2026-09-10 - Town Council Work Session

03:53Welcome. We're going to convene our

03:56September 10th work session. At this

03:58time, I'll turn it over to interim

03:59manager Russ over.

04:01>> Thank you, Mayor. And I'll point to

04:02Jenny to click. [snorts]

04:04>> Um

04:06uh well, here's the agenda for tonight.

04:07We're going to um review the upcoming

04:09meeting schedule and then [snorts] um

04:11finance director Kim Branch will come up

04:13and do some fund balance training with

04:15us which is part of the OSA

04:17recommendation 13. So, it'll be good to

04:18start that and then obviously and and

04:20part of that then get some training on

04:22the way it is now, but also have a uh

04:25initial discussion I'd frame it um to

04:28start the discussion about what you may

04:30want changes to be in the future. And

04:32that will continue to come back and

04:34we'll have discussions on what changes

04:36uh may take place uh later in the year.

04:39I'll give some updates and then we'll

04:41adjourn. And that's it. I'll throw it to

04:43Jenny to do the uh meeting schedule.

04:46>> Okay. Well, I'm just looking at the

04:47upcoming meeting. We originally had held

04:49September the 16th as a joint meeting.

04:52Um, but then there was talk about having

04:54the a special called meeting at that

04:55time. Also, um, Tuesday 22nd is the work

04:59session, September 24th, regular

05:01meeting. And then October, we're back to

05:03our work session, regular meeting. Just

05:05a reminder, the quarterly is September

05:07the 15th, followed by the other one in

05:09November on the 5th.

05:12As you're um thinking about dates,

05:15wanted to we've kind of heard some

05:17feedback about joint meeting holds and

05:19need direction on whether we're

05:21continuing with scheduling joint

05:23meetings are using these times as work

05:26sessions

05:27and just wanted to get the council's

05:29opinion about that.

05:31>> I think our work s my opinion I think

05:34our work sessions are more time critical

05:37and I would use those times for that.

05:39I'm open to what my colleagues have to

05:41say. Agree.

05:43>> Agree.

05:43>> Yep.

05:44>> Okay.

05:45>> Okay. And I believe September the 29th,

05:47we wouldn't have one then because of

05:49there's some key staff members that are

05:50out of town, but we would start with

05:52that on October the 12th.

05:55>> Okay.

05:58>> Okay. Bring Kim up.

06:01>> They told me my mic wouldn't start until

06:02I cross this line.

06:05>> Hello. Hello. Can you Am I on? Yep. We

06:07>> All right.

06:09>> Good evening, Mayor and Council. Y'all

06:11know I always get super excited when I

06:13have the opportunity to come before you

06:14and talk about some of our most

06:16significant financial topics. Tonight,

06:19um, as Russ mentioned, we are going to

06:21go through some finan balance training.

06:24I have to say, as I've pulled this

06:26information together, it's become fun

06:29balance um, for me. So hopefully um,

06:32throughout the night as we get this

06:34training or continue this training, you

06:36all will see, you know, find the fun in

06:38it as well. We are going to pick up from

06:40where we left off during your annual

06:42meeting in February. If you remember, we

06:44started a fun what we called fund

06:46balance 101. So, this is a part two of

06:49that session. So, some of tonight will

06:51serve as a refresher um for you, but

06:53there will also be some new concepts

06:56that we use so that you all can continue

06:58to to build your toolkit as we

07:00transition as Russ mentioned into

07:02thinking about ways we need to adjust

07:05our fund existing fund balance policy um

07:08for who to reflect who Carrie is today.

07:11Okay. Um, additionally, tonight this

07:14training is serving its purpose as

07:17responding to a recommendation that the

07:18office of state auditor um provided for

07:20us. So, we want to always make sure you

07:22all are equipped with the information

07:24you need as often as you need so that

07:27you can better make decisions. Okay. So,

07:30with that tonight, we are going to

07:32continue to train and build our

07:34understanding on terminology and

07:36components and how fund balance fits

07:39into our overall financial position.

07:41Financial position is a big big concept.

07:44We'll use it several times throughout um

07:46this presentation. What does this mean?

07:49Finan um financial position also people

07:52look at as financial health. What that

07:55means is our ability for the most part

07:58to be able to respond to pay our

08:00short-term long-term obligations. Our

08:03ability ability to be able to respond to

08:06emergencies. Um just that overall make

08:09makeup. and third parties look at our

08:11fund balance number to be able to assess

08:13that. Okay. Secondly, we are hoping to

08:17explain the per we're not hoping to, we

08:18will continue to explain the purpose um

08:22and um why fund balance pretty much is

08:25important because it will support our

08:28financial stability and resilience and

08:31um the role of the policy as it plays

08:33into guiding again those financial

08:34decisions. and we will connect the

08:36policy with financial stewardship

08:38because we will talk a little bit about

08:40how we manage, how we evaluate and use

08:42it to support our long-term financial

08:45sustainability.

08:46So, with that, I'm hoping that you take

08:48away three things tonight. You will take

08:51away that fund balance helps us build

08:53our resilience. Um, when we have

08:55policies that gives us capacity, it

08:58gives us a safety net to respond to

09:00things like emergencies, to respond to

09:03things when our revenues are not coming

09:04in at the same time that we're having to

09:06pay things out. That's the resilience

09:08that fund balance allows us.

09:10[clears throat]

09:11Tonight, as we talk about policy, we're

09:13going to talk about what the right

09:15target could be because a right target

09:17is based on risk. And when I say right

09:20target, it's the right target for

09:21Carrie. So I am going to talk a little

09:24bit about some other jurisdictions and

09:26where their levels are um from a

09:28percentage standpoint. However, as you

09:30all have conversations, we are going to

09:33just have to talk about what those sign

09:34those risks are for carry that makes us

09:37um specific to that target that we will

09:39establish. Lastly, the policy

09:43um allows us to have you all to have

09:47financial safeguards because as you

09:49select um as you settle in on a policy,

09:52you'll know what your minimums are.

09:54You'll know what we're saying fund

09:56balance can be used for. So those

09:58guardrails will be there for you. Okay.

10:01So with that, you all may remember this

10:04from February. Let's just talk about

10:05fund balance definition baseline. All of

10:08you should have

10:11My voice is shaking. I know y'all. I

10:13don't know why it's shaking. [laughter]

10:15You all should have in front of you

10:18schedule C that I have printed out for

10:20you. This is just an excerpt from our

10:23annual comprehensive financial report.

10:26If you remember when we had our

10:27education on how to read the the um

10:30ACTER for short, um we talked about that

10:33this schedule C was a very important

10:35schedule. This is the one that you will

10:38always see at the end of the audit in

10:40your aer. Um this is the balance sheet

10:44for governmental funds. The fund that we

10:46are most interested in from an

10:48operational standpoint is general fund.

10:50So definition the definition of fund

10:54balance the net worth of a fund which is

10:56the same as financial position is

10:58calculated assets minus your

11:00liabilities. And you can see from your

11:02schedule. I just want you to

11:05see here this is the balance. You see

11:07the assets there, liabilities there, and

11:10you see the fund balance starting at the

11:11bottom. We will do a deeper dives if you

11:15turn to the um bottom of the front the

11:19second page. We'll do a deeper dive

11:21tonight of the categories that are very

11:24important where we're going into um

11:27continuing to understand

11:30um those um what makes up like a policy.

11:34Um what I will say that's not on this

11:37slide is fund balance is not simply

11:39cash. Cash measures like liquidity. Fund

11:42balance is more about our overall

11:44resources that we have after we've paid

11:47long-term short-term liability after we

11:50consider short-term long-term

11:51liabilities and after any g given year

11:54after what we've paid out. Okay. So that

11:56will give us our fund balance level.

11:59>> Real quick question. So when you say

12:01balance, you're not necessarily talking

12:03about unrestricted funds, just total

12:06balance.

12:07>> Right now we're just talking to um fund

12:08balance in general. Total fund balance.

12:10>> Thank you. Okay, so the next two slides

12:13that we have here, they kind of go hand

12:15in hand talking about why fund balance

12:17matters and the purposes of fund

12:19balance. Why does it matter? It provides

12:21us continuity.

12:23Again, it gives us a safety net to where

12:26when our revenues are not coming in at

12:28the same pace, as I mentioned before, as

12:30expenditures, it allows us to to

12:32continue to pay those obligations,

12:34right? It's a t it's a timing. We do

12:36public safety, police, fire, streets,

12:40all of those things. things we have to

12:41continue to do, you know, on a

12:42day-to-day regardless of the timing to

12:44how things are going um are coming in.

12:47So, fund balance allows us the ability

12:50to be able to continue services without

12:52having to shut things down, right? And

12:54that's what we want to do. It allows us

12:56to be resilient.

12:58It's giving us that it a good fund

13:01balance will give us the capacity we

13:04need to be able to respond in times of

13:06emergencies. There are so many things

13:08that could come up that's unknown. We

13:10know we have storms. We had COVID. There

13:13are various different things that can

13:15drive or determine how our revenues and

13:18expenditures will flow. With a proper

13:20fund balance, it will allow us the

13:22resilience to keep up with that

13:24flexibility. Fund balance gives us

13:26options. If there is a project, a

13:29capital project that maybe pops up we

13:31didn't know about. It's another

13:32uncertainty during the year. onetime

13:35expenditure fund balance allows us the

13:38opportunity flexibility to be able to

13:40make that decision if we want to dip

13:41into fund balance or not. Uh

13:44[clears throat]

13:45lastly I have here credit and cost. Um

13:49our fund balance level again the measure

13:52of our financial health is looked at

13:54among several several and third parties.

13:57We have our um rating agencies that you

13:59all are familiar with. We have investors

14:02who are wondering how they can um be a

14:05part of when we're borrowing money. Um

14:08local government commission, they look

14:10at levels. It's a different level, but

14:12they look at levels of fund balance. So

14:14there's several people who pay attention

14:16to our fund balance levels.

