2026-09-15 - Town Council Quarterly Meeting

04:46We'll call to order the September 15th

04:50fourth quarterly meeting of the Kerry

04:52Town Council and staff. And I'll turn it

04:54over to our interim manager, Russ Over.

04:56>> Thank you, Mayor and Council. Thanks

04:58everybody for being here today on the uh

05:00Tuesday edition I guess of the quarterly

05:02feels a little unique and then we were

05:05recounting there's been uh for this

05:08quarter the fourth quarter report if you

05:10will um we've had storms we've had

05:12hurricanes or um tropical depressions I

05:15guess um it has been a uh an unfortunate

05:19cancelling of some of these meetings as

05:21a result of some various events. So

05:22we're glad to be with you today in the

05:24September edition of the meeting. I'm

05:27going to go through the agenda pretty

05:29quickly and then have a few slides to go

05:31over some introductions and then we'll

05:32get going. Um, everybody saw the news

05:34today, I believe, about the 5way 55

05:37water main break and the update. Uh, so

05:39it seems appropriate to bring Jamie and

05:42maybe hear some from some of the team

05:43that worked on that little update. We'll

05:46do a finance update for you, go over Q4

05:49financials, and then have a debt

05:50discussion with um, Davenport and the

05:53team is back here. specifically

05:55mentioned Tai is back in the corner.

05:57We'll do an introduction in a little

05:58while and his team uh to do that for us.

06:02Then we're going to do a council work

06:04plan prioritization, which in my opinion

06:06probably hasn't been done in a while,

06:08but with where we are right now and

06:10planning our workload for the remainder

06:11of the year and especially getting to

06:14the um ultimate retreat or annual

06:17meeting, this will be very helpful for

06:19us to make sure we're working on the

06:20most important things to council. Lisa

06:22is going to do a legislative update. Um,

06:25which is very fun. Very fun. Uh, Lisa

06:28said it was fun earlier. [laughter] Um,

06:30uh, that is in between your work plan

06:33partization because we need a little

06:35time to tally your results and have you

06:38uh come back and talk about this. This

06:40will be a group exercise and we'll pair

06:42you up with some staff around the room

06:44and um, have fun with that exercise.

06:47Then something that um I know some of

06:49you have had wished to talk about for a

06:51while, but there's some real estate

06:53discussions and opportunities and then

06:54specifically a council initiated item

06:56with that. I don't believe there's a

06:58close session tonight. So um so let me

07:02hit just a couple of slides as far as

07:04what's going on um and where we are. And

07:06I think there's a lot in the backdrop of

07:08today's quarterly meeting and one thing

07:10that resonated with me, there was a

07:12couple of us there, mayor, you were

07:13there, but at the chamber of leadership

07:15conference this year was Dr. S Sarah

07:17Glover um who I believe uh is a

07:20professor at Duke and she had a couple

07:22of slides and I'm using a few of them

07:25and one of it was just um if you had a

07:27crystal ball and you were looking you

07:28know 10 years ago and you were looking

07:3010 10 years ahead would you have

07:32predicted we would be here? I think the

07:35answer is no. And then it it just it

07:37just was food for thought for me to then

07:39think what has changed in local

07:40government in the last 10 years.

07:42Unfortunately we have a resource for

07:44that. Um and ICMA, the International

07:46City Council, uh city county managers

07:49association group, uh kind of put

07:51together a list of uh what has changed

07:53in local government in the last 10

07:55years. This is a world word cloud of

07:58that. Um showed this to staff earlier.

08:01Uh we talked about maybe some things

08:03that we thought were missing. Uh but I

08:05think everyone pretty much agreed with

08:07there have been a lot of changes.

08:09Greater expectations obviously being one

08:11of the larger fonted items certainly

08:16seems appropriate and uh lots of

08:19changing. Public trust is up there.

08:21Transparency and accountability,

08:23emergency preparedness certainly um in

08:26light of the past two days. Hybrid work

08:29is something we never had to deal with

08:30in the last 10 years. digital services

08:33evolving expectations kind of lands with

08:36greater expectations but certainly

08:38dealing with public trust. So I just

08:39share that in the some of the backdrop

08:41of all the change that we've had because

08:43I think we're in the midst of change and

08:46so this slide back to um a Dr. Sarah

08:48Glover slide was um we navigate the

08:51change we lead the transition and it hit

08:53me that um you change kind of happens to

08:56us um and what we're not really in

08:59control sometimes of the change that

09:00happens to us and we certainly what we

09:02are in control of of how we lead in a

09:04time of transition out of that change

09:06and I think that's where we're at. Uh

09:09this was a slide from that but just how

09:12you navigate change um kind of having

09:15three parts. You have to end the last

09:17thing before you can begin something

09:19new. And uh the neutral zone as they

09:21called it was the messy middle. Again

09:23this is a slide at the chamber planning

09:25conference and this really spoke to me

09:26in that moment as we were dealing with

09:28various reports that were coming out

09:30around those same times. Um but this

09:33doesn't happen on a scheduled date. It

09:34happens when people are ready and

09:36everyone um is at a different stage at a

09:38different time and I think I've talked

09:41to the directors about this. I've done

09:42it at an all hands at least kind of

09:44introduce this as a topic and uh I think

09:47that kind of some people are closer to

09:49the end of the last thing than they are

09:51the new beginning. Some are stuck in the

09:53messy middle, but we're we're all over

09:54it. And then what that really leads me

09:57to think we're at and I've used this

09:59analogy with staff. Uh we are in the TSA

10:02line. This is a TSA line. Everybody's

10:04been through a TSA line. Do you know

10:06understand all the rules in the TSA

10:08line? Um, sometimes it feels like the

10:10rules are being made up on the fly in

10:12the TSA line. Uh, but you get through

10:15it. You navigate the line and the

10:17clunkiness that it is and some of the

10:19clunkiness of even today might be that.

10:21Um, I I said um some of us are dressed a

10:24little differently than you may have

10:26seen in the past. Um, Chris and I were

10:28talking about that. Uh, so you know

10:30there's old rules of suits and ties and

10:32new rules. Um, you know, quarter zips. I

10:36did say I'm not sure what the quarter

10:38zip equivalent for ladies [laughter]

10:40are, but talk amongst

10:41>> it's called a quarter zip.

10:42>> Ah, it's a quarter zip. That makes so

10:44much sense. It's a quarter zip. Ah,

10:48>> now I know. Um but anyway, we are in the

10:51midst of our own TSA line of sorts and

10:53um this is just something that I think

10:56you can point to a lot of analogy to our

10:58um time and our transition and change.

11:01So you know what's next um and what's

11:04next for us? Why we may not be able to

11:06predict what's happening in the next 10

11:08years. I'm certain it's going to be a

11:10lot of change and certainly there's lots

11:11of articles about how much change and

11:13the pace of change is rapidly expanding.

11:16But I do know this at least for this

11:17moment right now. We're all moving

11:18forward. We're moving forward together.

11:20We've got a lot of work to do and that's

11:22what we'll do today as part of our

11:24moving forward exercise with you all and

11:26uh I think we're all looking forward to

11:28that. So, that's what excites me. So,

11:31back to the agenda. Um let's bring up

11:34Jamie and he's going to talk about the

11:37uh water man break.

11:42>> All right. Well, good afternoon council.

11:44Um Rusty, you have the clicker?

11:46>> Um sure. I have a clicker.

11:48>> Yeah. Okay. Thank you, sir.

11:51So, we obviously uh had a very difficult

11:53water mane break um this week that we've

11:55been responding to. And um I'll just

11:58jump right into a quick summary. Part of

12:01the reason this water main break was so

12:02challenging is because it was one of our

12:04big transmission mains. This was a 30-in

12:07diameter transmission main. It's one of

12:08the biggest transmission mains we have

12:10in the water system. And this is one of

12:12the lines. The bigger they are, the

12:14closer they are to the water plant. and

12:16obviously the more citizens and the

12:17bigger coverage area they serve.

12:20So I got the call from our water plant

12:23manager Sunday night actually in Monday

12:27morning a little after 12 midnight

12:30and uh he told me that something was

12:32going on. We knew we had a main break

12:33and the tanks the tank levels were going

12:36down. That's how we tell what's going

12:37on. when we when we're in the control

12:38room, we can monitor these water tank

12:41levels and if we see those levels going

12:43down, we know something's going on. So,

12:47when uh a combined team of public works

12:49and utility staff went out and found out

12:50what was going on, we knew right away

12:53this is a 30-in transmission mine and um

12:56and the tanks were declining at a rapid

12:58rate.

13:00So, long story short, um the the tanks

13:04lost a lot of water very quickly. Um, it

13:07all happened so quickly we couldn't even

13:10mobilize our staff to the site fast

13:12enough to try to remedy the situation

13:14before the tanks were at a low enough

13:16level that we had essentially lost

13:17pressure in the central zone. That's how

13:19fast it happened. All with under an

13:22hour.

13:24So, um, so we knew right away that, um,

13:26with with us getting below 20 PSI, that

13:29is our threshold for the regulatory

13:31standard,

13:33um, we were going to have to do a system

13:35pressure advisory. And that means we

13:37would just have to notify the public

13:39that we lost pressure and that we were

13:42going to, very much in a precautionary

13:44state of mind, um, recommend that, um,

13:48citizens boil the water or use alternate

13:51sources. And um again, very

13:54precautionary. It's not a do not drink

13:56order. It's a system pressure advisory.

14:00So um so I knew that I was going to need

14:02a lot of help. So the first two calls I

14:04made was I called Chief Cooper and I

14:07knew we were going to have to activate

14:08the emergency operations center. And so

14:10Chief Cooper got up and and went right

14:13over to uh fire station number nine and

14:15got the EOC started. And I also called

14:18Jimmy Simpson uh because I knew that we

14:20were going to need public works support

14:22on site. And so between me and Jimmy and

14:25Chief Cooper, we pretty much divided it

14:27up. I went to the water plant because I

14:28can see what's happening with the water

14:30system at the plant in the control room.

14:33Um, Chief Cooper activated the EOC and

14:36Jimmy went to the job site where the

14:38where the pipeline was damaged and start

14:40started leading the efforts to clean up

14:43the mess and try to see what we could do

14:45to get this pipeline repaired.

14:48Um, as soon as we were able to, we um,

14:51we started putting together our comm's

14:53materials. We knew that we were going to

14:54have to reach out to the state. This was

14:56going to be a regulatory item that we

14:58would have to report. We knew we had a

15:00lot of comms that we had to issue. So,

15:02we started working on those right away.

15:04Meanwhile, at the job site, they started

15:06working on isolating. We wanted to

15:08isolate this area and get the water

15:10going back into the system so that we

15:11could reressurize as fast as we could.

15:14[sighs] One advantage and disadvantage

15:16all at the same time was it was the

15:18middle of the night. Hard to see things

15:20in the middle of the night, but um but

15:22it does give you a time when there's not

15:23very much water demand. So, we could our

15:25goal was to try to get the water

15:27pressure reestablished before the

15:28morning rush. and we were able to do

15:31that. Um, aside from that, Highway 55,

15:35there was an embankment. I'll show you

15:36some pictures in a moment. There was a

15:38lot of mud. There was a lot of debris

15:40all over Highway 55. And in the initial

15:42assessment, we thought there may have

15:43been more damage to Highway 55 than it

15:46ended up being. A lot of times when

15:48you're dealing with an emergency, the

15:50first reports, the first information you

15:51get, they're all over the place. It

15:53takes a while to get really good

15:55information to size up the situation as

15:58they say in the fire department. Um and

16:01so um and so we were working through all

16:03of that. And of course over the last

16:06couple of days we've worked on the

16:07repair. We've done lots of

16:09communications. We've done lots of water

16:10sampling and testing. Everything's

16:13pretty much back to normal today for our

16:14citizens. And um this afternoon they're

16:18looking to put that water pipe back in

16:20service. the one that had been having uh

16:22the one that had the break. So, they're

16:25really really close to getting that

16:26repair wrapped up today.

16:29[sighs] So, one of the questions we got

16:31asked a lot was, well, with the central

16:34pressure zone, why the central pressure

16:36zone, and how many customers are

16:38impacted? And so I didn't have all of

16:40these numbers right at my right at the

16:42top of my memory when when we were going

16:44through the uh the planning for this the

16:47other night, but we've compiled all of

16:48this and um and so we were pretty close

16:50about 50,000 customers in the central

16:52pressure zone. It is the largest single

16:54area uh that we provide water service to

16:57within Kerry system. And so um this

17:00particular pipeline provided a

17:02transmission artery to provide water to

17:05the central zone. And that's why the

17:07central pressure zone tanks declined at

17:09a rapid rate and we lost pressure in the

17:11system. But on the positive side, we

17:14didn't have any problems in the western

17:16zone, didn't have any problems in the

17:17southern zone, and we didn't have any

17:19problems with Apex. So everything was

17:21good in those three areas.

17:24And then another question we get asked

17:25is, well, how many water tanks do we

17:27have? And so we've got we've got these

17:29water tanks in the central zone, and it

17:31is the biggest zone, and it's the area

17:33where we have the most tanks. Um, and of

17:36course, you know, just looking through

17:37the list there, the kill main tank is

17:39our newest um, elevated water storage

17:41tank in the central zone, and it's it's

17:44a very large 2 million gallon tank. Um,

17:47this was the tank that it took the

17:49longest to fill back up when we were

17:51recharging the system. And then, of

17:53course, the old Apex tank. Everybody's

17:55kind of seen that tank. It's on the

17:56ground over there by Kerry Garden

17:58Center. And um that tank is very helpful

18:01in situations like this because it has

18:03three million gallons of storage is just

18:06to be able to supplement the water

18:08demand in the central pressure zone.

18:09It's not elevated. All the water moves

18:11in and out by pumps. And so um having

18:14that water on hand helped us a lot in

18:16responding and reressurizing the water

18:19system.

18:22So these are a couple of the photos from

18:24the area where the break occurred. Um,

18:27that manhole is for a um an air vacuum

18:30relief valve that um supports the 30-in

18:33diameter pipeline. This embankment um

18:37just really got washed out during the

18:39event. This is where a lot of the mud

18:41came from that ended up on the road and

18:43caused a lot of issues with Highway 55.

18:46These are this picture on the left here.

18:49This is what the broken pipeline looks

18:51like when you get it all dug up. And you

18:53can see there was a stress factor and a

18:55split right in the side of the pipe. And

18:57then that picture on the right, that's

18:59that gives you some idea of just how

19:01much dirt and debris and mud was on the

19:02road that all had to be cleaned up. And

19:05so that was a really big job. Took a lot

19:07just to get Highway 55 back open for

19:09traffic.

19:11But our public works staff did an

19:13amazing job. They got it all cleaned up

19:15uh the next morning and um and got

19:17traffic back flowing on Highway 55. At

19:21the same time, we were working on doing

19:24the repair, and that's why we have that

19:25lane separated off on the right is so

19:27we'd have room to go in and do that

19:28repair, which is being finished this

19:30afternoon.

19:34So, this is um this is from last night.

19:36I think this is from like 9 or 10:00

19:38last night. They've been we're working

19:39on this repair non-stop and uh so

19:42they've got the pipe all put back

19:43together. And so we had to cut out the

19:45bad piece of pipe, put in a new piece of

19:47pipe, leave it all back together, and um

19:50and today they're working on making a

19:53couple of final connections, and then

19:55they're going to start recharging the

19:56pipe and putting it back into service.

19:58And so that's where we are now. So we're

20:00getting close. We're getting close to

20:02wrapping this up and putting everything

20:04back into service.

20:07So um you know, working through the

20:09communications, it's really really hard

20:10to explain. Hey, if you're in the

20:13central pressure zone, you're under a

20:16system pressure advisory. But if you're

20:18in the western zone, you're okay. If

20:20you're in the southern zone, you're

20:21okay. And Apex is just fine. So, um, so

20:25our staff put together this application

20:27through GIS where you could type in your

20:30address and um, and it would tell you

20:32exactly which pressure zone you're in.

20:35And so, the little box on the lefth hand

20:37side here, we just type in Maryland

20:38Circle, even just typed in a street name

20:40without an address. And boom, it pops up

20:42and tells you exactly where you are.

20:44Maryland Circle is in the central

20:45pressure zone, which we know is right

20:47across the road almost from the old Apex

20:49water storage tank.

20:53So, communications was a very important

20:55part of the job. Um, I can't say enough

20:59great things about our 311 staff and our

21:01marketing team and utility billing

21:03staff. they all work together to get the

21:06word out and um and getting the word out

21:09quickly is so important because once we

21:12lost pressure in the system in order to

21:14provide water service and get the system

21:15reressurized we had to get that system

21:18pressure advisory out to the residents

21:21as fast as we could. So it's not like

21:24you have days and days to plan this. You

21:26got an hour, you got two hours, you've

21:28got to get the word out to the public.

21:30It has to be done quickly. And so, um,

21:33that obviously created a lot of

21:35additional calls and texts and messages

21:37and web traffic on Monday. Um, and that

21:41really all of the all of the combination

21:43of the communications media really

21:45helped get the word out. Um, I mentioned

21:48we did do a formal activation of the

21:50emergency operations center. Um, that

21:53was incredibly helpful. When I went to

21:56the emergency operations center, uh,

21:58Chief Cooper had the whole team

21:59mobilized. We had IT support. We had all

22:03of the different people there who could

22:05get things done. And most importantly,

22:06we had communication staff who could who

22:09could field questions, who could answer

22:11um these inquiries and could get

22:13information out through all the social

22:15channels and the web updates and all of

22:17those different things that have to be

22:18updated in real time. We also had a lot

22:22of important communications with our

22:23neighbors. Um obviously, um our

22:26neighbors over in Morrisville, they

22:28depend on Carrie for utility service. It

22:30was really important that we stayed in

22:31close contact with them as well as Wake

22:34County and RDU airport. Can't say enough

22:37great things about Wake County Emergency

22:39Management. Uh they are such a great

22:41partner when you're going through one of

22:43these types of emergencies. They helped

22:45us get messages out to the schools and

22:49um and that was very important. They

22:51helped us um in just so many ways with

22:54um Wake County Environmental Services,

22:56Wake County School System, you name it.

22:58there. They are truly a great partner as

23:00well as with the um the Ready Wake uh

23:04the Ready Wake Communications platform.

23:08We have some very important critical

23:10customers in Kerry. You know, we're very

23:11concerned about Wake Med just making

23:13sure we're getting good information to

23:14them. We uh we actually did some special

23:17water quality sampling at Wake Med just

23:19to just to provide enhanced information

23:21to help them make the best decisions. We

23:24mentioned the Wake County schools.

23:26Obviously that was a a very critical

23:28customer for us and there was multiple

23:30locations all throughout the central

23:32pressure zone. Uh the SAS campus we've

23:35uh we work very closely with them. And

23:37then of course we got graded facilities.

23:39Graded facilities are restaurants and

23:41daycare centers. And that's where Wake

23:43County is a great partner because they

23:45provide the permits for those graded

23:47facilities. And so working through Wake

23:48County, they helped us helped us manage

23:51how we get information out to those

23:53types of facilities.

23:55We mentioned all the platforms, press

23:57releases, TV news, websites, social

23:59media, readywake. We communicated on

24:02just about every forum we possibly could

24:05um early and often. And um we think that

24:08really helped us get the word out.

24:11And so with that, that's pretty much

24:13where we are. It has been a it's been a

24:16very busy few days to say the least. Um,

24:19on a personal note, I'm just so pleased

24:22with the support of this organization

24:24and how everybody just came together to

24:26help us get this job done. It was very,

24:28very impressive. Be glad to take any

24:31questions.

24:32>> First of all, I want to thank you and

24:33the team. That was amazing. When I saw

24:36pictures, I was stunned how big it was.

24:40>> Um, the questions I've been getting is

24:43what caused it, how old was the pipe, is

24:45it going to happen again, kind of stuff.

24:48And then I want to talk about

24:50communications. And I know Li has a lot

24:52to say about communications. So

24:54>> yeah, so the pipe um the pipe is one of

24:57the original pipelines that goes back to

24:59when the uh the water plant started

25:00operating. Um which means it's probably

25:02about 33 34 years old, somewhere in that

25:05ballpark. It is a very heavyduty, heavy

25:08constructed pipe. Um you know, really

25:11really tremendous thickness class,

25:13pressure rating, all of that. Um, in

25:15many ways they built pipes better back

25:17then than they do now. So, uh, so all of

25:19those original pipes, I I say they're

25:21built like tanks and I really believe

25:23they are.

25:23>> Dr. has a lifespan of

25:26100 years.

25:27>> Yeah. Has a lifespan of 50 to 100 years

25:29for sure.

25:30>> So, well within it like lifespan and jam

25:32Jamie can answer and I'll give you mine.

25:33Um, yes, you're going to have

25:35emergencies and more waterline breaks

25:37because every community experiences

25:39waterline breaks,

25:40>> right? Yes, absolutely. Um, I've had a

25:44number of people now that we're kind of

25:45wrapping up the repair and we've been

25:46able to get the damage section out. I've

25:48a lot of people crawling through it,

25:49looking at it this morning trying to see

25:51what we can assess. Um, there's a number

25:54of reasons why pipes fail, age, it could

25:57be a water hammer issue, it could be a

26:00corrosion, it could be a number of

26:01things. Um, in this particular location

26:05where there was um there was an air

26:06vacuum valve that could have had a

26:08little something to do with it. So

26:10that's something we're going to look

26:11more into to see if we had any what's

26:12called transient impacts in that area

26:14that would have caused water hammer in

26:16that isolated part of the pipeline. And

26:19talking with the staff who were working

26:20the job, the area that we tied the pipe

26:22on to on both ends was in great shape.

26:24Looked almost brand new from what I

26:26understand. So we think that that gives

26:28us an indication it may have been

26:30something to do with how that pipe was

26:32taking in air and releasing air and it

26:34was at a low spot in the pipeline. So

26:37that's something we're going to look

26:38more into. and um and see see if we can

26:42uh gain any more information that way.

26:43But overall, it's a really good pipe.

26:45It's in great condition. We think there

26:47may be something related to that one

26:49location that uh warrants further

26:51investigation.

26:53>> So, on the communication side, I will

26:55say I wasn't even here. I was on the

26:58coast and I I found out first

27:00[clears throat] thing in the morning

27:01when I got up.

27:02>> However, I've been bombarded by people.

27:06one asked me to resign because of it.

27:09>> Um, and I said, "We did all the social

27:14media and TV, printed news, everything

27:18we had, we blasted it out there." So

27:20every So tell me how we can communicate

27:24with you better. And they couldn't. So

27:27that's I'm perplexed with what do we do

27:30about that? and Lori brought it to ISAB

27:33last night and I would love to hear some

27:35of that conversation

27:37>> just to get you in the loop of where we

27:39are. My personal opinion, you guys did

27:42an outstanding job getting the message

27:44out because like I said, I wasn't even

27:46here and I got the message and nobody

27:48Well, Russ called me later, but but I'd

27:51already gotten the message. So,

27:52>> Mhm.

27:54>> Um, well, yeah, first off, I'm sure

27:55we'll all give you all thanks and

27:58congratulations for um reacting so

28:02quickly and and and really I didn't lose

28:05I don't know about anyone else. I didn't

28:07lose access to water. If I wanted to

28:09drink it, I had to

28:11>> I didn't have to boil it, but I should

28:13boil it. Um, it was uh an appropriate

28:16time last night. We had the information

28:18services advisory board meeting and so

28:21um we asked them how many of you knew,

28:25how did you find out? What did you think

28:27of the messages you received? And what

28:30would you recommend to do better? And

28:32just for a reminder for anybody

28:34listening that information services

28:36advisory board is a volunteer board and

28:39commission that gives uh council and

28:41staff feedback on the best ways to

28:43communicate with our residents. Um I

28:46would say one thing that was very

28:48interesting was about half these are

28:49people who know how to connect with the

28:52town right they're but I you know

28:54civically engaged very engaged and only

28:57half of them had ready wake

28:59>> so all of the ones who had ready wake

29:02knew it

29:03>> immediately either had a text or phone

29:05call if you get a phone call and if you

29:07don't res confirm right it keeps going

29:11um so about half of them knew I would

29:13say the other half um out of them, two

29:16of them had the town email s signups,

29:20which was great because the town did a

29:21great email. Um, but then there were a

29:24few who were outside of the loop. Um, a

29:27couple of them who are younger don't

29:28have Facebook. They had Instagram. Um,

29:32and so they didn't receive anything

29:34until 930 when they, you know, when I

29:38think the Instagram post went out, 9 or

29:409:30. Um, already on their way to

29:43daycare. um their feedback was that

29:46their daycarees didn't know uh several

29:48of them who and I I'm understanding now

29:51the connection. Um it would have been

29:53nice uh from a feedback perspective if

29:56daycarees and restaurants there were

29:58some comments about people going through

30:00the Starbucks line and finding out after

30:02they left, you know, by the way these

30:04are first world problems [laughter] that

30:07maybe they shouldn't drink their

30:09Starbucks cup. um and then actually went

30:12back into Starbucks and said, "Hey, do

30:14you know there's a boil wire advisory

30:17and Starbucks [clears throat] didn't

30:18know?" So, there were some of those

30:21business related even one of the

30:23business owners who provide a uh a

30:28service didn't know um and they were you

30:32know making drinks and didn't know. So

30:35maybe some sort their feedback was that

30:37some sort of additional connection maybe

30:40through Wake County on how we better let

30:44businesses know. Um also there were some

30:47concerns of people who

30:50heard [clears throat] about people who

30:51work in Kerry but were on ready wake and

30:56the ready wake goes to where you live

30:58your residential right so where you

31:01live. So they didn't get they were

31:03talking with people they were on their

31:05way to carry but they didn't get the

31:06ready wake emergency notification

31:09and didn't know it was a problem. Again

31:11another opportunity challenge for

31:14thinking out of how [snorts] we do

31:15communication.

