as not significantly at all. If we met them, we were doing really well. We actually relied significantly on our underspending of our expenses to have those fund balances. And so I don't know if I am even more conservative than was previous. That's possible. But, you know, through the COVID years, I think Sally's saying, yeah, through the COVID years, you know, I certainly think that it's been tremendously difficult to project. Yeah. And I would agree with that. Again, this is not a criticism or a form. It's actually meant to be a compliment in that I appreciate that we're looking favorably and putting a big budget forward because I think our economy is a lot healthier and stronger than we've even budgeted in the past couple years. What is the number on the interest earned on our cash holdings? So the two interests that we have right now, we have a few different pots of money that gain interest. We have the economic contingency fund and any interest that's earned on that stays within that fund. So you all may, if you see a beginning balance plus our investments during the course of the year and you see the ending balance, that's why those don't quite jive because it's always earning interest and it's invested. The ARPA interest, this was on the first two years. So this $6.8 million was earned over the course of two years. And we've been spending that down. so we've got probably I don't know I'll actually have to get back to you on how much we've earned an economic contingency but that the economic contingency pot the ERP money the emergency rental assistance money the ARPA interest are those those have been the primary drivers because we've been able to kind of set those aside and not spend them a lot of our other cash is invested in extremely short-term items so that they can help us cash flow and that's been able to really prevent us from going out for bonding so we haven't invested all of that in longer term CDs or anything like that any Treasury bonds that are longer term just because we need to cash flow sure but obviously we've had enough cash that even short we have yeah short-term interest rates are doing pretty well for us so I have some other stuff chair but I'll come back thank you thank you councilmember next we have councilmember Lynch thank you Commissioner for your presentation I just have one question right now you stated in your presentation that right sizing of historically underspent operating dollars of divisions and departmental levels has been a priority do you mind to provide a couple examples of that sure thing we actually spend a lot of time on this this year we at the time we were looking at the February financials and we were about 17 million dollars versus the 21 that we just saw underspent in our operating but 11 of that was encumbered so we really targeted the difference and we went division by division went through every single line in their budget and identified over the course of a three and four year period depending on the data that we had the line items that traditionally underspend and so based on that underspending we went back to the divisions and asked them we gave them the lines and said here are the lines where you typically underspend can you go back and reevaluate your additional requests and see if based on this information you can come to something that's a little more reasonable because we're not artwork already not spending the money that we have and then we're asking for more so we were able to reduce those requests with the help of the divisions by almost eight million dollars which is significant so that was that was a lot of time and effort spent and I really appreciate the hard work and the thought. You know, we went with some lines, and some folks came back and said, no, no, we need that there, and proposed other items. But they were very thoughtful and very helpful in coming back to those numbers with us. Thank you. Thank you, Chair. Thank you, Council Member. Next, we have Council Member Reynolds. Thank you, Chair, and thank you for the presentation. I had a question about slide 32. And slide 32, I'm sorry, on page 32 in our packet, so I'm not sure what slide. Other funds? It's the general fund revenue breakdown. That one? There, yeah. Sure. Thank you. Okay, so that's really helpful. I was wondering if maybe we could get in the future one that has the expense breakdown. So you have the estimated revenue breakdown, but you don't have a slide that is just like that for the estimated expenditures. Yep. for the revised expenditures the way that will look for you all is we will bring you a ba that has included all of those pre-fund adjustments and so that will create the revised or the estimated expenditures for the end of the year so we're using expenditure savings as part of that pre-funding and we'll have to bring a giant ba to kind of bring those things down to pre-fund the other items I think we'd like to see it before that so that we can have just estimated knowing what the expenditures would be before the pre-funding. Okay. So projected for 24 for the end of the year, maybe a pre-fund column, and then you can see it with and without? Sure. But just so that it has it there estimated before we get to, you know, pre-funding. Okay. Yes. That would be very helpful. Thank you. And then you mentioned some of the pre-funded things and all of that, but that is one way to make sure that we don't have a huge fund balance, which I totally understand. Those items could also be put into the budget and that money absorbed into next year's budget. There's no room in next year's budget. to absorb these items. So if we don't pre-fund them, we don't have the resources in next year's budget to be able to accommodate them. But we can decide with, we could decide with fund balance to use them that way. We could pre-fund it right now and say we're pre-funding this, or we could take the exact same line items and if we had a balance say we're funding them. There are some of those things, most of those things that is true. But you'll see in here the affordable housing transfers in here. E911 subsidy transfer is actually paying for their staff. E911 used to be funded by a revenue source that came on our landline phones. But as those have gone away, our revenue in that fund has declined. And so the general fund is actually subsidizing that by almost $4 million. So that is one item that is not something that we can do in fund balance. that would mean that we have positions