14:19[clears throat] Positive, good, healthy

14:21fund balance levels allow us to be AAA

14:24rated like we are. It allows us when we

14:26borrow money to be able to issue at

14:28lower rates. So there are benefits that

14:31we can get from strong fund balance

14:33levels.

14:35Fund balance purpose. Some of this I've

14:37mentioned before, but this is just to

14:38bring it into perspective very quickly.

14:41Cash flow. It covers short-term cash

14:43flow. That just talks about really the

14:46difference in how first three months of

14:48the year we don't get sales tax, right?

14:51So when we when we don't um get again

14:54the revenues at the same pace as we're

14:56getting our um expenses, it's a cash

14:59flow situation and fund balance allows

15:01that. Emergency and contingent and

15:03contingency reserves, fund balance

15:06again, safety net for unexpected events.

15:09Um plan capital and one-time

15:12expenditures. I mentioned that as well.

15:14just f I felt like these three pointed

15:16ones was worth repeating because this

15:18goes to some of the purpose to why we

15:20use fund balance. [snorts]

15:23Okay, let's talk about categories. This

15:26is another slide you may be familiar

15:28with from our fund balance 101 part one.

15:31Um but we want to go into this is a

15:34refresher for all of you I believe.

15:35Okay, categories. You will see these

15:38from that bottom of that exhibit C that

15:41you have at your table um on into the

15:43second page. Non-spendable fund balance

15:46cannot be spent. What usually goes in

15:49this category are items like inventory

15:51and prepaid expenses. Like if we pay for

15:54something early, but it doesn't really

15:56occur until the next year, those are

15:58restricted because we can't spend those

15:59funds. Restricted. This is a pretty big

16:03um category on our balance sheet. is one

16:06of the larger ones because there is an

16:08element in here that is restricted by

16:10state statute that is a very detailed

16:13calculation um that we have to run at

16:15the end of every fiscal year. It

16:18includes components like cash

16:20incumbrances which are commitments that

16:22we've made um all expenditures there's a

16:25whole bunch of components that go into

16:27that calculation. So that is where this

16:28sits and it is required by the state.

16:31Grants as you can imagine if we have

16:34money grants mostly all the time are

16:36restricted to a purpose right so that's

16:38where that sits committed the committed

16:41category is a category that at some

16:43point there was a formal action by

16:45council to say we want to make sure we

16:48have money on reserve for these items.

16:51and our committed item um items you

16:53should be able to see on your schedule

16:55is mostly the law enforcement separation

16:57allowance.

16:59Assigned assigned is intended for

17:01specific purposes as well, but these

17:04funds come from smaller funds that we

17:07I'm going to get a little technical that

17:08roll up um into the general fund, but

17:11they have their own respective fund

17:13balances. So that's like workers comp.

17:16We have workers comp reserves just in

17:18case anything happens. We have things on

17:20reserve. Small claims, we have

17:22accidents, whatever the case may be, we

17:24have funds on reserve for that purpose.

17:27The last category that should make

17:29everyone smile and um which is one

17:31[clears throat] I like is no restriction

17:34category. This is unassigned.

17:36Um, and I will give you a little preview

17:39of our thinking just as you all go into

17:41thinking about fund balance policy right

17:44now. And we'll talk about it, but I'm

17:45jumping ahead just because I see it on

17:47the screen. Our fund balance policy

17:49exists on total fund balance. Total is

17:53all five of these categories.

17:55>> We would love to shift to an area of the

18:00um more flexible. You see here I have

18:02less flexible to more flexible

18:05categories that are more flexible. So

18:07that can be total available which is

18:09assigned unassigned or unassigned.

18:11Right? So that's just something for

18:13thinking going forward.

18:15Here you also see unrestricted. There's

18:17a reason there's this is this the

18:19category of unrestricted is committed

18:21assigned and unassigned. You will see

18:23this reference later in the presentation

18:26because GFOA, our government finance

18:28officers association, they look at

18:30unrestricted as a recommendation.

18:34I'm going to stop because I said a lot

18:37um right there to see if there's any

18:38questions just on what fund balance is

18:41and things like that.

18:44>> Any questions?

18:44>> So, uh last page.

18:47>> You want me to go back?

18:48>> Yeah. Yeah. So all these categories are

18:51designed by law or we can change or like

18:55assigned restricted.

18:58So we are responsible, we are reliable

19:01for reporting certain things. It's just

19:04a requirement, right, with our um GFOA

19:06requirements. The categories of what's

19:08in them with the exception of

19:11restricted,

19:12well, with the I'll say with the

19:14exception of non-spendable, we really

19:15don't have any say on that because

19:17inventory is inventory. It's really

19:19whatever our balances are. Um restricted

19:22that calculation has to be done. We

19:24can't change it. We have to do it.

19:26That's state required. grants. If we

19:28have any grants, we have to report them.

19:30Um because there are laws that say they

19:32have to be separated. Um committed.

19:36Again, I I mentioned these were set

19:38aside at some formal action by council.

19:41You all can make that decision to if you

19:43want what you want in this category or

19:45if you want to shift from what's already

19:46in there, but it has to be formal

19:48action.

19:49Assigned. Um these are ones that we just

19:53assign because we know they they have

19:55their their separate funds of tracking

19:57but there again we can say how much we

19:58want to have like we can max out at a

20:01certain level right there and so I hope

20:04that explained

20:05>> yeah thank you

20:06>> kind of the covers

20:07>> okay any other questions

20:09>> can you help there's two places where

20:11I'm hoping for a little bit of clarity

20:13first understanding

20:15the practical difference between

20:17non-spendable and restricted in those

20:19top two category ories, but also

20:22secondarily, I want to make sure I

20:24understand the unrestricted bracket.

20:27These are monies that council makes

20:29decisions [snorts] about assigning the

20:32money to a project or a fund and that's

20:36why they're they're unrestricted because

20:39we can make decisions to move that

20:41money.

20:42>> They're unrestricted because you you all

20:44can make the decisions and what you want

20:45in those categories. We have no

20:48flexibility

20:50less flexible in those restricted

20:52categories. Right? Those numbers will

20:54change from year to year because we may

20:57have grants this year, we may not have

20:59grants next year depending on our cash

21:01may be lower one year or higher one

21:03year. So that restricted state statute

21:05calculation is going to flux every year

21:07as well.

21:08>> Can [snorts] you offer more clarity to

21:10the non-spendable bucket? So the

21:13non-spendable is really just reserving

21:15the stuff that we just it's it's not um

21:18there's no cash or anything related to

21:20it. Inventory that's inventory we may

21:23have like in the warehouse, you know,

21:25around town that we have that value of

21:27that. We can't it's a part of our

21:29assets. We can't we can't do anything

21:32with it. So it has to be restricted from

21:34the standpoint of you can't really

21:36appropriate that for a future capital

21:38project. Can I say that another way to

21:41make sure I understand that if we buy a

21:44significant number of of water meters

21:47and have those on a shelf, the value of

21:50those water meters would fall in this

21:52nonsp inventory? Yep.

21:54>> Okay. Thank you. That's where I just

21:55wasn't.

21:56>> Does this also apply to a property? Like

21:59we buy property

22:01>> and um we're not using that property

22:04today. Most of

22:06>> most of the property we have that's just

22:08a fixed asset.

22:10>> Okay. So that

22:10>> buildings that Yep. That's just an asset

22:13that we have that's a part of fund

22:14balance because it's assets minus

22:16liabilities but it's not included in

22:18here because it's not like we're not

22:19using it. It's not going off a shelf.

22:22So um if I were to rephrase uh my

22:27understanding of this conversation

22:29between the less flexible and more

22:31flexible in le less flexible categories

22:34you will need council's approval to move

22:37the money uh for various purposes but in

22:41less more flexible you will not need

22:44that approval. Is that correct?

22:46>> So I love the way you said that. Thank

22:47you for that. Um because my bracket may

22:49not be what I would do per se. Like for

22:52me non-spendable restrict restricted

22:56that's not flexible at all. Less

22:58flexible could be committed because that

23:02was set aside by formal action. You all

23:04can revisit at a at a meeting and say

23:08you know formally what you want that

23:09reservation to be. But the council

23:12approval is needed for both to move the

23:14money or council approval is needed only

23:16for one versus another.

23:18>> Council formal action is for committed

23:22restricted. We're restricted by the

23:24state. It is going to be what it's going

23:26to be.

23:27>> Okay. Yeah.

23:27>> And how about assigned and unassigned?

23:30>> Assigned

23:31and unassigned is C council. you all

23:34drive both of those really because like

23:36I said with the assigned it's more of

23:39those just reservations that if we're we

23:42you know we have activity on workers

23:43comp and so it's whatever is reserve

23:45whatever is left over in that fund we

23:47tend to put it in a sign because at some

23:50point we we said it's just been a

23:52practice not formally adopted by council

23:54but it's just been a practice that we're

23:56going to keep these reserves in the

23:57event something happens. So together um

24:00all of these categories together they

24:02they total to this.

24:05>> I love that you said that. We're going

24:06to get that 100. Is that 106.4?

24:08>> Yes. Yes. I didn't wanted to say it. I

24:10don't want to. My math is not math thing

24:12today.

24:12>> Well, your math was very good there.

24:14Yes. All of these together. And I will

24:16put in one of the slides. You have

24:18numbers to go with these categories from

24:20fiscal year 25.

24:21>> We're under audit now for 26. So we'll

24:24revisit 26 later. So it would be

24:26accurate to call the first two

24:27non-spendable and restricted inflexible.

24:31>> That's right.

24:31>> Committed as less flexible and then the

24:34bottom two is more flexible.

24:35>> That's right.

24:35>> Okay.

24:36>> Next time I come to y'all, I'm going to

24:37have that adjustment made for you.

24:38>> I I [laughter] get it. You explained it

24:40well.

24:40>> All right.

24:41>> Do do retirement benefits fit into the

24:44restricted

24:46>> the money set aside for pension or

24:48healthcare? Are those restricted?

24:50>> No. No.

24:52>> Okay.