31:16>> Right.

31:17>> Um the last one was the the was with

31:21respect to understanding what a central

31:23pressure zone is. Mhm.

31:25>> Um the first picture was uh from the

31:28feedback was kind of fuzzy so you

31:30couldn't see where the street names were

31:33>> and so they would hit the GIS app um and

31:38it would on a phone um it would hang for

31:42three to five minutes and so they they

31:45felt a little bit of anxiety about I

31:48don't know what zone I'm in. Um, and to

31:52be honest, I didn't know what zone I was

31:53in. I never thought about asking that

31:55question before. So, um, their

31:58suggestion was in the future creating a

32:00little, you know, web web app that might

32:03already have, you don't need the whole

32:05map to come up on your phone. You just

32:08need to be able to put in a a name of

32:10your city and um, then, you know, or

32:14sorry, name of your street and it should

32:16tell you what pressure zone you're in.

32:18Um, so that was just some feedback and

32:21not that we've none of these were um

32:24[clears throat] I would say negative

32:26just opportunities for doing it better.

32:28Overall, everybody was

32:30>> quite impressed with once they saw some

32:32of the pictures online and they saw the

32:35impacted area of 50,000 people, they

32:38were really really impressed with the

32:40continual update. That was really

32:42helpful. So just some feedback from that

32:44team.

32:45>> Thank you. And um one thing I'll mention

32:47that we're looking at for the future,

32:49especially with the new utility billing

32:50system, is having more interactive

32:53communications features that go into the

32:55customer portal. So that's one thing

32:58that we're we're believing is going to

33:00be a big improvement for us going

33:02forward with the new Aquaar that comes

33:04out with the new utility billing system.

33:06>> Great.

33:06>> Yeah.

33:07>> And publicizing 311. I mean, it was

33:09impressive. um staff will got staff to

33:12the office very early in the morning and

33:14stood up 311 way earlier. Um, just as

33:17another plug since we're um, live and on

33:19video today, but you know, to call when

33:22in doubt, you know, call 311 is another

33:24way folks can at least get in touch with

33:26us. And since this is early, I know

33:28Jamie, Jimmy, uh, Cooper and team, uh,

33:31you'll be doing an afteraction, I'm

33:33certain. [clears throat] We always do

33:35seen it happen. So, we're getting

33:36feedback. There's probably, uh, more

33:38time and more space for even more

33:40feedback as you do that exercise. Um,

33:43and the only thing that I'd add to it,

33:45if you haven't been to the EOC or you

33:47haven't seen the teams in action, and

33:49some of you have seen it for snowstorms

33:50or past um, hurricanes and other um,

33:55weather issues. I tried not to say

33:57events, but I couldn't. Um, is just how

34:01[clears throat] um, how well the team

34:02works during an emergency. And I think

34:04it's a defining moment of carry.

34:06Something that I've been impressed by in

34:07uh, my almost three decades of working

34:10here. Jamie team chiefs um how just now

34:14you've got some of the marketing and

34:17communications kind of came together as

34:19we've talked about we don't even have a

34:20uh communications director yet which was

34:23an emphasis in the budget so we'll keep

34:25working on that but it's a defining

34:27moment from Carrie um even with all the

34:29feedback and with regards to some of the

34:31some of the criticisms I even knew folks

34:33were calling in about the team did an

34:34amazing job under a lot of pressure in

34:36the middle of the night and to get

34:37everybody back in service within you

34:40really 24 hours is just amazing when you

34:42can stop and kind of stand back and look

34:44at it. So, and I think some of that's um

34:47a testament to the council and past this

34:49council and past councils. That's kind

34:51of the vision and values and the culture

34:53that you you instill in us to want to

34:55have those services. And I think John

34:57and I are debriefing a little bit, but

34:58having, you know, it might be sometimes

35:00if you saw the debris, it's having back

35:03trucks that maybe you wouldn't have,

35:04having the resources, having the

35:06availability of crews, um, dump trucks,

35:08backhos, and just the ability to

35:10mobilize those types of things that a

35:12lot of municipalities don't have and

35:14folks can take for granted that you

35:16funded those things through the years

35:17that we are ready for emergencies when

35:19they hit and they will hit again and

35:21we'll be prepared and I think it's a

35:23hallmark of the town of Kerry. are very

35:24proud of the entire team.

35:26>> Awesome.

35:27>> Yeah. By the way, well [applause] done.

35:31>> Thank you very much.

35:32>> I would like to offer a counterpoint.

35:34Jamie and Jimmy, I need to let you both

35:36know how angry my children are that you

35:40fixed this so promptly that they

35:43[laughter] were actively rooting against

35:46you. And so I hope you can both sleep

35:49tonight knowing that your competence and

35:52hard work has disappointed the school

35:54children of Perry [laughter]

35:55and they didn't get a second snow day

35:57today.

35:58>> On behalf of the parents, thank you.

36:01Thank you. Thank you for your very

36:03prompt work. Uh I think it is remarkable

36:06that it was fixed in essentially 24

36:08hours. I know that is an indication of

36:11the roundthe-clock work that your teams

36:13did, that our chiefs did. Um, and uh,

36:17for all the folks that we don't get to

36:19meet that we don't get to see, please

36:21extend them our gratitude as well. And I

36:23know that is our leadership team, too. I

36:26got your email this morning at 5:00 a.m.

36:28Russ, I got yours yesterday at 5:00 a.m.

36:30So, thank you for the communal sacrifice

36:32for our residents.

36:34>> I'll follow up with that and say, "My

36:3516-year-old went as far as to work up a

36:38plan for the Wake County Public School

36:40Superintendent. should he want to trade

36:43today for the work day that was supposed

36:44to be on Monday for traditional

36:46calendar. So, he had already figured

36:49that out. Um, in addition to that, I

36:52thank you so much. It's been just so

36:54impressive how everyone worked together.

36:57I learned that in addition to signing up

37:00for a Ready Wake account, if you get

37:03distracted in the middle of it and you

37:05don't check the boxes, you don't get

37:07emails and phone calls. because I

37:10checked and I have a readywake account

37:12but I didn't get the emails and phone

37:14calls etc because I didn't finish the

37:17process.

37:18>> So I made made sure to make a post about

37:21that and to remind people that you have

37:23to do all the things [laughter]

37:26to get the things back. So that was

37:29>> a very important

37:31>> thing that I learned to share. Also

37:33>> can I share a a communications

37:35observation? Um, and this is, you know,

37:38first thing I said when I saw we'll call

37:40you Mr. Rebels. I feel like we need to

37:42be

37:43>> formal, [laughter]

37:44>> you know, like a little bit more formal

37:45since you're just such a big deal to me

37:48right now. But one of the first things I

37:50said was, "Hey, I got immediately got

37:52texts. Um, I didn't answer the I didn't

37:55open the text. The second text I got

37:57quickly and it was followed up by an

37:58email each asking me to affirm that I

38:01got the communication. Obviously, that

38:03made them stop trying, I'm assuming, so

38:05they didn't have to keep trying to

38:06communicate with me. But it would make

38:08sense, I would, to perhaps suggest

38:11>> to our county um commissioners that they

38:14consider graded facilities um as

38:17somebody to be automatically and without

38:21an option subscribed to Ready Wake. Um

38:25that would probably solve for the exact

38:27communication problem that was described

38:29here. I I was very well communicated

38:32with and I don't have a daycare or you

38:36know a restaurant or anything like that.

38:38And I think even further to a nonwater

38:40emergency, there's a lot of other

38:42emergencies that we want to make

38:44absolutely certain are communicated to

38:47places like a daycare um especially when

38:49there's you know any kind of public

38:50safety threat or something like that. So

38:52just a you know I I'm in marketing and

38:54we have two kinds of emails and te texts

38:57we can send people. one is um basically

39:00just a a you know marketing please

39:03here's your marketing flippity floop

39:05please buy our thing um and that you can

39:07opt out of but what you can't opt out of

39:09and you probably get it from your bank

39:11and other organizations there are

39:12communications that just by being a

39:14customer you get those those

39:18transactional communications and I think

39:21probably as a water utility we have the

39:23right to that transactional

39:25communication so just something to

39:28consider that are maybe take something

39:30like e emergency communications out of

39:33the I'm a a a customer citizen resident

39:37and I have to actively do something and

39:40instead just opt them in.

39:43>> Um I I I really think that would be

39:45appropriate. But I wanted to ask the one

39:47question that wasn't asked before that

39:49I've gotten frequently. Why generally

39:53does a loss of pressure create concerns

39:58that would lead to a a boil advisory

40:01that I think that's something that

40:02nobody really understands.

40:04>> So um real straightforward answer to

40:06that having pressure inside the pipeline

40:09is one of the best protections of the

40:10pipeline there can possibly be. So if

40:13there's not pressure actively on the

40:15pipeline, it introduces the possibility

40:18that something could leak in through one

40:20of the joints that could have bacteria

40:22in it that could have contamination,

40:23that kind of thing. So pressure protects

40:26pipes from anything coming inside the

40:28pipe, through a leak, through a crack in

40:30the joint, through anything like that.

40:32And so having pressure is like the best

40:34protection there is to make sure a

40:35pipeline stays sanitary.

40:38>> That makes sense. I should have thought

40:39of that on my own. Thank you.

40:41>> Thank you. Thanks, council. I just want

40:42to say something. Yes, ma'am. Um I don't

40:45have any feedback. I did see some um of

40:48the comments online and I think Michelle

40:51was doing an excellent job uh pushing

40:53message across the board. So I was

40:55watching that too. So thank you for

40:56doing that Michelle. But um I think what

41:00um I would say today is that this is

41:02what car makes Kerry great. This is our

41:05staff. This is the leadership and this

41:07is exactly what we strive for even in

41:11future. uh to the to do the best and the

41:13best commitment that the staff brings.

41:15And I want to thank you and Chief Cooper

41:18and you said um

41:20>> Jimmy

41:20>> Jamie

41:21>> Jamie

41:22>> um for your leadership. I want to thank

41:24all the staff for you know coming

41:26together and helping you

41:28>> um in u getting us back on our feet. But

41:32you know thank you for everything.

41:35>> I'm going to call him Mr. Simpson.

41:36[laughter]

41:38Just don't

41:39>> I just want to say that you have a good

41:41rest. You have two busy so busy days. So

41:44have a good night today. [laughter]

41:46>> Yeah. I'll sleep well tonight.

41:48>> Yeah.

41:49>> Yeah.

41:49>> Thank you.

41:50>> All right. Thank you.

41:51>> Thanks, Shane.

41:52>> Yeah,

41:52>> Rebels,

41:54[laughter]

41:55>> Mr. All right, we're gonna transition to

41:57our financial updates

42:00and assistant manager Dana Whitmar is

42:03gonna come up and introduce the topic.

42:05>> And I'm going to try to speak fast and

42:08voluntarily yield some of my time to

42:11Jamie.

42:12>> Okay.

42:12>> And we will not judge you, Jamie, if you

42:14have to take a desk nap here. [laughter]

42:18>> Um, so today I think this is a great um

42:21you're I think you're going to enjoy

42:22this topic a lot. I really enjoy this

42:24information and uh and really there's

42:28just a few things I want you to think

42:30about as you're running through today's

42:31presentation. Number one, Car's um

42:35strong financial health. You're going to

42:37hear a lot about that here today. Um you

42:40are going to see the unudited fiscal

42:42year 26 um Q4 year-to-date um results.

42:47So that was in the the printed document

42:50that you got uh a little bit ago. Um

42:53there are also as part of that this is

42:55was also in that printed document um

42:58fund balance projections that would have

43:00been effective or that will be effective

43:03for the end of um fiscal year 26 and

43:07they are just projections that were in

43:10place at the time of the printing of

43:12that which was essentially July 1st. So

43:16we hadn't got into period 13 we hadn't

43:19received all of our revenues etc. But,

43:22you know, something to kind of get gauge

43:24where things are going. Um, the second

43:27part that that I'd like you to walk away

43:29from here today is um this is really

43:32about another kind of layer of growing

43:35financial knowledge. Uh, that's why I

43:38find it so interesting. I love learning

43:40this stuff. You're going to meet some

43:42folks here today that um provide

43:44excellent information and that

43:47information is going to be related to

43:48our rating agencies, the three rating

43:50agencies that have rated Kerry AAA. Um

43:54you're also going to see some long-term

43:57trends and municipal comparisons. Uh so

44:00I I point out the policies that are

44:03related to the general fund results. Uh

44:07and then the policy 17. So 175 is the

44:10general fund fund balance. You're

44:11already thinking about that. Everything

44:14you're going to see today relates to the

44:16current fund balance which is about

44:18total uh at 33.33%

44:23of expenditures. Uh and then the debt

44:26policy is policy 176. If you look that

44:29up, it's got some pretty good

44:30information in there. It's um I don't

44:33believe it's that old. I don't think it

44:35I think it was uh relatively recently

44:38updated and consistent with the

44:41operations that we have now. Uh and then

44:43I think probably most importantly this

44:45part is we want you to spend today

44:49thinking and asking questions. So you

44:51don't actually have to do anything here

44:53today. So think ask questions. uh there

44:57will be future doing associated with

44:59this and then future choices associated

45:02with this but this is just adding

45:04another layer to your knowledge base of

45:07all the things that you might want to

45:09consider as you make decisions about

45:11policies.

45:14So uh today you're going to of course

45:18hear from Kimberly Branch uh who always

45:21presents the quarterly um results for

45:24you. But then I also want to introduce a

45:26few other folks. And if you don't mind

45:28standing up when I say your name, it

45:30would be helpful. So Ty Welfford and uh

45:34Ty is going to um be speaking after

45:37Kimberly. And uh and he is such a great

45:40resource. We get to have him scheduled

45:42automatically quarterly and then all

45:44kinds of kinds of time in between. And

45:47uh we ask him a million questions and I

45:48encourage you to do the same thing to

45:50them. [laughter]

45:51Also from Tai's team is Clay Latell

45:56and then Robert Rosales

45:59and they're all here from Davenport.

46:02Um the last person I'd like to just

46:04introduce some of you may have met at

46:07work sessions before is um Hussein

46:10Shafari and

46:14and I got that back words after we

46:16practiced so hard. [laughter]

46:18Sharafi

46:22Um, [laughter]

46:24so Hussein is has been with us just a

46:27few months. He is our debt and

46:29investment manager. Uh, if you can

46:31imagine, we've got lots of uh dollars

46:34that we invest, lots of debt that we

46:37issue and uh and so Hussein makes sure

46:41that we are meeting all regulations,

46:43that everything is on time, all of the

46:45things. And uh and he is a part of

46:47Kimberly's team.

46:49Dana, could you tell the public who

46:51Davenport is?

46:53>> Yes. Uh Davenport um provides us with

46:56both debt and investment um consulting

47:00and uh and they service a lot of

47:03municipalities

47:04um a lot many in North Carolina. So for

47:07us, it provides really helpful

47:09information because they're very they

47:11understand a lot of what's going on in

47:13the marketplace. So for example uh when

47:16I speak of so investments of course um

47:20when we do investing we we first look at

47:24safety then we look at um liquidity and

47:27then we look at yield. So they provide

47:29us advice on amounts that go into

47:32different um into different uh

47:34investment. But then also on the debt

47:37end of things. So for debt um our rating

47:41agencies

47:42uh you're going to learn a little bit of

47:43this tonight but our rating agencies we

47:46typically when we issue um bonds which

47:50is essentially us someone buying our

47:54debt um so that we can do projects etc.

47:58uh the team at Dav Davenport helps make

48:00sure that we are following all processes

48:03that we are aware of everything that

48:04that we are making contacts with

48:06excellent um other agencies that might

48:08be interested. So it's really a a mutual

48:13relationship where we get um a lot of

48:15advice and and benefits from their work.

48:18So the media, some of the media wants to

48:21portray us as having financial problems.

48:24And we're doing this today to fix

48:26financial problems when I see it just

48:29the opposite. We're financially strong,

48:31have been financially strong, and

48:33continue to be financially strong. And

48:35this is going to help us be even

48:37stronger. Mhm. You are going to see when

48:40Kimberly does some of hers as and when

48:43Ty does some of his um pay closely close

48:46attention to the lines uh because you're

48:49going to see that um a lot of the things

48:52that people are talking about are things

48:54from two years ago. And so so two years

49:00ago there was a lower fund balance um

49:03and and we have recovered that since

49:08then so gained it back up again. Um, but

49:11when you see all these results, it's

49:13really helpful because you can compare,

49:15particularly with ties, you can compare

49:17today to five years ago to 10 years ago.

49:21And um, and then Kimberly's gives more

49:24granular information for every year in

49:26between.

49:29>> Thank you, Dana.

49:33>> All right.

49:34Good afternoon, Mayor and Council. I'm

49:37here before you again. As Dana

49:39mentioned, I I won't keep you long

49:40because I know the meat and potatoes is

49:42with Tai, but um I am going to provide a

49:45summary of the quarterly report that you

49:47all get every quarter. I'm just pulling

49:48pieces out of it that we think should be

49:51highlighted. Um what's important as we

49:53transition to TAI is that all of the

49:55information that goes into our

49:56financials, that is what the rating

49:58agencies look at. So the information

50:00today is kind of feeding up um to that.

50:03Um, just a reminder, the numbers I'm

50:05presenting is really as that snapshot as

50:07of June 30 that was in our financial

50:09system. What that means is they are

50:11unodudited year-end results, which is

50:13one of our takeaways. Um, and unodudited

50:16means just that we are um, as you may be

50:19reminded from the other night, I

50:20mentioned we are currently going through

50:22our audit now with our partner audit

50:24partner Cherry Beckard. So, we're doing

50:25all that work. So, hopefully in

50:27November, you'll get more um, actual um,

50:30results um, at that time. The second

50:33takeaway I would like for you to take

50:34away with you is the revenue performance

50:36is favorable. Um favorable are you know

50:40my like accounting terms that means

50:41they're positive. Um as of June 30, our

50:44preliminary numbers at June 30, but we

50:47should remain disciplined about the

50:48future. And what I mean here is you may

50:51recall from the other night we talked a

50:52little bit about we could have the um

50:54potential for revenue volatility. Um

50:56sales tax this year we have favorable

50:59results because we're up 5%. When I say

51:01this year, in 2026, we were up 5%, but

51:04if you recall the year previous prior to

51:06that, we really didn't know what sales

51:08tax was going to do. So, we also h we

51:10always have to be mindful of that. Lisa,

51:12a little bit later in her legislation um

51:14update, she's going to talk a little bit

51:16about what's out there on property tax.

51:18That's another area of volatility

51:20depending on how people vote in

51:21November. So, those are things we just

51:23need to consider as we go into our

51:25future. The third result is we are

51:27preserving capacity. um which for me

51:29capacity is fund balance. Um if you

51:32recall we were talking about the safety

51:34nets and building capacity um in our

51:36reserves and because we are um

51:39projecting a positive ad to fund balance

51:42as of um fiscal year 2026. That's our

51:46effort when we're adding to fund

51:47balance. We're building that capacity

51:49for carrie's future which includes car

51:51uh capital andor unforeseen things that

51:54could happen.

51:56All right. So, let's get Did I hear

51:58somebody say let's get into the number?

52:00Oh, it's a drink. Let's get into the

52:03[laughter]

52:03Let's get in let's get into the um the

52:07numbers. Um snapshot fiscal year 2026.

52:11Again, unodudited. We showed revenues as

52:14of um that came in for the general fund

52:16about $283 million. We received about

52:1995% of our budget at that u for the

52:22year. the expenditures, we spent about

52:25275.2

52:26million and um which is a good thing. We

52:29spent 92% of our um budget being under

52:34the budget spending. That's a statutory

52:35requirement. So that's that's a good a

52:38good look there. When you compare

52:39revenues to expenditures, our net

52:41results as of June 30, early June 30 is

52:447.9 million. That's revenues over

52:47expenditures. In short, um, looking at

52:50that as a percentage, revenues were up

52:52for the general fund 8%, expenditures

52:54were up 5%. So, it's good that revenues

52:57increase at a higher rate than

52:59expenditures. All right, this may this

53:01is um a picture that you are familiar

53:04with. I do try to pull this out every

53:06time I do a quarterly update. This is a

53:08five-year history for as of June 30th um

53:13for the last five years. Just a

53:15reminder, these are year-to-ATE numbers.

53:17So, it's for the whole fiscal the whole

53:1812 months of the year. White bar

53:21revenues, orange bar expenditures. You

53:23can see um when paying close attention

53:26to the 2026 columns again, the 283 that

53:30we spoke of and the 275 for expenditures

53:33that we spoke of. And you can see nicely

53:35how our trends have increased um

53:39year-over-year. in particular on the um

53:42revenue side. Just a reminder, we did

53:44have a property tax reval last fiscal

53:46year. That's something to take into

53:48consideration as well.

53:50>> Excuse me, Kim. Does unodudited

53:53um mean

53:55preliminary?

53:56>> Yes, they're one and the same. Yeah, I

53:58use them interchangeably.

54:00>> So, the unodudited numbers could change

54:05um as that month 13 information comes

54:08in. Yeah, we usually we clo I mean we

54:11close at the end of each month, right?

54:13But because items like sales tax, we

54:16have not received all of sales tax. We

54:18have about two and a half more months

54:19after that that fiscal year that we have

54:21to capture back. There are some payments

54:23that we make after the year end that we

54:26say the word acrew back so we can make

54:29sure everything is properly accounted

54:30for in the fiscal year that they should

54:32be in. So all of that work that we're

54:34doing after that June 30th is to make

54:36sure and that that is you know a

54:39statutory requirement as well for us to

54:41do that work.

54:43>> Is it um is there projected amount

54:46projected revenue and expenditures

54:49included in those un

54:53so much unknown in those months. So to

54:56keep it safe, I will say this is apples

54:58to apples though because none of these

55:00include like that period 13 or the

55:02acrruels. You all will see closer

55:04actuals when I come back in November.

55:07Okay. Because Yep.

55:08>> I appreciate it.

55:09>> Yep.

55:10>> Just a question. I noticing I'm a trend

55:12noticer. This quarter we had higher than

55:18um expected compared to Q4 uh 2026. And

55:22you mentioned that it was likely because

55:26of the property.

55:27>> No, I was just saying it's important to

55:29note we had that during this 5-year

55:30period. That increase from 25 to 26 is

55:34really the growth and what we um

55:36estimated during our budget time about

55:38about the the 5%.

55:39>> So it's the first time I guess I'm

55:41noticing that revenues came in higher

55:44than expenditures in Q4. Do you have a

55:47like a reason for that?

55:50>> The last five years. uh last five year.

55:52Every year is different because a lot

55:54some of it could be contingent on timing

55:56of capital because we do transfers out

55:58of funds. Um we make

56:00>> the [clears throat] sales tax.

56:01>> Yep. [snorts] Sales tax in was it 24 the

56:05bad the bad year? Um as you can see yes

56:0724 you can see revenues is under

56:09expenditures. We you know they came in

56:11when we So it depend is

56:13>> our answer a lot of times it depends on

56:15a given year.

56:16>> Okay.

56:16>> Yeah. And these are just for quarter

56:19four for those people wa watching. It's

56:22not the entire years that we're looking

56:24at.

56:25>> It's not a

56:26>> just comparing the quarters. So we

56:29didn't lose money

56:31>> for five years.

56:32>> So what this is showing is June 30th

56:36year to date from July 1 of a fiscal

56:38year to June 30 in our financial system.

56:42These are all apples to apples. Now if

56:44you want audit results that is reflected

56:47in our annual comprehensive financial

56:49report which is online and you all will

56:51see those final full year of activity

56:55all acrruels everything to closer to

56:57November because that gives us time to

56:59finish our audit.

57:00>> Make sure you answer the mayor's

57:01question since it is Q4.

57:03>> You're saying it's the full fiscal this

57:05slide.

57:06>> It's it it's it's representing 12

57:08months. Yes. From July to June

57:10>> which is just to make sure you know

57:11that.

57:12>> Yes it is. Yep. We just have some things

57:14we have to catch up with that because of

57:16timing to how they come in. They don't

57:17come in.

57:18>> It's a fiscal year year to date.

57:20>> It's a fiscal year year to date

57:22>> with the same year to date being

57:23compared.

57:24>> Yes.

57:25>> Thank you.

57:25>> Is it fair to say it's an accounting

57:27year?

57:29>> Um,

57:29>> what is an accounting year for us?

57:32>> So,

57:33it it's a it's an account it's an

57:36accounting year, a fiscal year, but with

57:39you know, and it's not just us. Um there

57:41are some things that there's some things

57:43that happen right after that accounting

57:46year or that fiscal year that we have to

57:47make sure is captured in the correct

57:49year.

57:50>> We're paying it subsequent to the year

57:53but we have to pull it back.

57:55>> So the Q4 does that mean we are looking

57:58at this in Q4 is last time the similar

58:02time maybe in Q3.

58:05>> Yep. So this Q4 we're looking at as of

58:08June 30th.

58:09>> Mhm.

58:10um 26. However, when I come to you in

58:13November, I'm still going to be looking

58:14at it as of June 30th, 2026 because of

58:18things that I had to pull back

58:20>> until the appropriate year. Does that

58:22make sense?

58:22>> Yes. So, that number

58:23>> I mean, we could have a whole accounting

58:25less in one day. You know, if you really

58:27>> 2026 numbers are subject to change as

58:30plus or minus Absolutely. Final numbers

58:32come in.

58:32>> That's right.

58:33>> I think that's the key. The numbers that

58:35you see here today will not be the exact

58:36same. Is there a simple example you can

58:40give about something that you have to

58:41pull back as you keep saying?