that are not funded. So the majority of these items are things that are capital and discretionary, if you will, but some of the others are definitely not. Okay, all right, thank you very much. Thank you. Thank you, council member. Next, we have council member Savigni, who is on this committee. Yeah, thank you, Chair. Thank you, Chair. Sometimes I am out to lunch, for sure. So I appreciate, and I appreciate your guys' presentation, and you've done a great job on the budget, and you answer every question I ask, so I really do appreciate it. I have just a quick one, and Council Member Reynolds asked one of my questions, because it does seem like we could just have some of those pre-funded items just be part of the fund balance discussion. and it's probably good for us for them to be and i don't know if they're denoted as to which ones are like a monthly expense that we're going to start on july 1st so that would be helpful maybe if there was a star on those we could okay um and then the other thing is on the debt slide the one which and i'm excited that we're getting down towards our resolution number of ten and a half percent yeah so and I think what I see their new debt service 2.44 million what you're saying there is that there will be new debt payments of 2.44 million for the for just for whenever it happens during the year you're budgeting for 2.4 million dollars worth of payments correct okay which is roughly about a a half that's roughly about a half percent of our budget right right okay got it thank you appreciate it thank you chair thank you council member uh next is vice mayor wu thank you chair um had one other question about the um debt ratio so you said council established that 10 sort of benchmark uh do Do you remember when that was established by council? I don't remember when it was established. Okay. It's been some time. Okay, and then was that established based on best practices or averages compared to other municipalities, or how was that number established? Melissa says it's based on other municipalities. I apologize, I wasn't here for that conversation. No, that's okay. And so if that's the case, does that figure change as time goes on? in terms of best practices and where does our 10% number now compare to other cities? Commissioner, I'm sorry, I didn't mean to cut you off, but I know Council Member Fred Brown was real instrumental with the debt service ordinance. And maybe you could speak to some of the Vice Mayor's questions about where it originated and the thought behind it, if you'd like to. Just briefly, I think, I'm not sure if it was the late 90s or when we were dealing with that. I think the mayor was probably on the council then, and Dr. Stevens was budget chair at that time. And we just got to looking at, we felt like that we needed to, and I've always been budget conscious, debt conscious, and we just felt like that we needed to put something, I think it's an ordinance, in form of an ordinance up there and put a percentage on it to try to deal with the future. And it's worked well. We haven't adhered to it like we should in ordinances, even though it's supposed to be law. But it has gone, I think, 11%, maybe 12%. But that was just a number that we, I don't know, we just come up with to some extent. and it's lived out to that point, and I don't know that we need to change the number, you know, but anyway, that's kind of the history, but it's been over 20 years, I guess, that we've adhered to it. Yeah. Thank you, Council Member, and that's kind of the basis of my question asking about when it was established too because I just want to make sure that we're keeping up with potentially changing or evolving best practices. I'm not necessarily suggesting we change that number, but I would love to look into kind of where we are with comparable cities and what everybody else is kind of doing to make sure we're still kind of in there. And then my last question is about the ARPA interest for capital. We've got $6.8 million this year. For the next couple of years, are you foreseeing zero, or are we foreseeing still a little bit kind of trickling down? No, we're not expecting zero. We still have some ARPA dollars that are here. we did not budget anything more than what we know we have right this minute because we're spending those funds as we go one of the things that we've been able to do with the cash that we've had on hand is leave the arpa money over in the grant as long as possible to earn interest before we pull it back to reimburse those costs so we won't be earning at the clip that we have been for the last couple of years um and so that's kind of you know why we didn't elect we didn't really know what that number is going to be but why we didn't elect to include any more than what we know we have in the budget we have until the end of 2026 to spend the arpa money itself right so we can foresee potentially earning a little bit a little bit of interest uh up through and maybe even a little bit past that right and so if we ever want to use that interest for anything if if council wants to use it or anything any needs arise for the administration we will have to bring that as a revenue addition to council as a budget amendment and then whatever else happens with that would be how that flows through the system if you will thank you thank you vice mayor next we have a councilmember Worley thank you chair I have two questions I'm gonna ask here and then just if we could get follow-up we don't need to take time but one the the bond reallocation for the Jacobson Park bridge project if if Monica or Commissioner could just you stay there Monica just get me some information on that please I'd like to just kind of see how all that that played out exactly where we are on all the projects there and then also Commissioner Horn this can be this can something that comes to the link and I chaired this link with planning but the the administrative officer exactions position if you just get some information I think we got some little some summary about all of those positions but how that how we kind of see that particular position are we finishing planning getting rid of exactions is that implementation of unwinding the program so that I just like to do since we've been working on that and I so I support that position I think that and the urban growth position are absolutely needed because those are gonna be two big issues for your staff and then the only other question that I have generally about