24:53Now they're in our liabilities because

24:55you may remember a few years back we had

24:58to set up liability for OPED.

25:00>> Right. Right.

25:00>> Um but they are not um a restriction

25:03that we have on our general fund balance

25:04sheet. Those are long-term.

25:06So you will see those on go sorry

25:08technical another statement not general

25:11fund.

25:12>> Okay.

25:12>> Yeah.

25:13>> So so when you said that um it depends

25:17on the council on which side we want to

25:20shift. Sounds like the first two

25:23categories are like something we cannot

25:24touch but the last three is something

25:28where we can make a policy adjustment if

25:31needed or if we want to.

25:34>> That's correct.

25:36>> So are you going to talk about what is

25:39required by the state and what we are

25:42doing and the difference and all of that

25:45stuff? When are we going to talk about

25:47that? We will reference those topics

25:49throughout the presentation. I will tell

25:51you off the bat there's no requirement

25:54for a fund balance policy reserve level

25:58at all. Now there are recommendations

26:00and I will show you the government

26:02finance officers association

26:03recommendation. Um and [clears throat]

26:06we can talk in general about what the

26:07LGC says.

26:08>> Some of it's coming in the next section.

26:10>> Okay.

26:10>> Thank you. You looked ahead.

26:11>> That's what I was trying to get at.

26:13We're going to talk about that.

26:14>> All right. So, so in the in this page

26:17the restricted I see the police

26:20operations and activities

26:23850 and at the committed there's also

26:27police operations and activities. So

26:30it's 4 million. So what's the

26:32differences?

26:33>> I think the first restricted I couldn't

26:35go back and verify would be grants and

26:37that's it. But we do have funds that

26:40have police like capital funds in it and

26:42so those would be

26:44>> um and Yeah. Okay.

26:45>> Yeah. For that purpose.

26:47>> Yeah.

26:50Okay. Y'all good? All right. Let's go

26:53into our next fund section. Policy fund

26:56balance policy. All right. Here we go.

26:58We were talking about a benchmark. Let's

27:00talk about government finance officers

27:01association. This is our national um

27:05overseer of most of local not most local

27:08governments um in the nation. Um their

27:11recommendation is two months minimum of

27:15unrestricted budgetary fund balance

27:18which is what they have and they are

27:19comparing that to regular general fund

27:23operating revenues and expenditures.

27:25That means at the end of the year if you

27:28look at those categories and if you

27:30recall um unrestricted was committed

27:34assigned and unassigned if you look at

27:37those balances that's the numerator

27:39divided by the budget for um operations

27:44re they say revenues or expenditures

27:46um you should they want they would they

27:48recommend a minimum of two months that

27:50is about 16.7%.

27:54Um I think I want to I do not I think I

27:57want to call attention to they say

27:58revenues or expenditures if budgeted

28:01number y'all know we we um we balance

28:04our budget. What I will say is as you

28:06continue to to listen to this um

28:09education a lot of people are doing

28:11different things. So there's no you know

28:15rhyme or reason again it goes back to

28:16that what did I say the right target for

28:20carry. And so that's what we'll

28:21determine what our baseline is. But

28:2316.7%

28:25is what?

28:25>> Operating

28:27>> um operating. Yes.

28:29>> Okay.

28:29>> Yeah. Just cleared.

28:31>> Um so the question does come up, well

28:33when would we ever consider a higher

28:35target than that? As you can imagine,

28:38that goes back if you saw one of the

28:39takeaways, fund balance policy is risk

28:41based. So it depends on the risk that

28:44you all will talk through and figure out

28:46what level of capacity you want to have

28:47there. But we have here revenue and

28:49expenditure volatility. Um, we know a

28:54couple of years ago, I think it was 25,

28:56Stacy, you can keep me honest, we had

28:58sales tax, y'all remember that, um,

29:00plummeted. That's revenue volatility.

29:03I've been in local government for a

29:04number of years. And there were years

29:07back the state did not revert sales tax

29:11to the local jurisdictions because they

29:12had gaps on the state end that they had

29:14to fill. Now they made us whole

29:16eventually but in that me that interim

29:19we had to use fund balance to help mend

29:21the gap right um so revenue and

29:24expenditure volatility um if there's any

29:27disaster exposures those are the types

29:29of risk that you would consider if you

29:32want a higher than 16.7 [snorts]

29:34um percent. I do have here don't confuse

29:38the GFOA minimum with our policy target

29:41and I actually talked about that a

29:42little bit. So in risk, are we going to

29:45talk about bond rating agency risk or is

29:48that another day?

29:49>> So

29:50>> because that's a risk to me also.

29:52>> Yes. So the education of that is another

29:55day during your quarterly y'all are

29:57going to start hearing more about the

29:58importance of that. Um I will at the end

30:02of this presentation just give you some

30:04of those considerations so that as you

30:06all go back and have conversations um

30:09start you know you'll be you know you'll

30:11identify okay if we look at this AAA

30:13bomb rating what does that mean for us

30:19all right so let's just talk about our

30:20current policy our current policy I know

30:22y'all probably know this like the back

30:23of your hands now is 33.33%

30:26of budgeted general fund expenditures we

30:29use operating expenditures. Um for this

30:32baseline we say here oh well let me keep

30:35going fund expenditures include total

30:38expenditures and debt service. It

30:40include it excludes other financing

30:42sources. What that means is we have

30:45operational expense expenditures and

30:47then we have what I say is below the

30:49line like transfers the capital

30:52transfers out are what we are saying are

30:53other financing sources. We don't

30:55include that in our baseline.

30:58Um we also say here this approximate

31:00about four months 33 um 333%. That is

31:04one that you could question the

31:06flexibility of that because again what

31:09is our baseline is total fund balance

31:11and so that has restrictions in it right

31:16which is another reason we're trying to

31:18transition or get you all to transition

31:20away from that. All right

31:22[clears throat]

31:23please let me know if you have questions

31:24on this as we go through it. This is

31:26just our way of trying to show you that

31:28different people do different things.

31:30Fund balance methodology. There's two

31:32parts. One I wanted to show you on the

31:34left side is Carrie's policy. And again,

31:37this shows you the numbers. The numbers

31:39I'm pulling are from fiscal year 25. The

31:42total fund balance that we had, y'all

31:44have it on your sheet, 106.4 million.

31:48Our baseline is those budgeted

31:50expenditures that I just gave you in the

31:52definition. That was for fiscal year

31:542025 259 million. You don't see that on

31:58any of what I handed out. This is more

32:00of a talking point. But at the end of

32:02the year, the calculation showed that we

32:04were about 41%. So our policy 33.33%.

32:09We um calculated 41%. So that shows we

32:13were in excess of policy which is good.

32:14And Kim, a point there would be that's

32:17why it's hard to project what it is

32:19during the year because your cash flow

32:21versus revenues coming just to hit. It's

32:24easy to show at the end of the year.

32:26>> Very good. Yep.

32:27>> So the number that you said isn't

32:30anywhere as a talking point. The 259

32:34million,

32:34>> right? Where you will find this number

32:36is um what we use is budgeted um

32:39expenditures for a for a year that's

32:42adopted. So that for fiscal year 2025 in

32:45the general fund summary, that's where

32:47you would find it. So for 2026, if you

32:50want to know what our policy is, it's on

32:52the general fund summary that was

32:53adopted for the fiscal year 2026. What

32:56is your plan like I don't know how to

32:59ask this uh what is your plan for making

33:01let's let's say we don't make any

33:02changes to the budget policy like let's

33:05say today is like uh May 30th or June

33:101st and we're getting ready to to to um

33:14pass a budget. Can we make the balance

33:18sheet line up with what you're showing

33:21so that I can find the actual equation

33:25easier rather than asking? Can we make

33:27it easier for our residents to either do

33:30the math or do the math for them? So

33:32what we have decided and it's from you

33:34know you all's direction is that every

33:36time at the end of the year because

33:38that's where all these calculations take

33:39place in our annual comprehensive

33:41financial report there's going to be a

33:42fund balance calculation that will show

33:44you these

33:45>> good

33:45>> direct calculations

33:46>> and each of those numbers will be

33:48articulated so that if I I know the

33:51budgeted FY25 expenditure number I can

33:54see where it came from. We will make

33:56sure you can.

33:57>> Okay, that would be helpful [laughter]

33:58just because it it's helpful to have

34:00this and now I'm loving this and all I

34:03wish I had is

34:04>> Sorry, I should have did the general

34:05fund summary for you.

34:06>> That's okay.

34:07>> But I see now like I see the 106 and I

34:11can definitely see how you got to that

34:13number. That's really helpful.

34:14>> Y

34:16>> um so what you will see on this right

34:18side is that like I mentioned there are

34:21a lot of jurisdictions who do different

34:22things. So the numerator like you can

34:25see I illustrated our numerator was the

34:27106.4 that was our total fund balance.

34:29Some people use like GFOA that

34:31unrestricted number that's adding up the

34:33committed assign unassigned. Some people

34:36use what we call available that's

34:38assigned and unassigned. Some people use

34:41unassigned and then there is the total

34:44like um we calculate ours on. So as the

34:47numerator as the denominator there's so

34:50many different options for that as well.

34:52Some people use actual expenditures.

34:56>> Um so at the end of the year you look at

34:58the um I'm trying to stay away from some

35:01of the technical terms but profit and

35:02loss statement see your expenditures

35:04that's the number that they use. A lot

35:06of people are using budgeted numbers

35:09their budgeted expenditures like what

35:10was adopted in a given year but that

35:12even that's even different. Some people

35:14use budget expenditures on the current

35:16year which is what we do. That means

35:18budget fiscal year 2025. We're doing

35:21comparison of 2025 fund balance. Some

35:24people would have the fiscal year 2025

35:28fund balance but they the numerator

35:30could be the budgeted operating

35:32expenditures for the next year. Um so as

35:35you can imagine those numbers could be

35:37vastly different because most years our

35:39budget numbers are increasing.

35:42I am one of those believers who say

35:44that's the most conservative

35:46um to use [clears throat] the second

35:48year, but you all can decide what your

35:50preference is there.