58:43>> Sales tax. Sales tax is one which is why

58:46we don't um do like monthly July reports

58:50or um August reports because we're not

58:53receiving sales tax which is 21. That's

58:55a significant part of general fund. So

58:57what's happening in those first couple

58:59of months is really we're just spending

59:02reason fund balance for that just so

59:03y'all know. um we're spending um during

59:06that time. So, it's not really telling

59:08us a fair um a fair assessment, but yes,

59:11we have to pull those so we can have 12

59:14full months of activity of sales tax. We

59:16have to capture those sales tax that

59:17we're getting in July and August because

59:19they revert to when um people actually

59:22>> as there's a lag in receiving the funds.

59:26>> Yes. Yep. Um payments happen the same

59:30way. We get several invoices

59:32after June 30th that have invoice dates

59:36May June of the previous year. So we

59:38have to pull those back as well.

59:40>> Yep.

59:41>> So I'm trying to simplify it for

59:44everybody watching because the

59:46misinformation is just running rampant.

59:49>> Sure.

59:49>> About the financial problem. So which

59:52don't exist. Um, so revenues are

59:56basically 60some percent property tax,

1:00:0020 something sales tax. So that's over

1:00:0380% of our revenues.

1:00:05Expenditures

1:00:07are money we expend including operations

1:00:10and capital.

1:00:11>> Yep.

1:00:12>> Okay.

1:00:12>> Yep.

1:00:13>> That's why you see the volat in my mind

1:00:16that's why you see the volatility in

1:00:18expenditures and revenues are more

1:00:20steady. If you drew a line

1:00:22>> y

1:00:23>> that's why that is

1:00:25>> just stating that for those that are

1:00:28watching like oh that was the out of

1:00:29control excessive spending that they

1:00:31were doing you know no

1:00:33>> yeah know um what I think is you know is

1:00:36important and when we look at variances

1:00:39year-over-year and we're saying we're

1:00:40comparing periods apples to apples what

1:00:44are the variations of change if you're

1:00:46not seeing significant change

1:00:48you know things are okay If you see

1:00:51swings, we will bring that to you, of

1:00:53course, but right now we're not seeing

1:00:55significant swings

1:00:57um when you look at these um

1:00:58comparisons. Like I mentioned, revenues

1:01:00up eight, expenditures was up five.

1:01:03>> Yep.

1:01:04>> And there more data shared including

1:01:06when we get a ties presentation will

1:01:08fill in maybe some of that picture.

1:01:09Mayor Y.

1:01:10>> Thanks.

1:01:12>> All right. This is our fund balance

1:01:14financial position that we are

1:01:16projecting. Again, these are early

1:01:18numbers. Um if you recall our policy

1:01:21statement 33.33% of expenditures our

1:01:23minimum requirement for fiscal year 2026

1:01:26was about 96.3 million dollar. We are

1:01:30projecting to be at 19 119 um.3 as of um

1:01:34that June number. That projection that

1:01:37we are projecting does include let's

1:01:40just estimate some other things that we

1:01:41might get you know in that in those

1:01:43audit seasons. And so if you compare the

1:01:47119

1:01:49um

1:01:50to actually what we had we have we had

1:01:53in at the end of fiscal year 2025 was

1:01:56about 106. That's about $13 million that

1:01:59we are projecting to um at least add to

1:02:02our fund balance at the end of the year.

1:02:05>> Could a lot of that be attributed

1:02:07[clears throat] to our conservative

1:02:09estimate of sales tax and and that being

1:02:13exceeded?

1:02:13>> That's good. That's part of it. Yes.

1:02:14Yep. Yep.

1:02:16>> I wanted to get one thing right there.

1:02:18>> I love that. You got a a on that,

1:02:20Michelle. [laughter]

1:02:22Um, just in looking at this year's

1:02:24budget that you all recently adopted,

1:02:26fiscal year 2027, it says that our

1:02:28policy minimum should be around 103 um

1:02:31million. Again, this just a reminder,

1:02:34this is on total fund balance. As we

1:02:36continue to talk about fund balance and

1:02:38transition, we'll have some different

1:02:40com um comparables, but this is where we

1:02:42are now. the projected fund balance. It

1:02:44does support our financial stability,

1:02:46future capital needs, and the

1:02:48flexibility if something is to um occur.

1:02:53All right, these are just quick

1:02:54snapshots, some of what I've already

1:02:56mentioned. Revenues, we received about

1:02:5995% of our budget. Total revenue growth

1:03:03was about 8%. Property tax here, we're

1:03:06outlining those significant revenue

1:03:07sources, 59%, that was up 7%. We collect

1:03:10we collected most of our um property tax

1:03:13as of that June 30th point. Sales tax

1:03:16revenue um is the second largest is 21%

1:03:20and as of June we were up 5% same point

1:03:23in time. So um percentages may vary a

1:03:26little bit once I come back with the

1:03:28final numbers.

1:03:29>> Just to jump on to Michelle's [snorts]

1:03:32point, Council Member Kra's point, 5%

1:03:35over our conservative estimate. Is that

1:03:37right? We

1:03:39>> Oh, yes. Yes. Yeah. Yeah. No, no, no,

1:03:41no, no, no. 5%.

1:03:42>> The 5% is over the previous year. Yeah.

1:03:45>> Over the previous year. Conservative

1:03:46effort effort. The estimate was like 1%.

1:03:50>> I think we estimate, Stacey, do you

1:03:52recall about 1 to 2% of sales tax for

1:03:5426? I mean 26. Yes.

1:03:56>> Okay.

1:03:57>> Yeah.

1:03:57>> I just wanted to make sure.

1:03:58>> So, we're still favorable there, but

1:03:59>> we're still conservative and the numbers

1:04:01came in higher than we expected or

1:04:03>> than expected. Then we budgeted

1:04:05>> than we budgeted. And this is after we

1:04:07lost 300 million I believe with in the

1:04:10uh property tax revenue for affordable

1:04:13housing due to state legislator change.

1:04:15Right.

1:04:16>> Okay, that's fair. Stacey,

1:04:18>> you're nodding your head on that one.

1:04:20>> The loss the loss is not that high, but

1:04:22there are some loss due to the um

1:04:24exclusion for apartments.

1:04:26>> Oh, for the nonprofit. Yeah. Yeah. Yeah.

1:04:27Okay. Yep.

1:04:30Nothing to add, Stacy? Okay. All right.

1:04:33Utility fund. So this is our other major

1:04:36fund. Jamie is um my helper um with this

1:04:38fund, but this is just a um reflection

1:04:40of their numbers as of June 30th.

1:04:42Revenue 100 about $107.8 million. We

1:04:46actually received a little bit more than

1:04:48we budgeted. Um there expenditures we

1:04:50spent 63% of budget representing $63.4

1:04:55million. The net there that we're

1:04:57experiencing is about 44.4 4 million um

1:05:01which was a significant increase over

1:05:03the previous year. I'm going to try to

1:05:06do a deeper dive into some of why the

1:05:08variance is um the way it is. I do want

1:05:11to pause for a second because when I

1:05:12look at the the net so utilities fund

1:05:15also has a net position fund balance

1:05:17just like the general fund and so the

1:05:19health of that fund has allowed you know

1:05:21when things emergency like what happened

1:05:24yesterday we were definitely in a great

1:05:26position because of the results that the

1:05:28utility fund is in. So here's a

1:05:31five-year um history as well. White bar

1:05:35represents revenues, orange bar

1:05:37represents expenditures. You can see

1:05:39here the 108 that I just mentioned. Um

1:05:42that um was an increase over the

1:05:44previous years as well as the um $63

1:05:49million in um direct expenditures that

1:05:53we have here.

1:05:54>> I'm sorry that went right over my head.

1:05:55Where did the 108 come from?

1:05:57>> That is revenues for the utility fund.

1:05:59>> Right. Right. But we are going at a

1:06:01steady pace and we jumped.

1:06:02>> Yes. Let's talk about it.

1:06:04>> Okay. Utility trends. Let's just um talk

1:06:06about this a little bit. We show here

1:06:08again that increase from year-over-year

1:06:10was 19%.

1:06:12We as a reminder we do rate smoothing

1:06:15every year and there's a 4% usually in

1:06:17the utility fund that we increase our

1:06:19water and sewer rates. That's an

1:06:20adjustment that we make annually. That

1:06:22rate smoothing is in preparation of

1:06:24capital projects that our um utilities

1:06:27group is mapping out and so that we're

1:06:30able to fund those in the um future. We

1:06:32also received started receiving money

1:06:35from our PAS settlement. We mentioned it

1:06:36in third quarter as of June 30 we had

1:06:39received about 70 not 707.3

1:06:43million um in receipts there. So that's

1:06:47the revenue that explains your increase.

1:06:49>> That's the bump.

1:06:50>> Yes. Can I um check uh an assumption I

1:06:56have with you to see if it's accurate?

1:06:58We do not spend money on utility

1:07:02infrastructure

1:07:03projects then retroactively

1:07:08bill to replace the money via revenues

1:07:12be via utility bill. We do it the

1:07:15reverse. We collect the revenues and

1:07:18then we spend it on

1:07:22>> projects and you know capital

1:07:24investments.

1:07:24>> That's usually what happens like we're

1:07:26building. It was the premise of rate

1:07:28smoothing in general of maybe wild mood

1:07:30swings with regards to large scale

1:07:32utility projects like plant expansions.

1:07:35>> Thank you. As an example,

1:07:36>> I just wanted to make sure if somebody's

1:07:38looking at this, they're going to go,

1:07:39"Well, why'd you ch raise our our water

1:07:41rates? You didn't need the money." when

1:07:44in fact because I think in the past

1:07:46probably people weren't paying a lot of

1:07:48attention and when we we let folks know

1:07:50that we are not allowed to make a profit

1:07:53>> okay

1:07:54>> on our water utility that that is not

1:07:56the case of what's happening here these

1:07:58monies will be solely spent on utility

1:08:02expenditures I just thought it I wanted

1:08:03to make sure that yes

1:08:05>> I am not u misinforming people when I

1:08:07when I talk to them

1:08:09>> and as part of the budget um and Stacy

1:08:11could probably give us the page numbers

1:08:12but there is say make sure it's a

1:08:1415-year plan. Capital plan.

1:08:17>> Yes, it's 20 budget 20 the budget plus

1:08:21folks who are watching want to go see

1:08:23what our needs are anticipated to be.

1:08:26Again, not a budget year, but what uh we

1:08:29are are planning for in future years and

1:08:31why you need either cash or ultimately

1:08:33bond funding or other funding mechanisms

1:08:35is to pay for all of that. That's in the

1:08:37back some page. Stacy can probably tell

1:08:40us what page number it is, but you can

1:08:41see all of what we say our needs are in

1:08:43the next 20 years for both utility fund

1:08:46capital as well as general fund capital.

1:08:48>> And to be clear, these revenues aren't

1:08:50just carry taxpayers. These are

1:08:52surrounding municipalities. The anybody

1:08:55who's got a utility account in Apex, you

1:08:57know, that they're also contributing to

1:09:00that revenue amount. Correct.

1:09:02>> Yeah. Gently Jamie wants to add Apex is

1:09:04different.

1:09:05>> So Carrie and Morrisville are merged. So

1:09:07we're we're all one utility customer so

1:09:10to speak base.

1:09:12>> Apex is their own customer base and they

1:09:16reimburse us for the expenses required

1:09:18to run their part of the utility

1:09:20operation. So it's it's a different

1:09:22financial arrangement.

1:09:23>> Okay. But it ultimately comingles um and

1:09:26so they are paying their fair share for

1:09:29capital infrastructure

1:09:30>> cost. Paying their fair share. They're

1:09:32just they're just a part owner. So the

1:09:34the financial the way that we recover

1:09:36the funds is different.

1:09:37>> Okay. I'll get that right next time.

1:09:39>> Yeah.

1:09:39>> Yeah. Thank you.

1:09:40>> And just a little history and I don't

1:09:42have the numbers right on the rate

1:09:44smoothing question. I think we were

1:09:47presented with some big number like it'd

1:09:49be a 20% increase. More or less. I can't

1:09:52remember.

1:09:53>> If you waited.

1:09:54>> Yeah. If we waited or we could smooth it

1:09:56out and as as we've seen with tax

1:09:58increases, you know, big numbers, people

1:10:01don't like that. So

1:10:02>> yeah, yeah.

1:10:04>> One of the other things if folks are

1:10:06watching, they say, "Oh, you've got all

1:10:07this extra money here. You should use it

1:10:09to, you know, fix the roads." The

1:10:11requirement for utility funding is that

1:10:14it be used on utilities. That's correct.

1:10:17Right. So, um, one other thing I guess

1:10:20just to remember is I think the water

1:10:22reclamation plant way back when, the

1:10:24Western Wake Reclamation Plant was like

1:10:26$300 million. So these are

1:10:30these are really big capital projects

1:10:32that need require us to save up the

1:10:36money as well as find other

1:10:39methodologies to do things like bonds

1:10:42etc so that we can expand or build

1:10:45another one. So they're they're very

1:10:47expensive projects which again hence the

1:10:50need for rate smoothing. But I know that

1:10:53if I looked at that and said oh I have

1:10:55money over here can't I use it over

1:10:56here? If only if only we could.

1:11:00>> Only you could.

1:11:00>> Thank you for that.

1:11:02>> All right. So on the expenditure side,

1:11:04um we we spent 63% of the budget and

1:11:07that shows um comparing to the previous

1:11:09year about a 20% decline. The usually

1:11:12the expenditure change in particular

1:11:14with the utility funds is driven on the

1:11:16timing of capital projects. Um, and so

1:11:19what you will notice this year is that

1:11:21some of those projects were deferred and

1:11:23this year in 27 you're going to probably

1:11:26see per Jamie a pickup in that because

1:11:28of the timing of um those capital

1:11:30projects.

1:11:34All right, these are some additional

1:11:35items that we just wanted to pull out of

1:11:37those quarterly reports just for

1:11:38awareness. We are actively managing

1:11:41about 297 capital projects across the

1:11:43organization with a budget. I meant to

1:11:47um identify this as budget. That 847

1:11:50million is actually the budgeted funds

1:11:52that you all authorize for those 297

1:11:55active projects. Um another item that we

1:11:58went into, just as a reminder, we did

1:12:00issue about 5.2 borrow. We borrowed

1:12:03about $5.2 million in vehicle financing

1:12:07in June. You all approved it. And that

1:12:08is a way for us to extend the payments

1:12:11for some of the vehicles that we

1:12:12purchase just to go along with some of

1:12:14the lifespan of those um vehicles. We

1:12:17started to operationalize this type of

1:12:19um financing because you may some of you

1:12:22may remember we did it in 24

1:12:25and 25

1:12:27um so that we are starting you know a ca

1:12:29a regular cadence on that. One fun thing

1:12:32that we were able to go back to in um

1:12:35the fourth quarter as well with the help

1:12:36of Hussein Sharafi is that we have been

1:12:39able to some of our um liquid available

1:12:43funds trying to capture some return on

1:12:45th those. So he was able to invest about

1:12:48$60 million in some US treasuries just

1:12:51to get us some yield on those. Um so

1:12:54with that next steps we are as you know

1:12:57we are completing our year in annual

1:12:59audit hopefully in November. We'll come

1:13:01back to you with some more um finalized

1:13:03numbers for the fiscal year 2026 and we

1:13:06will do a formal presentation in

1:13:08December which is usually when we come

1:13:10to you all in December with final Cherry

1:13:12Beckard will come with their um annual

1:13:15presentation at that at that time as

1:13:17well to give you your fiscal year final

1:13:192026 numbers

1:13:20>> and that is as you said an annual audit

1:13:23that we've done and will do.

1:13:26>> We are required to do every Yes. every

1:13:28municipal local government is required

1:13:30>> because of the state audit.

1:13:31>> That's right.

1:13:32>> Okay. I was just going to pipe up and

1:13:34say perhaps we can add a descriptor in

1:13:36front of the annual audit that that

1:13:40everyone does every year that is not you

1:13:42know so we'll know

1:13:43>> it's not you know what people are

1:13:45thinking of as audit even if you wrote

1:13:47Cherry Becker audit audit in front of it

1:13:49or something just so that all the

1:13:51materials are really clear to folks that

1:13:54are

1:13:54>> you know paying a lot more attention and

1:13:56and sort of trying to absorb this

1:13:58information.

1:13:59>> Got it. I know it's so hard because it's

1:14:01the language. It's just the language,

1:14:03right?

1:14:04>> Yeah,

1:14:04>> that's the easy button. We got it.

1:14:07>> Um I have a question.

1:14:08>> Yes.

1:14:09>> So when we renewed um the contract with

1:14:12Sherry Becker, maybe Ross, you might be

1:14:15able to answer this question. You do. Um

1:14:19so

1:14:21um I believe that last time there was a

1:14:24miss and we all did not understand the

1:14:27scope of the auditor um agreement that

1:14:29we had with cherrypicker or we the

1:14:31requirements were very limited. So this

1:14:34time the requirements will also require

1:14:36them to

1:14:38um check the information against our

1:14:40policies. Right. U that was some of the

1:14:42extra services and Kim may want to speak

1:14:45about it that we were bring we'll bring

1:14:46back to you on what they um we want them

1:14:49to do into addition to just normal um

1:14:52external audit services.

1:14:53>> That's right. Um to Russ's point, we um

1:14:56recently met with um Cherry Backer to

1:14:58see what some of those additional

1:14:59services could be. We are waiting on a

1:15:01response just so we can have a

1:15:02comprehensive um list of options that we

1:15:05can um bring back to you for the future

1:15:07for those additional services. In

1:15:09regards to the direct question policy

1:15:12maybe around fund balance, we did talk

1:15:14about too as a reminder the other night

1:15:16we are inserting a um an expansion of

1:15:20what we include in our annual

1:15:21comprehensive report so everyone can

1:15:23know do we meet the poss. This is a

1:15:26calculation that is what we're

1:15:27including.

1:15:28>> And that's a good reminder just to make

1:15:29sure we bring it back to you all so that

1:15:31it's crystal clear and to the public

1:15:32watching. Yeah.

1:15:33>> Um of what services are and aren't with

1:15:35Cherry Beckard. and we did do a request

1:15:37for proposals um to to get their

1:15:40services and look at others that that do

1:15:42[snorts] that type of work um when we

1:15:44renewed that contract this year.

1:15:45>> But Kim, you also mentioned um that you

1:15:49know the during [snorts] our last

1:15:52session where we did an extensive

1:15:55um

1:15:57um 101 course on fund balance and it's a

1:16:01deep dive. Um you mentioned that you

1:16:04know fund balance could be calculated in

1:16:07any way and you know so will this um

1:16:11future recommendation or whatever you

1:16:14may want to call it that will uh or when

1:16:17you when you present the actual fund

1:16:20balance in November

1:16:23um which will be as of the closing

1:16:27>> of the audit cycle um

1:16:30>> you would you also provide provided with

1:16:32the information on how it was calculated

1:16:34and was it in alignment with our

1:16:37existing best practices.

1:16:39>> What you will receive in November will

1:16:40be as of your existing policy which is a

1:16:4333.33%.

1:16:44As you all decide um when we continue

1:16:47the training and conversations to

1:16:49transition to a new um methodology

1:16:53that's when you know you'll start seeing

1:16:55different um calculations. Um, we'll

1:16:58give you some thing things to think

1:16:59about in November as well, but it will

1:17:01be based on your existing policy of

1:17:04total fund balance.

1:17:04>> Consultants look at that tie some of

1:17:06Tai's presentation and maybe your

1:17:08questions to that speak to what changes

1:17:11it might be and what the rules are

1:17:13around it or considerations for the

1:17:15rules you want to make around it. I just

1:17:16want to make sure that we make this as

1:17:18our best practice that you know we

1:17:20understand how it is calculated and

1:17:22every time we could have those data

1:17:24points to compare against um because if

1:17:27the calculation can change and you know

1:17:29somebody is changing the numbers

1:17:32>> um how will council know about that

1:17:34right so I think this could be a good

1:17:36checkpoint for everybody

1:17:37>> and I'd say we we don't want to change

1:17:38our numbers un um of the policy of how

1:17:41it's calculated unless you agree to

1:17:44adopt a new polic

1:17:45>> um and then also O make sure Cherry

1:17:47Becker just as they did last year is um

1:17:49includes it in their presentation as

1:17:51well as to what their audited numbers

1:17:53are

1:17:54>> and that's a good idea

1:17:55>> but good point so that we don't and as

1:17:57you saw at the last work session seeing

1:17:59how many different mun municipalities do

1:18:02it different ways and uh folks also have

1:18:04their different opinion of what the

1:18:05right way is.

1:18:07>> Um but it seems like everyone has a

1:18:08different version of a way to do it and

1:18:10as we change it y'all will be fully

1:18:12involved in that before any decisions

1:18:14are made. It's just a good checkpoint

1:18:15and God will drill to have, you know.

1:18:17>> Yep.

1:18:18>> And if we choose to change that

1:18:20calculation,

1:18:22>> would we make the adoption for fiscal

1:18:25year 2028? Would that be when it

1:18:29>> you would want I would you'd want to do

1:18:31it with the budget.

1:18:32>> I mean, we wouldn't do it like midcycle,

1:18:34would we?

1:18:34>> Not that would be really midcycle. You'd

1:18:37say for the subsequent year.

1:18:38>> Okay.

1:18:39>> Yes.

1:18:39>> Yeah.

1:18:41>> And I just wanted to add some

1:18:43clarification. um to make sure um when

1:18:46we're talking about different changing

1:18:49the way you calculate something that

1:18:51relates specifically to the policy

1:18:54versus the audit is the audit. The

1:18:58numbers are the numbers that are shown

1:19:00in the ACT for um for each fiscal year.

1:19:03It's just simply how you uh calculate um

1:19:08whether or not there is funds in excess

1:19:11of policy. Would would it also help as

1:19:15once we get there to talk more about the

1:19:18nomenclature we we use because we've

1:19:20been using

1:19:22we weren't using all the very specific

1:19:24ones you use. We we didn't use it, you

1:19:26know, un unaddressed, right? Restricted.

1:19:30We were just talking about available and

1:19:33>> well, total. Where is

1:19:34>> total? Thank you. Total and not

1:19:36available, restricted.

1:19:38>> Um,

1:19:39>> it seems to me that part of the problem

1:19:41was understanding

1:19:43uh what exactly was included included

1:19:47>> in the total. That's right. So maybe

1:19:48we'll use more specific language so that

1:19:51we we actually do it maybe similar to

1:19:54some of the other municipalities that

1:19:55call out

1:19:56>> restricted or unrestricted.

1:19:58>> That's what I was trying to say, but you

1:20:00said it's so much better.

1:20:01>> Oh, okay. [laughter]

1:20:04>> Okay. Any more questions? Thank you.

1:20:07>> Thank you.

1:20:08>> Ties up.

1:20:11>> How do I just hit the green button?

1:20:13>> Yeah, just the green.

1:20:13>> Great. take a break.

1:20:17>> Good afternoon.

1:20:18>> Thank you all for having me, mayor and

1:20:20council members. Um, my name is Ty

1:20:23Welfford. I'm with Davenport and

1:20:25Company. Um, I'm a senior vice

1:20:27president. I've been working for

1:20:29Davenport for 20 years and as Dana

1:20:33eloquently said we advise primarily

1:20:36local governments and our focus is I

1:20:40would call it as a capital advisor and

1:20:44so before I get into the topic today

1:20:47help set the stage a little bit we

1:20:50really help our local government clients

1:20:53with capital planning right and so

1:20:55[clears throat] you all do a tremendous

1:20:56job as a sophisticated local government

1:21:00with capital planning. Not everybody has

1:21:03a dedicated capital plan. Not everybody

1:21:05has a plan that goes out 20 years. They

1:21:07don't necessarily have funding sources

1:21:10identified with their capital plan. So,

1:21:12we'll help assist with that. you know,

1:21:14what's the right mix of cash and debt,

1:21:17um, those types of things where grant

1:21:20dollars might not be available. Where we

1:21:23really, um, I'd say carry the torch with

1:21:27our clients is when there are projects

1:21:30that need debt financing, we'll help

1:21:32figure out the best way to do it, right?

1:21:34Because there are different avenues you

1:21:36can borrow. You can borrow from a bank.

1:21:38You can borrow from a state or federal

1:21:40program. You can borrow from the public

1:21:44markets if it's a large enough

1:21:46borrowing. And if you're a creditworthy

1:21:48entity, which Carrie certainly is. And

1:21:50so we are here today to talk about

1:21:53credit ratings, which is something we

1:21:56help our clients with, help facilitate

1:21:59getting credit ratings when there is a

1:22:01public bond issuance, right? And so it's

1:22:04a dense topic. Uh we are going to try

1:22:07and keep it high level today um and

1:22:10start with some of the basics. What is a

1:22:12credit rating? Why would you get one?

1:22:14Why do you care? What it is? What it

1:22:17helps you do? And then with that

1:22:20background, help arm you with at least

1:22:23the key pillars that the rating agencies

1:22:25look at, what they care about. Uh it's

1:22:28not rocket science at a high level,

1:22:30right? They want to make sure you have

1:22:32the wherewithal to repay your debt.

1:22:34That's the that's the essence of the

1:22:36conversation, but they're looking at

1:22:38very specific things. So, we're going to

1:22:40focus on that at a high level and we're

1:22:42going to we're going to talk about them

1:22:43as pillars and then we're going to give

1:22:45you some perspective on where Carrie

1:22:47stands with some of those pillars. Uh

1:22:49not only where you are today, but where

1:22:52you've been in the past uh and compare

1:22:54you to some of your North Carolina AAA

1:22:57rated peers. So, um, our first slide

1:23:02here is what is a credit rating, right?

1:23:04I'm going to compare it to if you are

1:23:06going to get a mortgage or a loan from a

1:23:09bank. The first thing the bank's going

1:23:10to do is they're going to pull your

1:23:12credit score. It's the exact same

1:23:14concept, right? And what they care about

1:23:16is [clears throat] not only your

1:23:18financial standing right now, but what

1:23:20is your ability to service this loan or

1:23:23payment over the long term. So, you'll

1:23:25see some words jump off the page here.