the budget and I'm gonna put you and Wes on the spot here and if you need to say I'll get back with you because you probably didn't factor I know you didn't factor into your numbers because the proposed the potential new parks tax won't be passed and we don't even know if it'll be passed until until November so obviously that would not have played a position in the numbers of this budget but in thinking about the budget then rolling over into a year in which the calendar year tax would potentially take in some of that there's some fun balance stuff there could just if any thought you've had on if that is passed when will that be imposed collected would there be any fund balance effect on this budget if that if that potential potential tax is actually passed and imposed so I'm I'm not certain but I would suspect if history is any indication that the parks folks would not be interested in creating a second billing on ad valorem for their adopted referendum at that point so we are not anticipating that being in this budget at all so if it gets past this November we won't be seeing it until the collections in 26 so it is not anticipated in this budget at all should that be incorrect we will adjust accordingly but we do have almost 2.9 million dollars worth of parks investments in here capital improvements that would potentially be eligible and we have trended with significant investments through ARPA and prior to that the last several years with pretty decent ARPA or pre-decent parks investments so if any effect on some of the things that people may see in this budget it could potentially be a cash flow sort of situation like we typically like we've used ARPA like we've used bond reallocation like we use fund balance and saying that we might have other opportunities to pay for things that we're putting in the budget should they not be ready to go until that additional revenue comes in right exactly thank you Oh, Dave. It goes into effect January 1st of 2025 if it gets adopted. Which means I don't think you'll see it next year either. Thank you, Dave. All right. Thank you, Council Member. Next is Council Member Savigny. Thank you again. And I don't know if this is part of, if we have another part of this conversation. But last year for council, a lot of us were new to the concept of the revenue part of the conversation comes in July, and it's very bang, bang, bang, very quickly. Okay. How do we prepare for that better this year? And then is there a way, if something happens that there is a fund that's out of a line, is there a way to do something so that it, like it could be subject to a recall if it's greater than the 4%? And I think when I've looked at your revenue numbers, I think you've basically targeted that staying underneath that level, which is great. but if something is needed to do that is it something that can be enacted but then it's just subject to recall but you would enact it in the following like in the following fiscal year versus the same fiscal year I'm just curious if there's a way to not because obviously we've given people two bills or they've gotten two bills two years in a row right so thank you I think I'm gonna try answer all of those questions because that was a lot um so the the current budget does project the four percent you know we don't have um the property roles at this point to be able to know where we're going to be with those funds and we have to do the best projecting that we can and we don't want to lock um you know the mayor and council into a decision with this budget and so we have assumed the four percent at this point if there is a change in that if there if there's another decision made obviously we would adjust it like we did this year through the revenue and expenses but also there's a number of our different activities if you will where there are decision points do we want to invest in the capital or do we not do we want to scale back street sweeping if you will if that one's going to run our street lights we did balance this year and it's looking like it's done what it was intended to do um and so you know we kind of are are taking into account everything else just like you all are everything else that's swirling around we know that property values have gone up we know that people are feeling the impact of those last few years and you know prior to coming to the government most of the decisions that I was involved in were financial in nature and here financial is one component of the decisions that are made and so we're really aware of the impact that we would have on our residents if we made alternate choices and you know we're we're trying to work towards getting that information as soon as possible after you all come back but I do know it's a squeeze. I guess then the follow-up is if something had to be done versus a two-bill situation, is it possible that this body could do something that would not create a two-bill situation? You always have the option of if you're talking about raising the property tax and you don't want to send the second bill out, if the idea is you're doing it for the longer term, you can make a decision not to send that bill out, in which case you'll forego that additional revenue for that particular year and it really won't go into effect until the next year. But you would need to do that. I think that Council Member Fred Brown was asking me about that on the last one, but it was a little too late in time to do that at that point in time. You would do it at the same time you're making that decision. Yeah, and that's I just want to because it happens so quickly. I just want to make sure that we're at least aware. We're just more more aware. Thank you so much. Thank you, Thank you, council member. Are there any more questions for the mayor? The commissioner about the mayor's proposed budget. Not the mayor. Well, I just have a few things. And one of them is, one of my things, commissioner, is about future bonding. We know that interest rates are higher now than they have been in the past. How much consideration did you all take when crafting the budget about looking for opportunities to pay for some of the things that are in the bond now with cash, knowing that we may have an opportunity to bond later at a better rate once rates start to decline? So I think one of the considerations that we made for that was the timing of the bond. We don't want to pay for anything any longer that is necessary. and we know it's unlikely even with