35:51>> Which of those is the GFOA denominator?

35:54>> So GFOA they did they do revenues or

35:56expenditures. They would do the I'm

36:00assuming they would do the the I don't

36:03know. I mean you know you know so one

36:05thing that I will say when you said that

36:07the way it's written the way GFO you can

36:11do what you want as long as it's in that

36:14parameter just keep it consistent. So

36:16I'm saying that to say I'm hoping that

36:19we write our future policy to be very

36:21specific

36:22>> because our current policy says budgeted

36:25expenditures excluding um other

36:28financing sources. But which budgeted

36:30expenditures? We have elected to use the

36:34current year, but could we have used the

36:36subsequent year the way it's written?

36:38Yes. Um, but we're consistent that we're

36:41using the same baseline so we can

36:43compare. Um, so that's what you'll

36:46notice in some of the policies, too. And

36:47Kimberly, can any numerator be paired

36:50with any denominator

36:52>> or

36:53>> do does it make sense if you're using

36:56one of these numerators, does a that

36:59help determine which denominator might

37:01make most sense or does it just then

37:03adjust your percentage accordingly and

37:06then adjust your percentage accordingly

37:07>> and then your policy reflects that?

37:09>> That's right. That's right.

37:10>> And maybe maybe your point is to spell

37:12out exactly how you do it.

37:14>> That's right. That's my point. But also

37:16if you want to see options, what does it

37:18look like here? So yeah, we can we do

37:22>> I was going to say and that gets back to

37:23the risk of the bond rating agencies.

37:26What are they looking for?

37:29>> You want me to jump before Tai

37:30[laughter] is coming on the 15th. He's

37:32the expert next week.

37:33>> All right.

37:34>> I just don't want us to go too far down

37:36this and then have the bond rating

37:38agencies. Yeah, you can do that. But if

37:40you do, shame on you.

37:41>> Something you can think about is they

37:43use available. Well, they we have three

37:45bond ratings. They all have different

37:48methodology

37:48>> and Ty will explain it.

37:49>> And Ty will explain it.

37:51>> Yeah.

37:51>> Sorry. And you said which one was the

37:53GFOA? I'm sorry.

37:54>> Unrestricted, which is committed

37:57>> and the denominator

37:58>> the denominator I from how it's written,

38:01I can't tell you if they're between

38:03budgeted current year or budgeted

38:05subsequent year.

38:05>> Okay. So, one of the

38:06>> I think it's one of the budgeted. Yes.

38:08>> Okay. Okay. Sorry about that.

38:09>> That's okay.

38:10>> When was this policy in Kerry?

38:13um last reviewed or what like do we

38:18[clears throat] know

38:19>> we updated

38:20>> when when was the decision made on this

38:21policy just for some context here

38:24>> we update our last update was in 2020

38:27reflective in that 2021 year

38:29>> we did all the work 2020 we fiscal year

38:312021 was the first year

38:33>> so Kim last time we have um a slide of

38:36other municipalities comparisons so

38:39there are different numbers

38:40>> next one

38:42>> next how Y'all are very clairvoyant.

38:44>> Yeah, I looked [laughter] ahead.

38:46>> It's coming.

38:48>> Okay. Okay.

38:48>> All right. Y'all ready?

38:51>> All right. So, I do want to You've seen

38:52this. This is the five-year history of

38:55our actual fund balance at the end of

38:57the year. You can see 2025. These are

38:59our numbers um here. And the next slide

39:02will show you clear what our numbers

39:04were for 2025. But what I think is nice

39:07about this um history is that we see

39:10that our levels for 2025 are getting

39:12back to um 20 fiscal year 2021 in

39:15particular with that unassigned number

39:18which is the orange um bracket. We can

39:20also see the telling story that y'all

39:22talked about for months of using

39:25spending down fund balance um and how

39:27we've been um very mindful with correct

39:31to get back on track with our existing

39:34um policy

39:38>> and these are [clears throat] you know

39:40looking at them the percentages

39:42associated with them.

39:44>> So these are not the percentage

39:46associated with them. I did not do that.

39:47I could bring that forth when I come

39:48back to you in November. But what I will

39:50say is you can see the percentage for

39:512025. Excellent. Oh, for the categories

39:54is the next slide. But holistically for

39:58um 2025 policy 33.33%

40:02we came in at 41.

40:04>> Okay.

40:04>> Yeah. And that's total total fund

40:06balance again.

40:08>> Okay. All right. So this is what

40:10>> sorry this slide. Yeah. So 2023

40:14I see that we are in negative. Maybe you

40:17asked that question. We are in negative

40:18unassigned. [laughter]

40:20>> Yep.

40:20>> Um was that intentional or something

40:23happened

40:24>> that we I know the answer. I just want

40:27you to say it.

40:28>> Well there was planned appropriations of

40:31fund balance that year. I think to the

40:33magnitude of about 21 million that year.

40:36Um so that caused that um downturn

40:40because this is I do think this is

40:41representative of total fund balance. So

40:44when we're looking at total fund balance

40:45we're not really the categories they do

40:48matter because we're spending into

40:50reserves that we probably should

40:53>> which means that this money was um taken

40:56from the fund balance and allocated to

40:58another project. Um usually when you all

41:01make the um decision to appropriate fund

41:03balance, there are projects that you are

41:05identifying that you're saying we want

41:07to appropriate fund balance for this

41:08purpose

41:09>> and most of the time it's capital

41:10>> and it's with council's approval.

41:12>> That's always with council's approval.

41:14>> This was council's approval. It

41:16>> appropriated fund balance. The

41:17appropriations that we notice for that

41:19year is always with council's approval.

41:21>> Okay.

41:22>> But we didn't have this chart.

41:23>> Yeah.

41:24>> You have this information,

41:25>> right?

41:26>> Just saying.

41:27>> And so that's part of the education. So

41:29you're knowing the cate, you know,

41:30you're knowing the questions. We're

41:32hoping to equip equip you with questions

41:34to ask and we're committed to showing

41:37you what we need to show you.

41:39>> So So can double check the year is from

41:42like 2025 is from uh calendar year 24

41:47July 1st to 25 uh June 30th.

41:51>> It's July 1, 2023.

41:54>> I mean sorry 2024, right? to to June 30,

41:572025 specific. Yeah, it's the fiscal

41:59year,

42:00>> not calendar year.

42:00>> Not calendar year. Yeah, that's right.

42:03>> So, if I were, tell me if I'm reading

42:05this right. If I'm looking at 2025 of 51

42:08million is unassigned, meaning that in

42:11going back to your numerator and

42:13denominator, the the 37 is restricted

42:17and the five is non-spendable

42:20and then the four is committed. And that

42:23could be flexible or not. Guess what?

42:27>> Oh,

42:27>> look at the numbers.

42:28>> Okay,

42:29>> let's go back.

42:30>> Numbers.

42:31>> Excellent.

42:31>> That's I didn't look at that slide.

42:33Okay.

42:33>> Yeah, this is what you This is very This

42:35is a magical slide.

42:37>> Um, so you can see here non-spindle bull

42:41represented 2%, restricted 14%,

42:43committed 2%. The big numbers that I

42:47would think you you know going forward

42:49you may care about are those between

42:50assigned and unassigned. Um and as you

42:53can see here unassigned 20%. That 51% we

42:56did the calculation it represents 20%.

43:00Which 20%

43:02you know we know 16.7 is two months. So

43:06it'll give you a reserve between 2.4

43:08between two and three. Yeah. Because I

43:11know 25 is three months. So can all

43:14these numbers you get all these numbers

43:16in late 2025 like uh December.

43:21>> So it it comes with the audit. So we end

43:23our fiscal year in June of every year.

43:27We report final audits to y'all usually

43:30in December. So it's usually in that

43:33half mark of the next um fiscal year

43:35because we got to do all the audit work.

43:37We're we're under audit.

43:38>> Um now we're coming back to you all in

43:41November. I'm hopeful because that's not

43:44my December. Um, but I'm hopeful that

43:46you'll have some preliminaries that we

43:48can look through and talk through for

43:492026.

43:50>> Kim, Cim, could you [clears throat]

43:52explain better what you just said that

43:53we're under audit? Um, so that folks

43:55that are watching this understand better

43:57what you mean as far as the always, you

44:01know, outside of our current

44:02circumstances, [clears throat]

44:04what the audit procedure looks like for

44:06for the town every year in a completely

44:09normal year.

44:10>> Yes. Every year we are required to go

44:13through an audit with an external audit

44:16firm. In our case, Cherry Beckert is our

44:18external audit firm. We do close the

44:20year at the end of June. However, when

44:23we close that that date does not mean

44:25our year um specifically is closed

44:28because there's sales tax that's still

44:31coming through that we have to make sure

44:32we acrew. You know, we have a couple of

44:34months maybe through September that

44:36we're acrewing things back to make sure

44:38they're in the proper period. Um but

44:40during that time as we're still closing

44:42out our books, our auditors are coming

44:45out to do transactional testing um to

44:47make sure internal controls are in

44:49place. Um so we from a closed closed

44:53book perspective, we usually are around

44:57I you know I'm hesitant to dates because

44:59it does depend on the year. Um, but we

45:02have the auditors out here for the most

45:04part starting in July through October,

45:07beginning of November doing work.

45:08>> Kim testing.

45:09>> Kim, would you clarify? This is the

45:13audit that is required by the state of

45:15North Carolina

45:16>> of every local government every year.

45:20This isn't a special investigation or a

45:22special audit.

45:23>> That's good.

45:24>> Thank you.

45:24>> Thank you for that, Susan.

45:26>> Yep.

45:27>> Okay.

45:28>> Appreciate that. Y'all ready for the

45:29next slide?

45:31>> Questions y'all just asked them. We're

45:33going to the next. [laughter]

45:35>> All right.

45:35>> Is there Can you go back one?

45:37>> Is there some sort of best practice

45:40associated with [laughter] how much of

45:42that available should be assigned or

45:44unassigned? Because if going back one

45:46more chart, you have the orange and

45:49green,

45:51right? So you had 50.