1:23:28Um, you know, they're looking at the

1:23:30relative risk of financial obligations

1:23:33in North Carolina local government's

1:23:35case that those are debt obligations.

1:23:37They can come in different forms or

1:23:38fashions that we'll talk about. It's

1:23:41rated through a economic cycle or

1:23:43long-term focus. It makes sense, right?

1:23:45Because when we take out debt, it's

1:23:47usually over a long period of time,

1:23:49oftentimes 20 plus years, matching the

1:23:53asset with the liability. As Kim alluded

1:23:56to, credit ratings are assigned to

1:23:58specific securities, and the common ones

1:24:01we see in North Carolina are general

1:24:02obligation bonds, limited obligation

1:24:05bonds, and then on the utility side,

1:24:07water and sewer revenue bonds. Car's

1:24:09issued all of those types of bonds.

1:24:11General obligation bonds tend to have

1:24:13the highest credit ratings. Although

1:24:15we'll see you all have the highest

1:24:16ratings for both your go or general

1:24:19obligation bonds as well as water sewer,

1:24:21which is very rare. We'll talk about

1:24:23that a little bit. U but general

1:24:25obligation bonds tend to have the

1:24:27highest rating because it's a full

1:24:29pledge of your taxing power. You're

1:24:31going to do everything in in your legal

1:24:34ability to repay the debt and that's

1:24:36that's the security of the people buying

1:24:39the bonds. And so that's what the credit

1:24:41rating agencies are looking at when they

1:24:43evaluate that. And ultimately it's

1:24:45looking at your ability to repay, right?

1:24:47Your your expectation of repayment uh of

1:24:50a potential default. So high level

1:24:53that's what a credit rating is. So the

1:24:55WHO who who are the credit rating

1:24:56agencies? There are three major ones.

1:24:58Moody's, Standard and Pors, and Fitch.

1:25:00You've probably heard of some of them.

1:25:02There are certainly other credit rating

1:25:05agencies out there, but these are the

1:25:07three main ones. uh and we're going to

1:25:09focus on those today. Carrie has credit

1:25:12ratings on both its GO general

1:25:15obligation bonds and water sewer bonds

1:25:17from all three of these agencies.

1:25:21To orient you to their rating scale,

1:25:23their scorecard, um this is a little

1:25:26table that outlines from top to bottom,

1:25:29best to worst, the rating scale and

1:25:32their columns for each of the three

1:25:33rating agencies, Moody's, S&P, and

1:25:35Fetch. I should mention my colleague did

1:25:37pass out hard copies because there's

1:25:39some small print on here especially as

1:25:41we get to the back probably easier to

1:25:43see on the paper but um all three of

1:25:46them have the same highest score and

1:25:48that's AAA or three A's. Moody's has a

1:25:50little bit different. They like being a

1:25:52little bit different. They have little

1:25:53A's. As you [clears throat] go down the

1:25:56table the double A category is the next

1:25:58best you know double A plus double A

1:26:01flat double A minus. Moody's does one

1:26:03two three. Same concept. They're all

1:26:05equivalent. And then all the way to the

1:26:07bottom, there's a dotted line near the

1:26:09bottom. Anything below tripleB minus or

1:26:12BA3 is called non-investment grade or

1:26:15junk ratings. Um, so in the local

1:26:19government world,

1:26:21you know, nine times out of 10 or

1:26:23probably 99 times out of 100, uh, local

1:26:26governments are going to be in the

1:26:28investment grade category because just

1:26:30of your ability to generate taxes, pay

1:26:33your bills, and the the setup of your

1:26:35organization. So, what are some of the

1:26:37benefits of a credit rating? We'll put a

1:26:39little bit more specificity to this, but

1:26:42just [clears throat] broad brush market

1:26:44access even during economically volatile

1:26:47periods, right? If you are a well-rated

1:26:49organization, by definition, it really

1:26:52means you're a financially healthy

1:26:53organization, especially if you have AAA

1:26:56ratings like Carrie has, that's

1:26:57highlighted across the top. You have the

1:26:59highest credit ratings you can get. uh

1:27:02it gives you access to broad investor

1:27:05base when you do issue bonds like in the

1:27:07public market because individuals and

1:27:09institutions buy those bonds and they

1:27:11expect you to repay. If you're going to

1:27:13a bank for a smaller financing, you tend

1:27:15to get broad participation from banks

1:27:18because they want your business.

1:27:20Ultimately, it results in a lower

1:27:23interest rate to you and that's how

1:27:24we're going to quantify it. You know,

1:27:26what's the value of a AAA?

1:27:28Unfortunately, the answer is it's

1:27:29complicated, but we'll try and give you

1:27:31some perspective on that. And then

1:27:33lastly, an intangible, right, public

1:27:35recognition. A lot of people take pride.

1:27:37I think historically Kerry as an entity

1:27:40has very much prided itself on its AAA

1:27:42credit ratings. And certainly that uh is

1:27:45a value in and of itself. It's a third

1:27:47party kind of independently evaluating

1:27:50you and giving you a financial

1:27:52scorecard.

1:27:54So this next page is to give you some

1:27:56perspective of some of the broad pillars

1:27:58we're going to talk about. It's a busy

1:28:00slide, but on the left side we've

1:28:02outlined our four main pillars. And they

1:28:04all all three of the rating agencies are

1:28:07looking at the same basic categories.

1:28:09They're looking at your economy. They're

1:28:12looking at your financials. They're

1:28:14looking at how much debt or leverage you

1:28:16have. And they're looking at management

1:28:18factors. and that doesn't necessarily

1:28:21have the the same thing that comes to

1:28:24mind. They're not grading people per se,

1:28:26but they're grading the structure of an

1:28:29organization in certain ways. So, let me

1:28:31talk a little bit about it just to give

1:28:33a flavor for it. So, when we're talking

1:28:35about that first pillar, economy,

1:28:37they're looking at certain things like

1:28:39the health and strength of both the

1:28:41local and regional economy that you're

1:28:44situated in. They're looking at certain

1:28:46demographic things like population size,

1:28:49population growth, employment, wealth

1:28:52levels. They're looking at the size,

1:28:55structure, diversity of your tax base.

1:28:57If you have any certain concentrations

1:28:59or areas of risk, right? If you have a

1:29:03singular

1:29:04company that is your number one employer

1:29:06and that company leaves, that is risky

1:29:09for a small place. Right? That just

1:29:10gives you a little perspective of some

1:29:12of the things they're looking at. On the

1:29:14second pillar, financial performance.

1:29:16They're really looking at two key areas.

1:29:18Your operations, right? Revenue and

1:29:21expenditure structure and patterns.

1:29:23Concentration risk or the stability of

1:29:26those revenues and expenses. You all

1:29:28heard a little bit about that.

1:29:30Your operating performance, which goes

1:29:33into your budgeting process, right? Are

1:29:35you consistently meeting or exceeding

1:29:38your budget or is your budget a stab in

1:29:40the dark and you don't know how you're

1:29:41going to end the year until you get

1:29:42there? Right? I'm just illustrating kind

1:29:45of some bookends here. Financial

1:29:47leverage and fund balance. So fund

1:29:50balance is critically important. It's

1:29:51your savings account. So we're going to

1:29:53look at that. All these things kind of

1:29:55play together. Not every not any

1:29:57individual one uh is the singular thing.

1:30:00They're looking at debt. Uh we're going

1:30:03to talk about so the amount of debt you

1:30:05have as well as your annual burden. And

1:30:08when we talk about debt, the rating

1:30:09agencies have evolved on this uh

1:30:12especially in the pro probably past 10

1:30:14years. They're not only looking at debt,

1:30:16they're looking at pension and OPED

1:30:17liabilities as well. So, we're going to

1:30:19talk about that and they look at it

1:30:21relative to your tax base, right? The

1:30:23size of your assessed value as well as

1:30:25it relative to your total budget, right?

1:30:27Because 10 million of debt could be a

1:30:29lot or it could be a little relative to

1:30:31who you are, right? 10 million of debt

1:30:34might not be a huge number for Wake

1:30:35County, but it could be an extremely

1:30:38large amount for a town of a thousand

1:30:40people. Right? Once again, just kind of

1:30:42pulling out extremes there. Lastly, oh,

1:30:45sorry, [clears throat] also with that,

1:30:47they're looking at the affordability and

1:30:49that's the second main bullet, fixed

1:30:50cost burden. So, they're looking at how

1:30:53much your payment is both debt service

1:30:55and pension contribution and OPB

1:30:58contribution is as a percentage of your

1:31:00budget, right? So in in their view the

1:31:03lower the better. Uh but if debt

1:31:06payments, OPED and pension payments

1:31:09become too large a share of your budget,

1:31:12it can become unmanageable. And then

1:31:14lastly, management is more of a

1:31:16qualitative factor. Um they

1:31:20are very specific in how they look at

1:31:22management in order to be apples to

1:31:24apples. Instead of judging people, they

1:31:27try and judge processes that are in

1:31:29place. And with the rating agencies, we

1:31:32note on this page, things like long-term

1:31:35plans, long-term financial operating

1:31:38plans. Are you looking over a multi-year

1:31:40period? Capital, same thing I talked

1:31:42about. Are you looking over a multi-year

1:31:44period? Do you have sources and uses

1:31:46identified? Things like that. They do

1:31:48look at financial policies. Financial

1:31:50policies is probably too broad a term.

1:31:53What they care about are having policies

1:31:55in place related to debt. for example,

1:31:58how much debt you're willing to take on,

1:32:00how much your debt service payment might

1:32:02be relative to your budget. Same thing

1:32:04you all have. They also want to have a

1:32:06fund balance policy, which we've been

1:32:09talking about as well. And also things

1:32:11like investment policies. So, they care

1:32:13about those specific things. And then

1:32:15they want you to be in compliance with

1:32:18those things that you've set out, right?

1:32:20So, they want to make sure you're

1:32:21following the the long-term plans you

1:32:24set out. They want to make sure you're

1:32:25staying on top of your policies, debt

1:32:27and investment and fund balance

1:32:29policies. You're monitoring those types

1:32:30of things.

1:32:32>> Remind us what OPED stands for.

1:32:34>> Other postemployment benefits.

1:32:36>> Yes.

1:32:36>> Yes. Good question.

1:32:39The right side of the page just gives a

1:32:41little flavor and it actually looks kind

1:32:43of funky on the screen here, but um this

1:32:46is Moody's and S&P's methodology. Same

1:32:49broad categories. You can see they all

1:32:52have they both have different slightly

1:32:54different weightings to it because

1:32:56ultimately they put all your financial

1:32:58metrics into what they call a scorecard.

1:33:00It spits out a grade or a score and then

1:33:03they have the ability to notch you up or

1:33:05down for that from there from other

1:33:07qualitative factors. But we've noted

1:33:10some of these things all of them are

1:33:12technically within your control, right?

1:33:14Some of them are more in your short-term

1:33:16control versus longer term control,

1:33:19right? economy is something that's

1:33:21harder to change in the near term. That

1:33:23usually takes a dedicated focus, a

1:33:25redevelopment, what have you. Things

1:33:28like your operating budget performance

1:33:30is something you might be able to change

1:33:31year-toear, for example.

1:33:34So, that's a broad brush. We're going to

1:33:36look at those individual categories

1:33:38later on for Carrie as well as comparing

1:33:40you to your peers. [clears throat] So,

1:33:42this chart is one way to look at the

1:33:45value of a AAA credit rating. And what

1:33:47we're showing here is since 2003, the

1:33:51credit spread or the different in

1:33:52interest rate on a daily basis of a AAA

1:33:57rated

1:33:58municipal taxexempt bond versus a single

1:34:01A rated taxexempt bond. So, it's two

1:34:04broad categories apart. It's a 30-year

1:34:07maturity. That's just the the data we

1:34:09have access to. And what you can see is

1:34:12it evolves. It changes every day. Um but

1:34:15on average it has been about 0.57%

1:34:21since 2008 which in my mind post

1:34:23financial crisis is kind of the the more

1:34:25recent history but it's been as high as

1:34:281.25% it's been as low as 0.15%. So it

1:34:32it depends. But just to put it in

1:34:34context, let's take that average about

1:34:360.57%.

1:34:39If you were to quantify that on a

1:34:41hundred million borrowing over a 20-year

1:34:44term, it would translate to about 5.9

1:34:48million of interest rate savings. So

1:34:51having a AAA rating does provide real

1:34:54tangible value in terms of a lower

1:34:56interest rate. It's about $300,000 a

1:34:58year.

1:34:59>> Can you say that again?

1:35:00>> Sure. So that

1:35:02>> maybe use an use an example like a fire

1:35:05truck or something that costs $10

1:35:07million, right?

1:35:08>> Yeah. So $10 million a new fire station

1:35:12is more expensive than $10 million.

1:35:13Let's round it. [clears throat] So on

1:35:15$10 million,

1:35:17uh the interest you would save by being

1:35:21AAA versus single A um is about 590,000

1:35:26over the life of a loan if you did it

1:35:27over 20 years. It'd be about $30,000 a

1:35:30year. So I was saying it on a 100

1:35:32million it's a bigger rounder number on

1:35:34a 100 million it's 5.9 million of

1:35:36interest rate savings or about 300,000 a

1:35:39year.

1:35:39>> Thank you.

1:35:40>> Uhhuh.

1:35:48So this slide is a little bit more for

1:35:50reference but just wanted to level set.

1:35:53Each of the rating agencies has reviewed

1:35:55you all relatively recently. uh S&P's

1:35:59data lags the most, but this is a

1:36:00snapshot of their most recent report.

1:36:03So, when they update your credit rating,

1:36:05they'll do that when you go seek a new

1:36:07rating. They also are obligated to

1:36:09review you regularly, which usually

1:36:11means within a two-year window. When

1:36:14they do that, they'll put out a report,

1:36:15and these reports are out there. You

1:36:17sometimes need to subscribe for them,

1:36:19but they put out a report so investors

1:36:21know, you know, what the review

1:36:23entailed. And what we've put here are

1:36:26three broad categories. All the reports

1:36:27are set up fairly similarly. There's an

1:36:29outlook. They then identify kind of the

1:36:32strengths of the credit, especially for

1:36:34a AAA credit. And then they all have to

1:36:36say what could lead to a downgrade. What

1:36:39could lower you from AAA to something

1:36:41lower? And so that's what we've

1:36:44put here as the three main categories.

1:36:48The outlook is there. There are three

1:36:51possible outlooks. Stable, positive, or

1:36:54negative. As a AAA, you can't have a

1:36:56positive outlook because there's no way

1:36:57to go higher than AAA. So for you all,

1:37:00stable or negative are your only two

1:37:01options. It's usually their assessment

1:37:04of what direction you might be moving in

1:37:06the next couple years. In all of these

1:37:09cases, they noted a stable outlook for

1:37:12carry, which is good. Um, you'll note

1:37:14the S&P report was from 2024. The other

1:37:17two were from this calendar year, noted

1:37:20at the top under their logos. credit

1:37:22strengths all fairly similar in their

1:37:25takeaways. Strong economy, manageable

1:37:29leverage, which is kind of interesting.

1:37:31We'll see a little bit more about that.

1:37:32And then the factors that could lead to

1:37:34a downgrade a little bit nuanced, but

1:37:37the general common takeaway is a

1:37:40reduction in fund balance, usually

1:37:42resulting from budgetary imbalance is

1:37:45what they use a lot, which just means

1:37:47expenses higher than revenues, right? So

1:37:50if you have a sustained trend of

1:37:51expenses higher than revenues, which how

1:37:54would you plug that with fund balance,

1:37:56right? With that sustained trend and a

1:37:58reduction in fund balance, that could

1:38:00lead to a downgrade. Once again, they

1:38:03all have to say it in the report.

1:38:04They're not saying that's inevitable.

1:38:07All right, so this last section, we're

1:38:09going to get into some peer

1:38:10comparatives, which hopefully you all

1:38:12find interesting. This is a setup page

1:38:15to show on the left all of the North

1:38:18Carolina municipalities which are cities

1:38:21and towns that have at least one AAA

1:38:24rating from the three rating Moody's S&P

1:38:27and Fetch. They're a total of 24.

1:38:30We've also noted who have at least two

1:38:33AAA ratings, which it's a smaller

1:38:34universe. It's 19. That's the universe

1:38:37we're going to use on the following

1:38:38slides for peer comps. those

1:38:40municipalities that have at least two

1:38:42AAA ratings. And then the last group,

1:38:44which you all are part of, is those with

1:38:47triple AAA ratings. In North Carolina,

1:38:49there are only seven. Used to be a

1:38:51longer list. There are three cities and

1:38:55towns or a couple counties who uh

1:38:58recently dropped their Fitch ratings.

1:39:00Fitch came up with a new methodology a

1:39:02couple years ago, very focused on

1:39:04economy. Those with uh weaker economy

1:39:08metrics did not score well under their

1:39:10new methodology. They're put on review.

1:39:13A number of them got downgraded, not

1:39:15heavily, but from AAA to double A plus.

1:39:17They no longer saw the value in having a

1:39:19FH rating. And so they removed it. And

1:39:22so this list used to be 10. Now it's now

1:39:25it's seven. Also worth noting uh those

1:39:29that have AAA ratings, not on this

1:39:31slide, on both GEO bonds and water sewer

1:39:35bonds, you're one of three in North

1:39:37Carolina. You, Raleigh, and Charlotte

1:39:40are the only three that have that

1:39:41distinction.

1:39:43Ty on that slide, just in fairness to

1:39:45our peer communities,

1:39:48>> these check marks don't necessarily

1:39:50indicate that they have less than a AAA,

1:39:52but perhaps that they have elected not

1:39:54to seek a rating altogether.

1:39:57>> Correct. That is certainly the case for

1:39:59some. Thank you for that clarification.

1:40:01It could be it could be either. It could

1:40:03be that they're they do have the rating

1:40:05and it's lower than AAA or they just did

1:40:07not seek having a AAA rating. Thank you

1:40:08for that. So will that affect their bond

1:40:12interest rate if like double A or AAA

1:40:15what's the differences?

1:40:17>> It's a good question. That's so having

1:40:20two versus three AAA ratings. Um you

1:40:24know I think you need to talk to some

1:40:27investment banks about it specifically.

1:40:29But I think it would be no real

1:40:32difference, no meaningful difference in

1:40:34your interest rate. Um, if you had a

1:40:37double A plus or a double A flat rating,

1:40:39we could get you some more data on it.

1:40:41That's kind of the concept I was trying

1:40:42to get to earlier. You know, AAA versus

1:40:45single A, that credit spread evolves

1:40:48every day and it kind of depends on the

1:40:50market that day at that time. In that

1:40:53case, it was about 0.57% or a little

1:40:56more than half of a percent uh overtime

1:40:59on average. Okay.

1:41:02We also noted on the right um we have

1:41:05access to to information from Moody's

1:41:07but give you some perspective from

1:41:09Moody's rated universe of cities and

1:41:11towns how their national across the

1:41:14country credits they rate almost 2,000

1:41:16cities and towns of those there are 258

1:41:19that have a Moody's AAA rating about 13%

1:41:23the vast majority fall in that double A

1:41:24category and about 22% in the single A

1:41:27category.

1:41:29All right. So, now we're gonna get into

1:41:31a series of peer comps. Let me orient

1:41:33you to it. And this once again might be

1:41:35easier to see on the hard copies.

1:41:36There's some big foldout pages. Um, but

1:41:40we're we've organized these by the same

1:41:43pillars. So, this first page is an

1:41:45economy what I'll call dashboard. This

1:41:47is not everything that they're looking

1:41:48at, but I want to give you a flavor for

1:41:50some of the things that they do look at.

1:41:52And what we show on each of these graphs

1:41:55is three metrics for Carrie. 2025 is in

1:41:59the dark blue. That's the most recent

1:42:01available data that's on their website.

1:42:04Um, and they update it regularly

1:42:07annually. So 26 when that finishes up,

1:42:09it'll probably be posted end of the year

1:42:11or early in the spring. We then show

1:42:13five years ago in the medium color blue

1:42:16and 10 years ago in the light blue.

1:42:18Right? So just give you some perspective

1:42:19on how these metrics have evolved. The

1:42:22next section, the lime green colors are

1:42:24showing the national and North Carolina

1:42:28AAA medians.

1:42:30>> Back to school median is the middle

1:42:32number. I don't know what mode is, but I

1:42:34know what median is.

1:42:35>> And then the dark green bars are all of

1:42:38your peers. The 19 cities and towns in

1:42:42North Carolina that have at least two

1:42:43AAA ratings. Okay. So, assess value in

1:42:46the rating agency's mind. All of these

1:42:49charts for economy, the higher the

1:42:51better. in their mind. Okay. So the the

1:42:53larger your tax base, I think the

1:42:55concept is you have a broader taxing

1:42:57base versus it being concentrated. So

1:43:00you can see for carry your assessed

1:43:02value has grown pretty dramatically over

1:43:04the past 10 years. It's more than

1:43:06doubled. So we've gone from 22 billion

1:43:09to north of 52 billion in that 10-year

1:43:11horizon.

1:43:13>> You are well above both the North

1:43:15Carolina and national AAA medians. And

1:43:18so you compare very favorably on this

1:43:21metric. In North Carolina as of 2025,

1:43:24you were the third largest tax base of

1:43:27all these municipalities. Now reval all

1:43:29I mean you all get this right timing of

1:43:31rebal and you know if these others had

1:43:35but that that was a point in time. So

1:43:37this is 2025.

1:43:39So good takeaway. I'm going to go

1:43:40through the rest of them more quickly.

1:43:42Population size also important as well

1:43:44as population growth. This has been a

1:43:46more manageable growth for Carrie than

1:43:48than tax base. But your population has

1:43:50grown from about 150,000 to north of

1:43:53185,000 over this time period. About a

1:43:5624% growth rate. You compare very

1:43:59favorably. You're on the larger size of

1:44:01your North Carolina peers here as well.

1:44:04Put those two metrics together and you

1:44:06get assessed value per capita in the

1:44:07bottom left. It's a wealth metric. Um in

1:44:11in the rating agency's view, higher is

1:44:13better. You can see Kerry has grown

1:44:15dramatically really as a result of the

1:44:17growth of the tax base. Uh and you are

1:44:21the second highest assessed value per

1:44:23capita interestingly behind Morrisville

1:44:26in the peer group. And then lastly,

1:44:30this is a wealth metric median household

1:44:32income as a percentage of the US. So if

1:44:35you had a 100% metric for this, you'd be

1:44:38right on average with the US. In this

1:44:40case, Carrie is around 150%. You've held

1:44:44very steady over the past 10 years. You

1:44:46compare favorably to your North Carolina

1:44:49peers. Well, in the top third there as

1:44:51well. That all make sense? So, that's

1:44:53economy. Those are some of the things

1:44:55they're looking at, right? So, they talk

1:44:57about your strong economy. You get a

1:44:58flavor for some of those. All right.

1:45:00Next pillar, we're going to talk about

1:45:02financials. This case, we're going to

1:45:04talk about fund balance.

1:45:07this chart, we need to kind of bifurcate

1:45:10the top from the bottom. And I'll tell

1:45:12you why. I didn't even notice this down

1:45:14here. This is nice. Sorry. Um [laughter]

1:45:17the I was wondering why Kim was looking

1:45:19down. The top shows general fund. The

1:45:24bottom two show carrywide, so

1:45:28governmental and business type

1:45:30activities. So water, sewer as well. The

1:45:32reason we're showing both is because SNP

1:45:35in their review looks at just general

1:45:37fund for this.

1:45:38>> Moody's looks at carrywide everything in

1:45:41your audit. So I wanted to give some

1:45:43perspective on both views. So the top

1:45:45left is showing on a nominal VA basis

1:45:48your available fund balance. That's not

1:45:51an accounting term. So throw in another

1:45:54layer to your education. Last week I

1:45:56think it was available in their mind

1:45:58means unassigned and assigned. the two

1:46:00most flexible buckets, unassigned and

1:46:03assigned. And in this case, you can see

1:46:07Car's trend has been generally downward

1:46:10over the last decade. You've gone from

1:46:1276 million in 2015 to 94 million

1:46:17[clears throat] down to 65 million in

1:46:192025.

1:46:21In general, on a nominal basis, you

1:46:24still compare favorably with your peers.

1:46:26However, the rating agencies look at it

1:46:28on a relative basis. So, we're going to

1:46:30go to the right and look at it relative

1:46:32to your revenues,

1:46:34which think of it as a percentage of

1:46:36your budget, similar to how a policy

1:46:38would fall. This is available. This is

1:46:41not total. So, unassigned and assigned.

1:46:44You can see Car's metric, you've dropped

1:46:46from basically 50% of your budget to 23%

1:46:51of your budget in 2025. So, this has

1:46:55come down. This starts to bring back

1:46:58some of the commentary we saw from the

1:47:00rating agencies. What could lead to a

1:47:01downgrade? They were clearly looking at

1:47:03fund balance. Further deterioration of

1:47:05that could potentially be one thing that

1:47:08could lead to a downgrade.

1:47:10>> Are they looking at the trend or the raw

1:47:12number?

1:47:13>> They look at both. Uh so the trend comes

1:47:15in through the financial performance and

1:47:18we don't have a pure comp for it, but

1:47:21they're looking at like your operating

1:47:22results. So if they saw a multi-year

1:47:25trend of operating deficits that

1:47:28resulted in fund balance draws that

1:47:31would be a red flag. Now they do

1:47:33distinguish capital versus operating. So

1:47:37capital transfers they might see that

1:47:40might draw down your fund balance and

1:47:42then the absolute level of fund balance

1:47:44becomes a problem but it might not

1:47:46actually be a operating pro I shouldn't

1:47:49use these problem terms but hopefully

1:47:51the concept makes sense an operating red

1:47:53flag

1:47:54>> and is there a floor because we're at 20

1:47:58>> 3% so for SNP for example 15% is a key

1:48:03threshold for them once again that's not

1:48:05the answer to your policy question, but

1:48:08for them where we're talking about

1:48:10general fund 15 is a key threshold for

1:48:13them to to [clears throat]

1:48:15get full credit for this specific

1:48:17metric.

