August 15, 2025 — Meeting Transcript

Good afternoon, everybody. It's our Friday afternoon discussion session and I think we're going to get started right away and talk about the budget.

All right.

Hey, here we go. One of my favorite days of the year. Today is our budget work session. So I'm going to go through the annual operating budget. We did the CIP last month and had that approved by resolution. This will come before the board in ordinance form in September for adoption. And then, of course, on October 1st, we go live with the new fiscal year. I did want to point out in front of you are two new pages for revenue and expenditures. Last night, everybody got it. Yesterday afternoon, everybody got a copy of the operating budget. We've been really scrambling to put this together where we lost quite a bit of time this year with the tornado. But we realize today just looking at it that the tornado numbers were really heavy. And so we had an initial submittal that went off to FEMA for public assistance. That number had an estimate in there about 13, just under $13.3 million for public damage, but that included damage at Fontbonne and Concordia. So the numbers that you have and the packet that was sent to you yesterday afternoon includes those expenditures. So what we've done is we've backed those numbers out. What I show on the screen today is going to be the revised numbers with those expenditures removed. So this is a much better depiction of where we're at financially because it's not as dire as what you see in here, at least for fiscal year 26, where you see all of those expenditures for the tornado but none of the reimbursement coming in just yet. And we're not really banking on any of the reimbursement until fiscal year 27. But what you're going to see at the bottom line are much healthier numbers than what you saw yesterday afternoon. So we apologize for that oversight. We caught it today. We're going to update all of those materials. We are going to double check the tornado numbers one more time before we do that. So you should have a revised proposed budget to you within the next few days, early part of next week. And that's what we'll utilize when we get into September. Yes, Alderman Bibas.

Can

we flip to it? No, that's a good question. That's correct. So it's going to be 40 and 41. And then it's going to 43 to 45, I believe, where the expenditures show up. Yes. And again, we've got these numbers kind of compressed or broken down in the slides you're about to see. So all the rest of the numbers are good. The one that is going to throw you is that finance number where the tornado's at. We just were booking all the tornado expenses right now into that finance account. So it just threw that one number off. But everything else on there is accurate and we're happy to talk through any of those specific lines as we progress here. So getting into the general fund, We'd like to show this line graph every year. And when you look at this line graph that we have up there right now, this shows the expenditures with those tornado costs in there. So, you know, we've talked about this dashed line for years, which is the revenue without the operational transfer that was coming from the capital fund. And then we always had that little bump. to the solid blue line, which was the overall revenue within the general fund. And this year that gets shut off because we passed the fire sales tax. We're going to start collecting that sales tax on October 1st. And so we've cut off that $500,000 transfer from the capital fund to the general fund. So that's going to be a change in 26 and a change going forward is you're not going to see a dash line moving past this point. So that's something that we've terminated now that we have that new revenue stream. But what you are seeing is this huge jump in expenditures, and that's due to those tornado expenses. To get a better depiction of where we're at operationally, tornado expenses aside – and I should say – I'm saying tornado expenses – Uh, it also includes that one-time expense for the Shaw park ice rink site. We're going to draw down some general fund reserves to pay at least those design costs in fiscal year 26. So we signed that contract the other night. Um, so if you look at, um, this, these lines here, this is a really accurate depiction of where we are, which is these lines are touching again. Um, we do not have a lot of cushion at this point between our ongoing revenue and our ongoing expenditures. That's even with the fire sales tax that was passed. So remember 500,000 of that went to the capital fund to shut off the transfer. And so you're only looking at about four to $500,000 of additional revenue that's hitting the general fund. So we'll go through the general fund in more detail, but what you're going to find is those revenues are just incredibly flat sales tax. We're looking at like 1% year over year growth. Sales taxes slowed significantly. We don't have any new sales tax generators that are really coming online here in the city. Property tax is going to get a really nice bump this year, and we'll look at that number in a minute. But that's due to projects that we've been waiting for to actually collect the taxes on, things like Forsyth Point and Bemiston Place. Those come online, so we get a nice bump there, as well as the Centene Chapter 100 abatement that gets shut off for this tax year as well. So we're going to see a boost from those three things happening. But other than that, with property reassessments, we see an increase there. But now we've got this property tax freeze for seniors, and we don't know what the impact of that will be just yet. And we'll see how that goes over the next two years. But you're going to start to see because of that, your property tax lines smooth, just like the sales tax has are really flattened down to that one, 2% range. So if our revenue growth is only one to 2% per year, We're seeing consistent expenditure growth, probably more in that 5% to 6% range due to contracts going up, salaries going up, that type of thing. We're going to be in a situation again not too far off in fiscal year 27 where you start to see these lines cross again. So we've headed that off in the past by having residents pay for trash. we pass a fire sales tax, we've leaned up our expenditures without cutting any other services. But we're at the point where we really can't pull expenses back anymore without drastic service cuts. And we have to look at potentially either raising revenue or finding a way to get service costs down by cooperating and collaborating with our neighbors. And that's where a lot of our focus is being placed at this point. And we've started those conversations to look for those service areas where we could cut costs by working together. So I do want to put a lot of emphasis on the fact that this is where we're at. And as you know, every year though, we budget, the revenue rather conservatively because we don't want to miss on the short side with our estimates. And we budget the expenditures as if all of it's going to get spent, you know, every position is going to be filled with everybody taking, you know, health insurance and doing those types of things. So we always realize some savings on the expenditure side because we'll have vacancies throughout the year and that sort of thing. Uh, revenue again, we tend to be kind of conservative. So we might have a little bit of a cushion. So, um, They're close to touching. I don't know that it's spot on what you see here. We usually always have a little bit more cushion at the end of the year than what this line graph shows. But, I mean, we're getting to that point again. Within the next couple years, they're going to cross. And remember that we do have labor negotiations coming up this next year where the CBA... We're going to have to renegotiate CBAs with both police and fire. And what we've seen in the market overall for public safety is really substantial increases since our CBA went into place in fiscal year 23. So that's just kind of the overview snapshot, but a really, really important graph that you're looking at here. The general fund sources of revenue, these really haven't changed much. Property tax still at 26%. That's where it was last year. Even though all those new things came online, sales tax bumped up because of the fire sales tax and really brought that back to its previous levels. So this pie chart hasn't changed much. property tax still at 26%, utility taxes at 18, sales tax at 24, license permits and fees at 12. These numbers are really, really consistent for us year to year at this point in time. No big changes as far as our revenue composition. Expenditure categories is a reminder of what these larger buckets entail. On the personnel side, salaries, overtime, Social Security, Medicare, and benefits. So when we talk about personnel costs, it's not just the salaries themselves, but all the benefits and other things that go along with it. contractual services, utilities is a huge one for us, electric, you know, water, especially with the Shaw Park pool and that sort of thing. Software and licensing, we're continuing to see big increases in those areas. Dispatching is going up quite a bit year over year. And that's the bill we pay for our police and fire dispatching through East Central Dispatch. Lifeguards, insurance, legal services, You can see the various things that make up contractual services, but we've seen a lot of growth here within the past few years. And then finally, commodities, which is a really small part of what we buy. When people think I'm going to cut costs, this is what always comes to mind first. Well, we're going to buy less stuff. But when you see the makeup of our expenditures in a minute here, you'll realize that very little what we buy is actually commodities. We're really heavy in personnel and contractual service costs, but these are things like uniforms, fuel, salt, construction materials, those types of things that we use in our operational departments. So the general fund breakdown, and this includes the, let me just make sure I got it right, this includes the storm costs here, so the tornado recovery costs. You'll see that On the revenue side, again, we use our projections based on the best information that we have today. So what buildings are going to be coming online? Is there any other big user that's potentially going to come or a big draw from a sales tax perspective? And so we use that information to come up with these projections. And then on the expenditure side, you can see the overall composition. So where I showed salary before kind of in a pie chart, this is a similar thing just in table form. Personnel and benefits is going to be 64.2% in fiscal year 26, 31.2% for contractual services, and 3.6 for commodities. You're seeing this number jump up because of those tornado-related expenses. Those are all going to be considered contractual services. When you back out the storm expenses, you'll see here personnel right in line with kind of where it's been in the past, actually a little bit higher. We're up to 73% now of our overall expenditures in the general fund relate to personnel and benefits. Contractual services at 21. And then again, like I said, commodities, just not a big chunk of what we spend our money on here. Only 4.1% of our expenditures relate to commodities. So the greatest increase is personnel services, which is higher than the budgeted amount and definitely higher than the estimated actual amount for fiscal year 25. So we're continuing to see growth there. you know, we are on a step system. And again, we're seeing that a lot of that salary pressure and public safety. For personnel, again, we try to run really lean here. We've run into a few spots where we think we can strengthen things, though, and I want to go through those for you. First, in IT, we reclassified an associate network engineer one position to associate network engineer two. We really want to create a mid-tier position within our network engineer group, so We want to give them the opportunity to be somewhat mobile here at Clayton, even though we have a limited number of positions for network engineers. One of the reasons for that is we've had a lot of trouble retaining those personnel over time. They leave because they want to take that next step in their career. And so we want to create kind of this intermediate step here to try to help with retention with our network engineers. When you lose a network engineer, it takes a long time to get back up to speed because they understand your systems, which are always unique and complex. And as you know, we split IT costs with Brentwood and Richmond Heights because we provide their IT services. And they've seen the same thing is when we lose a network engineer. the new network engineer that comes in to replace them, they have to learn three separate systems and the learning curve is very, very steep. So we're trying to do our best to retain them. There's not a huge jump in salary from the network engineer one to two, but it's enough to entice somebody to wanna stay here with us. So we've got really good network engineers don't wanna lose anybody. And so we've proposed that additional reclassification. We have an additional planning technician in the planning department to provide support and streamline services. This is because of the work pressure in that particular department. As you know, we're implementing the comprehensive plan. At the last meeting, you saw that really impressive presentation from Ryan, one of our planners here. We are doing a lot of this stuff in-house and actually our in-house capabilities are as good as anything you're gonna find outside if you were to go with a consultant. They're doing amazing things down there with a very limited staff. But we're getting to the point where the number of items that we're working on between commercial zoning, neighborhood characteristics, stormwater regulations, all of those, we feel we would be best served hiring a planning tech and using in-house talent to work on those things rather than go out and use a consultant, which would actually cost more than a planning tech. So that's a proposal that we have in here. And then finally, a municipal service technician too in Parks and Rec. And this is to maintain a lot of the name gardens. So we have gardens that have been donated to us over time that don't look particularly good. They get the same level of attention as everything else, but they're definitely more high profile. We also know that we have the Shaw Park ice rink that's going to happen at some point. But Parks and Rec is just really stretched as far as trying to get all of their stuff done, field striped and everything taken care of at this point. So to relieve that pressure, we are recommending an additional position there. although we've put into the budget as a mid-year hire. So we wouldn't hire this person until we get to the warm months, until we get to next spring. So the budget only shows six months of this new position being added. Any questions about any of those? We do have Larry here from IT. We have Ana from planning and then also Tony from parks if you have any specific questions about how we would utilize those staff members.