45:52>> Is there a best practice to what those

45:54levels should be? Yeah,

45:56>> there's not a best practice of what

45:57those levels to be because what those

45:59levels are, it's really math, right?

46:01Because you have your assets minus

46:03liabilities and then you have a number.

46:05Non-spendable is a number. We got to

46:07subtract it. Um restricted is a number.

46:09We have to subtract it. So really, you

46:11left with what's left,

46:12>> right?

46:13>> For the available number, is there a

46:14best practice for how much should be

46:16assigned or how much shouldn't be

46:17assigned?

46:18>> Should it just all be unassigned or

46:21should we have

46:21>> Oh, you made between assigned and

46:23unassigned.

46:23>> Yeah. in the available cont.

46:25>> There's no recommendations on the

46:26categories. No.

46:28>> And and [laughter]

46:30I feel like I'm repeating myself.

46:33>> Bear with me.

46:34>> Sure. [laughter]

46:36>> Managing a household. I don't want to

46:38put so much money in savings and have

46:41debt and capital needs.

46:44I need to know what makes sense.

46:47>> Yep.

46:48>> In savings. And that's out of all of

46:51this. The question I want to answer is

46:54how much money should we have in savings

46:57because it seems like it's excessive and

47:00we need to [clears throat] get

47:02information to drive us to a point where

47:04we can talk about that.

47:06>> Yeah,

47:06>> I know Lori and I have talked about it

47:08for years with other council members and

47:10it seems to just go round and round and

47:12round and I never come to a conclusion

47:16about where we should be.

47:18>> Yeah. Now, I'm sure we we'll have

47:20recommendations for you, but it is about

47:22the level of risk and the things you

47:24want to make sure that's concluded um

47:26included in that um type of because

47:28there's so many things to consider. So,

47:31like tonight, I can't give you that.

47:34>> Sure.

47:34>> Including possibly what council

47:36strategic goals are for spending in

47:39future years. [clears throat]

47:40What are your saving? What are you

47:41saving for?

47:44I

47:44>> mean, most

47:45>> well, and and I don't want I I do want

47:46to Oh, who was talking? Who? Sorry,

47:48Michelle.

47:48>> Michelle, you're you're

47:49>> I didn't actually say anything.

47:50>> No, it was me. It was me. It was Dana.

47:53>> Oh, Dana. Sorry. You were leaning in, so

47:55I thought that's okay.

47:56>> I thought it was her, too.

47:56>> I wanted I wanted you to know I was

47:58next. I I think for um for this

48:01conversation, for the conversation next

48:04Tuesday, for the conversation in

48:06November, for the conversation in

48:08December, your questions and your

48:11discussion is extremely helpful for us

48:14in understanding your perceptions of

48:18what would be ideal and what your level

48:21of risk tolerances. And each time we're

48:24going to drill in farther and farther so

48:26that we can collectively make these

48:28decisions about um risk tolerance. And

48:31so just tonight just conversation make

48:35is is a very helpful tool in getting us

48:38to um a recommendation for the changed

48:41policy.

48:43>> So having said that in past years when

48:46we've had this debate over fund balance

48:49we talked about emergencies.

48:51For example, I remember talking with the

48:53manager of Newurn and they had a

48:56hurricane and they got federal funds.

48:58However,

48:59>> it took months to get those federal

49:01funds. They had to come up with cash

49:03>> and that's what fund balance is for.

49:05That's right.

49:05>> We had hurricane Fran what 40 years ago

49:09>> that trashed a lot of carry.

49:11>> Um had to have cash

49:1430 [laughter] years ago.

49:15>> Yeah.

49:16>> I just moved here for it and I was like

49:19>> Yeah. Yeah. Uh so those are things you

49:22need cash for, but again that gets how

49:24much do we need? We'll need expertise

49:28from staff to tell us

49:31>> what can we do to keep the lights on?

49:32What can we do to keep running if we

49:34have a national disaster, natural

49:37disaster? Um and then back to the bond

49:41rating agencies, when are they going to

49:43start frowning at us if we start taking

49:45some of that money out of savings? and

49:48then we don't want too much money in

49:50that, you know. So, I'm just back and

49:52forth waffling, needing information to

49:55drive me to a decision. That's where I'm

49:58going with this.

49:59>> Yeah.

49:59>> So, I'm going to ask a very

50:02I [clears throat] think it's a difficult

50:04question, but um and you don't have to

50:07answer if you don't feel like you don't

50:09think you have the answer today, but um

50:13generally having I'm talking in a

50:15layman's term. Um having savings is

50:18always seen a good thing. Um you know um

50:22even in like personal if we go by the

50:25example of personal household having

50:27saving account and going above the level

50:31that we want to maintain is a good

50:33thing.

50:33>> Yeah. Not [clears throat] necessarily.

50:35>> Does this represent

50:38does this represent a good financial

50:40standing for the municipality?

50:43Um, so my personal opinion is that, you

50:46know, it does go beyond just the

50:47terminology of fund balance because I'm

50:49hoping that you all look at this as a

50:52management tool to build the capacity of

50:54whatever we feel like we need to absorb

50:56the risk that may come our way. Um, so I

50:59say all that to say is we

51:00[clears throat] do have to be mindful if

51:02reserves are too high, right? And then

51:05maybe we have a tax that it wouldn't

51:06make sense, right? Um so but we have to

51:09consider those things um like

51:12expenditure flexibility,

51:14revenue volatility because I would say

51:16if we don't have much expenditure

51:18flexibility when things happen we can't

51:20really reduce um our thing if revenue is

51:23down and our revenue volatility is there

51:26then our reserves may need to be higher

51:28>> right and if it's the opposite we don't

51:31have much volatility we have flexibility

51:34then you can go with lower so I didn't

51:36answer your question directly But those

51:38are elements we need to talk through.

51:40>> And to pile on to that question,

51:43personally, if I'm saving a lot, but my

51:46debt service is higher, well, my debt

51:49service has a higher interest than my

51:50savings, so I don't want a high debt

51:52service. I want to lower that.

51:55>> And that is a part of the equation as

51:57well. Yeah, I think that's um that's a

51:59good point um that you raised

52:02>> that having too um too high a fund

52:05balance could also be a pro problem

52:08>> and what is that right threshold and few

52:10few months ago I heard someone maybe it

52:13was Lori or Chrisa uh one of you may

52:16have mentioned this that um we just you

52:20know um as we're growing the

52:22[clears throat] size of the maybe it was

52:24you the size of the municipality also

52:27matters and you have to find that

52:29threshold because when we were small

52:3033.3% seemed viable but today that might

52:34not be

52:35>> right

52:36>> my there were two things that I was

52:38thinking of as you were going through

52:39the part of the discussion is if you're

52:42if the goal is to have it for an

52:44emergency

52:46and our policy currently says four

52:48months which is would you say 16.7%

52:51or

52:52>> 33.33 our current policy represent

52:55depending on how how we align it then we

53:00need to think about well you can't

53:02really do the even if we have an

53:04emergency you can't use any of the

53:06unavailable even if we have an emergency

53:08>> however [clears throat] you can you can

53:11make tough choices to take things that

53:13you've assigned just like if you had

53:15your own budget you don't buy the car

53:18because you have to fix the house

53:20because a tree fell on it and you don't

53:23have the insurance or whatever you can

53:25make different decision decisions with

53:27the assigned information or assigned

53:29number. So I think the idea as we talk

53:33about it is I like using the available.

53:36I think that's a a more valuable number

53:40that it's real rather than using the

53:43entire amount that's just not real. You

53:46can't touch it then it shouldn't be

53:48considered.

53:49>> Could you go back to the colorful slide?

53:51>> Colorful slide.

53:52>> Yes.

53:52>> Okay. Let's see this one. Is this the

53:55colorful one?

53:56>> Sure. I figured when you got there I'd

53:58say stop.

53:58>> Okay.

53:59>> Um, going back to [clears throat] first

54:02I wanted to say the level of detail that

54:05we've gotten in the past year. Anything

54:08number related has been remarkable

54:10compared to my previous two years. And I

54:14it it obviously makes a difference. We

54:17that's what we want is the level of

54:18specificity

54:19>> [clears throat]

54:19>> um transparency and all of that.

54:22thinking about what you said about we

54:23don't really know all of our actual

54:26numbers until all the audits take place

54:28and everything and it's

54:30>> December. I'm thinking

54:332023

54:35um

54:37that fiscal year um started July 2023.

54:43>> July 2022

54:45>> 22 because it ended

54:47>> it end June 20th June 30th 2023. Yeah,

54:51>> but it wasn't until December 2023 when

54:55you had really knew [clears throat]

54:56actual numbers.

54:58>> That would have been about the time we

54:59reelected. And I was just thinking how

55:03it's a good illustration of how it

55:05really matters the level of detail that

55:08we're getting. And in addition, because

55:11looking at whatever the fund balance is,

55:13the 33.33%.

55:16I mean most of it was

55:22[clears throat] nonsp

55:24which is which restricted and assigned

55:28but very little was

55:30>> unassigned. I'm just thinking

55:31>> there's no unassigned

55:33>> borrowing.

55:34>> So we were borrowing.

55:35>> I mean but

55:38>> I I wanted to point out the fact that or

55:41my it may not be a fact. My speculation

55:44is that if council was not getting the

55:47level of detail that we are now,

55:50>> they may not have realized at the time.

55:52And this was before me, so I feel better

55:54saying.

55:54>> I I joined at almost that exact time. So

55:57I was I joined council uh two months

56:00after that budget was adopted and it was

56:03well known that we had dipped into

56:06our fund. It was it was not uh you know

56:09I think it was a maybe how much I think

56:12probably wasn't completely clear or like

56:16you said the mix of the revenues

56:18>> the policy was a key point.

56:20>> Correct.

56:20>> You didn't know the policy was violated.

56:22>> Yeah.

56:22>> Correct.