1:48:18>> Okay.

1:48:20>> Down below, we're looking at all

1:48:23available fund balance, which pulls in

1:48:25your utility funds. It pulls in your

1:48:27capital funds. Uh once again, it's

1:48:29unassigned and assigned. In the business

1:48:32world, it's a current net assets

1:48:34calculation. But same concept in this

1:48:37case similar takeaway. Car's total

1:48:41available fund balances have declined

1:48:44from about 390 million to about 350

1:48:48million. But on a relative basis, it has

1:48:52come down fairly dramatically from about

1:48:55160%

1:48:57down to about 77% of overall all

1:49:01operating revenues. And so you still

1:49:04compare online with the medians for the

1:49:08the bottom right corner graphic. It's

1:49:11not quite as stark as the top right. Um

1:49:14but you started as you know one of the

1:49:17best. We're not showing how everybody

1:49:18else looked in 2015, but you can see

1:49:20relatively you were uh at the top of the

1:49:23chart uh comparing that to their 2025.

1:49:26Okay.

1:49:26>> Does that does that also have a floor

1:49:28like you said with

1:49:29>> little bit more complicated with

1:49:31Moody's? they they're they don't have

1:49:33quite as defined a bucket. Um but we can

1:49:36get you some more info on that.

1:49:37>> That'd be great.

1:49:38>> It's a dense topic. We're trying to

1:49:41they're great questions, but the more

1:49:44specific you get, it kind of has a lot

1:49:46of twists and turns along the way.

1:49:48>> Without going too deep, sir. In the

1:49:51bottom right, I see the triple AAA town

1:49:55like Wake Forest

1:49:57like 50%.

1:50:04Does it depend on their trends or does

1:50:07it I know you tried to answer that while

1:50:09ago, but

1:50:10>> No, no. I mean, it's a great question.

1:50:11The reality of any you take any one of

1:50:13these metrics and you you can't look at

1:50:16it in a vacuum to deduce what their

1:50:19rating is. They all have their

1:50:21individual strengths and weaknesses.

1:50:23It's a full picture view. And it's also

1:50:25not just the numbers. They take into the

1:50:27qualitative factors that may also not

1:50:29tell the whole story. So that's kind of

1:50:31our job when we do go to the rating

1:50:33agencies with you is to tell your full

1:50:35story to make sure we're representing

1:50:37the full picture, but it's hard to know

1:50:39specific nuances

1:50:41for some of them.

1:50:42>> Ty, I'm sorry. I have one more question

1:50:44on balance. Mayor Prom has talked about

1:50:47floors, but what about ceilings? Uh, the

1:50:51lens that the rating agencies use is not

1:50:55the same lens that a taxpayer might use,

1:50:57but we have talked about using that

1:50:59lens, a notion of having fund balance

1:51:01that's too high, right?

1:51:03>> Why would you have such generous savings

1:51:06when we have expenses? Yeah.

1:51:08>> For the rating agencies though, like the

1:51:11previous page, is there no such thing as

1:51:14too high?

1:51:16>> [laughter]

1:51:17>> That's an interesting way to to

1:51:19[clears throat] look at it. Um

1:51:23they're once again they all use a rating

1:51:27scorecard, right? So it's just absolute

1:51:30[clears throat]

1:51:30they're looking at very specific metrics

1:51:32and some of them are not even shown

1:51:35here. There are certainly points where

1:51:38you get capped out for no longer getting

1:51:40credit within the confines of the

1:51:42scorecard, right? you get AAA marks for

1:51:45that ratio,

1:51:47>> but then it'll tie back in on the

1:51:50qualitative view, especially if it's

1:51:53needed to offset an extenduating

1:51:55circumstance. So, you might have off

1:51:57thecharts, not the best term, off the

1:52:00charts fund balance, but you also might

1:52:02be off the charts in terms of high debt,

1:52:05right? And so that might help offset

1:52:08that perceived weakness with a really

1:52:12strong strength that you have and they

1:52:14balance each other out. So

1:52:15>> So this is a singular data point in

1:52:18isolation is not as informative as its

1:52:20context.

1:52:21>> That's right. It's a good way to put it.

1:52:22Thank you.

1:52:23>> Can can I make sure I'm understanding

1:52:25this in this is you know we we got a lot

1:52:27of clarity from Kim on what those

1:52:30available funds really are.

1:52:33We

1:52:35can be spending money,

1:52:40right? We have projects. It's the the

1:52:42the money is earmarked for something. I

1:52:45don't want to use the wrong accounting

1:52:47term

1:52:47>> authorized and funded,

1:52:49>> right? But as long as it's part of this

1:52:52bucket and our in our fund balance, it

1:52:55would show favorably even though say

1:52:58we're we're spending it next year, it's

1:52:59it's

1:53:00>> correct.

1:53:00>> Right. So, it's it's really what they're

1:53:02examining in this available fund balance

1:53:04in the the percent of re revenues in the

1:53:07general fund. What they're really

1:53:08looking at is that bucket of money that

1:53:11we were talking about that has

1:53:13flexibility.

1:53:14>> Correct.

1:53:15>> Correct.

1:53:15>> That's right. Especially general fund,

1:53:17right? Because you're taking out some of

1:53:20the noise of capital funds that in

1:53:23y'all's case, you might transfer money

1:53:25over there and it's going to eb and flow

1:53:27as the timing of the project spend or

1:53:29get authorized. But in the general fund,

1:53:32there are certain restrictions that you

1:53:34have to have by state statute. I'm sure

1:53:36you've got all of the education from

1:53:38Kim. But right, they're looking at those

1:53:40true flexible unrestricted

1:53:43available, which is in their mind

1:53:45unassigned and assigned fund balance,

1:53:47the two most flexible buckets.

1:53:49>> Okay.

1:53:50>> Yeah.

1:53:50>> And realistically, and I I think this

1:53:52might be a a

1:53:55don't answer this if I'm asking it

1:53:57incorrectly. I look at that especially

1:53:59in terms of what we see when we look at

1:54:03the fund balance over the last several

1:54:05years. Had we not increased property

1:54:08taxes,

1:54:10would that those two top graphs that

1:54:13fiscal year 2025

1:54:15bar

1:54:17be even lower and put us in an

1:54:19uncomfortable position

1:54:22the next time we're critically reviewed?

1:54:26What I'm trying to understand is

1:54:28generally what our current tax rate and

1:54:31the decisions we've made in the last two

1:54:33years as far as our tax rate, how that

1:54:35affects um this overall picture that the

1:54:39rating agencies are looking at because I

1:54:41see that number shrinking, right?

1:54:44>> I think probably the answer to your

1:54:47question is if you looked at this metric

1:54:49in 2023,

1:54:51[clears throat] it was lower. And so,

1:54:55um, I don't want to speculate, but my

1:54:59understanding of part of the strategy

1:55:01was to help build your fund balance back

1:55:04up because it had fallen below maybe

1:55:08uh, level that you all

1:55:10>> were comfortable with. And so even

1:55:13though you can see from this chart 25 is

1:55:16much lower than 5 or 10 years ago um it

1:55:20reached an even lower point pre-reval.

1:55:23>> Yeah. Two years ago. Okay. I I I in my

1:55:26head I was trying to figure out where

1:55:28you know were we at or near that 15%

1:55:32floor prior to increasing

1:55:35>> property taxes and re-evaluating you

1:55:37know the budget spends.

1:55:38>> And and I'll clarify that statement too.

1:55:40the 15% for SNP, that's to get um in

1:55:45their highest uh range for that one

1:55:49specific metric. Falling below it does

1:55:51not mean you would get downgraded in and

1:55:53of itself. There's a lot of moving

1:55:54pieces and nuance to it. So,

1:55:56>> you were you were clear. I just

1:55:58unfortunately

1:55:59>> as I am not a CPA or an accountant, I do

1:56:02have to think kind of in broadly applied

1:56:05>> um approaches to the budget and just

1:56:07want to make sure

1:56:08>> I'm not connecting things that are in

1:56:11fact not connected because I keep going

1:56:14back

1:56:14>> to what we just reviewed about the fund

1:56:17and what I understood at the time that

1:56:20we made the tax rate decisions we have

1:56:23over the last couple years

1:56:24>> and just sort of looking forward

1:56:27I know I'm already thinking about what

1:56:29is next year going to look like, right?

1:56:31And I know we don't want to talk about

1:56:33it probably right now, but that's that's

1:56:36the lens to to steal Britney's term.

1:56:38That's the lens that I'm looking at at

1:56:40this through and just trying to get I I

1:56:43almost want to know ahead of time um how

1:56:46stressful Q1 and Q2 are going to be next

1:56:49year for me.

1:56:51One other question I was by looking at

1:56:53this at first I was thinking like

1:56:55looking at the available fund balance as

1:56:57a percent of re revenues I was thinking

1:57:00oh well that that's easy if you have a

1:57:02small city you know you have a greater

1:57:05percent likely a greater percentage

1:57:07except Raleigh is the outlier but Indian

1:57:10Trail Morrisville Davidson Huntersville

1:57:13they're smaller towns and cities is is

1:57:17there some alignment or um with the city

1:57:22size versus

1:57:24>> it's a tough one. Um

1:57:27I would I mean

1:57:33>> yeah I I I don't want to speculate on

1:57:36it. I I would I would venture a guess

1:57:38that um if you are a smaller

1:57:41municipality,

1:57:43uh you need strengths elsewhere to get

1:57:47to a AAA rating such as higher fund

1:57:50balance or lower debt levels or other

1:57:52types of things because economy and

1:57:56having a smaller tax base weighs

1:57:58negatively from the rating agency's view

1:58:00on your credit rating. So as our

1:58:03population increases, is it is it

1:58:06natural to shift some of these numbers?

1:58:10>> I think the reality is the absolute

1:58:13value of a dollar, right? The bigger

1:58:16your budget is. It's it maybe could be

1:58:20more challenging to accumulate the same

1:58:23critical mass of dollars to get to the

1:58:25same percentage you see with smaller

1:58:26places.

1:58:27>> I see. Okay, makes sense.

1:58:29>> Okay.

1:58:32We good? Keep going. All right. Last

1:58:35section is debt. Um, some interesting

1:58:39takeaways here, but to orient you again,

1:58:42[clears throat]

1:58:43top is governmental in this case. Bottom

1:58:47is all carry-wide governmental and

1:58:50business. Top is S&P's view. Bottom is

1:58:54Moody's view. Just for example, in all

1:58:58of these instances, in the rating

1:59:00agency's mind, lower is better, right?

1:59:03Although if you had no debt, they'd have

1:59:04nothing to rate, but uh lower amount of

1:59:08leverage uh would signify

1:59:11uh you know higher higher credit

1:59:14strength. In their mind, at the top

1:59:17left, it's an absolute measure, right?

1:59:19The absolute amount of debt. Carrie has

1:59:22seen an increase in governmental debt

1:59:24over the last 10 years from about 135

1:59:26million to north of 215 million. You are

1:59:32a little bit above average on a absolute

1:59:34level but once again you got to look at

1:59:36it on a relative basis which is the top

1:59:38right. As a percent of revenue

1:59:42you have come down quite a bit from

1:59:45about 83% of revenues to 63% of revenue.

1:59:50So although the debt amount has

1:59:52increased since your budget has grown

1:59:54more, the relative basis has come down.

1:59:58You compare very favorably with your

2:00:00North Carolina peers and you're right on

2:00:02line with the national AAA median in

2:00:05that metric. Down below, we're looking

2:00:08at governmental and business type. Also

2:00:11kind of an interesting story here.

2:00:13You've been fairly flat on an absolute

2:00:15basis. On the bottom right, relative to

2:00:20your revenues, you have dropped from

2:00:22285%

2:00:25down to 138%. Now, in 2015, you have to

2:00:29remember it came up earlier. Western

2:00:31Wake had just come online. There was all

2:00:33of the debt associated with it. It was a

2:00:35generational project. And so, on the

2:00:37utility side, the business side of the

2:00:39operations, there was a lot of debt.

2:00:41There's also a lot of cash uh to offset

2:00:44some of that, but your overall

2:00:48leverage measures have come down and you

2:00:52are in line with your North Carolina

2:00:54peers on the total in the bottom right.

2:00:58Right. I think you are the median for

2:00:59that metric. And so once again, going

2:01:02back to the rating agency's commentary,

2:01:04manageable debt. Well, that certainly

2:01:07has evolved and become more manageable

2:01:09on a relative basis over the last

2:01:10decade. And then there are a couple

2:01:13other charts in the back. Last

2:01:15perspective just on debt. Debt relative

2:01:17to your tax base and then debt service

2:01:20as a percentage of your general fund

2:01:23budget. Um once again, Carrie compares

2:01:26favorably here. I think the trends are

2:01:28fairly self-explanatory. Uh but just a

2:01:31couple other metrics there to note.

2:01:34It's very complicated like

2:01:36>> it is

2:01:37>> and th this is the this is kind of

2:01:39trying to keep it high level too. It is

2:01:41a it is a very complex topic. So um

2:01:45hopefully I was able to to instill a

2:01:48little bit of knowledge on it. Uh but

2:01:50certainly happy to answer any other

2:01:51questions you all might have. Does it

2:01:53mean from the debt uh comparatives here

2:01:57shows in 2015 2020 uh percentage Carrie

2:02:02has more percentage in debt that that

2:02:05mean we borrowed more money in the past

2:02:09and over the years we pay back and that

2:02:13makes us currently the uh the fund

2:02:16balance or the

2:02:18uh the fund balance like general fund or

2:02:22a percentage of revenue lower than past

2:02:2510 years.

2:02:26>> So let me let me point to this slide 11.

2:02:29The top left is just an absolute level

2:02:31of debt that's outstanding. So in 2025

2:02:34in the general fund, for example, it was

2:02:39$218 million.

2:02:42that amount of debt relative as a

2:02:46percentage of total revenues

2:02:50was 63%.

2:02:52So these really go hand in hand. We're

2:02:54not showing what the total revenue

2:02:56number is here.

2:02:59If you look at 2015,

2:03:01you had 135 million of debt outstanding.

2:03:05That was 83% of your budget at the time.

2:03:09So your budget was much smaller in 2015

2:03:13in order for it to be a higher

2:03:15percentage. So the number was smaller,

2:03:18the amount of debt you had, but relative

2:03:19to your budget, it was a bigger ratio

2:03:22than where you are now.

2:03:23>> Okay.

2:03:24>> Does that make sense?

2:03:25>> Multi-year total amount owed versus one

2:03:28year of revenue.

2:03:29>> Correct. Okay.

2:03:30>> Which is kind of an interesting We

2:03:32grappled with this when they came out

2:03:33with this methodology. Why are you

2:03:35comparing it to one-year budget? It's

2:03:37just a way for them to measure it on an

2:03:40applesto apples basis relative to your

2:03:42budget. Similarly, they measure it

2:03:44relative to your tax base,

2:03:48which is the percentage of your assessed

2:03:49value. It just gives an order of

2:03:51magnitude.

2:03:52>> That makes sense.

2:03:53>> Even though you're not going to pay it

2:03:54back in one year,

2:03:54>> I look at my budget and the amount I owe

2:03:57versus what I make very similarly. Um,

2:03:59and I made that assumption, so I just

2:04:01want to make sure I made the accurate.

2:04:03>> Good question.

2:04:04So,

2:04:06I'm I'm trying to think in relation to

2:04:09my budget, debt as opposed to debt

2:04:11service.

2:04:12>> Why would the debt matter if I know the

2:04:15debt service? I guess because

2:04:17>> yeah,

2:04:18>> debt means there's going to be more or

2:04:20less debt service based on the total and

2:04:22that's why we look at that.

2:04:23>> Good question. they are really checking

2:04:26because not in North Carolina you can't

2:04:28do this but in some places you can

2:04:30stretch your debt service payments over

2:04:32a very long period of time or you could

2:04:34have a bullet right where it's interest

2:04:36only for some period of time. So they're

2:04:38looking at them both. So you might have

2:04:40a very low debt service payment if you

2:04:42stretch your debt out really long

2:04:45>> but you have a lot of debt still and so

2:04:46they want to look at both.

2:04:48>> Okay.

2:04:48>> So some governments could make minimum

2:04:50payments on their credit cards like I

2:04:52did on my good way to say it. [laughter]

2:04:56It's not advised.

2:04:57>> No,

2:04:58>> for anyone.

2:04:58>> For anyone, actually.

2:04:59>> Learned that the hard way in my 20s.

2:05:01>> Yeah.

2:05:03>> You were still paying for it in your

2:05:0430s.

2:05:06>> It's really fascinating. I mean, if you

2:05:07had to bubble up um some like key

2:05:11takeaways from looking at the data for

2:05:14us besides the kind of outliers that are

2:05:18quite large like the Charlottes and

2:05:20Raleighs,

2:05:22>> the rest kind of fit in the middle from

2:05:24a population. Are there key takeaways

2:05:26that you think we should be aware of

2:05:29besides the ones you said, hey, keep

2:05:31track of these kinds of things that they

2:05:32look at?

2:05:34I think going back to the commentary um

2:05:38that was on a earlier page I think it's

2:05:41just interesting to see there is a lot

2:05:43of uniformity between all three of them.

2:05:45They're noting your strengths economy

2:05:48manageable debt burden. They are also

2:05:50noting fund balance as a potential one

2:05:53potential trigger that could cause

2:05:56rating pressure if they saw that

2:05:57trending downward. So,

2:05:59>> I don't want to oversimplify it because

2:06:01it's a very complex topic, but I think

2:06:03those are kind of some of the takeaways

2:06:06from from what we've seen.

2:06:08>> So, sort of kind of following up on

2:06:11that, I've been thinking and I guess

2:06:14some of us have been thinking,

2:06:17do we have an excessive amount of

2:06:20general fund reserves, which is a

2:06:23concern, especially when we have so many

2:06:25capital needs? And it sounds to me like

2:06:29the rating agencies really want to look

2:06:31at what I think we need to change our

2:06:33policy to is available and unrestricted.

2:06:37Um, and if we change our policy there,

2:06:39then we could probably help ourselves

2:06:41answer that question. U, but based on

2:06:44what you know, do you, and this is

2:06:47strictly an opinion, I know.

2:06:48>> No, I understand. We're trying to figure

2:06:50out are we going into dangerous

2:06:51territory if we revisit our fund balance

2:06:55policy fund balance reserve policy.

2:06:58>> Yeah.

2:06:59>> So I'm going to stick to the rating

2:07:01perspective too. They [clears throat]

2:07:04encourage you to revisit policies

2:07:06regularly. Right. That's a good process,

2:07:09right?

2:07:09>> Um they are also not going to give you

2:07:11guidance as to what the right level of

2:07:13policy is.

2:07:14>> There's no answer key.

2:07:15>> There is no answer key. you do know what

2:07:17you know some of the ratios are looking

2:07:19at where you stand and that's some

2:07:21perspective that Kim has [clears throat]

2:07:23provided and that we've been looking at.

2:07:25Um but the you know from where I sit and

2:07:29what we see with other municipalities

2:07:31there's no right or wrong. I will say in

2:07:34terms of unassigned versus unassigned

2:07:37and assigned which is available those

2:07:39are your tools you can really plan

2:07:42around right you can't plan around

2:07:44restricted fund balance it's just you

2:07:46can't spend it right so um from a you

2:07:50know purely philosophical standpoint

2:07:52moving to an available metric versus a

2:07:56total makes good sense I think you'll

2:07:58see that's more common place in in the

2:08:01local government Mhm.

2:08:03>> With all due respect, it does sound like

2:08:05there is a wrong answer here, though.

2:08:07>> There are multiple right answers, right?

2:08:09There's no prescriptive

2:08:11>> and you're available to advise us as we

2:08:15reconsider or consider.

2:08:17>> Absolutely. Yeah, we can policy

2:08:19>> bring some perspective on what others

2:08:20do.

2:08:21>> Support staff isn't

2:08:23>> Yep.

2:08:23>> the only one trying to keep us.

2:08:26>> He does. Yeah. So in the background when

2:08:29we give him things you

2:08:32>> Yeah. Yes. [laughter]

2:08:33We'll give him things. We'll give him

2:08:35your feedback. When we talked about how

2:08:37what your the questions you ask, the

2:08:39things you talk about are very very

2:08:41helpful. And um and we relay them to

2:08:43him. He gives us feedback. He gives us

2:08:45things to think about. when we talk

2:08:48about how we change um or might change

2:08:52policies, he will look at specifically

2:08:55some of the things that um that we are

2:08:57talking about.

2:08:58>> Excellent. Thank you.

2:09:00>> I have a very specific question about

2:09:02OPEB

2:09:04>> just because as we get bigger that and

2:09:06we get more retirees

2:09:08>> Yep.

2:09:08>> the the number of the pay as you go for

2:09:12those benefits increases. Um, I guess

2:09:15I'm curious what your thoughts are on

2:09:18the need for or for an OPB trust fund or

2:09:22whatever that looks like. Money set

2:09:23aside that

2:09:25>> is that what does that look like from

2:09:27your perspective and is it based on

2:09:30population revenue like what are the

2:09:32considerations for moving forward on

2:09:34that?

2:09:36>> So, no specific guidance on what you

2:09:39should or shouldn't do. Um, but I will

2:09:41say the [clears throat] rating agencies

2:09:43look at OPED, they treat it like debt,

2:09:46as a liability. So in your case, your

2:09:49OPED liability is about 20% of your

2:09:53overall leverage burden, right? Just in

2:09:57terms of dollars. So

2:10:01you know, from the rating perspective,

2:10:05it's viewed just as if it were issued as

2:10:07debt. And so if you were to do something

2:10:09to reduce it, that would be viewed

2:10:11favorably on the debt metrics, right?

2:10:14Leverage metrics. If you're using fund

2:10:16balance, this is just purely theoretical

2:10:19to reduce it and you're reducing fund

2:10:21balance to do it, then they're going to

2:10:22look at that as well.

2:10:23>> Um, so I don't I don't know if that's

2:10:26helpful to address the question, but

2:10:28it's in in their mind, it's treated like

2:10:32any other debt obligation. And in your

2:10:35>> the increase because of the silver

2:10:38tsunami of those of us retired or

2:10:41retiring along with the increase in

2:10:43health care costs is their guidance in

2:10:45that because that could be

2:10:47>> that's been for people who pay healthare

2:10:50we've seen and just at the grocery store

2:10:51we've seen increased cost

2:10:53>> and now you know additional retirees you

2:10:57know coming on board yeah I don't not

2:11:00reducing any of the retirees if anybody

2:11:02wants benefits but maybe looking at it

2:11:04more forward

2:11:06>> thinking that you know maybe new hires

2:11:09>> shouldn't get 100% healthcare benefits.

2:11:11I mean are there

2:11:12>> any recommendations?

2:11:14>> No recommendations. [laughter]

2:11:16Be careful. No the I I appreciate the

2:11:18question. I think what we have

2:11:20>> commonly seen across our footprint are

2:11:23people tapering back OPED benefits to

2:11:27try and wrangle in the growing

2:11:29liability. future.

2:11:30>> That's just That's right. By either

2:11:33cutting it off or taper. I'm not

2:11:34recommending that. Please be clear about

2:11:36that. But I think that's fairly common

2:11:39to what we see as a way to combat a

2:11:41growing balance sheet liability issue.

2:11:45>> And can I just add something really

2:11:46quick um Lori to your point about OPED?

2:11:49We actually partner with an actuary as

2:11:51well who can give us those types of

2:11:54recommendations, benchmarks, options,

2:11:56and things like that as we look into our

2:11:58future. Just letting you know that.

2:11:59Yeah,

2:11:59>> thank you.

2:12:00>> And Ty, I have another question about uh

2:12:03the fund balance policy because um as we

2:12:07change the policy and we might thinking

2:12:10about issue more bonds in the future,

2:12:13right?

2:12:13>> So can we do any predictions of the

2:12:16future like property tax prediction

2:12:19because like I would love to know if we

2:12:22change the fund balance and we issue the

2:12:24bond.

2:12:25>> Yeah. Do we have pressure on the

2:12:27property tax income revenue because

2:12:30that's the main

2:12:32>> revenue we have now.

2:12:33>> And that's a great question and that's

2:12:35what [clears throat] we really help

2:12:36coordinate with your staff on is looking

2:12:38at some of those whatifs. So before

2:12:41you're issuing debt, what's the impact?

2:12:44What's the payment going to be? How are

2:12:45you going to pay for it? Right? Because

2:12:47all of this is theory in general, right?

2:12:50It's looking at capacity levels and

2:12:52metrics versus peers. It's not looking

2:12:54at the reality of how you budget for it,

2:12:56how you pay for it. We also do have the

2:12:59ability, you know, once it's determined

2:13:01what the affordability impact might be,

2:13:04revisiting some of these key metrics,

2:13:06right? Well, if you did issue this

2:13:08amount of debt or you change fund

2:13:10balance to this, how might it change

2:13:12your rating scorecard outcomes? And

2:13:14that's something that we'll help

2:13:16evaluate. We have models set up to to

2:13:19mimic that and look at those sorts of

2:13:20things. so we can give some real

2:13:22guidance on some of those key decisions

2:13:24before you know so that you're not going

2:13:26into them blindly.

2:13:27>> Okay. Thanks.

2:13:28>> Thank you.

2:13:31>> Anything else?

2:13:33>> Thanks, Ty.

2:13:34>> Yeah, whenever time. I'm sorry.

2:13:35Informative.