I'll try it again. We talked previously about hiring someone who would be looking for a long time to help with downtown maintenance and enforcement. Is that already addressed or where is that? It has

not been. So we've not been able to fill that spot. We've had a limited number of applications come in for it. We've had discussions internally about whether or not we need to potentially adjust that salary upwards a little bit to try to entice somebody, but we've not been We're down three now in public works over the last couple of weeks. So we've been really good about not having any turnover in our operations, and we've just lost three, I believe, correct? So this was already vacant, and then we've just lost 3 employees in public works. So backfilling for these labor-intensive spots is going to be very difficult. So we just don't see that being in the budget is just... I would continue to have it in the budget. And in fact, as I said, we're having conversations about whether or not we need to bump that by perhaps a couple thousand dollars a year to try to get somebody in it to take it. The problem is with the labor intensive stuff, you just, you have so many options at that 20 to $25 an hour range. And that's where we start those particular positions. And it's hard to entice somebody to come and work outside and the heat and do that type of thing when you can go work in an Amazon warehouse and perhaps make a little more money. So it's an ongoing effort and that's why it's not in here. Yes, yes. But we need that position. If you've walked around downtown, you can see that we need it. Same thing with Daman and some of the other business areas. We really need that position filled, but we've not been able to do it. Thank you.

So I'm thinking that this is going to be an ongoing theme. We need more help, it's gonna cost us more and our revenues aren't gonna keep up with it. And it's gonna happen over and over and over again as you go through your presentation. So what I'm wondering is when it comes to things, anything, but in this particular example, in the case of IT, I'm sympathetic to what you just said in terms of the challenge. So we can respond to the problem, but how else can we solve it? And so what I'm thinking is A way to solve it is maybe we grow it even more, but we bring in more communities in order to help offset the cost. So net-net, it's a savings to us, even though it's an expansion. Or we do the opposite. We look for a solution that is totally outsourced in order to save money because of the nature of the problems. I'm not suggesting we do necessarily one over the other, but I'm just thinking, I encourage us to keep thinking about other ways to solve the problem. We have to solve this problem, but then how do we solve the revenue and expense issue that comes with it?

With that one in particular, it's again, not a major expense, but to us to spend a few thousand dollars to be able to make sure that we have that that same person in that spot, that redundancy or that resilience within that position. We think that's money well spent. One of the biggest concerns with something like contracted IT is they may send different people. They have their own turnover, that sort of thing. You're better off having your own in-house team that really understands your particular system. So it's trying to maintain that competitiveness in order to do that. But I agree. I mean, we're looking at a lot of different ways to try to Not so much IT, but maybe outside of that, ways to try to get expenses down by collaborating more.

Right. And I don't really want to recommend the outsourcing one, but I do know that, you know, to your point, if many communities are looking for ways to address budget pressure, then maybe we could be part of the solution by offering this service. And so even if it is what you're saying, a modest amount of money, maybe we can actually turn it into a net positive for us. And so it's a way to work on that. That's something we can talk about.

David, did any in that meeting, David and there was a meeting that happened actually when I was out of town, but mayors and city managers got together to talk about different ways that we can, you know, save money and, you know, work together. Did IT come up at all?

IT did not come up. Other cities approach us on a regular basis. I know Central Dispatch does as well. Wanting IT services like we provide for Brentwood and Richmond Heights. We've not felt comfortable scaling that up just yet. So that's something we can continue to talk about. But we've had space constraints and other things here that have kind of made that difficult. If you remember the capital fund we were talking about, expanding IT into that old police training area so that we had actual workstations for hardware and that sort of thing. A lot of these other cities don't have really areas within their city halls for us to really detach employees. So that's something we need to try to work through, but it's not been something we've been comfortable scaling in the past or scaling it up at least. The other thing is just the turnover that we've had within those IT positions. Within the last 12 months, we've been really fortunate where we've really seen that slow down. But if you go back two, three years ago, we lost more than half of our department. We really were churning some people there. So Larry, I don't know if you have anything you want to add to any of that. Okay.

Real quick question on that same topic with IT. It's pretty simple. So as we cooperate with Brentwood and Richmond Heights, is it structured in such a way that when I know this is a modest increase, but is that just in split between all of them or by percentage usage?

Yeah, so it'll be split between everyone. that's what helps keep it modest. So yeah, that's where we're seeing the benefit of it. Thank you. Any questions about any of these other positions?

I would just, I would reiterate kind of this larger point that I think Rick was sort of hitting on is it's not something to solve for today, but I think we just need to keep in mind that while whether it's IT or whatever the department is, it may not be ideal that you wind up outsourcing it, or it may not be idea to take the other options, but we're kind of, we're going to reach a point where we're either gonna have to make a revenue increase or we're gonna have to make those suboptimal decisions. So as much as, again, this is not picking on IT, but since we're talking about it, like we may not wanna do the outsource for all the reasons David laid out, but the alternative is trying to find revenue somewhere that we don't have. So I think we just all, as we continue over the next couple of years working through these budgets, We like this talk up here, like there's going to be tough choices at some point, but I think those are some of the choices that we may not want to make, but those are going to be the non-revenue rates conversations we're going to have to have if we're going to try to make the numbers work.

Yeah, and I'm happy to talk about contractual services for positions. I was referring to IT specifically where that's one area where I wouldn't want to look at it. We do perhaps have other areas of operation here within the city where it would make more sense.

I mean, I don't like the idea for all the reasons we played out. I'm just, since we're talking about it, I wanted to kind of raise the point more of a granular level. We'll be having these conversations. Those are the kinds of conversations that may have to be had.