56:23>> We knew that fund balance was lower but

56:25we didn't know the policy was violated.

56:26And if the policy had been more specific

56:29versus what about what kind of

56:32[clears throat] um whether it was

56:34unassigned, assigned, whatever, then

56:36that would have been easier to determine

56:38and make the decisions.

56:39>> Yeah.

56:39>> And when I I I got some, you know,

56:42tutoring when I first came on board to

56:43make sure I understood because you

56:45remember I I was elected strangely a

56:48year and a half after the typical

56:50election date. So in an effort to make

56:52sure that I understood where we were, it

56:55was pointed out to me that this was

56:57unusual. This these budget decisions

56:59were extraordinary and not how it it

57:02typically is done. So and that was when

57:03I very first joined. Um, so I would say

57:06that that doesn't that probably reflects

57:08[clears throat] a strategic decision.

57:11Um, a commitment to avoiding a tax

57:13increase that probably, you know,

57:15>> last year,

57:16>> right? So

57:17>> didn't

57:18>> correct. Correct. So I think that's

57:20something that with the current tax

57:21rate, we've corrected for that lack of

57:25unassigned and what I would consider

57:27true reserves. when I when I first

57:30learned about the fund balance and our

57:33policy and that this is for emergencies,

57:35but the majority of it is often

57:38unavailable to use in an emergency.

57:41>> Mhm.

57:42>> I said, "Okay, so that's like my two

57:44savings account. I have one that's

57:45really hard to get at because it's in a

57:47online bank and you know takes days for

57:49the money to transfer. That's a

57:51different bucket of money and frankly I

57:53really need it for retirement so it is

57:55not really available." And then I've got

57:57the one tied to my checking account.

57:58That's my uh crud. You know, I need a

58:02car repair.

58:03>> That's my unassigned, uncommitted,

58:05completely available. That's my reserve

58:07fund.

58:08>> So, I just want to echo what you said,

58:10Lori, from the minute I learned about

58:11how our fund balance policy works. I

58:14would really prefer a fund balance or a

58:16reserve balance policy that is truly

58:19available reserve funds and and not

58:22quite so complex because I also

58:24secondarily too [clears throat] it would

58:26make me feel better about making a

58:28decision when it comes to the risk

58:30tolerance.

58:31>> It would I think it would also help

58:33residents who are looking at our our

58:35what we're talking about now and looking

58:36at our budgeting documentation to

58:38understand better what in the world

58:40we're talking about. Um, so I just think

58:42that's

58:43>> simpler is almost always better when

58:45you're talking about [cough]

58:48money,

58:50>> is it not? I mean, I'm obviously not a

58:53CPA by any stretch of the imagination.

58:55>> We like simplicity, too.

58:57>> So, I just wanted to share that I I

58:58really do feel strongly. We talked about

59:00this enough now that I do believe um

59:02approaching the fund balance policy

59:04differently to me does make sense.

59:07That being said, um, at this time, I'm

59:12I'm kind of, I think, in the same place

59:14you are, Harold, Mr. Mayor. I am nervous

59:18all the time lately about the economy

59:20and about sales tax. I remember I was a

59:22very negative Nancy when we were doing

59:24we were working on the budget last year

59:25and the year before, concerned that the

59:28sales tax revenue was going to drop off,

59:30concerned that we're going to go into a

59:31recession. And it's that's the the if

59:35you ask me this question five years from

59:37now, I probably am going to have a

59:39different risk tolerance profile than I

59:41do right now. I don't have a ton of

59:44confidence that if there are federal

59:46funds available for an emergency

59:49in theory that they'll be paid in

59:52practice.

59:53>> That's right. Yeah.

59:54>> And I that and that's one of the things

59:56that just sort of gives me a great deal

59:58of pause. I would like to be able to

1:00:00say, you know what, it's going to do a

1:00:02it's going to do good things for our tax

1:00:04rate to reduce the amount that we feel

1:00:07necessary in the fund balance, but I

1:00:09also think right now I'm the ris risk

1:00:11averse part of me feels like this is not

1:00:15an easy decision to make and and is

1:00:17something that gives me a great deal of

1:00:19pause.

1:00:21So,

1:00:22>> yeah, and I think us talking it through

1:00:24and understanding what what our risk

1:00:27tolerance is is really helpful. And I

1:00:30think we're we're kind of coalesing on

1:00:32some numbers. The numerator

1:00:34also drives what that percentage going

1:00:37to be, right? So that will also because

1:00:39I I know you're going to get to it, but

1:00:41looking at every other municipality, not

1:00:44only do they have different ways of

1:00:47looking at the denominator, they have

1:00:49totally different ways of looking at the

1:00:50numerator as well. And with both, we'll

1:00:53need to understand what how both of

1:00:56those play in. [snorts]

1:00:57>> Yeah. Right. Mhm.

1:00:59>> I think from my perspective may um I'm

1:01:02thinking this more from um the

1:01:05perspective that you know maybe we this

1:01:08is a great opportunity to go back and

1:01:11look at you know the this policy and

1:01:13align it with u what the vision and the

1:01:16growth for the town is and where we are

1:01:18as a current in our current state and

1:01:20considering what we are going through. I

1:01:23think this is probably the right time

1:01:25for that and I agree that if something

1:01:27is fixed we cannot touch it, we cannot

1:01:30spend you know we cannot move then why

1:01:33wouldn't consider that. So have like a

1:01:35practical

1:01:37um policy which is easy to understand

1:01:40and easy to communicate.

1:01:42>> Yeah, makes sense to me. I was going to

1:01:45add one thing as we finish out the slide

1:01:47in the section though also as you're

1:01:48giving commentary to the work done you

1:01:50also have to recall the work you've done

1:01:52over those two years maybe 23 and 24

1:01:54closing capital projects

1:01:56>> totally

1:01:57>> that that type of thing that you were

1:01:58also

1:02:00>> kind of knew you had to make some

1:02:01decisions to make sure that we met fund

1:02:03balance and we had a lot of projects

1:02:04going that cost also increased

1:02:07>> and a lot of them can't stay closed

1:02:08forever

1:02:12>> don't get us starting talking about

1:02:13roads again,

1:02:14>> right? [laughter]

1:02:16>> Not trying to, but there was hard

1:02:17decisions made to meet your policy.

1:02:21>> And I'm guess some point we'll get a

1:02:23budget update and and make Carissa feel

1:02:25better about sales tax numbers still

1:02:27coming in higher.

1:02:28>> It does. Every time Dana comes and does

1:02:30a sales tax revenue update. My heart

1:02:32soarses.

1:02:33>> I know.

1:02:34>> I I It's my favorite pleasant surprise

1:02:36of the quarter.

1:02:38>> Every quarter.

1:02:38>> I feel you.

1:02:39>> Yeah.

1:02:40>> Okay. You ready to move on?

1:02:43>> All right. Right. So, let me jump.

1:02:46All right. Peer municipalities. Um, we

1:02:49are going to see a number of peer um

1:02:52municipalities. We did shorten our list

1:02:54from what you saw in February to reflect

1:02:57municipalities mainly that are using

1:02:59that unassigned fund balance. However,

1:03:02what I will say about that is even with

1:03:03that, you'll have questions. Well, what

1:03:05are they using for their base and things

1:03:07like that because I will tell you

1:03:09they're all across the board even, you

1:03:10know, even um with that. So um first I'm

1:03:14going to show the total fund balance

1:03:15because that is our current policy. The

1:03:18other AAA rated jurisdiction in North

1:03:21Carolina that has uh that uses their

1:03:24that has their policy based on total is

1:03:26that happens to be Charlotte. Um and as

1:03:29you can see here what I'm trying to

1:03:31illustrate is the months when I looked

1:03:33at their 2025 annual comprehensive

1:03:35financial report. This shows about the

1:03:38number of months that they came in

1:03:39actually um on their reserve. So for

1:03:42Charlotte in this case um 25% Charlotte

1:03:46uses 16% which I said is approximately

1:03:492% because you remember

1:03:51>> GFOA was 16.7 which is really those um

1:03:55those two months what I would say with

1:03:57Charlotte and Raleigh from what I know

1:04:00these jurisdictions also have and this

1:04:02is another technical component which is

1:04:04why I'm saying everybody does something

1:04:05different they have a debt service fund

1:04:09where they are all they have like

1:04:10another reserve

1:04:13um that they're considering that could,

1:04:16>> you know, contribute to their lower rate

1:04:19of 16%. Right? Does that make sense?

1:04:22Like it's not just a general fund.

1:04:24There's some other money um

1:04:25>> coupled in there. Okay.

1:04:27>> Is that a best practice having another

1:04:30fund? I mean,

1:04:31>> there there there is not a I'm not going

1:04:34to say if debt service fund is a best

1:04:36practice. What I will say is it's a nice

1:04:40management tool for future for current

1:04:42debt and future debt. How to manage it?

1:04:45>> Whole bunch of things. We'll get

1:04:46>> your job easier.

1:04:47>> What a debt service.

1:04:49>> Um my job easier I think it's another

1:04:53management tool that will allow us to

1:04:55have everything in one place really

1:04:56because right now all of our our debt

1:04:57service is running through the general

1:04:59fund and we will get there too in some

1:05:01months to come. I don't you know I don't

1:05:03know if right now we're ready to jump.

1:05:04I'm not going to make you answer that

1:05:06question now, but I would like you to

1:05:07answer that question at some point. Got

1:05:09it.

1:05:09>> You know, so we don't consider something

1:05:11that actually makes everybody's jobs

1:05:12more difficult.

1:05:13>> That's right. Right now, I can't say

1:05:15we're living, you know, we're

1:05:16struggling.

1:05:17>> Yeah.

1:05:17>> Let me add to that um question.

1:05:20>> Uh you'll find that a debt service fund

1:05:23is more typical in larger

1:05:26municipalities.