2:13:35>> Nice to be with you. Thank you again.

2:13:37>> Thank you.

2:13:38>> How far off of schedule are we?

2:13:40>> A little off schedule. Maybe we can take

2:13:42a shorten [laughter]

2:13:43>> a little bit of a shortened break. That

2:13:45was an important topic obviously. So,

2:13:46great questions. Hey, can I just say as

2:13:48we go to break and I probably should

2:13:50have this done this from the be

2:13:51beginning. We have several first time

2:13:52guests. Uh, one is Chris Coltic. I'm our

2:13:56new IT director over here. And we've got

2:13:59Ashley Ladigan who you folks should

2:14:00know, but she's in the role of interim

2:14:02HR director.

2:14:03>> And then I was going to I think Christy

2:14:05Buchanan's been at a quarterly and other

2:14:07things. Um, and I was going to let Lisa

2:14:09introduce some faces as well.

2:14:11>> Well, we brought several people with us

2:14:12today. So, of course, Matt Pence is here

2:14:14that you all know. Martha Bordona is

2:14:16kind of behind council member Bush over

2:14:18there. She's our newest attorney. And

2:14:19then over behind Jenny, we have our two

2:14:22um fall semester externs, Chase and

2:14:24Lauren. So

2:14:26>> it's just as you see faces during the

2:14:27break. Um and maybe we take a seven and

2:14:30a half minute break instead of 15.

2:14:32>> Yes, let's do it.

2:14:33>> 317. [laughter]

2:28:10We're back from break and turn it over

2:28:12to

2:28:12>> Russ

2:28:26this year. Um, we're going to do a

2:28:28council party authorization exercise.

2:28:31Um, I'll walk you through a list a

2:28:33little bit of um, priorities that these

2:28:37are things that we need to bring back to

2:28:39you.

2:28:41Step three have a time component to

2:28:42them.

2:28:45Staff did this earlier today, so I kind

2:28:47of want to share some results and we'll

2:28:49see where um, alignment or gaps exist in

2:28:52this exercise.

2:28:54All right. Um, I'm gonna channel my

2:28:57council member Richards in this because

2:28:58she and I and Bella and uh, Sera,

2:29:02Council Member Wong and Fansel also saw

2:29:04this at the same time, but it resonated

2:29:06with me. There's lots of different um,

2:29:09documentation about how elected

2:29:11officials and staff work together and

2:29:12which place is where on this continuum.

2:29:16U, we were given this at a UNCC school

2:29:17of government uh, class and they used a

2:29:20flight analogy and you know it's like

2:29:22kind of where are we going? Where are we

2:29:24going together? Starting with vision and

2:29:26purpose on one side leads its way to

2:29:28where elected officials um do more work.

2:29:31Staff does a little bit of work all the

2:29:32way down to the runway um to where the

2:29:34day-to-day work is done by uh staff. And

2:29:38to break that down further to some

2:29:40degree today where we're going to spend

2:29:42our effort because this is where we are

2:29:43in this period of time. Uh certainly has

2:29:46talked about the transitions that we are

2:29:47under. Um there's probably a different

2:29:49way of going about this, but we need

2:29:51some party action on some of the uh just

2:29:54some of the items that we're doing that

2:29:55are day-to-day work or just party or

2:29:58planning oversight. So, we'll bring that

2:30:00to you at a different moment in time.

2:30:02And I think this is a good conversation

2:30:04at annual meetings or retreats as we get

2:30:06back to strategic goals, visions, and

2:30:08purpose conversations at retreats. Um

2:30:12that is not to say that we aren't using

2:30:13our time wisely. And if you look back at

2:30:15this year's retreat, obviously we were

2:30:17going undergoing a lot of transition and

2:30:19our budget was the biggest topic of that

2:30:20moment in time. To give you a few items

2:30:24of kind of things that you can think

2:30:25about this is where different roles and

2:30:27items are. But on the one side is um you

2:30:30know the 50,000 footer vision and

2:30:32purpose is setting community vision

2:30:33establishing values and protecting

2:30:35legacy. And I think it's ironic if you

2:30:37think about that especially protecting

2:30:38legacy where the values of this

2:30:40community are is to have the tools um

2:30:43equipment materials etc that then you

2:30:45can play this out that give the

2:30:47opportunity for Jamie Jimmy and team to

2:30:49have what they need when emergencies

2:30:51occur so that we can do the day-to-day

2:30:53operations or emergency response as you

2:30:55see over there [clears throat] that

2:30:56happens on that end of the spectrum lots

2:30:58of in between having strategic goals

2:31:01obviously our imaginary community plan

2:31:03is one of those adopted in 2017

2:31:05readopted more recently, but we do

2:31:08master planning and then revenue

2:31:09strategy is something that I think we

2:31:10took up a little bit um you know over

2:31:13the past year and something we'll be

2:31:14talking more about. Kind of where we're

2:31:16at right now with some of the items that

2:31:18we need to talk about as priorities is

2:31:20um we've got moving forward items, act

2:31:22items, annual budget adoption. Uh CIP

2:31:25was mentioned in the finance

2:31:27presentation. Planning and oversight is

2:31:29annual financial audit policy ordinance

2:31:31and resolution adoption. Make sure I'm

2:31:34out of your way. Um, quarterly reports,

2:31:36getting down to projects, day-to-day

2:31:38work, monitoring high level spending,

2:31:40repaving. Um, we've got Walnut Street

2:31:42stabilization, prioritizing community

2:31:44projects and efforts. Already mentioned

2:31:46utility uh emergency response core

2:31:48services and utility billing as just a

2:31:51um minor part of the day-to-day work.

2:31:53And then we put this bar on the bottom.

2:31:55Fiduciary responsibility should span

2:31:57across any of these areas and something

2:32:00that we're talking more about.

2:32:02It's a little bit of a capacity reality

2:32:04check for where we are in time, if you

2:32:06will, um with the amount of work

2:32:08sessions that we have and and time that

2:32:10we have together, but these, you know,

2:32:12staff and council's uh uh capacity is

2:32:15finite. Um time is mostly committed to

2:32:17non-negotiables. I'll tell you what

2:32:19those things are. And every item that's

2:32:21added to the work plan comes at the cost

2:32:22of something else. So I think it would

2:32:24be um this is kind of teeing up a new

2:32:26muscle memory or exercise such that um

2:32:29the list can grow and eb and flow and we

2:32:31should bring you back what your

2:32:32priorities are u possibly at quarter

2:32:34meeting quarterly meetings and these

2:32:36priorities your priorities for us can

2:32:38change and then it allows us to also

2:32:40think tell you things that are going on

2:32:42in the organization that we believe are

2:32:44a priority for you.

2:32:48[snorts]

2:32:48So scheduling meetings, scheduled

2:32:50meetings remaining for the end of the

2:32:51year. This is just um uh this is

2:32:54necessary to know how much time we have

2:32:56together much like today. How many items

2:32:58can we fit into a meeting and what are

2:33:00we thinking of to get use our time most

2:33:02um strategically and uh and bring you

2:33:05things that are timely to these meetings

2:33:07knowing that when we get into 2027 as

2:33:09you've seen with this year kind of think

2:33:11that uh retreat or annual meeting time

2:33:14through budget adoption most of those

2:33:15meetings are used uh for budget

2:33:17conversations. So, I think you could

2:33:19roughly estimate anywhere from a quarter

2:33:22to a third of your um work sessions are

2:33:25really planned around the budget. And I

2:33:26would not expect that to change for the

2:33:28upcoming year. We did just add three

2:33:30meetings um to this the rest of the

2:33:32calendar year. So, we actually have nine

2:33:34work sessions to use these um to to do

2:33:37some of the work from this instead of

2:33:39the six that we were talking about

2:33:40prior. We have one quarterly meeting

2:33:42left in November.

2:33:44All right. So, we're going to break you

2:33:46up into an exercise. Um we've done this

2:33:48a couple of times of a similar nature at

2:33:51um council staff retreats. This time it

2:33:53just happens to be around some

2:33:55priorities. So let's talk about that.

2:33:57What you've got in front of you and I

2:33:59guess I should look at my copy

2:34:00somewhere.

2:34:02Um actually you do you still have a

2:34:05copy?

2:34:06>> All right.

2:34:09>> I have a copy. It's probably just under

2:34:10a stack of papers because what I want to

2:34:12share with you is there's a list on the

2:34:14front that we've referred to as

2:34:16non-negotiables. Thank you, Carrie. Um,

2:34:18so that is pages one and two, I believe,

2:34:20on your handouts. Um, that we are not

2:34:23asking you to prioritize. We're saying

2:34:25they're non-negotiables because

2:34:27specifically there are the 39

2:34:29recommendations from the various

2:34:30investigations that we have that are

2:34:32taking a lot of um staffs and this

2:34:34team's work time to prioritize and work

2:34:37through those recommendations. And then

2:34:38quite frankly, you all had a meeting

2:34:40last night where you were doing the same

2:34:41thing. So, as you've seen more recently,

2:34:43our a lot of our work session time is

2:34:45now programmed to talking about those

2:34:47things. We believe that they're

2:34:49non-negotiables and don't wish to touch

2:34:50them and um so therefore, we're not

2:34:53asking you to rank them. Um the other

2:34:55thing that are similar that we added to,

2:34:57but uh the temporary data moratorum um

2:35:00not that you couldn't undo it, but we've

2:35:02under a moratorum. Um we've got an

2:35:0418-month moratorium. Heather and team

2:35:06and I know it's bigger than that is

2:35:07working on that. So over the next

2:35:09probably uh 17 months at this point in

2:35:12time the team will continue to work on

2:35:13that and another non-negotiable is

2:35:16budget creation and priorities of which

2:35:18we've already said you've dedicating up

2:35:20to a third of your meeting time towards

2:35:22that.

2:35:23So non-negotiable items are items

2:35:26obtained to address um uh regardless of

2:35:29council or other priorities driven by

2:35:31legal requirements. Um, I mean, I don't

2:35:34have financial audits, office estate

2:35:35audits and attorney recommendations. I

2:35:37think it's pretty self-explanatory.

2:35:39Happy to answer any questions about

2:35:41those. And as we go through the

2:35:42exercise, if you believe something else

2:35:44is a non-negotiable, I'd expect you tell

2:35:46us through your work. Uh, just a plug

2:35:49for our dashboard. Obviously, the 39

2:35:51items are on the moving forward

2:35:53dashboard on our website and we'll

2:35:55continue to devote um a lot of our work

2:35:57session time to updating the results of

2:35:59that and uh where we stand with the

2:36:01status of recommendations.

2:36:04All right, so the list today to

2:36:06prioritize is um you have it, this was

2:36:08the evolution of this list. You have um

2:36:10the real list in front of you with all

2:36:12of these items and we're going to talk

2:36:14about how did we get to this list.

2:36:17They're largely externally driven items.

2:36:19Um there's a picture of if anyone

2:36:21remembers it. This was just some fun

2:36:23topics looking really out in the future,

2:36:25but a lot of folks put you know what

2:36:27should we or might we be working on in

2:36:29the future. So we cap we said that was a

2:36:31vision board. We captured that at the

2:36:33annual meeting and those are uh topics

2:36:35on here. We had staff inputs items for

2:36:37awareness future decisions probably the

2:36:39poster child to that. I think Jamie

2:36:41actually mentioned one earlier, but it

2:36:42was a um utility billing uh project um

2:36:46or possibly even the Holly Springs

2:36:49wastewater study, joint wastewater

2:36:50study. So, we know we have actionable

2:36:52items that have to come to you in a

2:36:54timely uh manner thinking over the next

2:36:57uh four quarters or year. Um so, staff

2:36:59input and then there's a lot of council

2:37:00input in here. You probably see your

2:37:02name next to items. We've um received

2:37:04these through 3x4 meetings and other

2:37:07meetings throughout the year. So, those

2:37:08are on for your consideration. And

2:37:10again, these are items that need to get

2:37:12to council in this fiscal year. Um, in

2:37:15general, we just need to prioritize

2:37:17them. Um, I want to make it clear, these

2:37:20are not all the items that we're working

2:37:21on. Uh, quite frankly, as we've done

2:37:23this exercise today, we we took some off

2:37:26and we talked about adding some more.

2:37:28Um, this is a snapshot in time. This is

2:37:30the best guest of items, if you will,

2:37:32that we have at this moment in time. Uh,

2:37:34so we'll go with that. And as you go

2:37:36through your exercise, if you want to

2:37:38add something, we're giving room for

2:37:39that. So, let me get to your

2:37:41instructions and then the small groups

2:37:43that will split out and do some

2:37:45hopefully fun work. Um, you're going to

2:37:48give given. We're going old school here.

2:37:50I know we did quadratic voting um at the

2:37:53last meeting. Um, we just decided to go

2:37:55back to sticky dots at this point in

2:37:57time and see how that works and we'll

2:37:59keep trying new things. Um uh there uh

2:38:02let me So there you get six dots for

2:38:04most important items to council and then

2:38:05six dots um to not. So think of it as

2:38:08your most important things, your least

2:38:10important things. And earlier when we

2:38:12tried it, we actually had a middle item,

2:38:13which maybe I'll say Matt or Ashley or

2:38:16somewhere over here said, well, what

2:38:18happens with all the other items that

2:38:20were stuck in the middle? Well, they're

2:38:21just in the middle. So we'll leave in

2:38:22the middle. Um they might be fun topics

2:38:24that we um we'll take it to if there's

2:38:26time we can get to some of those. But to

2:38:28understand where the energy is at the

2:38:30most important t things is great. Uh we

2:38:32had add some rules. So no h half dots. I

2:38:35don't know we had some half dot people

2:38:37in here earlier. Um and then um you can

2:38:40start on page three. We're not asking

2:38:42you to review non-negotiables. Um and

2:38:44there is a write in. If you would like

2:38:46to write in something um we're asking

2:38:48that if you're writing it in it must be

2:38:51important to you. So then put a dot next

2:38:52to it. um you know if there's something

2:38:55that if there's um commentary to the

2:38:57list um we'll take that. I think these

2:39:01are your folks but let me just give some

2:39:02other instructions because we'll collect

2:39:04these at the end Jenny as a reminder

2:39:06these will go into the minutes as you do

2:39:11them.

2:39:11>> Yes. So just remember we'll collect

2:39:13these at the end. And we'll also as we

2:39:15come back out of the exercise, we're

2:39:16going to allow you to tell to debrief on

2:39:20what your items were and then we're

2:39:22going to collect all this and give it to

2:39:23Carrie and she's going to summarize it

2:39:25and we'll also then compare that to kind

2:39:27of some results from staff. All right.

2:39:30So, group exercise, these are your

2:39:33teammates, if you will, that'll be happy

2:39:35to answer any questions and uh help you

2:39:38along this way. We are going to break up

2:39:40into an area and um teammates, do you

2:39:44know where your council members are

2:39:45supposed to go and let me ask you if you

2:39:47have any questions as we go into this?

2:39:50>> I do.

2:39:51>> Yes.

2:39:51>> So, do you want us to review or need the

2:39:54council initiated items or do you want

2:39:56us to review everything like topic and

2:39:59>> um they're top

2:40:00>> sorry the non-negotiables too?

2:40:02>> You do not have to do the

2:40:03non-negotiables. You're really starting

2:40:05on page three. And that's a great

2:40:07question. and do everything else past

2:40:08that page. Um so page three and beyond

2:40:11it um we categorize them to some degree

2:40:15just to maybe help in terms of a cate

2:40:17category but

2:40:18>> but then there are things like multi

2:40:20model master planning which is in the

2:40:22budget and it is also we know that we

2:40:27are so far off that we cannot stop the

2:40:29work on that

2:40:30>> correct

2:40:30>> but you know not everybody might have

2:40:33the same level of understanding I mean I

2:40:35know about this but I might not know

2:40:37about 10 other projects

2:40:38>> correct Then what what are we gonna do?

2:40:40>> And this is that's why the is hard. Uh

2:40:43multi multimodal may need to come to you

2:40:45anyway. Um because it gets into the

2:40:49timing of that project, but this will

2:40:51help us know well what are other

2:40:52priorities that you believe should also

2:40:54be coming to you. Um it's again it's not

2:40:57an exhaustive list. Uh but we we

2:41:00grappled with those things as well

2:41:01knowing when it could come to you or

2:41:03not. um knowing that there is room to

2:41:05stop anything to be perfectly honest. If

2:41:08it's not a priority to you, we can slow

2:41:10it down. If it is a priority to you, we

2:41:12can speed it up. Um

2:41:15>> so let me be clear. So for example, if I

2:41:17say senior center expansion 2026 annual

2:41:20meeting timeline input, I put a green

2:41:22dot here. Let's just assume which means

2:41:25that this is going to be an important

2:41:27item for me and I would like to this to

2:41:30move forward. On the next line, Renaway

2:41:32card art center, I would put red dot.

2:41:36And on the third line, PRCR venues,

2:41:39education on operations, I don't put any

2:41:40dot. Then is that important or is that

2:41:43not important?

2:41:43>> It's in the middle.

2:41:44>> Okay.

2:41:45>> But what you're going to find out is

2:41:46what if it was important to Michelle and

2:41:49then everything will be tallied. So

2:41:51we'll tally the results as a group of

2:41:53y'all. So then you'll know what were the

2:41:55most important things as a council body.

2:41:57Um, you'll also then know whether your

2:42:00individual items made it or not.

2:42:02>> That said, we won't know any of those

2:42:04results until you at least try. And this

2:42:06is our first time trying. So, we're

2:42:08going to add um in our TSA line analogy,

2:42:11this might be a little clunky and we'll

2:42:13figure it out as we go. And you might

2:42:15may wish to revisit this. Um, but at

2:42:17least it's a step to maybe understand

2:42:19what your priorities are. Um,

2:42:21collectively

2:42:22>> the worst situation for you is we have

2:42:25uh 7* 6 42 priorities

2:42:28>> which will still be less than this whole

2:42:30list. [laughter]

2:42:34>> Yes.

2:42:34>> If you use your red dots.

2:42:36>> Correct. Correct.

2:42:38>> So would it be fair to say you're more

2:42:40interested in what we are willing to let

2:42:44go than what we are willing to

2:42:45prioritize?

2:42:47I don't know yet. That that's a good

2:42:50hypothesis.

2:42:51>> Okay.

2:42:52>> Yes.

2:42:52>> And then the other one is if we feel and

2:42:55it goes I guess it's basically taking

2:42:57from SA's question. Um I think is some

2:43:00of these we know have are likely going

2:43:03to happen like the South Hills Municipal

2:43:05District or things that are already

2:43:07funded. We know they're going to happen.

2:43:09We might not want to waste a green

2:43:11dollar.

2:43:11>> Exactly.

2:43:12>> I'll say that's why anything can be

2:43:15stopped. anything

2:43:16>> anything can be stopped and that is the

2:43:18hard thing that I don't want you to

2:43:20assume just because you put it didn't

2:43:21put a dot on it that it would happen but

2:43:23this is a difficult exercise

2:43:25>> wake regional water reclamation facility

2:43:28expansion that's

2:43:29>> it can be stopped

2:43:30>> it's a

2:43:31>> nah not going to be stopped

2:43:33>> I mean it's [laughter] super important

2:43:35>> and stop is stopped is not going to be

2:43:38stopped

2:43:38>> it's not going to be stopped is slowed

2:43:41in the commiserate

2:43:43>> um realm of what are your then then

2:43:47priorities and here's what we'll say

2:43:49whatever we learn from this exercise

2:43:51today maybe we re revisit at the next

2:43:54meeting like this is going to be a hard

2:43:56I mean it's a hard it was hard for staff

2:43:58earlier um you'll see and we did it with

2:44:02three times your group um so it's

2:44:04actually inherently harder and you'll

2:44:06also see where you have alignment on

2:44:07dots and where you have one item on dots

2:44:09and where you have red dots negating

2:44:11green dots to some degree this will also

2:44:14be a exercise to you learning about

2:44:16yourselves.

2:44:17>> For example, election science. Come on,

2:44:19Ross. We cannot uh say that that's not

2:44:22that's important or it's not important.

2:44:24It's something we have to do.

2:44:25>> So, election science is about doing it

2:44:27differently, not doing what you have to

2:44:29do.

2:44:29>> What are we doing different about it?

2:44:31>> And we haven't discussed it yet.

2:44:32>> We have to vote on whether or not to

2:44:34talk about it.

2:44:36>> Okay.

2:44:37>> This is where your rumors and your

2:44:38>> You want to know or you don't,

2:44:40>> folks? Get to help get to help you out.

2:44:43Yes.

2:44:43>> Is it a one dot per line?

2:44:46>> Yes.

2:44:46>> Limit?

2:44:47>> Yes.

2:44:48>> Okay.

2:44:48>> No half. No half.

2:44:50>> No half dots.

2:44:50>> I think I think Michelle is asking

2:44:52though if like in our quadratic voting,

2:44:54could you put two dots on the same line

2:44:57and try to boost?

2:44:58>> I I get I don't want to get If you do,

2:45:00you do

2:45:02put all five on. That's why I asked the

2:45:04question. [laughter]

2:45:06>> That's why I asked the question.

2:45:07>> Yes. I I we will allow it. But

2:45:10>> if you end up doing that is to cancel

2:45:13the activity, you're getting very close.

2:45:16>> Can we discuss before

2:45:18>> Let's give you some spaces where

2:45:19[laughter] you're staying.

2:45:21>> Do we go somewhere?

2:45:22>> Yes, we're going to let you go

2:45:23somewhere. Belly, you're staying.

2:45:25Britney. Britney.

3:14:59And we're back.

3:15:00>> All right. How'd that go?

3:15:03>> This is just a Everybody get through it.

3:15:05>> I'm very anxious.

3:15:06>> It was very um a lot of discussion as I

3:15:08was walking around and listening. Can't

3:15:10wait to see what your results are. All

3:15:11right. Which brings

3:15:13>> just about how we feel right now.

3:15:16>> Sure. for this period of time

3:15:18>> until until the next period of time

3:15:20where you talk about this again

3:15:22>> and it it's all about to me was about

3:15:24scheduling

3:15:25>> which I would say

3:15:26>> and that schedule window the red dots

3:15:27mean eh not necessarily doesn't mean I

3:15:30want that away

3:15:31>> but there's a Heather stand Heather do

3:15:32you mind since you're looking at it

3:15:34>> um we would we would and this is a slide

3:15:37later I'm going to ask you a question

3:15:38first but help us populate our work plan

3:15:42to get our your priorities back to you

3:15:44in the remainder of this fiscal year.

3:15:47>> Yeah. So, so when this is public record

3:15:49and people see a red dot on something

3:15:51that a colleague of mine had, I don't

3:15:53want them coming after me and

3:15:55>> why don't you like their project? That's

3:15:57not what it was about at all.

3:16:00>> Fitting it in a schedule.

3:16:01>> No, on all mine.

3:16:03>> All yours. Yeah. [laughter]

3:16:04>> All right. Which leads us to how you

3:16:06want to finish the day. Um, we are

3:16:08behind. Um,

3:16:10>> no, [laughter]

3:16:11>> you you asked great questions earlier

3:16:13and yes, not Jaime's fault, but we had

3:16:15an emergency that warranted um

3:16:17additional discussion about that project

3:16:19and you asked great questions about that

3:16:21as well. Um, didn't know how long this

3:16:23would take. We programmed time um

3:16:26because I think it's just something to

3:16:28work into how we do quarterly meetings

3:16:30in the future and talk about your

3:16:31priorities at quarterly meetings. Um so

3:16:33you have if you look at the agenda uh we

3:16:36can either finish uh do the legislative

3:16:40uh update which is fairly quick by Lisa

3:16:42and then come back to and debrief on the

3:16:45work uh priorities and Carrie's working

3:16:47to tally your results and we'll and

3:16:49share those with you and give you your

3:16:50papers back so that you can share your

3:16:52thoughts as well and end the day there

3:16:54or we can go straight to real estate and

3:16:57finish the day on real estate.

3:16:59>> Option one.

3:17:00>> Okay. And just does everybody because if

3:17:02we don't do real estate today, what

3:17:03we'll do is push it to um next Tuesday's

3:17:05work session and make that our topic

3:17:08along with um uh a dashboard update and

3:17:11any any updates that you have that I

3:17:13think the committee wanted to do uh from

3:17:15last night if that's fair and that'll

3:17:17likely be our two items. So option one,

3:17:19everybody good? All right. So if it's

3:17:21option one, we're going to mic Lisa up

3:17:24and do a legislative update.

3:17:27And sorry I didn't get you miked up.

3:17:31and then we'll come back to your results

3:17:33to finish the day.

3:17:36>> Thank you.

3:17:39>> I do want to share my perspective on the

3:17:41red dots.

3:17:42>> Okay.

3:17:43>> I use probably half of my red dots on

3:17:45things I think we've talked about enough

3:17:48>> and

3:17:48>> I thought about that too

3:17:49>> that we I feel as though we've discussed

3:17:51it. we everybody understands and if we

3:17:54were brought for example a sample

3:17:56ordinance to approve I feel like we have

3:17:58what we need to just move forward

3:18:03>> that's that's sort of where I prioritize

3:18:05the red

3:18:06>> and then I asked the questions about

3:18:08what if it's not red or green what does

3:18:10that mean it's in the middle

3:18:12>> it's in the middle

3:18:13>> that's why I didn't waste red dots on

3:18:15that like okay if it's stuck in the

3:18:17middle

3:18:18>> I choose

3:18:19>> let's talk about that as you um debrief

3:18:21in just a few minutes cuz I

3:18:23>> we were killing time.

3:18:24>> I think [laughter] cave this will be a

3:18:26great discussion.

3:18:27>> All right. And this is the uplifting

3:18:29part of the day where I give you all the

3:18:30great news about what the legislature

3:18:32did this [laughter] past session.

3:18:34>> Okay,

3:18:34>> that was a joke.