So it's going to be revenue conversations, which are real hard because we're really out of levers to pull. We made the move with trash. We just passed the fire sales tax. The only thing you have really is a property tax increase. We tried that in 21 and we've talked about how we need to space those out because we have the general obligation that's out on the horizon to do a lot of these street improvements and things. So we need to be really mindful about how we go to voters for that type of thing. So it's gonna make it really, really hard on the revenue side. So the only way we can make things happen is shared services, maybe contracting out some services or having the hard conversations about reducing service levels here in the city. That's where we're at. Any other questions about the staffing? Okay. On the compensation side, what we have in here is the 2.5% increase for positions with the step increase that's really baked into our salary system. What we do have is that mid-year range adjustment. And so what we have right now as a placeholder is a 2% increase effective on April 1st, 2025. We're not seeing as much pressure at the moment for non-represented positions in other cities. So this number may change a little bit by the time we get to April. What we really want to monitor is where those January 1 cities go. We've got a lot of cities that we compare ourselves to that are on a calendar year budget. So once we have a sense of where the market's gone for these positions, we may adjust that particular number there. But for right now, we have a 2% increase as of April 1st. uh, for all of our ranges. So to bring those up and keep them competitive, what that in effect does is it's a 1% increase. If you stretch it over the 12 months, just from a budgetary standpoint. Um, so you're looking at two and a half percent on the steps and then another 1%, uh, if you wanted to look at it on an annualized basis. So three and a half total, uh, for the compensation adjustment for non-represented employees, um, And then we have a one-time $600 retention incentive in here for all full-time employees who remain with the city through October 1st, 2025. So this would be a one-time payment after October 1st if you stay with the city through the end of fiscal year 25 into fiscal year 26. And a lot of this has to do with the fact that, uh, this has been a really hard year. Uh, we recognize that it's been a really, really hard year for our employees. Uh, we want to make sure that we're able to retain them because going out to get more folks, uh, is our, our new employees is very, very difficult. Um, so if we can retain people to the next fiscal year, uh, we would like to give some sort of, um, incentive for that. So the $600 number, uh, is there, we, we, you know, we're really trying to figure out how to get everyone $500. 600 recognizes that there's some tax that's going to come out of whatever kind of incentive we could potentially give there. So 600 would get people closer perhaps to that $500 number overall to try to retain them. But As a great example, Public Works had a really rough stretch going through the tornado. And then they're moving out of their building right now, which is certainly stressful so that those improvements can be done. And we've lost three employees over the last month here. So we are seeing this pressure. This is a real thing. And it's not just isolated to that one department. Everybody here has had, especially over the last six months really had to go with things so we feel this is important to try to keep people here. And we think that would would would definitely be a nice gesture from the city that people would recognize so any questions about the compensation portion.

So. I've got sort of a left-hand and right-hand comment here. So on one hand, I think our whole STEP program was designed to right-size our compensation program and to address retention as we're going forward. So adding the retention incentive seems to be redundant. On the other hand, we have had all the things you just identified in terms of a stressful year and recognizing the employees with some kind of compensation for that is appropriate, but we're not allowed to pay bonuses. So I get that. So I guess where I'm getting at is We need to call it what we need to call it in order to move forward. But what I'm hopeful of is that this doesn't become a recurring theme, that that was the whole purpose of this compensation program. And this compensation program is very expensive for us to implement. The increases, the benefit increases that come as a result of that and then layering this on in a situation where our revenue just isn't keeping up with it just makes our problem even harder.

I understand and appreciate that.

Um, a couple of questions in no particular order. Can you put some, some dollar numbers to each of those three bullets? Like two and a half percent, 2%, all of that. I mean, it does, it doesn't sound like a whole lot, but when you add it together, you're talking four and a half percent or whatever, plus the retention bonus, it'd be nice to kind of know what the actual dollars are. You can do that. I don't know if Karen has that handy or not, but if not, we'll

get that out to you shortly.

Um, Attention bonus, separate thing. But on the first two, what flexibility do we have given the step system is set up the way it is to go less than that if we wanted to? Is it even allowed under the way the step system's set up?

not necessarily we could say we're not going to give a step um we really don't have half steps built into it the way you would do that is you would change the the ranges themselves either up or down to to meet whatever you want those step numbers to be so the steps equate two and a half percent or whatever the steps equate to just over two and a half okay and

then the other and then the the two percent the range adjustment that's the other lever that we could in theory say we're just not going to do those correct i mean if if we're at a spot

where uh revenue is not coming in the way you you would have hoped uh maybe expenses are higher than you would have hoped and you're at that april one you could make that adjustment up or down um and so that's one thing we've stressed over and over again is we'll make that decision when we get closer to april um and the 2% is really just a placeholder number. So if we wanted to dial that back, um, if that was necessary, we can, we can do that. I forget we vote on that separately then we do. And we do that in April of every year. Um, and so it, it, it hits the books really for, for half of the year. Um, The important thing with the range adjustment, the reason it's in there is just to keep pace with the market. We don't want to be at a spot where we were when we did the compensation study a few years ago and found that we had slipped significantly. And then when we got our salaries caught up with where they should be, It was a huge expense to make that happen. So it's kind of, do you want to pay as you go with that and retain your employees along the way? Or are you okay in the meantime kind of falling behind but recognize when you get to comp study time, you're going to have to bump those salaries up because you

will start to lose people. Yeah, I mean, it gets – I mean, it is – Rick alluded stated earlier, it all circles around the same questions, which is you either potentially slow raises now and maybe lose some folks, but it stretches out how long you can provide the quote, same level of service. Or at some point we, you keep letting the comp grow and you may get to that point sooner where you've got to actually cut service. Arguably though, if you keep losing a bunch of people, you're cutting service one way or the other. That's exactly right. So if, if, if that's,

if that's the direction you're, we start to head here, I would rather have real conversations about service levels, but keep salaries where they should be rather than have salaries drag and then have morale and retention issues to get what in the end is a service level cut. So if we think we need to get to the point where, hey, salaries are a big problem, where we're paying too much in compensation, we got to do something about it to balance the budget. I think all of those conversations need to take place in the form of service cut conversations. And then the salary staff will do whatever has to happen in order to meet whatever that new service level is. But to play around with the ranges, I would recommend that we not do that because we do want to retain everybody that's here and not cause

morale issues. Do you think about it more as... keep comp where it should be and maybe have less people equal to less service levels than trying to keep the same amount of people but just wind up slowing their rate of growth. I would rather you say we

don't want to provide X service anymore and we look at what that implication is on our staffing level and then Usually through attrition, you can back that staffing level down to whatever you need it to be and just not fill those positions that you would have utilized to provide that service level previously and realize your savings that way, rather than saying, hey, we're going to pay people less. And if we lose some, that's okay. Employees feel that and that doesn't go over well.

Yeah, I mean, I'd certainly argue, had we not implemented the step increase, we could have had larger attrition in the last year. I mean, it's hard to understand one or the other whether or not you know, potentially the stepping crease kept people here longer or is continuing to keep people here that might have otherwise gone elsewhere. I don't know. And I think public works, I mean, I'm disappointed to hear that, but, you know, as David just, you know, there's a lot of changes going on right now that probably doesn't make for a very pleasant work environment. But two years from now, when we have a brand new public works building, I would hope that, you know, a lot of people will be like, hey, I just heard that Clayton has a new public works building. Sounds like it's, you know, wonderful to work there. So I think I'm going to go check that out. Whereas right now, potentially people are working in trailers or, you know, I mean, I know there's a lot of things going on right now, which doesn't make for a very pleasant work environment. So and I think it's a good reminder to all of us too, that like we don't, you know, implementing and i'm not suggesting that you guys were suggesting this but i i just want to continue to be in a place where we're paying people what you know richmond heights brentwood maplewood webster are paying um otherwise we're really going to find ourselves in a difficult spot so um and david i don't know if you i mean in talking to a few other mayors um i think a lot of municipalities are having trouble filling positions so i don't think it's unique to clayton So

actually doing really well on that side.