the senior and therapeutic center that we won't have any significant sort of cost at best case scenario in the spring so we are trying to time the bond to the most advantageous and the least expensive for the government and be able to hold whatever cash we have to be able to invest so that's the first decision the second item would be as we looked at all of the different capital requests and the items that were included we really tried to be intentional in placing them in a bucket if you will where we thought they would be best suited so for some of the items we think we're going to hang on to the cash a little bit longer that might be in pre-fund where we can move it to capital and it can earn some interest and so we really were trying to be thoughtful about where those items are that being said some of that is you you know variable wherever you know there's there's some things that are interchangeable within that uh... but as far as reducing the bond that would kick out other items that have been included so so tell me about the also those vehicles in the bond we pay for them when we order them or when we proceed what we would those be a further the amount that we talk about bond for vehicles with that wait till the the bonds go out to be it or do we pay for them as soon as we order uh... let's see what vehicles we have in there so we have the police vehicles we actually have a number of those on the lot right now so we could go ahead and obtain those in which case we'd be paying for them right now but we we think we're able to float that amount of money until we go out and get our bond as far as the general government replacement vehicles a lot of those are on an order timeline and so we would just put in a purchase order and encumbrance we have to have the money authorized to be spent but it doesn't necessarily go out the door until we take receipt of the vehicle so we do have the flexibility to drag that cost to a better time right we sell the bonds okay all right then my next my next thought was around right sizing for historic historical reasons and personnel it's part of the reason that we're having the right size and and we're spending all the money in operations and personnel is because of the hiring challenges that we're seeing everywhere and if we've right-sized it too much do we have the potential to impact services by not having the person having the money there to hire the personnel that we may need so the right sizing in personnel is what we call attrition and it's what we look at every single year So we are only anticipating a year at a time for the personnel, and we go division by division. So, for example, police we know is running shorter than their authorized strength. We take a look at how many classes they're going to have during the course of the year and what is likely that they will have coming out of the academy when they're finished, and we try and set their attrition at higher than that so we don't pinch or prohibit their hiring process. Some of the other divisions don't have turnover, really per se. They're smaller and they don't have that kind of turnover. But 3.5% is, I feel like, really well done for a budget and a personnel budget of our size in particular. As far as the operating goes and right-sizing that, we have looked over a number of years. and we did not take you know did not intentionally target or intentionally you know set our sights on anything that did spend during the course of those years we like to you know really be informed in that that's why we were asking the divisions for some help here's the things that we see that you're traditionally not underspent or traditionally underspending and if they came back to us and said, no, no, no, you know, now we've got this cloud managed software and that's not going to be a thing anymore, then obviously that's not somewhere we went. So those were things that we thought, you know, were things that we could absorb in perpetuity. Okay. Yeah, I'm supportive of right sizing and getting those numbers in line, but I didn't want to do it at the cost of impact and services. The other thing I'll say, and I appreciate, and I think the council asked some really good questions today. I think the fact that the $30 million pre-fund is being folks are recognizing that it's really going to be our fund balance for next year on the front end I think is acknowledgement to you and your team are doing a real good job of educating us on where monies are coming from and the rationale around the mayor's budget. And then also the questions about the interest earned because that's something new that we haven't had those funds. And I do appreciate having the flexibility to use those when need arises, like we did with the eviction prevention methods that we put in place a few months ago. So thank you for that. Yes, sir. Those are all the questions I have, and it doesn't look like anybody signed up to speak. So we can move to the next item on the agenda. But before we do, there's other information in your packet for information only, and that's the breakdown of some of the other funds that are in the budget. And so the next item on the agenda is the revenue adoption discussion. And council members, last year we adopted the budget at this meeting. And I think it was beneficial last year because it let the administration know that we're playing from the same playbook that they built their budget. So if council is supportive of it, we can set that revenue number here today and And helps us with our budget discussion going forward. Does anybody have any contrary thoughts to that or any comments? We need a motion on that? Yes, sir. So moved. Second. All right, so I'm going to state a motion and then you can- Okay. Just because I can't make the motion, but you're fine. The motion will read, I move to adopt the total funds available amount of $500,000,11434 for the purposes of the council's discussion of the mayor's proposed budget FY 2025 general fund budget expenditures. So that's your motion? So moved. So moved. A motion was made and seconded on the revenue. Are there any questions or discussion? Hearing none, all those in favor, please say aye. Aye. Are there any that oppose? Hearing none, that motion passes. That brings us to the end of our agenda. I will entertain a motion to adjourn. So moved. All right, a motion was made and seconded. All those in favor, please say aye. Aye. Any opposed? That motion passes. Thank you. Thank you all. Thank you.