3:18:35>> That was the media. All right.

3:18:38>> Sorry to not be clear. Okay. Um, three

3:18:40key takeaways about this past

3:18:42legislative session. Local authority

3:18:44continues to be restricted um and not

3:18:47just restricted but often supplanted u

3:18:50in land use and other spheres. Local

3:18:52government litigation exposure has been

3:18:54increased by recent legislation. Um and

3:18:58in the coming months um and again this

3:19:00was not on your prioritization list

3:19:02because we're going to just have to do

3:19:03it. It's a non-negotiable really. Um

3:19:06ordinance amendments to implement the

3:19:08changes that are coming out of this

3:19:09legislative session.

3:19:12Um, a few quick hits. So, I'll just boom

3:19:14boom boom through a few things and then

3:19:15I'll spend at the end a little more time

3:19:17on a couple of land use items for

3:19:19everybody.

3:19:21Uh, so some finance and budget quick

3:19:22hits. You've all heard about the

3:19:24property tax um language that will be on

3:19:27your ballot on November the 3. It's a

3:19:29constitutional amendment that would

3:19:31direct the general assembly to limit the

3:19:33amount by which property taxes can

3:19:35increase. Now, the general assembly, if

3:19:37that passes, would have to come back

3:19:39into session and enact some kind of

3:19:41legislation, and they would have to

3:19:42decide um how to, you know, what would

3:19:45that be? Would it be a percentage limit?

3:19:46Would it be a, you know, you can't go

3:19:49more than.5

3:19:51cents? You know, whatever it would be.

3:19:53Um, so, um, we'll have to wait and see

3:19:56what happens with that. But, fun fact,

3:19:58the general assembly right now could

3:20:00pass legislation to limit the amount by

3:20:02which property taxes can increase from

3:20:04local governments. They don't need a

3:20:05constitutional amendment to do this

3:20:08>> political cover.

3:20:10>> Yes.

3:20:11Um so that Yep. fun fact. [laughter]

3:20:15Um on the procurement side of things,

3:20:17again, like I said, I'm going to try to

3:20:18go fast. On the procurement side of

3:20:20things, the legislature eliminated the

3:20:22hub office, which is the historically

3:20:24underutilized business office. that was

3:20:26a state government office and also

3:20:28eliminated uh the requirement for

3:20:31minority or womenowned participation

3:20:32goals in building construction

3:20:34procurement. Um they have switched that

3:20:38to an increased emphasis on what they

3:20:40call small business enterprises. And so

3:20:42they are kind of beefing up a small

3:20:43business enterprise office and

3:20:45eliminating the historically

3:20:47underutilized business office. Um, on

3:20:49the economic development side of things,

3:20:51any economic development dispersement

3:20:54over $25,000 must be reported to the

3:20:58state auditor. Um, and

3:21:00>> is that incentives? Is that what you

3:21:01mean [clears throat] by that?

3:21:02>> It is incentives for sure, but it could

3:21:04be other things. The extent of what it

3:21:06means is not entirely clear. We are

3:21:08working through that. And we will get

3:21:10guidance from the state auditor's office

3:21:11at least on how to report. That hasn't

3:21:13come out yet. And then the auditor is

3:21:15required to forward those reports to the

3:21:17local government commission [cough] and

3:21:19then also to the joint legislative

3:21:21commission on governmental operations

3:21:23which you've also probably heard called

3:21:25gov ops the legislative committee. So

3:21:28more reporting requirements and

3:21:30paperwork for staff to have to do.

3:21:34Um again kind of a grabag here. Uh, in

3:21:36positive news, the general assembly

3:21:38funded at a state level a bonus for

3:21:41every sworn local law enforcement

3:21:43officer that was employed by local

3:21:46agencies on June 30th, 2026. This money

3:21:49has not been paid yet. [laughter]

3:21:52Um, but it is funded at the state level.

3:21:53It will flow through our HR folks

3:21:56whenever they get their act together at

3:21:58the state level. Um, and go to again

3:22:00just sworn officers who were employed as

3:22:02of June 30th. Um on ebikes, another kind

3:22:06of positive change. Um the definition of

3:22:08ebike has changed. If you remember from

3:22:10some of our past work sessions, they had

3:22:12kind of a weird definition of ebike and

3:22:14is it a moped and all those things.

3:22:16They've kind of now come around and

3:22:18they're using the class 123 um

3:22:20designation that you all are more

3:22:22familiar with and that most people are

3:22:23more familiar with. and they explicitly

3:22:25give local governments the authority to

3:22:27regulate the class of ebikes and the

3:22:30speed of ebikes on our greenways

3:22:33multi-use path sidewalks. Um, and as you

3:22:35know, we have an ordinance amendment um

3:22:37that's been in the works and so we will

3:22:39incorporate this new change as we bring

3:22:41that forward

3:22:43over to Jaime's side of the house. Um,

3:22:45two things. Um, as you know, we have

3:22:49some customers on the Kerry water system

3:22:51who are not car in car's corporate

3:22:54limits. So, they get charged a different

3:22:56utility water and sewer rate than

3:22:58others. Um, for our next budget that we

3:23:02adopt, if the outside utility rate

3:23:05exceeds the inside the corporate limit

3:23:07rate by 25%, then a public hearing has

3:23:10to be held on that item. And so we

3:23:12expect that we may be having a public

3:23:14hearing on that at some point in the

3:23:16budget cycle. Um on the positive side,

3:23:20water and sewer contracts now, um most

3:23:23formal construction contract, so

3:23:25anything that's not just a small

3:23:26project, you have to have three bids

3:23:28before you can award a contract just for

3:23:30water and sewer contracts. They lowered

3:23:32that to two bids. And I kind of asked

3:23:34Jamie if he could speculate as to why

3:23:36that happened this year.

3:23:38Yeah, we had learned through some of our

3:23:40professional associations that um that

3:23:42came up through Holly Springs and their

3:23:45representatives in the legislature

3:23:46because they were letting some big

3:23:48projects during the time where it was

3:23:50hard to get construction contractors on

3:23:51board. And so reducing it from three

3:23:54bids to two bids helped out. And so I

3:23:55think that's something that came up

3:23:56through Holly Springs. And that can

3:23:59definitely be helpful when you're

3:24:00dealing with a more specialized utility

3:24:02contract as we handle quite a number of

3:24:04those ourselves.

3:24:06That is a timelmited provision. So, they

3:24:08put a sunset date on it for let it be in

3:24:11place for a couple of years and then I

3:24:13guess we'll see how it plays out. Um,

3:24:15all right. A little break before we get

3:24:17into land use. Who can tell me and not

3:24:19staff because we've already had this

3:24:20quiz. There are two things in this

3:24:22picture I need you to identify. What

3:24:25What are they?

3:24:26>> Moravian cookies.

3:24:27>> Yes.

3:24:28>> And what's the big silver thing?

3:24:32>> It's called a Moravian star. Oh my

3:24:35goodness.

3:24:36>> And so maybe you didn't know this, but

3:24:38in this year's budget bill, the

3:24:39legislature adopted an official North

3:24:41Carolina star.

3:24:42>> Oh my gosh.

3:24:43>> And an official North Carolina cookie.

3:24:45>> And I do have some official cookies

3:24:47here, which I will go out in the cookie

3:24:50break room um after I talk. Um so that

3:24:53kind of stuff was also in the budget.

3:24:55You can see why the budget was over 600

3:24:56pages.

3:24:58>> Um all right, now we'll move to land

3:25:00use. Um, and really most of this is all

3:25:04not good news for local government. This

3:25:05is where most of the restrictions and

3:25:07things are coming in. We'll go through a

3:25:09few of them quickly and then spend a few

3:25:11more minutes on some bigger things. Um,

3:25:13I think you've all heard about the

3:25:14parking legislation. This one goes into

3:25:16effect January 1st. So, as of January

3:25:191st, can no longer require any kind of

3:25:21minimum number of parking spaces for

3:25:23residential, commercial, any kind of

3:25:25development. U, we will need to do an

3:25:27ordinance amendment to recognize that.

3:25:30um accessory dwellings. Um you know, as

3:25:32you know, we adopted an ADU ordinance a

3:25:34year or so ago, and ours largely meets

3:25:37the requirements of what is now in

3:25:40place. Um we are going to have to tweak

3:25:41it because we did require minimum amount

3:25:43of parking, and we're going to have to

3:25:44take that out. We also need to take a

3:25:46close look at um the size limitations we

3:25:49put in and make sure it matches up with

3:25:51what the legislature did. So, we'll be

3:25:53looking at that. Um, as for building

3:25:56design, our community appearance manual,

3:25:58and Heather confirmed all this for me.

3:26:00If I get it wrong, correct me. Um, on

3:26:02the ground floor of commercial

3:26:05buildings, we currently require 50%

3:26:10transparency for retail uses and

3:26:12restaurants. Transparency is

3:26:15essentially, I think of it, Windows.

3:26:17Thank you. [laughter] It's more

3:26:18complicated than that, but think of it

3:26:20as Windows. Um, so we are now can no

3:26:23longer require 50% for retail and

3:26:25restaurant. We can only require 35% of

3:26:27the front be windows. Um, for things

3:26:30that are not retail and restaurant. So

3:26:31if you have like a ground floor medical

3:26:33office facility or something like that.

3:26:35Um, we require that to be at least 35%

3:26:39transparency. The legislature has now

3:26:41limited that to 20%.

3:26:43So again, we'll have to update the

3:26:45community appearance manual to match

3:26:47that. Interestingly, the legislature

3:26:49specified that no one can offer as a

3:26:52voluntary zoning condition to put in

3:26:53more transparency. Now, they can turn in

3:26:55a development plan that has 100%

3:26:58transparency, I guess, if it would meet

3:26:59the building code. Um, but they can't it

3:27:02can't be a zoning condition.

3:27:04>> Interesting.

3:27:04>> Yes.

3:27:05>> Why does it save the money or something

3:27:07or

3:27:08>> the why the limit on transparency? Yes.

3:27:10>> Punish the window lobby.

3:27:12>> It kind of forces I mean reszoning goes

3:27:14with the land. So they could probably

3:27:15resone it and sell or leave and somebody

3:27:18else has to.

3:27:19>> But why are they doing this at all? Why

3:27:22why do they care? That's a good

3:27:23question. Trying to think logically.

3:27:25[laughter]

3:27:25>> Is it cheap? It's cheaper.

3:27:27>> It would be cheaper to not put in as

3:27:28many windows.

3:27:29>> Put in windows.

3:27:31>> So expensive.

3:27:32>> All right, a few more fun ones. Um

3:27:34vesting and permit choice. So this is

3:27:37how long u and what regulations

3:27:39someone's project are judged by. Um, now

3:27:42when you submit a resoning application,

3:27:45it appears that that essentially locks

3:27:47in the LDO for your project, even if you

3:27:49don't build it for years, but the LDO on

3:27:52the date of your submitting your

3:27:53resoning application may be the LDO that

3:27:55you get to build under five years from

3:27:57now. It's unclear what they're trying to

3:27:59do with that one. Um, there's a a

3:28:01category of things called sight specific

3:28:03vesting plans. You all haven't seen very

3:28:05many of those, although there is one

3:28:08coming. Jason Baron has one. Um, and so

3:28:12currently or before the statute said

3:28:14someone could lock in the LDO for that

3:28:16sight specific vesting plan for a

3:28:18two-year period. Now that minimum is

3:28:20five years.

3:28:22Um, and storm water permits also now

3:28:24vest at time of application. So again,

3:28:26trying to trying to lock in local

3:28:28government regulations as early in the

3:28:30development process as possible for

3:28:31developers so that when our regulations

3:28:33change in the future, they don't apply

3:28:35to anything that's already kind of come

3:28:37in the door. And when we're talking

3:28:38about development regulations, we're

3:28:40talking about the building itself or are

3:28:43we talking

3:28:43>> not building code, right? But we're

3:28:45talking about our setback height, storm

3:28:48water. Yes. Okay.

3:28:50>> Building code. Although they made a lot

3:28:52I didn't even put this in here. There

3:28:54were a lot of changes made to building

3:28:55code.

3:28:56>> Uh things including changing who

3:28:59regulates building code. They moved it

3:29:01out of one agency into another. And then

3:29:03they put in a lot of requirements of

3:29:04different things where they've said

3:29:06we're overriding the building code on

3:29:07this, this, and this. Um, we can get

3:29:09more into that if anyone has questions.

3:29:11I didn't put any of that in here for

3:29:12today because it's very weedy.

3:29:14>> Is that like the single stair

3:29:16requirement for D triplexes? Is that

3:29:19>> Yes. Did that one pass, Chief Cooper?

3:29:22>> Yes.

3:29:22>> Yes.

3:29:23>> Okay. Okay.

3:29:24>> So, examples, things like that where

3:29:26they pick a particular thing out of the

3:29:27building code and say, "Ah, we want it

3:29:29to be different." So we are the

3:29:30legislature going to change the building

3:29:32code on that point. So there was some of

3:29:34that this time too. Um storm water they

3:29:37um are changing it seems like every year

3:29:40they decide either gravel is pvious or

3:29:43it's impervious one year and it's pvious

3:29:45the next and they're constantly

3:29:46changing. Um this year they talked about

3:29:49existing builtupon area. Um Dana thinks

3:29:52our regulations already match this but

3:29:54we're just going to have to take a look

3:29:55to make sure. So a lot of these things

3:29:57too, just thinking about the staff time

3:29:59that it takes to figure out does our

3:30:01regulation comply or not? Do we need to

3:30:03change it? What do we need to do

3:30:04differently? We are just starting those

3:30:06conversations. And a lot of these laws

3:30:08came into effect immediately upon

3:30:10signing, meaning we don't have any lead

3:30:13time to actually implement. They were

3:30:14effective immediately as we'll talk

3:30:16about with some of these at the end.

3:30:19Um, in the in [clears throat] the Lawyer

3:30:21Employment Act of 2026, as Matt and I

3:30:23are referring to it, um, they have made

3:30:26it a lot easier to sue local

3:30:28governments. They've increased the time

3:30:30frame in which people have to file

3:30:31lawsuits against local governments. And

3:30:33they have increased the um, people who

3:30:36can sue and broadened out what we call

3:30:39standing, which is who can sue you over

3:30:41something to um, trade organizations as

3:30:44an example. um so that that may have

3:30:46members who may be impacted by a

3:30:48regulation that is passed by a local

3:30:50government. They've also increased the

3:30:52uh types of cases for which fee awards

3:30:54can be issued against the local

3:30:55government.

3:30:56>> Lawyer Employment Act. I just got that.

3:30:59[laughter] Sorry.

3:31:02>> All right. Now, the deeper dive into

3:31:04some more fun things. Um no impact

3:31:08homebased businesses was the title of

3:31:10this legislation. Um, in our LDO, we go

3:31:15through a list of type one and type two

3:31:17homebased businesses and these kind need

3:31:18a permit and these kind have different

3:31:20requirements and we're going to have to

3:31:22redo that whole thing. Um, because they

3:31:24have essentially said in homebased

3:31:26businesses which in their view have no

3:31:28impact. Um, cities cannot prohibit them

3:31:31and also cannot require folks to get a

3:31:33permit. So, this is going to really

3:31:35change the way we do um home occupation

3:31:38things. Um, this is Stacy's house. So,

3:31:40when Stacy retires to become a pet

3:31:42sitter or, you know, something else, um

3:31:45really we're gonna have a lot less

3:31:46authority to even look at what people

3:31:48are doing, homebased businesses in

3:31:50inside their home, and the effect that

3:31:52that could have on neighbors. They're

3:31:53trying to say these really don't affect

3:31:55neighbors, but we have some requirements

3:31:57in place today that are much stronger

3:31:58than this. So, it effectively will have

3:32:01an impact on neighbors greater than what

3:32:03is there today.

3:32:04>> So, does HOA can u regulate?

3:32:07>> Yes, HOA can still regulate. Yes.

3:32:11Um the development fee transparency

3:32:13provisions. Again, this is one that was

3:32:14effective immediately um and that we are

3:32:17trying to catch up to. Um we have to

3:32:20post our fee schedule online. We already

3:32:22do. It's part of the budget. This is um

3:32:24a little snippet from the budget. Um but

3:32:27what's new is um we have to give a fee

3:32:30estimate to everyone who turns in an

3:32:32application for development within 10

3:32:35business days of their completed

3:32:36application.

3:32:38um if they change their plan through the

3:32:40review process, we have to give them an

3:32:42updated estimate. And whatever the

3:32:44estimate was, the last estimate was that

3:32:46we gave them before they finished the

3:32:48process, that's the fee they pay. We

3:32:50can't charge them anything higher. So,

3:32:52we really need to nail that estimate

3:32:55when we do it, and we have to do it

3:32:57within 10 business days. Um, as I

3:32:59understand it from Scott and Heather and

3:33:01Cassie, um, right now not everyone even

3:33:04asks or wants a fee estimate, but we are

3:33:07going to have to give everybody one kind

3:33:08of whether they want it or not at this

3:33:10point. So again, think about increased

3:33:12staff time and all that. Um, we also

3:33:15have to do an annual report on our fees

3:33:18and collections and send it to the local

3:33:20government commission. Now, this is in

3:33:22addition to we already have to report on

3:33:24our inspection and permits like building

3:33:25fees. There's already a reporting

3:33:27requirement for that. This is a separate

3:33:29and different reporting requirement. And

3:33:31we are going to have to bring you some

3:33:33fee schedule amendments um in the coming

3:33:35weeks because you also have to talk in

3:33:37your fee schedule about how you came up

3:33:38with the fees. And so we're adding that

3:33:40language in.

3:33:43And finally,

3:33:45uh residential byite. Again, this is

3:33:48effective already today. Uh you've

3:33:50probably heard a little bit about it.

3:33:52This completely overrides existing

3:33:54zoning um to allow by detached

3:33:56dwellings, town homes and multifamily

3:34:00um and mixed use with residential and

3:34:01other uses um up to 60 ft in height um

3:34:05potentially higher on any redevelopment

3:34:07parcel that is commercial, business or

3:34:09light industrial zoning that's being

3:34:11redeveloped. So think about some of our

3:34:13office parks that have perhaps empty or

3:34:15underused office buildings. You might

3:34:17think of one in particular that's

3:34:19already in for resoning. um that project

3:34:22no longer needs a reasonzoning to move

3:34:24forward.

3:34:25>> So we won't have a decision in this

3:34:27process any longer.

3:34:28>> You will not unless they choose to come

3:34:30to you for some reason.

3:34:32>> But otherwise in a redevelopment site,

3:34:34no, you won't hear it. So,

3:34:37so if we were talking about a particular

3:34:39office park that had a reasonzoning,

3:34:41>> they don't and they decide they want to

3:34:43turn an office building into

3:34:46>> um an apartment building.

3:34:48>> Well, they already don't have to look at

3:34:50parking because of the previous one.

3:34:52>> Right.

3:34:53>> Right.

3:34:53>> They get residential by Right. Do they

3:34:56have to do [clears throat]

3:34:57transportation,

3:34:59you know, studies or anything like that?

3:35:01>> No.

3:35:02>> So, they don't have to do anything. So,

3:35:04>> so anyone who lives by a defunct

3:35:07>> um office park.

3:35:08>> Yeah. Good luck.

3:35:09>> In the cities of Charlotte, Raleigh, and

3:35:11Kerry only. That legislation only

3:35:14applies to those three cities.

3:35:15>> Wait, really?

3:35:16>> It's only in Say it again.

3:35:19>> Charlotte, Raleigh, and Kerry. The way

3:35:20they phrase the legislation is the only

3:35:23cities that it applies to. [laughter]

3:35:25>> Sorry. Well, yeah. Unfortunately, it

3:35:28still applies to Carrie, but just

3:35:29Charlotte, Raleigh, and Carrie.

3:35:30>> Is this by uh population, size of the

3:35:33Yeah, it it was it's a weird it is

3:35:36>> bigger.

3:35:36>> Well, it's weird because they did it by

3:35:38county and city population. So, you have

3:35:40to be a county of a certain size and a

3:35:42city of a certain size within that

3:35:44county. So, the only two counties that

3:35:46triggered it were Meckllinburgg and Wake

3:35:48and the only cities that were large

3:35:49enough Charlotte Raleigh car

3:35:51>> had all Democratic council.

3:35:53>> So, and council member Bush you may

3:35:57>> just to make sure it's reiterated enough

3:35:59you may even want to restate what you

3:36:00said

3:36:01>> where this could happen. So for in well

3:36:04let me use an old one. Uh Weston.

3:36:06>> Yes.

3:36:07>> If Weston came today,

3:36:09>> we would not have had the entire long

3:36:12conversation and zoning and requirements

3:36:16and you know all the conditions they put

3:36:18for the neighbors. They could have just

3:36:20come in and put whatever they wanted

3:36:22with respect to a multifamily.

3:36:24>> Can they change the footprint though?

3:36:26>> Absolutely. Yes. Yeah. And in fact, let

3:36:28me say to you, I hate to keep giving you

3:36:31worse and worse news.

3:36:33>> Um, but the one that was just reszoned,

3:36:35they could come in tomorrow.

3:36:36>> Oh my god.

3:36:36>> And ignore that zoning.

3:36:38>> Oh, yeah.

3:36:39>> And ignore their zoning conditions.

3:36:43>> Yes.

3:36:43>> And build according to the zoning. Can

3:36:46you tell me um c can they build anywhere

3:36:49up to 60 feet? Like five that's five or

3:36:51six stories depending on how tall the

3:36:53ceilings are. that any

3:36:57com currently commercial property they

3:37:01can build a five or six story

3:37:04>> apartment building

3:37:05>> apartments condos whatever it is

3:37:07>> town houses anywhere

3:37:10>> it it has to be a redevelopment site so

3:37:12something that's already developed with

3:37:14uh in a commercial business or light

3:37:16industrial zone um so so it can't be a

3:37:20green field of course Carrie doesn't

3:37:22have a lot of that left.

3:37:24>> Um, but redevelopment sites as defined

3:37:26in the statute.

3:37:28>> You pick good one. Office parks,

3:37:30>> office parks is the easiest. So, as an

3:37:32example, since we've already had it, we

3:37:34have a regency reasonzoning that's come

3:37:36to us. [clears throat]

3:37:38>> Um, that was talked about at the utterly

3:37:41>> drive community meeting. I think

3:37:43Spectrum was

3:37:44>> Yes.

3:37:45>> that one that will not likely not come

3:37:48back to us because they can do

3:37:50everything they want by right.

3:37:51>> Yes. It does not have to come back to

3:37:52you under this legislation most likely.

3:37:54Now, we have to look at each individual

3:37:56one as it comes through and make sure it

3:37:57fits the requirements of the statute,

3:38:00but broadly,

3:38:01>> would you like some information?

3:38:02Possibly, maybe we could get you a

3:38:04report or something on what's in system.

3:38:06Yes.

3:38:07>> That could be affected by so that we can

3:38:09at least get you some information on

3:38:11what's

3:38:11>> in asking for

3:38:14Well, you would might want to ask us for

3:38:15that.

3:38:16>> Yeah.

3:38:17>> When you have commercial and light

3:38:19industrial though, I'm sorry.

3:38:20>> No, go ahead. Are you talking about I if

3:38:22I have a gas station, I can now build a

3:38:24five-story apartment building on that

3:38:25lot.

3:38:27>> I was thinking more like think like

3:38:28grocery stores, you know, think we have

3:38:31a lot [clears throat] of not a lot.

3:38:32Think of the areas in town that are zone

3:38:34general commercial like I think that's

3:38:36red on our map, general commercial. Um

3:38:38like the food line shopping center, you

3:38:40know, down Kilder Farm.

3:38:42>> Think of, you know, areas like that

3:38:44would fit. So there's a lot of areas

3:38:46where it could potentially. So, it's not

3:38:48really just some place where there's

3:38:49business use. It's specific types of

3:38:53commercial zoning.

3:38:54>> No, it's any kind of commercial zoning.

3:38:57>> I was just giving that as another

3:38:58example.

3:38:58>> Yeah. Okay.

3:38:59>> Wow. Can we also get an update then on

3:39:02what Weston what Kane's plan is for

3:39:05Weston so that we can let the um I mean

3:39:09are they planning on just building

3:39:11whatever they want now and not coming

3:39:12back or are they going to

3:39:14>> I have not heard that so I don't want to

3:39:16to put that out there I'm just as a

3:39:18worst case

3:39:19>> scenario

3:39:21>> that's what I don't want to say I'm into

3:39:23the micro

3:39:23>> what are the other developments we have

3:39:25>> yeah that's what would be helpful to

3:39:27know got [laughter] as we talk about

3:39:31prioritizing staff time, we'll just uh

3:39:33heap on some more. But, you know, if we

3:39:36if we did have some kind of report, I

3:39:38think what would be helpful to know is

3:39:39how many other Westons are there, right,

3:39:42that were already approved resonings

3:39:45that this would apply to retroactively.

3:39:48And then how many are in the pipeline

3:39:51that we did not yet see like Regency,

3:39:54but this would apply to. And then I mean

3:39:57we could all go on to our development

3:40:00our zoning map and look up these zones.

3:40:03Um so I mean we we could do that on our

3:40:06own, but if we're compiling this

3:40:07information, I think that would be

3:40:09helpful too to know then how many

3:40:13parcels in Kerry this could apply to in

3:40:15the future. And we need to get that

3:40:18information to residents ahead of them

3:40:22being shocked and awed

3:40:24>> and possibly who they should be talking

3:40:26to,

3:40:26>> right,

3:40:27>> to make changes.

3:40:30>> Is not XYZ.

3:40:32>> There's a lot of them. I mean, there was

3:40:34a gas station taken down on Maynard,

3:40:36right?

3:40:37>> That's what I was thinking.

3:40:39There's a lot of them that were

3:40:41>> that were getting ready for

3:40:42redevelopment of some kind and maybe a

3:40:44resoning that

3:40:46>> could just now come in by right and

3:40:49build.