Right. A

lot of our surrounding jurisdictions are really struggling, especially in areas like public safety. We're probably the only department out there that's not down an officer right now. We can fill fire department spots that open up. Actually, even with these public works openings, I feel more comfortable here than being other places. You know, we heard from public works people that were here on mutual aid during the tornado that they hadn't seen that level of organization or anyone. any city really operate like this. And I think that word is out there. I think people want to be here. I think that top workplace designation that we just got is another kind of feather in our cap when we go out to recruit people. But we're generally better than others as far as being able to get people to come here, even though those salary levels are really right in line with what we're seeing you know, market-wide. So it is a huge advantage we have, but in the end, you know, money talks with a lot of folks that are looking for a new position. So if those salaries start to slip, you can overcome it with culture to some extent, but not completely. But what we're seeing right now is our salaries are in line with what the market is. And we've got that extra edge because the culture is good, because people want to be here. So we're

And to be clear, it wasn't my proposal. I'm just trying to, again, I'm trying to just think ahead as to, and I think, David, your explanation was a good one. It's like. That is a question that we will have to ask ourselves. Like, you know, which way do we want to go if we're not going to do the revenue piece? How are we going to solve the thing? You either start paying less for a lot or you start just saying, we don't want to do this. And you just kind of right side. So it'll be a larger conversation for us later. But I think it's a philosophical one that we all will need to get on board with or come to with at some point, sadly. And Mayor,

the other point you brought up is, you know, other cities and how they're struggling to fill spots. The other thing they're all struggling to do is balance their budget at this point. you know, they're all paying what we're paying. They're all seeing revenue stagnation just like we are. Everybody's in this situation where they're just scrambling to try to find ways to bail out water, meaning cut their expenses back or, you know, get whatever kind of revenue they can capture. But most people are about maxed out on the number of tax streams that they have. And most voters at this point in time, if you go to them for a property tax increase, aren't inclined to approve those. So We're all in the same boat here. And that's why we continue to have those conversations about trying to consolidate services and get expenses down because we're really forced to at this point. And those cities that have been really isolationist in the past, you're even starting to see them come out and have conversations with the cities that have cooperated a lot like Brentwood and Clayton and Richmond Heights and Brentwood and try to find ways where they might be able to participate. So you're gonna see a lot of this and it's gonna accelerate over the next couple of years And we're right in the middle of those discussions. So I'm hoping that we can offset a lot of this pressure, financial pressure we're seeing with more shared services. That's going to be key for us.

And I think exploring those shared services until we can really exhaust those. I mean, then we can't until we can say to voters like we have explored all these options. These are all the different things we looked at. You know, we are consolidating here, but we can't do it here. You know, until we really explore those options. I don't feel comfortable going to voters and saying, okay, like we are cutting services, unless you, you know, approve a property tax increase.

Can I just say that I agree that I think if if we were to pursue property tax increase. we have to demonstrate that we've done everything with consolidated services. On the other hand, I think our residents after the tornado appreciate in a way they haven't before what it takes to operate a city and what it takes to be able to have the resources to be able to do what we've done in the last few months. So I think at some point they, we may just have to go back to the voters and say, it's the same story we've said for eight years, which is our expenses are, clearly outstrip our revenues. And at some point, it's been a long, long time since we've raised property tax. So I realize it's a tricky subject, but I don't think we can give up on that. We just have to make sure we're ready to make the argument when the time comes. All right.

Oh, thank you. If you could use the mic, please. All

right.

Okay, so the cost, the estimated cost for the retention incentive is 115,616. So 115,616, then just a moment while I flip screens. The total for represented and non-represented increases is 652,985 and 93 cents. So 652,980 and 93 cents. Okay. sorry did you say what does the number mean that is the total dollar value of the step increase for the represented and non-represented and the percentage range adjustment that's budgeted as well

but yeah

uh so our yeah our personnel our extra expenditures are about 30 percent of so yeah questions

Sorry, on the screen now is the overall general fund budget. And so this is kind of a collapsed version of what you have within the proposed budget document itself, which this screen share was somewhere else. See if we can move it again in a second. So good spot for today. There we go. That's fine if we can't see the 24 number. All right, so you can see the various columns here. We've got 2024, so those are gonna be actual numbers from fiscal year 24. We've got the adopted budget in 25. We've got estimated budget, so this is where we think things will be at the end of fiscal year 25, and then the proposal for fiscal year 26 for each of these categories. This column here compares the 26 proposed number to the 25 estimate, and this column here compares that 26 proposed number to the actual 25, or I shouldn't say actual, but the 25 adopted budget. So property taxes, you see this big increase and you think, oh man, things are great, this is good. It is good, but that's not a number, that 9% that you see in that 7% that are gonna be consistent year over year. What you're seeing is the increase, again, attributed to Forsyth Point coming online, Bemiston Place coming online from a tax collection standpoint, the Centene abatement turning off and then the reassessment year. So I would look for this number when we look from 26 to 27 to flatten out considerably. So that's going to drop down to probably like a 2%, maybe 2.5% level year over year, but a nice bump this year with all of those things happening. And of course, that number compounds over time, so it's always good to have new users come online. Sales and use tax, it looks like, again, we've got a really significant increase here year over year. With $7.5 million proposed for fiscal year 26, most of that is attributed to the fire sales tax that's coming online. So when you see that bump, sales tax we think will probably go up about 1% or so. We got a little bit of a bump for some of the other little peripheral sales tax lines, but the big jump there is the fire sales tax coming online. So again, kind of a deceiving number where you're seeing a big increase. Really, that's a one-time jump. And then when you get from 26 to 27, you'll see that 16 number probably drop down to that 1 to 2 range again. So utilities, this one has been flat for us for some time now. You can see the numbers historically going back to 24. kind of how this has bounced around right around that 5.6 number. There's nothing to indicate that this is going to go up significantly at this point in time. We continue to see things like telecommunications drop off as the last of the landlines go away, especially in elevators, which was kind of the last holdout. A lot of them were still copper lines and people paying a lot of money for those, and they figured out how to get a lot of those offline. So utilities has really kind of been flat. You will see year-to-year fluctuation just based on weather. I imagine our receipts coming in right now from this summer, actually pretty good on the electric side because people are running their air conditioners so much. If you run into a mild winter though, you're, Natural gas receipts are going to be lower than you would otherwise get. So some seasonal fluctuation here.

David, I should know this, but is it a percentage? It sounds like it's a percentage of the bill for folks. That's correct. So if Spire or Ameren increase their rates, which some are projecting, that'll be a good thing for us in a weird sort of way? That's correct. So these numbers may go up a little bit if those rates wind up going up. With rate increases. And then

the biggest fluctuation, again, is just weather-dependent.

I want to go back and, I guess, reinforce a point that we've discussed in the past. As we get to the bottom section of this, we're going to talk about the level of service, the quality of service, the community we have, and all these are really good things. And we want those. We don't want to cut those back. So what can we do on this top part in order to drive more revenue? And so aside from raising a tax. And so I go back to, you know, what is the asset that's underutilized? And the one of them, at least in many parts of our community, are vacancies. Okay. And so commercial vacancies, if we can drive help in whatever way we can to get higher levels of commercial occupancy, A, that'll help with property tax or abate property tax appeals. If it's retail in any way, it drives more sales tax and it at least stabilizes utility tax. All of those are really important to us. And so I just, I wanna, we're gonna keep talking about the pressures on expense, but I also wanna make sure we're, especially if we're going back to the voters that we can go back and say, and we've worked on trying to take advantage of these other assets we have in order to drive more revenue. I

agree. And it's a priority for us. And I imagine once we get the Economic Development Committee up and going to implement the economic development policy, I would imagine that's the first thing that we'll be trying to tackle. The other lines, again, don't make up as much of the budget as what we just talked about. I will highlight licenses, permits and fees, which is building permits. We do show a little bit of a bump there up to 3.7 million. We saw this lag in 25 and we did the budget amendment at the last meeting and we dropped some of the permit revenues. We are going to see a little bit of bump though with the tornado permits that we're getting. So it's not necessarily large projects that are driving this number up, but there will be some additional revenue with the number of permits we're issuing at the moment for building improvements related to that so we do see a nine percent increase over last year's estimate which is you know a sizable amount relative all relative parks and recreation relatively flat again two percent uh fines we've seen this number really kind of crater over time especially if you look back to the you know the pre pre-Ferguson reform days to where we are now. You see we're at 681,000. We're proposing for 26. We missed our mark in 24 and had to adjust it down to 778. We thought it would be flat. We had to adjust that number down to 660. This year we're putting it in at 681. We'll see where it goes. Hopefully we don't have to adjust that down the way we have in the past because courts is an area where, you know, from a fine standpoint, Court really doesn't cover costs to actually run your municipal court when you look at what you're paying in salaries and personnel and that sort of thing. It's a necessary function, but that's a reason why our neighboring cities are looking at their municipal courts and trying to figure out whether or not it makes sense to consolidate those. So that's a conversation that we'll be involved with as well, just to hear kind of what their thoughts are on that and what that opportunity might be. But that's an area where we continue to see it decrease over time. Parking revenue, this is another area where we've decreased some with some of the lots that have gone offline here in the city. A few years back, we didn't renew a couple of leases that we had. We've seen parking demand drop a little bit with some of the offices not being completely full again. As Alderman Rick Hummell pointed out, we have more vacant storefronts than we would like to see. And when you have more vacant store fronts, you have less parking revenue because fewer people are actually going to utilize those spaces. So parking, we've got just under $1.9 million proposed for the upcoming year.