1:05:27define larger

1:05:28>> um Charlotte Raleigh

1:05:32>> uh population um you know you're in the

1:05:35complex three four more 100 and so uh we

1:05:40kind of went through this when we were

1:05:42deal doing some things related to our

1:05:44investment and debt carri size is like

1:05:47we're just growing into what is getting

1:05:52close to being considered maybe a large

1:05:54municipality so some of these tools are

1:05:57things you're probably going to want to

1:05:58consider as we get a little bit larger

1:06:02and you know um more sophisticated in

1:06:05the total uh balance that we have.

1:06:08>> Makes sense. Thanks Dana.

1:06:09>> So is our retire going back to

1:06:12retirement funds. I'm worried about

1:06:14that. Is that a considered is that

1:06:16considered

1:06:18unassigned or sorry restricted money?

1:06:21>> No. remember um it's not when we look at

1:06:23fund balance policies they're normally

1:06:25on the general fund level which is a

1:06:27current

1:06:28>> 12 months pretty much typical activity

1:06:31>> long-term liabilities like other oped

1:06:34things like that we report we have to

1:06:36report what those potential liabilities

1:06:38are governmentwide so it's at a totally

1:06:40different

1:06:42>> um level that is not considered in a

1:06:43restriction now could you consider if we

1:06:46get some you know if we decide that we

1:06:49want to do x y and z dur you know on

1:06:51something that's a whole another formal

1:06:53process that we have to talk through.

1:06:55Maybe we can have those reserves, you

1:06:57know.

1:06:58>> So today we're kind of in some respects

1:07:00a little like social security or a pay

1:07:02as you go.

1:07:03>> Pay as you go.

1:07:04>> So we're paying retirees health benefits

1:07:06and p pensions as we go even though

1:07:10without you [clears throat] know

1:07:12>> Yeah. benefits different than pensions

1:07:13though.

1:07:14>> OPED.

1:07:15>> Yeah. Oh yeah, you're right. You're

1:07:16right. You're right. You're right. We

1:07:17don't we don't have like a long liab.

1:07:20not included in our restrictions.

1:07:21>> It's not included. Okay. [clears throat]

1:07:23>> All right. I'm just uh worried because

1:07:26that that's a growing

1:07:29>> and restricted amount of money. I mean,

1:07:31those folks are still going to need

1:07:32healthcare. They're still going to need

1:07:35>> funding. And we see the social security

1:07:37as an example. Social Security is kind

1:07:39of pay as you go, but it also has a

1:07:40trust fund.

1:07:41>> So, it kind of has both. Y

1:07:43>> we don't have the trust fund, right?

1:07:44>> We do. It's in our

1:07:46>> reserve. Yeah.

1:07:47>> Okay.

1:07:49Okay, so that's total fund balance. Now,

1:07:52let's go. We ch made the decision again

1:07:54to use unassigned. These are AAA um

1:07:57jurisdictions in North Carolina who have

1:07:59AAA and they are using unassigned as

1:08:01their base budgeted expenditures.

1:08:03Greensboro has a policy of 9% in fiscal

1:08:07year 2025. They met their 9%. Um Durham,

1:08:11you can see here, is 12%.

1:08:15Um they came over the 12% at 21.

1:08:18Asheville, you can see here, is 15%.

1:08:21They came in at 14%. As you can see

1:08:23here, their actual is lower than what

1:08:25their policy says. So, that's one of

1:08:27those if you go in under policy. They

1:08:30probably have a replenish plan because

1:08:32that's something else that you all will

1:08:33consider. Um, in your policy, they had

1:08:36hurricane Helen. So, that is part of

1:08:38their reason to why they dipped into

1:08:39their fund balance.

1:08:40>> Can I ask a quick question? Why some

1:08:43municipalities don't do all three bomb

1:08:45rating agencies and only do two?

1:08:49I think that's I do think that's a

1:08:51preference.

1:08:52>> Um

1:08:54I can't answer it for the jurisdiction.

1:08:55>> I'm just curious why

1:08:58>> um

1:08:59>> doesn't have all three. [clears throat]

1:09:00I do know that Fitch used to be super in

1:09:02my older days, they were super strong in

1:09:04the utility and so that is why we opted

1:09:06to get their additional um well I say me

1:09:09we I was in the other jurisdiction when

1:09:12we did that. So [laughter]

1:09:13>> um but you know that could be some of it

1:09:15because they have a utility strong um

1:09:18side but I can't tell you about the

1:09:20other jurisdiction.

1:09:21>> Mayor that's a great question.

1:09:21>> It's not a mandate

1:09:22>> mayor that's a great question for Tai on

1:09:24Tuesday.

1:09:25>> Okay.

1:09:25>> Yes. Thank you,

1:09:27>> Kimberly. Before we leave, um, help

1:09:29clarify for me. Our very first slide was

1:09:33GFOA recommends two months. Is that

1:09:35where the two-month recommendation came

1:09:36from with GFA?

1:09:38>> And so, here we see everybody is

1:09:40>> less than under two months means some of

1:09:42them significantly. So, is the two

1:09:44months a recommendation tied to using

1:09:47total fund balance and it's lower if

1:09:50you're using unassigned or are these

1:09:52municipalities just under that? So these

1:09:55municipalities are just under that.

1:09:56That's a quick answer. But theirs their

1:09:582% if you remember was on unrestricted

1:10:01which was committed assigned and

1:10:04unassigned. So it was not in it was not

1:10:06total either. That's another

1:10:08>> caveat,

1:10:09>> right? Maybe we're saying the same

1:10:12thing. So

1:10:12>> I think you are you and you said 2%. I

1:10:14think it was two months. Is that what

1:10:16>> two months? Yeah. 2%. Two months. Two

1:10:17months. Two months.

1:10:18>> Yes. Two months. 16.7%. So does GFOA

1:10:22then have different recommendation? I

1:10:25mean is two months their recommendation

1:10:27no matter what numerator and denominator

1:10:29you're using or is two months really a

1:10:32reflection of total and if we have other

1:10:36ways of calculating it

1:10:38>> I think that's fair. Okay.

1:10:39>> I mean I do think two months though is

1:10:41would be two months. Yeah.

1:10:43>> Right. So like whatever baseline you're

1:10:45using, as long as you have some type of

1:10:47reserve, it could be potentially meeting

1:10:49that recommendation. So example, Raleigh

1:10:52had honestly I can't remember if they

1:10:55were at 15%, but GFOA has a

1:10:58recommendation of two months. So they

1:10:59recently updated their policy to 17%.

1:11:02And it was strictly driven by but it's

1:11:05based on unassigned, right?

1:11:07>> Um and it's it's it was strictly based

1:11:10on the GFOA um minimum.

1:11:14And before we go, it's 607. Just a time

1:11:17check. That means y'all are having fun.

1:11:20>> Yeah,

1:11:20>> y'all [laughter] hitting that

1:11:22fund balance.

1:11:23>> What you just said, you mean 16% of

1:11:26operating expenses.

1:11:28>> 16.7

1:11:29>> 16.7% just represents two months.

1:11:33>> GFOA has a recommendation of how to get

1:11:35there, but a lot of other jurisdictions

1:11:38are getting there in a different way,

1:11:39but they're still having two months in

1:11:41resolution. did. So, what exactly did

1:11:42Raleigh do?

1:11:43>> Raleigh had I can't remember if it was

1:11:4515 or 16%, but they adjusted their

1:11:47policy so they would have a minimum of

1:11:50two months.

1:11:51>> Okay.

1:11:51>> So, they're at 17% now. I think when I

1:11:54bought it to you in February, I'd have

1:11:56to go back and look. I don't think it

1:11:57said um 17% on the slide. Um but we've

1:12:01had it updated.

1:12:02>> But they also use the lower number. They

1:12:04only use unassigned. They don't use

1:12:06>> They use unassign. Yep. They'll be You

1:12:07want me to keep going? So, it's not

1:12:08apples to apples with how we're

1:12:10computing our 33%.

1:12:11>> There you go. It's not apples to apples.

1:12:14>> I was trying I was trying to get there.

1:12:15I was with you. Okay. Well,

1:12:17>> our unassigned is 20% from this last

1:12:19year

1:12:20>> and our assigned was 3%. So, together we

1:12:23were at 23% of those two notes.

1:12:25>> That's right.

1:12:25>> So, we're still higher

1:12:27>> much

1:12:27>> than most of them because our

1:12:30>> we still would have you know

1:12:31>> if we calculated it differently.

1:12:33>> Yeah. And that's what I was saying going

1:12:35into it. Everybody has a different um

1:12:37baseline.

1:12:38>> Okay.

1:12:40>> Um so here 16% for Winston Salem. You

1:12:43see their actual percentage for 25.

1:12:45Raleigh. This is what we were just

1:12:47talking about. 17% they came in. Is that

1:12:5018?

1:12:51>> Yeah. 18.5.

1:12:52>> 18.5%. I do know they have a debt

1:12:55service fund as well. I talked to my

1:12:56friends today. Um and they within their

1:13:00if you look at their annual um report

1:13:03you'll see in assigned actually it's

1:13:05it's up here that has the reservation

1:13:08for debt service whereas unassigned. So

1:13:11you could think that maybe they're able

1:13:13to do that lower um percentage because

1:13:16they already have a reservation for

1:13:18things like debt service that we have

1:13:20flowing through our general fund.

1:13:21>> Oh right. Yeah.

1:13:23>> Can you when you provide some of that

1:13:26information, can you give us like so for

1:13:28instance, if I were going to make us be

1:13:31somewhat similar to Raleigh, even if we

1:13:34made our unassigned, we wouldn't be

1:13:36similar to them because they have an

1:13:37entire act

1:13:38>> bucket of money. So, I think that's

1:13:40fair.

1:13:40>> Ours would have to be bigger.

1:13:42>> It would have to be bigger if we wanted

1:13:44to be aligned with them. Plus, they only

1:13:45do two months reserved. And right now,

1:13:47we look at four. That's

1:13:49>> but theirs might be closer to that

1:13:50depending on how much is in the debt s.

1:13:53>> Yeah. I don't know what it how much.