agree. And it's a priority for us. And I imagine once we get the Economic Development Committee up and going to implement the economic development policy, I would imagine that's the first thing that we'll be trying to tackle. The other lines, again, don't make up as much of the budget as what we just talked about. I will highlight licenses, permits and fees, which is building permits. We do show a little bit of a bump there up to 3.7 million. We saw this lag in 25 and we did the budget amendment at the last meeting and we dropped some of the permit revenues. We are going to see a little bit of bump though with the tornado permits that we're getting. So it's not necessarily large projects that are driving this number up, but there will be some additional revenue with the number of permits we're issuing at the moment for building improvements related to that so we do see a nine percent increase over last year's estimate which is you know a sizable amount relative all relative parks and recreation relatively flat again two percent uh fines we've seen this number really kind of crater over time especially if you look back to the you know the pre pre-Ferguson reform days to where we are now. You see we're at 681,000. We're proposing for 26. We missed our mark in 24 and had to adjust it down to 778. We thought it would be flat. We had to adjust that number down to 660. This year we're putting it in at 681. We'll see where it goes. Hopefully we don't have to adjust that down the way we have in the past because courts is an area where, you know, from a fine standpoint, Court really doesn't cover costs to actually run your municipal court when you look at what you're paying in salaries and personnel and that sort of thing. It's a necessary function, but that's a reason why our neighboring cities are looking at their municipal courts and trying to figure out whether or not it makes sense to consolidate those. So that's a conversation that we'll be involved with as well, just to hear kind of what their thoughts are on that and what that opportunity might be. But that's an area where we continue to see it decrease over time. Parking revenue, this is another area where we've decreased some with some of the lots that have gone offline here in the city. A few years back, we didn't renew a couple of leases that we had. We've seen parking demand drop a little bit with some of the offices not being completely full again. As Alderman Hummel pointed out, we have more vacant storefronts than we would like to see. And when you have more vacant store fronts, you have less parking revenue because fewer people are actually going to utilize those spaces. So parking, we've got just under $1.9 million proposed for the upcoming year.

How do we set parking tickets? fees like do we vote on that every year and i just forget we haven't not adjusted

those in a number of years 2016 was last time we adjusted

the rate um that would be enough i mean again i don't know how much actual money that is but to go to rick's point earlier like if we're talking about ways to raise money before we go to voters like i mean i know we look at permits and we updated those last year but again this is one of those where 10 years probably seems like a long time to increase how much you charge somebody for a parking ticket

At the same time, we're trying to increase the ease of people coming downtown too.

Well, but I think you can – but these are the fees people pay if they stay too long. So I think to your point, if we want to entice people to come down, then maybe we make the time they can stay longer or figure out –

It's a larger conversation. Yeah,

it's a larger conversation, I just – I don't think keeping, getting a ticket cheap necessarily is the best way to incentivize people to come down. I think it's better to incentivize people that are kind of churning through their parking spots. But either way, I think it's been 10 years. It's probably worth at least looking at, I guess, is my point.

Yeah, I mean, I think it is worth certainly looking at what our neighboring municipalities charge. But yeah, I mean, it's difficult because when you have neighboring municipalities that have big free city lots in the middle of their downtown, it's... Yeah. Yeah.

I have a question, just your comment on the municipal courts, because the charter amendment we're looking, I don't think it was the leeway to validate. If that's a conversation you're

having. They would. They just say that we need to have a municipal court, but there's nothing to prevent you from sharing it. Under the current charter, we would probably have an issue with that if the judge of the consolidated municipal court was not a Clayton resident. Okay, so you're

comfortable with the way that the amendment's written that it would allow.

And that was something that we were mindful of. So that's the parking revenue, unless there are other questions about parking. Interest income, we have at 1.2 million. You know, we are talking about, the Fed's talking about rate cuts. A lot of people are talking about that right now. A lot of chatter related to that. We do see a lag. So if there's a rate cut, the way we have our CDs laddered. and our different investments laddered, there's usually a lag where those cuts hit later on. What we've been able to lock in at this point in time, we're confident we can hit a number around 1.2. And as we saw in 2025, you know, we came in higher than we would have thought there. So with those laddered investments, that should continue to be a strong number, at least for the next year or so. And then we'll see that taper, I would think, if we had cuts in 27 and 28. So we'll continue to monitor interest rates and CD rates. miscellaneous is a relatively small number for us. Transfer from the special business district, this was approved a few months back, that's just over $555,000. And then here's that drop of $500,000, which is the operational transfer from the capital improvement fund. So all said, increase of 5% overall, but most of that 5% is really being driven by the numbers up here, which is the fire sales tax going online then those other property tax increases that i previously mentioned any questions about the revenue picture all right not hearing any on the expenditure side again most of these departments are going to be relatively flat here not much change in legislative Administration, you're seeing the big jump, but these are going to be the tornado-related expenses that are all being charged to finance, which is within administration. Outside of that, aside from the salary increases that are baked into this, we're really not looking at new programs, contracts, other things like that going in line in those particular departments. So that increase is really being driven by the tornado.

Would you expect is a generalization that we should be able to achieve reimbursement in the 80 to 87 percent range for all of these things? Are there some things that you know that aren't going to be eligible for reimbursement?

Tree replanting is an example of something that won't be eligible for reimbursements.

And it's something like that in this budget?

Yes, it's on the expense side. And when we go to do the revenue side in 27, when we start to look at that, we're going to have to back those numbers out. But the initial expense will be in there. So tree replanting, which is a big number, but it's not going to be as big as things like street lighting and some of those other items. There are some stump removal that may not qualify, tree pruning kind of stuff. So there are going to be some expenses related to the storm that are captured on the expense side that you're not going to see the reimbursement for. This is still a number, and I'll say this too, we really need to dial in. So we're in that 60-day window where we've got to build our projects for FEMA. This number is going to fluctuate quite a bit, especially once we go out to bid for these types of things. So what you're seeing is really a placeholder at this point, kind of an early estimate The street lighting system in particular is going to be very, very expensive to repair. But until we have an electrical engineer design a lot of this stuff for us with good cost estimates, it's going to be kind of hard to put a good number to it. We can try to figure out, we have X number of poles that have to be replaced and a pole costs this much. We've got this many linear feet of cable that needs to be redone and that typically costs this much. And we can come up with an estimate. But until we really get into the guts of that work, because the streetlight system is in really bad shape, like in the north side of the 7500 block in the Moorlands. Sections along Wydown are in really bad shape. Sections in Hillcrest are in bad shape. Until we have a more in-depth study on those, that number is going to fluctuate a lot. And overall, the tornado number is going to jump around with that.

This may be a question for Karen, but do we have a sense of what – can we do a rough calculation of what that 16% actually would be if you backed the tornado expenses out? Because right now, it looks like we've got, compared to the 26th, compared to 2025 budget, we've got a 6% increase in revenue and a 21% increase in expenses, which clearly that's not right because of the tornado. We

had charges. So your jump that you're seeing there in 2025, which was significant up to that $7 million number, are going to be tornado-related expenses that get booked in 2025.

I get that. What I'm trying to get a sense of is... what is the percentage increase we're looking at expenses for this year? Not counting the tornado ones. And I figured the 16 and 21, including the- I got you down to the bottom line. Yeah, we can back that up for you. I just want to have a sense of like, are we talking- 6% increase in revenue and 15% increase in expenses or 7%, like whatever that is. We'll back that up. For the similar conversation we had last Tuesday, like trying to get to tornado expenses on the side so that we can start to kind of see apples to apples on it. Great question. Thanks. So

David Moore, I mean, I feel like in the next like six months to a year, we're potentially just going to have a lot more budget. I mean, not more budget amendments, but just certainly a wider fluctuation than in years past.

Yes.

Because potentially... that deficit, hopefully as long as we get FEMA reimbursement will come down significantly. That's correct. As long as we get the 85%, but we don't want to, I mean, because we haven't gotten any of that and we're not assured of it, you know,

I mean, we're going to, we're going book the expenses as if we're paying for it. Um, but when you look at the fund balance and I'll go through that in a minute, uh, especially for 27, we do anticipate that money coming back in. Um, But, you know, we want to show the budget, especially for 26, as if we're not getting any kind of reimbursement. Where are we at at the end of the day? And but that number is just going to it's going to be a moving target. And we'll do budget amendments as we go, as we receive reimbursements and as we pay out those those costs.

And the tree planting, too. I mean, that'll be done over a number of years. I mean, we're not going to plant all the trees in the next year or

so. Get enough trees to plant to replace everything in a year. So that's administration, and that's why that number looks the way it does. Planning, you see a big increase there, which is 13% over the estimate. But if you look at the actual dollar amount, it's about $150,000. That's going to be the salary increases for those employees plus the new planning tax. So you're looking at a new position plus salary and benefits, and that's what's making that number bump up to 13%. Police is at 7%, so what you're looking at there is salary increases, but also a an increase to our dispatching fees. So all of our dispatching services are booked to police, and we saw a pretty big jump in our ECDC bill from fiscal year 25 to 26. And so that's what's driving that number up to 7%. That's salary increases plus dispatching costs. On the fire side, 5% increase there. That's going to be mainly the personnel increases. There are some specialized equipment things that we need to replace within the fire department, so we have a number of things that really have a lifespan to them that have to be repurchased, but that's all included in there as well. We're really at the point where, again, unless something absolutely has to be replaced, it's a safety type issue. We're not adding much to these budgets at this point. We did add cancer screening, which is something we didn't have in the past, so that's You know, something that I know our firefighters have certainly been looking for something other cities are providing at this point. And so there's been some big advancements on that front. So we definitely want to take advantage of that as well. So that's one of the few ads that we had within the fire department this year. Public works, 4%. Again, you look at salary increases, maybe a little bit increase in some of the contractual services. Fuel costs have gone up a little bit over what we budgeted for last year. So you'll see that in there. Then our salt dome, if you went on the tour there at the garage, isn't completely packed at this point in time. So we do need to fill that back up. So salt expenses are going to be a little bit higher than they were last year.

Would we expect when the fire trucks actually show up, will we need to take on a lot of additional costs to prep and train for that? Or is that we should be pretty good with that? No, we should be good with that.

What we're going to see is a decrease in expenditures for our maintenance, and that's included in here. So we do know that that's going to be rolled back, but not completely. Because if you remember the talk we had at the retreat about a reserve apparatus, we're going to have to keep a truck in service for our reserve vehicle. And our reserves are just awful. So we know we're not going to zero on the maintenance costs with the new stuff. We're still going to have to some money in there just to keep the backup truck up and running.

But there's no big expenses we should expect to

see once- Not on the training type, no. Okay. So public works relatively flat. Parks, you're seeing that new position being added here. The other thing you're seeing is the Shaw Park design, so the livable community design. That's what's bumping that number up. So we're happy to get that underway. And as you know, that's coming from the general fund reserve, but that's where that number is bumping up. So again, when we net that number out for you, Alderman Yorg, we'll net it without that expense in there as well. We'll back that and the tornado back both out. And then insurance relatively flat on that side, which is good because insurance is usually a big jump for us. Any questions about revenues and expenditures other than the what's the net number? And we'll send that out. All right, not hearing any. Fund balance? Always like to talk about this. Our goal, of course, is 50% of our projected operating expenditures. We have a, and then we have a, or I'm sorry, the minimum is 25. I should always point that out. 50% is our goal, but at 40%, that's when we take action to make sure that we don't get down to that 25% number. So when we look at our fund balance going forward here, I've got it really drawn a couple of different ways. So including the storm and the one-time draw in 26, and this is without that reimbursement coming in because we don't know if that's going to happen or not, you're at a 58% fund balance at the end of fiscal year 26. And I'll show you the numbers here in a second, but this is your fund balance on a line graph. You are seeing that first hit here for the tornado money. So we had about $1.5 million in expenses for tornado response in fiscal year 25. That came out of the reserves, and that's why you see the initial dip. And then the big dip is coming with all the contractual services that we expect to incur in fiscal 26. This graph over here just shows that same blue line, which is your reserve level. This orange line is going to be your expenses. So you can see those two running away from each other, which is what you would expect them to do when you're in a deficit spend situation for something like the tornado expenses. So that's the overall graph and kind of where things are headed, the trajectory here. When we look at it, though, and we put an extra year on there, assuming that reimbursement coming in, you can see that number jump back up. So Here again is that initial drop that we're seeing from fiscal year 24 to 25. Here's the big drop going into 26 and then jumping back up to around 74% in fiscal year 27. And you can see those lines start to close in again on each other. So we are trying to look at, where are we gonna be at fund balance wise if we get the FEMA reimbursement? And you can see we'll be right back to a really healthy level there over 70%. When you look at the raw numbers themselves, here's 24, 25 and 26. Again, we don't show 27 there, but this is with the tornado expenses and the Shell Park project. So you can see it drop into 64% at the end of fiscal year 26. If we didn't have this going on, you would see us drop 1% from 83 down to 82% on the fund balance. Any questions about that?

So, David, we would have a surplus then for 2025 estimate if we wouldn't have had a tornado. Is that the way I'm reading that?

Okay. We would have been about $400,000 surplus if there was no tornado. Okay. This year, you can see when I said those lines are pretty much touching, 54,000 is not much cushion. Oh, great. Thank you.

Okay, so I've subtracted out the tornado-related expenditures and the Livable Communities Master Plan one-time expenditure. And I have a revenue year-over-year change of 5.02%. And I have an expenditure year-over- year change of 6.19%, which is in line with what we usually do.

And again, with that 5%, you know, the other thing we didn't met is these, these numbers are not going to have that same kind of jump next year. So that nine and 16, you see those are going to fall to like two and two. So you netted all that, then you're probably at like three and six, two and a half and six, something like

that. It's all the same. It's just another way of showing the same story. Like expenses are going up percent. Direction. Yeah. Yeah.

All right, so moving on from the general fund if there aren't any other questions about the general fund we got a few more of these to go through here. I'll go a little bit quicker with these certainly sewer lateral fund, just to give you an idea that overall health, we're doing much much better with the sewer lateral fund, we're actually to the point where the amount of money we have. A bank can probably allow us to increase the amount that we put towards those improvements. So years ago, we dialed this back because we got to a point where we didn't really have much money in reserve and we were spending more than we were taking in. So when we reduced the max reimbursement, we were able to build that bank back up. So we're getting to the point now where we can maybe look at increasing that reimbursement amount to like twenty five hundred dollars or maybe three thousand dollars. Because we've got that cushion there, and this is typical with sewer lateral funds to have these ebbs and flows over time so. sewer lateral fund doing doing great special business district fun we've talked about this already this year. That's the additional tax levy within the downtown overlay area. We use that for events and marketing and different things, um, that revenues then it's collected and then it's transferred over to the general fund. And some, in some cases, the capital fund to support those expenses, um, This number is usually always going to be really flat as far as your revenue and expenditures adding up. Revenue is going to fluctuate a little bit with the taxes that come in, but the expenditures are basically fixed. So you can see 26 is really in line with your revenues and expenditures evening out.

David, can you move the screen share thing back up? I just couldn't see the bottom of that. No problem. Thank you. There's just no good place to

put it here. Yeah.