1:13:54>> So now Lori, what I would say is if you

1:13:57look at our existing policy and those

1:13:59numbers that you you said 20 something%

1:14:01in those in the areas that you think

1:14:03that ain't that's not a sorry my

1:14:05apologies. No, no, I was listening

1:14:07really hard.

1:14:08>> That that's not four months, right?

1:14:11That's not uh 25 represents three

1:14:13months. So it's still less than that.

1:14:15Four months is what our current policy

1:14:17said according to how it's written.

1:14:18>> Right. Right. Right. Right.

1:14:19>> Yeah.

1:14:19>> Yeah. I was just saying how much of that

1:14:21bucket of money what what's the

1:14:23percentage of that bucket of money? Not

1:14:25whether or not it aligns to our policy.

1:14:27>> Yeah.

1:14:27>> Do you happen to know how big those

1:14:30those reserve buckets are? Those debt

1:14:32service?

1:14:32>> If you asked me yesterday, I would

1:14:34remember the number, but I don't want to

1:14:35mess up Riley's numbers. So, it's a good

1:14:38>> I'm just wondering if they were

1:14:39significant or not.

1:14:40>> It's a good amount of reserve.

1:14:41>> Yeah.

1:14:42>> But it's for debt.

1:14:43>> Future debt. That's a whole plan and

1:14:45that's our

1:14:45>> actual and then actual percentage would

1:14:48would change every year because that was

1:14:52last 2025 we were like 41% but maybe

1:14:56next year will change right

1:14:58>> depending because it's driven by what

1:15:00you all decided to do during the year

1:15:02but also where we are at the end of the

1:15:04Yeah. Well during the year year end

1:15:06tells us

1:15:08>> how it's going to change but it will

1:15:09>> sales tax will grow by 5%. You never

1:15:11know. Y

1:15:13I'm getting to be sunshiny and I'm

1:15:14[laughter] working on it.

1:15:16>> You're manifesting.

1:15:17>> Yeah. All right.

1:15:20>> This is a great Morrisville.

1:15:22[clears throat] Morrisville is at

1:15:2525%. And they got 29

1:15:28>> as of 2025.

1:15:30>> And then come I'm going to get you to

1:15:31stop here because we will run out of

1:15:33time.

1:15:33>> Too much fun. Sorry.

1:15:34>> Too much fun. I love it. And the section

1:15:36that she'll be getting to is updating

1:15:38our fund balance policy and give you

1:15:40some things to consider and more food

1:15:41for thought and we need to allow time

1:15:43for that conversation. So I'd suggest

1:15:45that we do that at an upcoming work

1:15:47session.

1:15:47>> Yes. And I would like to formally thank

1:15:49council because y'all noticed my voice

1:15:50stopped shaking as we went on. Y'all

1:15:52made me feel welcome. Thank you.

1:15:53[laughter]

1:15:53>> You're always welcome.

1:15:55>> Thank you.

1:15:55>> Thank you.

1:15:57>> All right.

1:15:58>> Now I've got to Hold on. Don't look.

1:16:02>> Don't look.

1:16:03>> All right. I just want to do a couple of

1:16:05updates. Um, and specifically, it's

1:16:08going to be around our moving forward

1:16:09dashboard because we've made some

1:16:11changes in the last two weeks. Um,

1:16:12specifically, if you go to our website

1:16:14and look at the dashboard, um, anyone

1:16:16can sign up to receive updates. So, when

1:16:19something changes, like last week, um,

1:16:20you can see what's changed. Um, last

1:16:23week, we shared that four of the

1:16:24Wombleon Dickinson recommendations moved

1:16:27uh, from not started to research. this

1:16:29Friday. So tomorrow, we'll anticipate

1:16:31updating six more recommendations. Um

1:16:34five will move into development

1:16:35category, including one recommendation

1:16:37from the state auditor's office that

1:16:39will move into research phase. So again,

1:16:41moving some from not started to the next

1:16:43step. Uh there's a lot of moving parts.

1:16:45So by the end of the week, most all of

1:16:47the 39 recommendations will be in

1:16:49research followed by development. And

1:16:51I'll just say it again, 39

1:16:53recommendations is a lot of work. and

1:16:54the staff that is also running um the

1:16:56day-to-day high-quality operations that

1:16:58we do are also working on on this work.

1:17:01Um in our response to the state auditor,

1:17:04they required us to establish

1:17:05implementation dates. So, we did what

1:17:07they asked and developed those dates to

1:17:09set realistic expectations for this

1:17:11work. We're working through it. We're

1:17:13making progress and as the work moves

1:17:14forward um on we'll keep updating the

1:17:16dashboard and updates and progress um

1:17:19we'll get them out especially at work

1:17:21sessions like this so that you can see

1:17:23um of the six um I mentioned kind of the

1:17:25their womble bond that were the four

1:17:27that were updated last week this week it

1:17:29was OSA I'm just going to say the ones

1:17:31and you can u see online which they were

1:17:34but OSA 13 uh which also is tonight we

1:17:37started the training on OSA 13 so we

1:17:40moved that from research to development

1:17:41womble bond

1:17:42research to development. Womabond 14 not

1:17:45started to development. Wombleon 17 not

1:17:48started to development. Womabond 18 not

1:17:50started to development. And Wombleon uh

1:17:5321 was from not started to research. Um

1:17:57any rate um

1:18:00we have time. I also want to um thank

1:18:02you for your work on uh Tuesday night

1:18:04for the committee of three that met. It

1:18:06was your first um meeting as such and uh

1:18:09I was able to not be there but watch it

1:18:12online. So, thank you for doing that and

1:18:14I hope others did as well. But you

1:18:15talked about compensation including

1:18:17salary benefits and allowance, travel

1:18:19and training and code code of ethics.

1:18:21You set your next meeting for September

1:18:23uh 14th, so next Monday. And I thought

1:18:25I'd turn it over to the three if you had

1:18:27anything to share with the full council

1:18:28from that meeting.

1:18:29>> Yeah, we we intend to work at least

1:18:32through the end of September weekly. We

1:18:34feel a sense of urgency. Uh spent most

1:18:36of this meeting brainstorming and gave

1:18:39ourselves homework. Uh Miss Richards and

1:18:42Miss Conson took most of the homework on

1:18:44[laughter] a little bit. Uh but our next

1:18:46meeting we should start framing up some

1:18:49recommendations. I feel I don't know if

1:18:51you have anything to

1:18:52>> Well said. I think what was important

1:18:55was we in the discussions it was clear

1:18:58that what we expect to do probably in in

1:19:01there'll be cases where we'll gel on a

1:19:04single recommendation. I I feel like the

1:19:06conversation was going that way based

1:19:09off of factors like some of the

1:19:10pre-ressearch um you know timing

1:19:13constraints when we can and can't do

1:19:14things but it does feel as though we'll

1:19:17likely come with um some instances where

1:19:20there'll be a little little bit of

1:19:21nuance so that the full council um can

1:19:25sort of fill in those blanks or not they

1:19:28won't be blanks but but have feedback

1:19:30opportunities that'll make a material

1:19:33difference I think in the ultimate

1:19:34policy we all settle on. So, I didn't

1:19:36get the feeling that we're going to come

1:19:38with everything done done, but a lot of

1:19:41leg work done. Um, and I I really do

1:19:46believe this is going to be expedient.

1:19:48>> Yep.

1:19:49>> I really I felt like that after the

1:19:51meeting.

1:19:52>> One one other thing for the the rest of

1:19:54council, if you have ideas and you send

1:19:56us thoughts, we're going to put them on

1:19:57a web page for everybody to see uh for

1:20:00the sake of transparency. So while we're

1:20:03discussing that uh everybody can see

1:20:06what we're talking about. So that was

1:20:07another thing we decided. So

1:20:11>> my colleagues covered it. [laughter]

1:20:14>> Yeah. No, I I agree though. I think the

1:20:16the tenor of the conversation was um

1:20:20productive, but also that I think there

1:20:22was so much common ground as a starting

1:20:25point that I I think we're also going to

1:20:27be able to come to the rest of council

1:20:29with some thoughtful suggestions um and

1:20:35[snorts] our our research done uh so

1:20:38that we'll we'll I think be in a

1:20:40position to make decisions sooner rather

1:20:42than later. And thank you to Council

1:20:44Member Richards for doing pre-work that

1:20:46kept us from running down a a path that

1:20:49we shouldn't have been doing at the time

1:20:51or to, you know, considering things we

1:20:53couldn't do by so we understood what we

1:20:56can and can't do and when we can do it.

1:20:58So she identified some like statutes um

1:21:01that require certain things be done at

1:21:03budget time. So, it was helpful because

1:21:05I was riporn and ready to dive into that

1:21:07and she saved us a lot of time and

1:21:09breath

1:21:10>> and out of if if uh anyone hasn't had

1:21:12the chance yet to watch our riveting

1:21:14two-hour meeting [laughter]

1:21:16uh what council member Cohen Johnson is

1:21:18referencing and I'll thank Lisa for

1:21:20helping a layman through the the

1:21:23statutory language but realizing that

1:21:26when it comes to our compensation and

1:21:28the statutory definition of compensation

1:21:30is salary and allowances is that the

1:21:33very soonest we can implement that

1:21:35change will be when we pass next year's

1:21:37budget. Um that uh the state authority

1:21:40only allows us to adjust the

1:21:42compensation then. Which is not to say

1:21:45that the committee will not get to work

1:21:47and that we will not be coming back to

1:21:48you with recommendations that we

1:21:50couldn't have a policy ready to go come

1:21:53budget season next year. But that if the

1:21:55notion was we were going to be able to

1:21:57adjust our pay just as soon as we wanted

1:22:00to, that is a timeline that's imposed on

1:22:03us by the state.

1:22:04>> Yep.

1:22:05>> All right. So, it would seem like uh

1:22:07possibly for the committee to be

1:22:09updating full counsel in a work session

1:22:11is maybe a good way to go moving

1:22:13forward. Sounds good.

1:22:14>> All right. And that's all we have for

1:22:15tonight.

1:22:16>> All right. We are ajourned. Thank you.