That's what I thought it said. I just was seeing the

equipment replacement funds. So this is our revolving fund or sinking fund that we use to replace vehicles, equipment and facility components. We do have some criteria to put something in the equipment replacement fund. It has to be more than $20,000 in expenditures and costs and it has to have a life expectancy greater than two years. And then if it's over 20,000 but doesn't meet this criteria here, then we pay for it out of the general fund. If it's $25,000 and has five-year benefit, then that's a capital purchase. And the capital fund actually funds that portion of the IRF, we call it. This, you're always going to see fluctuate the number of vehicles that we purchase year over year. There's a set schedule for that, what we're replacing any given year. We save up for a number of years and then when the purchase year comes, we make the purchase and then we start saving for its replacement on a set schedule. So maybe five years out, maybe 10 years out from that point. fiscal year 26 we're buying 10 vehicles we've got seven software components so we're having to upgrade and then one facility component so 18 total purchases out of here it's a massive number because two of those vehicles are the fire apparatus that um we locked in our price three years ago uh i don't think they've even started our build yet on this equipment um so yeah so we're still waiting them for them to even start work on them hopefully we can get Our fire trucks may be in the spring or so, but this is not unusual. We're seeing 36 to 48 months just about anywhere anybody's ordering a fire truck. So we'll let you know as that progresses, but that will hit in fiscal year 26, and that's why that number is so large. equipment replacement fund, just in more detail here. Again, this is all kind of right size to the items that are coming up for repurchase. The reason we're showing that deficit again is the fire trucks are much greater than the revenue coming in for that particular year. We do carry a significant fund balance within the equipment replacement fund. It generates its own interest income that helps us fund out even more. But we carry that balance because that's the savings that's there for those items as they come up for replacement. The five-year CIP, this was approved by resolution by the board a few months back there, and you can just see the different funding sources that go into the Capital Improvement Fund. The total expenditure is down here at the bottom. So you can kind of get a picture here of where we're going over the next five years with the CIP, a really, really heavy year in fiscal year 26. So that's the municipal garage that's going to be driving a lot of that. Okay. funded projects coming up within the capital improvement fund. So this is over the next five years where that money's being spent. Microsurfacing is a big part of it, just street maintenance generally. So we're back to that cycle. Every seven years, we do our microsurfacing, maybe stretch it a little bit. We do use some other treatments, but that's going to be a big piece of it. Parks and Rec is going to be a But the big thing I want to point out with the capital improvement fund is the vast majority of this is us just maintaining what we have here already. We really don't build new things. We don't develop new parks on a regular basis. Remembrance Park's now done. We don't have another one coming online for some time. So the capital improvement fund you're looking at is really us just keeping things going. On

that previous page, what's the difference between street resurfacing and microsurfacing?

So micro surfacing is when we go in and we put that really thin layer down on top of the asphalt that keeps it in good shape. The street resurfacing is when we actually do a full mill and overlay. So you take the asphalt up and then you put down a brand new surface. And that's what we'll be doing. That's what you'll see here in the CBD here shortly is we'll take the asphalt down to the base and then we'll put down a new layer of asphalt.

Not that it matters one way or the other, but why do we choose to distinguish them differently? Yeah, so no, that's a great

question. So we have a pavement management program here that we use. So when we resurface a street, so we take off that top layer down to its base and we put down a new layer of asphalt, you get your brand new nice asphalt street. What we do is we want to prolong the life of that asphalt as long as possible because mill and overlay is very expensive. What we do at seven-year intervals, because it's cost effective, is we go in and we do what's called a microsurfacing. So we're putting a thin layer on top of that thicker layer of asphalt that then wears down. And then seven years later, we thicken it up again. And you can do that three times. So our streets have a life cycle of 21 years. And at seven-year interval, we do the microsurfacing so that we don't have to do the mill and overlay as soon. So it's really, really cost-effective. We've been using some other treatments, some fibers that we use within the microsurface to see if that'll extend the life a little bit further and maybe get to where we do 24 years or more on the streets with micros spread out eight or nine years.

So I get why it's a good strategy. I'm just wondering in the presentation of this wheel, is it helpful to you to break out the two as two different categories rather than making them one?

The reason we do it is this is your CBD improvements that are going to hit in 26. So we don't have a lot of street resurfacing going on. Microsurfacing is what we're doing on a regular basis. And that's why we break it out like

that. So the road bond issue we keep talking about that took place a while ago that may be coming Is that resurfacing or is that even more than that? That's like – or is that going all the way down and digging the whole roadbed out and starting from

scratch? It'll be resurfaced again. It'll be a mill and overlay. The base should be in good shape. Gotcha. Okay. It's so compacted after – being a street for, for that long.

So then, so then how are these street resurfacing is being paid for? Is it paying through the special district

tax or micro surfacing we pay with our capital improvement fund? The street resurfacing is the central business district project, which hits in 26. That's the only street resurfacing that's scheduled in the next five years. Gotcha. So the contract you just approved at the last meeting, that's what you're seeing in the Brown. But that's not being paid from bond issue premiums, uh, No, that's going to be paid capital fund and then reimbursed with that federal grant. Okay. Yeah. The street bond money to close that out. That's going to be the street lighting projects that we have. And then maybe a few monument improvements. And then we should be able to close

the 2014 bond completely. Gotcha. So when we're talking about another bond issue coming down the line, that would be street resurfacing for the whole city?

Yes.

I know it's a long conversation. Half the city at that point,

correct?

About

the city starting again.

Okay, cool. And so when we get to that five-year CIP, most of this thing will be brown. It's going to be a huge number. Street lighting, if we lump that in with the geo bond, will be another big piece of that. Okay, thanks. Any questions about the capital improvement fund? Great question on the pavement management. proposed capital fund projects, so this is what we have funded coming up again that that big chunk is that resurfacing that you see here $1.1 million in the central business district, we do have a municipal park grants for a lot of these these parks projects that you see so that's really good. And I don't. Unless there are questions, I'm not going to go over the projects again. We've been through those. But I do want to show you on the Geobond, you just asked about that. We are closing out the Geobond by doing the streetlight extension on Linden, which is Pershing to Kingsbury. That's 60,000. And then we have streetlight replacements in Wydown Forest and then High Point Daman. There could be some streetlights that were impacted by the tornado in High Point Daman, and we'll figure out how to work those into the larger project. But We need to get at least the design done on those and hopefully get some of the installation underway. And then the special obligation bond projects. This is the most recent issue that we had for the municipal garage project. You can see the bigger expenses there. We opened bids this week. And so those numbers came in line with what we expected with our cost estimates. So that was good. And then we're working through which contractor we're going to go with. So look for something on the next board agenda to actually get construction up and going. So we're really excited to be at that point any questions about capital projects

david can i just ask so on the geo bonds like matt was just saying that in 2034 we'll have to go out potentially for another one yes so we've used the 2014 geo bombs to i don't know if matt was saying basically resurface or reduce 70 of the streets in the city so the other 30 were able to just use capital improvement Proceeds? I mean, generally.

Because you'll have streets like the CBD streets that have fallen under other projects. Like

federal funds.

We did under federal funds. Maryland was done under federal funds.

So we've determined that it will be about 2034 before we have to go back out so that we can get proceeds to actually begin resurfacing.

That's for your 21-year proceeds. pavement cycle is going to hit okay that's the last time they were done so it will go but like

for the next nine years like where will the funding come i mean presumably there's going to be streets that we have to microsurface or potentially totally resurface

yeah we're in we're in a cycle of more microsurfacings right now right now we're still pursuing um grants when they're eligible streets for those but most of them won't be a lot of residential areas 2015 is when we began utilizing the last bond funds. So 2034 to 36 is when that section fires back up. In 2014 and before, we paved a few residential streets that weren't part of the bond funds at that time. And that's why I said 70%. When you take out federally-funded streets, CBD, a few of those residential areas, Clavarac and... I think it was Y down at the time. So it ended up being about 70% we paid with that bond fund. Because

we kind of get to a point, I guess, where it becomes because it's obviously a lot more expensive to redo or totally resurface a street rather than microsurface.

Yeah,

that's where we need to seek out additional funding to be able to do that.

Yeah, the way you think about it is a mill and overlay is a more expensive cost. A microsurface is about a fifth of that cost. And the crack ceiling we do, which is a lower-level treatment, it's even like a fifth or even less of that cost. So it's trying to do those little bitty steps to keep the pavement at a high level because once it falls off the degradation cliff, then it's harder and more expensive to get it back.

And then I know we talked about, you know, we redid – or we resurfaced Maryland in about approximately 2020, 2021. And then hopefully I guess in the next four or five years, we'll see if that pavement rejuvenator, I think that we put on, was actually successful, I guess, to see if we can cut out more years.

We started using that, not to go too deep. We did start using that in 2017 in residential areas with some tests, and we did push that first microsurfacing of the Morelands, for instance, to 27 because of the results we're seeing. So we're hopeful that translates to our arterials as well to begin to stretch out those times between treatments, as David mentioned, to 24 years or beyond. We've not applied that across the city just yet. So before we revamp our program, we still want to evaluate it, but it's looking good.

Okay. Thank you.

Just a reminder that the debt service that we have out there, so we have the 2019 refunding. These years are going to be, you know, they're going to throw you off a little bit. For instance, we were just talking about the 2014 bonds. It actually says 2022 bonds. That's because we went out and refunded these and essentially refinanced. And we did this at the perfect time. So when we did this stuff in 2019 to 2022, the rates were just incredibly low. So we've saved millions of dollars along the way in debt service payments by doing that at that point in time. But The 2019 refunding and improvement bond issue, that's some of the Senator Clayton renovations. And then we refinanced some 2009 outstanding bonds. That's from when we purchased the police building. So we've got that service that's still out there for those projects. The 2021 special obligation bonds, that's to actually renovate. So we had one issue to buy the building. We had another one that went to renovate the police building. We had some other parks and street improvements that was in That was refunded in 2021. We had, like I said, the 2022 general obligation bond. This was really in 2014. That was street and alley resurfacing and also some street lighting. We're still using it for street lighting today. And then finally, the most recent issue, which was the special obligation bond for the municipal garage. your net service funds kind of laid out, uh, the total outstanding amount on each one of those with the maturity date. So the 2019, uh, special obligation, you can see that's, that's 2032, 2032 for, uh, the other special obligations. So this is buying the police building, uh, in center of Clayton. This is the improvements to the police building here. Both of those are going to mature in 2032, 2034 is when the 2014 street bonds go off. Um, And so at that point in time, we're gonna have to go back out for another general obligation bond. As soon as you borrow that first time to redo all of your streets, and you don't save money in between to make that next purchase of it, you've locked yourself into a cycle where you're going to go out for a general obligation bond every time those streets need to be redone because they are on a cycle. So that's exactly where we're at. In 2034, which is 20 years after the first bond was issued, And we're talking about a 21-year life cycle on your streets. You're going to have to go back out for a general obligation bond to resurface the streets that you did last time. So we're going to be borrowing money to do that forever, unless we're able to find some way in the future after 2034 to save up, not only make the debt service payment, but save up for that next purchase. We're really locked into that cycle now. But anyhow, it goes off in 2034. $8.2 million left on those bonds. And then finally, you know, this is a fresh one for us. We were just issued this debt this year for the public works building and that goes off in 2044. So your total outstanding bonds at this point is just over $33 million. And when I say public works, I meant municipal garage, which includes parks and recreation as well. Sorry, Tony. $33 million outstanding in bonds there. So debt service funds, this is your debt repayment by the funding source. So how these are paid for. Property tax, the only one with that is the general obligation bond. So those street resurfacings, you can see it goes off in 2034. There's a dedicated property tax that goes to just paying off that general obligation bonds. It was voter approved and it turns off there. But again, you're probably gonna see this populated here with numbers going forward because we're gonna have to issue new debt. Sales tax. And capital improvement is they're funding the rest of this. So 590,000 through 2032, this is going through one of the special obligation bonds and then sales tax revenue, a mix of those going to pay off things like the municipal garage and the other special obligation debt that's out there. But this way you can see the annual expenditures. We spent about $4 million a year, or we will at least in 26 on debt service. That's going to taper over time as these things are paid off. But again, All of this stuff was to renovate the center. And we know there's a life cycle to all the things that we just put in when we renovated the center. So that's going to come back around on us. The police building, the major components there that we bought using debt, those are going to have to be redone. We're going to be borrowing again. So when you see these numbers fall off, it feels really good. But we're in a cycle where we're going to have to do it again. It's just like somebody buying a car and they pay it off. but they don't save up for the next car and they're just going to have to borrow again when they've got to go and replace it. And that's really where we're locked in with a lot of our major, major capital items, which are buildings and roads. Any questions about that service? All right. And again, here's the annual payments that go out to the various issues that we have. So 933 going to that special obligation refunding. We've got $490,000 going to the special obligation improvement, which was upgrading the police building. Pay $590,000 a year for the other one. And then we've got $963,000 going to those streets. And then we pay $1 million a year for the municipal garage project. All right, so that's debt service, which is the last fund we cover. And then finally, I'll go over the approval schedule. September 9th, you're gonna have the first reading for both the annual budget and the annual property tax levy. We always do those together. So public hearing, first reading, that'll be ready to go. We'll advertise all of that. We'll have approval of the CRSWC budget for the Senator Clayton. They had a meeting this morning. You've got the meeting on September 3rd with the school district. Our approval will come on September 9th. And then September 23rd, we've got the second reading and final approval of both the tax levy and the budget and of course october 1 is our go live date so that's first day of the new fiscal year any questions about any of this

yes please

In addition to the debt schedules that were presented here on page 103, as we previously discussed, there's a note at the bottom that points out that the capital improvement sales tax, a portion of it is being shifted to the debt service fund so that we're being very, very transparent. I just wanted to make sure that you all know that that was included.

Karen, do you know what the property tax levies are looking like yet or not? Yeah, thanks.

We get to hear from Kayla too, so that's exciting. I don't remember these numbers off the top of my head. I've calculated the preliminary, the public hearing notice, which is going to be posted later this month.

Curious if they went down again or, I guess they kind of, some go up, some go down.

Great,

it'll go down.

Yeah.

Can I ask a question while she's looking up so we're not all staring at her? Because we had this CRSWC meeting this morning, I know we've got the standard transfer in, but what did we budget for the extra money we're going to have to give them this year? Is that in the budget? It's the capital improvement fund. Okay. So it's in that one. I can look that up while she looks that up.

If we already

talked about it last meeting when we dealt with capital projects, that's fine. Unless Tony knows it and just yell it out from the back. I just know we're going to be paying more than what we originally budgeted because of the deficit, and I just didn't know where we took

that. But this year's budget looks better at the center than expected. $25,000, yes. It'll be up $100,000 better than

that.

Yes. And for 26, we had budgeted 645, 645,000. So that's our regular contribution plus the additional amount. Got it. Okay. Thank you. The split amount.

i haven't finished whether or not we'll have any recoupment calculations that has to go to the state auditor's office for review so i don't have that piece included that may affect it as well as these are based on the preliminary assessed values of new construction which could be adjusted by the board of equalization so not final numbers but are you interested mostly in the city general rates okay so for residential i'm looking at 0.454 And last year, residential city general was 0.493. So it's gone down. Commercial this year would be 0.552 compared to last year's final rate was 0.666. And personal property staying the same at 0.707. Thank you.

And if I'm not mistaken, the original voter approval back in 1995 was like 90 cents or more. So it's been cut in half in the last 30 years since the last time we did a property tax increase.

It continues to be difficult to explain to residents why, you know, they're paying so much more in property taxes. But, you know, our rate continues to go down. So it's just a difficult thing to explain to people. That's

what I was just saying. It's like they approved one level and we don't actually collect that anymore.

Right.

And it's hard to explain to them how their bills are higher, but it's not really going to us. Right. Yeah. All right. Any other

questions for us? As I said, we are going to amend the proposed budget that you have in front of you and make those adjustments for the tornado. It might change a little bit from what you saw this afternoon too. I want to make sure that those numbers are really dialed in. So we'll get that to you. And that's going to be our best initial guess as to what we're going to spend on storm related expenses. Is there any other information you'd like for us to provide?

I don't have more information, but I just want to confirm the conclusion I think I saw. It seemed it was pretty clear, and that is our fund balance, even in a worst-case scenario regarding tornado expenses, looks like we're not going to be in a cash flow timing issue. We've got plenty of cash to get us through all that. Obviously, where we are a year or two from now is highly dependent on the FEMA reimbursement. But okay, I just wanted to make sure we don't have to worry about that's

correct. We don't have any issue from a cash flow standpoint.

Great. Anybody else? Well, David, thanks for the presentation as always. And Kayla and Karen, and I know there's other people in your staff. I know it was a lot harder this year given everything that happened with the tornado. So I appreciate that I know it was more of a crunch in the last few weeks. So thank you for all the hard work. All right. Motion to adjourn.

Thanks to all the staff.

So moved.

Second.

All in favor? Aye. Have a good weekend, everybody.

I got the second.