3:40:49>> Do we have any regulation of like the

3:40:51number of units?

3:40:53>> Unclear.

3:40:54>> Okay.

3:40:55>> Um we don't currently have regulations

3:40:57because they sprung this on us in a last

3:41:01minute regulatory reform bill which no

3:41:03one had any chance to look at the

3:41:04provisions and give any input into. Um,

3:41:07and so, um, and we as staff are

3:41:10beginning to meet to try to figure out

3:41:12how to incorporate this into the LDO,

3:41:14but as you've seen all the list of

3:41:16priorities and the 39 non-negotiables,

3:41:18we are doing our best to fit it into the

3:41:20work plan as quickly as we can, but it's

3:41:22taking time.

3:41:23>> So, I don't want to dig too far in the

3:41:25weeds, but I do. Um, let's say you had

3:41:2780 feet. Can I make the first 60

3:41:31residential and leave the top two floors

3:41:34for something? Uh so what the what

3:41:36they're saying here is we could choose

3:41:38to limit their height at 60 ft to

3:41:42whatever they build. Uh they could build

3:41:44>> an existing building that's 80 ft

3:41:47>> or 75 ft.

3:41:49>> They could take the first 60 and do and

3:41:52make it residential

3:41:54>> and then they don't have to care about

3:41:55the

3:41:55>> if the building code would allow it.

3:41:57>> If the building code would allow it's

3:41:58probably it's probably cheaper and

3:42:00they're probably just it's tear downs.

3:42:01>> Yeah. Okay.

3:42:02>> It's going to be tearowns.

3:42:05What if they go down go down to the

3:42:08ground?

3:42:09>> They could go below ground if they

3:42:10wanted to spend that money [laughter]

3:42:12>> and it would just be 60 ft in height

3:42:14from ground level that we could we could

3:42:16cap it at

3:42:17>> and they wouldn't require any parking.

3:42:19>> No, no parking.

3:42:22>> I just thought I

3:42:23>> No, the mark the market will

3:42:27>> the market will drive them and financing

3:42:28will drive them to actually have

3:42:30parking.

3:42:30>> I agree. U they most likely can't get

3:42:32financing for a project if they provide

3:42:34zero parking.

3:42:34>> That's a good point.

3:42:35>> Um but we won't be able to control the

3:42:37amount of parking

3:42:38>> and the law that we can't downzone

3:42:40without the parcel owner's approval

3:42:42applies to commercial and residential.

3:42:44Correct.

3:42:45>> Yes. And that yes that the legislature

3:42:47made no movement on changing that law

3:42:49this session.

3:42:49>> So Lisa, do you know when did this bill

3:42:52pass and how long had this bill been

3:42:54discussed?

3:42:55>> Um it was not discussed.

3:42:57>> Oh. Um it was passed um at the end of

3:42:59the session and the um Governor Stein

3:43:02signed it on August 11th I believe.

3:43:10>> Wow.

3:43:11>> Anybody want a cookie?

3:43:13[laughter]

3:43:14>> Is that why you brought the cookies?

3:43:17>> Is that the only good news?

3:43:20>> That's why you brought the cookies.

3:43:21>> That's why I brought the cookies. And

3:43:23also I should remind everyone that um

3:43:25Lisa is doing um this task for

3:43:27legislative agenda. Not that you don't

3:43:29like it in general and we're a partner

3:43:31to former assistant manager but um it's

3:43:34in addition to Lisa's duties that um

3:43:36she's already doing to do legislative

3:43:38updates for you right now. So just

3:43:41>> thank you. And that's one of my

3:43:43concerns. Do you have the bandwidth to

3:43:44do all this?

3:43:46>> Well, it's not just me, but it's you

3:43:48know in terms of the staff that are

3:43:49going to have to implement all these

3:43:50changes. It's a lot of Heather's

3:43:52primarily Heather's staff

3:43:54>> um that we're going to have to work with

3:43:55to try to implement all these changes

3:43:56and it's uh it's a lot.

3:43:58>> How about keeping up with all the

3:44:00changes? You have the bandwidth to do

3:44:02that.

3:44:03>> Yes, because I really like that. So,

3:44:05that's the part of my job I really like.

3:44:06So, I I like to keep up with that kind

3:44:08of thing, but the keeping up with it is

3:44:09the easy part. The implementing it is

3:44:12what takes a lot of time.

3:44:13>> Okay.

3:44:13>> Yeah.

3:44:14>> Just going back for the transportation.

3:44:17So, there's no transportation. I I just

3:44:20I'm thinking about the [clears throat]

3:44:21fact that a grocery store or

3:44:24>> the only thing would be um if they need

3:44:26a new driveway permit from either us or

3:44:29NC DOT, but that would mean they're

3:44:30putting in a new driveway cut. If

3:44:32they're not putting in a new driveway

3:44:34cut, then they probably don't even need

3:44:35a new permit. I don't know. It depends

3:44:37on DOT's rules about what needs what

3:44:39would need a driveway permit. If they're

3:44:41really increasing a use, DOT might

3:44:42require them to do a little bit of work

3:44:44to get a driveway permit on a DOT

3:44:46street. That would be the only thing I

3:44:48can think of that would require any

3:44:49transportation work.

3:44:50>> I am thinking we are going to mold this

3:44:54over and have a lot of questions and

3:44:57hypotheticals. Uh

3:44:59>> and we'll when we do a staff report to

3:45:01bring forth the ordinance amendments

3:45:03that we think we need to do, we can

3:45:05incorporate a lot of this whatifs, the

3:45:07data you've asked about, we can

3:45:09incorporate that into the staff report

3:45:10as we try to gauge what the impact might

3:45:12be. Yeah, Heather, I'm thinking we could

3:45:16probably use this as a standalone agenda

3:45:19item to really understand all of the

3:45:22implications because I'm thinking too

3:45:24now understanding this, you know, are

3:45:27there any opportunities to in addition

3:45:30[clears throat]

3:45:31to changing our LDO to match the law,

3:45:35are there ways we want to proactively

3:45:38change our LDO?

3:45:40understanding that the way Kerry

3:45:41develops now looks different. You know,

3:45:44we have transitions. Do we want to

3:45:47reexamine our transitions knowing we're

3:45:49not going to have the opportunity to

3:45:50condition them at a resoning? Um, so

3:45:53planting the seed that I think council

3:45:55would appreciate

3:45:57>> some dedicated time to talk about this,

3:46:00>> put it on the list, rep. [laughter]

3:46:02>> Yeah. And I would say we discussing

3:46:05this, you know, bringing it to us and

3:46:06discussing it in a work session is

3:46:07excellent, but as soon as we can,

3:46:10getting this on a regular council

3:46:12meeting agenda is going to be important

3:46:14for media coverage and for general

3:46:17understanding with residents because

3:46:20they're they're going to be so surprised

3:46:22by this

3:46:23>> as the projects come in. And if we don't

3:46:26the the truth is they pay attention to

3:46:28our council meetings and for whatever

3:46:29reason not as much attention to our work

3:46:32sessions and I don't think

3:46:34the media is paying as much attention to

3:46:36the work sessions as well. So the more

3:46:38we talk about this in regular council

3:46:40meetings, the more socialization.

3:46:42>> And Carissa, one of the things to keep

3:46:43in mind is it's only going to be

3:46:45happening like it's not going to be

3:46:48happening really with our neighbors,

3:46:50>> right? Other than Raleigh

3:46:51>> Raleigh, right, and Charlotte. And so

3:46:54when residents hear about this,

3:46:57[clears throat]

3:46:57>> first of all, if it gets any coverage,

3:46:59but secondly, when they hear about it,

3:47:01it's not going to make sense to them

3:47:02because it's something that's so

3:47:04isolated.

3:47:04>> Right. Very good point.

3:47:06>> Yeah. I think I really like what um

3:47:08Council Member Johnson

3:47:09>> Cararissa

3:47:11>> Cararissa [laughter]

3:47:12I'll I'll use my veto power there.

3:47:14Carissa said um that we may want to be

3:47:17ahead on this one because I know that a

3:47:20lot of residents get really really

3:47:24you know I I don't think angry is the

3:47:26right word. may be disappointed that you

3:47:28know the council I think cannot work

3:47:30>> especially Bella in Regency

3:47:33>> the that the council cannot enforce and

3:47:35negotiate something with the builder

3:47:38reducing the number of stories you know

3:47:41density and whatnot but it looks like in

3:47:43this case the council might not even

3:47:45have that power anymore

3:47:48>> so it's better to get ahead and start

3:47:50rolling that news

3:47:53>> good or bad I don't know

3:47:54>> yeah especially share with them the

3:47:56power we have and um

3:47:58>> power that we don't have.

3:48:00>> Yeah. Power

3:48:00>> especially we don't have and especially

3:48:03the residents uh in regency they

3:48:07complain to the local government but

3:48:09local government could hear

3:48:10[clears throat] them anytime but if they

3:48:13go higher

3:48:15>> um like say the the state or federal

3:48:18level it's hard to hear their voices

3:48:21even they are still upset with that. let

3:48:23them know there's an election this year

3:48:25for

3:48:27>> but I think this might impact um

3:48:30>> Michelle and Bella's district more or

3:48:33maybe yours too a little bit

3:48:35>> already thinking of at least

3:48:36>> and South Hale

3:48:37>> I know I was worried about that one

3:48:39>> everything on West

3:48:40>> and I would say the the bill that passed

3:48:43>> I'm some Weston

3:48:45>> the the bill that passed had bipartisan

3:48:46support so it wasn't just you know it

3:48:49wasn't just one side of the aisle or the

3:48:51other there were folks on all sides that

3:48:53voted for the bill. Um because part as

3:48:55with the budget bill that was 600 pages,

3:48:57the regulatory reform bill was

3:48:59>> 50 or something. It had a lot of

3:49:01different things in it. So, you know,

3:49:03that had nothing to do with each other.

3:49:05So, um

3:49:05>> maybe somebody voted for the cookie

3:49:07>> that somebody voted for the cookie.

3:49:09Exactly. If it sounds like if I gave you

3:49:11all on the fly as we transition into the

3:49:13party exercise, if you all got one extra

3:49:15dot

3:49:17>> possibly this would be what you land

3:49:18your

3:49:20>> and we could add it to our not that we

3:49:22won't add it but just

3:49:23>> there was a

3:49:24>> there's a lot of agreement on this issue

3:49:26it would seem like to getting something

3:49:28back in front of you or

3:49:30>> um communicating about it

3:49:31>> when you bring it back. I'd also be

3:49:33really interested in what sort of

3:49:35infrastructure change requirements there

3:49:37are. Does it does an office building

3:49:40require more water, sewer, road

3:49:43improvement? Um, obviously school

3:49:46capacity was is going to be different,

3:49:49but you know, traffic, storm water, all

3:49:52of those things I think are can be quite

3:49:54different depending on the use of

3:49:56>> which I think I mean I'll let get her to

3:49:58say it. They still have to do a

3:49:59development plan.

3:50:00>> Yes.

3:50:01>> Okay.

3:50:01>> Technically.

3:50:02>> Okay. they won't have to do off-site

3:50:04improvements that you would get as part

3:50:06of a reasonzoning process.

3:50:08>> So, if a development plan there's not

3:50:11water or sewer capacity or whatever,

3:50:14what did they do?

3:50:15>> Well, there's already lines to location.

3:50:18So, I I would doubt there isn't water

3:50:21capacity.

3:50:21>> It doesn't change their application to

3:50:23the LEO application to their site. So

3:50:25they still do have to go through a

3:50:26development plan process and we will

3:50:28evaluate how they're meeting the the

3:50:31requirements of our land development

3:50:32ordinance. So that that still applies.

3:50:34>> So let me ask a crazy question. Back in

3:50:37the day, didn't council used to approve

3:50:40development plans

3:50:42>> maybe a lot maybe before any of our time

3:50:44>> some of them in certain.

3:50:47>> No, I'm just say I'm just going out the

3:50:49audience.

3:50:49>> I I'll say it's it's unclear the extent

3:50:52of the legis legislation. Um, as you

3:50:54know, our board of adjustment does

3:50:56approve some development plans today

3:50:58that are of a certain size. Um, we have

3:51:00to work through how and to what extent

3:51:02that applies to this specific category

3:51:04that they've created. It's unclear at

3:51:06this time.

3:51:06>> Uh, properties up to 60. [laughter]

3:51:10>> Yes. So, more information.

3:51:11>> It's unclear if we can do that. I I

3:51:14really think this also has a big impact

3:51:16on Wake County Public Schools because

3:51:18>> we give them land use planning and our

3:51:21vision plan that shows

3:51:23>> that shows where different types of

3:51:25development so that they can plan how

3:51:26many schools they need in certain areas.

3:51:28Now

3:51:30>> they don't know, you know, commercial

3:51:32they could at least say, well, there's

3:51:33not going to be any kids here and now

3:51:35they're going to be like, oh, well,

3:51:37there could be a lot of kids.

3:51:38>> What if you could put an elementary

3:51:39school at Airport Boulevard, it'll be

3:51:41awesome. Yeah, [laughter] exactly.

3:51:44>> I mean, it is

3:51:45>> mayhem.

3:51:46>> It it is going to be quite a difference

3:51:47and it makes it really difficult for

3:51:49them to plan

3:51:51>> because now they have to think that a

3:51:53commercial property

3:51:54>> could be residential and it could either

3:51:57be single, it could be multifamily at

3:52:00some huge amount or it could [snorts] be

3:52:02town homes. They won't be able to figure

3:52:04out the number of kids.

3:52:05>> The kids need to go to Apex or Hollis

3:52:07Spring to

3:52:09>> Wake County Public School System. They

3:52:11could because the school system will

3:52:13just um

3:52:15>> red distribute

3:52:17>> but even though it's I guess my point is

3:52:19even though it's only hitting Kerry and

3:52:22Raleigh,

3:52:23>> it's hitting the entire Wake County

3:52:25school district.

3:52:26>> It could

3:52:27>> potentially

3:52:27>> it could.

3:52:29>> I wonder if they know.

3:52:31>> I don't know.

3:52:32>> Not sure.

3:52:33>> Know how our delegation voted.

3:52:35>> Um who would have thought that the

3:52:36legislative agenda would have been one

3:52:38of the more robust topics of the day? I

3:52:40know it was kind of okay until you last

3:52:44one.

3:52:44>> Hand out those Moravian cookies.

3:52:46[laughter] Come on.

3:52:47>> All right. Do you want to do your

3:52:48result? Obviously, it's late in the day.

3:52:50We allocated 15 minutes. I'm going to

3:52:52share your results. I think you got

3:52:53passed back out what you put. So, we'll

3:52:56just weave that into some of the

3:52:57conversation as I share the totality of

3:53:00results and we'll see if they're

3:53:01surprising or not. Um, you actually I

3:53:04have it in my hand so it's paired more

3:53:06interestingly than I would have thought.

3:53:08All right. So, the results the um y'all

3:53:09are going to switch. There we go. And

3:53:12y'all can scroll. Let me make sure I'm

3:53:14out of the way. And you'll just see kind

3:53:16of generally where dots landed. There

3:53:18are totals. And the um you all had three

3:53:22on three items where the

3:53:26um largest. Ignore the red for right

3:53:29now. Right. Yes. There's also a red

3:53:31tally.

3:53:34We can ignore that for right now.

3:53:38Somewhere we're going to get to the twos

3:53:40and threes.

3:53:40>> They were there.

3:53:44>> Obviously, this makes sense.

3:53:48>> There's a three. Stormwater utility fee.

3:53:50That's great news because we have some

3:53:53information to share and a lot of work

3:53:54to implement.

3:53:57There's another three. Senior center

3:53:59expansion, which is interesting because

3:54:02I don't know that you've ever

3:54:02collectively talked about it, but it was

3:54:04something that someone put on the um

3:54:07chart from the

3:54:08>> Wow. Three. Okay.

3:54:09>> And multimodal

3:54:11master planning,

3:54:15which is probably a little different. I

3:54:17mean, not not that you're not doing it,

3:54:18but to see what your ideas would be

3:54:20around what it is or isn't with regards

3:54:23to um

3:54:25um mixed use development

3:54:27>> historic preservation master plan

3:54:29update.

3:54:31>> Yep. So, I have

3:54:35so just um maybe you Yes, we finished

3:54:38scrolling through all of them. public

3:54:40safety.

3:54:42Apparently,

3:54:43you're all Well, let's see what you all

3:54:46say, but there's some sort of unity

3:54:49[clears throat]

3:54:49>> about painting Car's logo on a tank.

3:54:53>> Not necessary. It's not that not a

3:54:55priority.

3:54:56>> It just means it's not a priority.

3:54:57Exactly.

3:55:00and unity on for not right now probably

3:55:05to use that language of uh meeting with

3:55:07other jurisdictions currently.

3:55:10>> Who added that last one

3:55:12>> where

3:55:13>> which one? [laughter]

3:55:15>> I have a guess.

3:55:18>> Huh?

3:55:19>> But you only use

3:55:21[laughter]

3:55:22>> You can talk amongst yourselves as to

3:55:23who you think added that last one.

3:55:25>> Russ who's doing our scrolling for us.

3:55:27Our IT team back there. Yep. Tech team,

3:55:29>> I'm curious if we could scroll again. I

3:55:32think there was at least one category

3:55:34that had some red and some green.

3:55:37>> Oh, yes. Let's see.

3:55:38>> Few. Okay. Wait, we just passed one.

3:55:41>> Oh, lighting standards.

3:55:43>> I I'll spoiler alert. I'm the one in

3:55:45green. [laughter]

3:55:48>> I just ran out of dots.

3:55:49>> Understood.

3:55:52>> Uh community center. So that there you

3:55:54know the ruron land

3:55:56>> mine is green new community gets center

3:56:00>> downtown park budget

3:56:02>> downtown park

3:56:03>> for me I thought some just from

3:56:06discussion of how each of us did this

3:56:09exercise for instance I thought that the

3:56:12multimotal transportation might then

3:56:15fall into some of the other

3:56:17transportation items would come from

3:56:19that. Yeah.

3:56:20>> So I tried to think of a couple things.

3:56:22one what need is needed now before some

3:56:26of the others

3:56:27>> right which ones will probably get done

3:56:29anyway on their own and which ones

3:56:32weren't that important to do right away

3:56:34from a not to do but to discuss kind of

3:56:37your question is do we need to talk

3:56:39about that again like I don't think we

3:56:41need to talk about the ruran

3:56:44park land again I you know I put that as

3:56:48a red

3:56:48>> well and I put like I put a red on ebike

3:56:51or ordinance amendment If if I I was

3:56:54telling my group if the chief came to us

3:56:57with a proposed ornament or um or

3:57:00ordinance that wasn't bananas, I'd say

3:57:03cool and we could just approve it and go

3:57:05about I feel like we've we've talked

3:57:07about that plenty the smoking ordinance.

3:57:09>> We just go ahead and change it.

3:57:11>> I think the way um

3:57:13>> I just want to share what Russ shared

3:57:15with me.

3:57:16>> Let's see what I said. Uhoh.

3:57:17>> That changed my perspective a little

3:57:20bit. Um what he said was that if you put

3:57:23red here that work could potentially

3:57:26stop.

3:57:27>> Yes.

3:57:28>> Yes. Red is not a priority right now.

3:57:31>> Mhm.

3:57:31>> Yeah. So that stops and that you know so

3:57:35I understand where you're coming from

3:57:36because I did the same thing. I do not

3:57:38know where to put the reds but um uh

3:57:42that so that's the least priorities.

3:57:45just not bring it before the council

3:57:48next year, next uh

3:57:50>> would not you're probably getting to the

3:57:52gray area where you're almost saying the

3:57:54same thing. But yes, not a priority

3:57:56right now. Doesn't mean we won't revisit

3:57:58these and they could resurface as

3:58:00parties in the future or as we heard

3:58:02with um state law changes. You have

3:58:04things that trump other parties during

3:58:06the year. Um and this is at least let me

3:58:08ground it in a start of having party

3:58:11discussions with you as the first time

3:58:13we've done it. let's leave some room

3:58:15that it's imperfect and we can hone in

3:58:17on a system as we go. and uh as several

3:58:20conversations of uh you led including

3:58:23CIA um the mayor said this and I know

3:58:25many of you have um especially if you've

3:58:27been on council for a while is getting

3:58:29back to

3:58:31um I'm not in it anymore but it would be

3:58:33getting to the um strategic goals

3:58:35conversation earlier in the year and

3:58:37then seeing where we land your

3:58:39priorities in those goals throughout the

3:58:42year possibly budget year or possibly

3:58:45thinking longer term. Um, I think that's

3:58:47where we want to get with having more

3:58:49robust conversations at least once a

3:58:51year. And, uh, I think Sria, you

3:58:53mentioned the pillars conversation that

3:58:55we had to kind of guide our budget

3:58:57process. The budget process is a way to

3:59:00implement your goals in a year's time,

3:59:04not necessarily a strategic visioning or

3:59:07strategic goals um, strategy session.

3:59:11>> Yeah. It was also somewhat difficult to

3:59:13weigh some of the different priorities

3:59:16with each other. For instance, the storm

3:59:18water utility is going to be a massive

3:59:21effort. The master

3:59:22>> Yes.

3:59:23>> planning and transportation is a master

3:59:25effort. Compare that to the fact that

3:59:28the I'll just pick one. The smoke-free

3:59:30ordinance is already on our agenda.

3:59:32>> Correct. Correct.

3:59:32>> 924. I mean there one is a vote and a

3:59:36quick discussion. The other one's months

3:59:38and months of months of work.

3:59:39>> Right. All while to some degree if you

3:59:41took this you're really giving us your

3:59:44um 42nd

3:59:46through whatever number parties cuz

3:59:48we're working on 39

3:59:50um items to begin with that we would say

3:59:52are most important items right now plus

3:59:55the budget plus moratorum probably plus

3:59:58some other things again start to a

4:00:00conversation not the ending of one

4:00:03>> um any I mean any other you know you've

4:00:05got the stuff in front of you any other

4:00:07observations oh and let me

4:00:09>> show you what staffs were

4:00:12as a top six results. Um,

4:00:17public safety utility billing project.

4:00:20Let's see

4:00:22if that was Did you have that on yours?

4:00:26>> Not these are not analogous to what was

4:00:29on our list. [laughter] I'm not sure I

4:00:31understand.

4:00:32>> Um, these these are the same. Uh, I

4:00:36think we condensed the topic. Public

4:00:37safety was an item, utility billing

4:00:40project, class and pay.

4:00:41>> These were the same. We did the same

4:00:43exercise earlier. It might be some

4:00:44shorthand to it.

4:00:45>> Oh,

4:00:46>> multimotal planning, debt planning, um,

4:00:50showing up on both

4:00:53charts.

4:00:54>> But that's another example of the fact

4:00:55that you guys picked the great big, you

4:00:59know, extra extra large t-shirt items,

4:01:01right, that are all planning that are

4:01:03>> Yes.

4:01:04studies and big picture ones and it

4:01:07makes perfect sense

4:01:09>> why you did that. what we did um

4:01:11different from y'all public safety I

4:01:13will add we split public safety into two

4:01:15c categories after we did it because it

4:01:17was unclear I think it was one of the

4:01:19top vote getters um but it's operations

4:01:21and then capital projects and the two

4:01:23aren't necessarily in the same um you

4:01:26all put votes on both of those so

4:01:30>> so can we get copy of these results

4:01:33>> um in to yes and it will also be in the

4:01:35minutes but we can share

4:01:38>> before the minutes

4:01:39>> I want to blog

4:01:40Yeah,

4:01:41>> we're going to have all the exhibits up

4:01:42today and I'll need to collect these

4:01:44back.

4:01:45>> Oh,

4:01:45>> but in in case there's anything because

4:01:47this is the last let's see we aren't

4:01:49taking a break. This was your

4:01:50discussion. It gave you the results and

4:01:53our next steps are to you know finalize

4:01:56this as a party for the for the fiscal

4:01:58year work this this year's work and then

4:02:00building institutional capacity for more

4:02:02work at at the annual meeting

4:02:04specifically around this type of

4:02:06conversation or build this into our

4:02:09muscle memory of conversations in

4:02:11general so that we can ensure we're all

4:02:13working on the most important thing

4:02:15organizationally.

4:02:17>> Use the doctor I move my

4:02:19>> Jenny's Jenny's collecting a cheater.

4:02:23>> And with that

4:02:24>> already been tallied. [laughter]

4:02:27>> You should have ordered for your

4:02:29>> dot

4:02:31move my dots

4:02:32>> was where we will end. [laughter]

4:02:34>> Did you buy dots from somebody?

4:02:36>> No, but I wanted to

4:02:37>> I heard them for sale [laughter]

4:02:39>> for the day knowing that we did not get

4:02:41to the real estate topics. Our plan

4:02:43would be is to move that to the work

4:02:45session next week. Um and let that be a

4:02:49topic there for those that may have

4:02:50expected today. They can see it at the

4:02:51next meeting. Uh Matt and team will

4:02:54mainly Matt will be giving Suzanne's

4:02:56here. But

4:02:56>> can I chime in on that? Yes.

4:02:58>> Ahead of that. Sometimes these

4:03:00discussions I feel would be more

4:03:01fruitful if we had the materials ahead

4:03:03of the discussion.

4:03:04>> I agree 100%.

4:03:06And I'm not saying necessarily this is

4:03:09one of those topics. But if there would

4:03:11be some value in us having the material

4:03:14ahead of time.

4:03:15>> Yeah.

4:03:15>> As opposed to it being not good. There's

4:03:17also I'm sure topics where it would not

4:03:19be good for us to have the material and

4:03:22make assumptions. But the the real

4:03:24estate one in particular, I know I'm

4:03:26going into that.

4:03:27>> We can get you before Tuesday. I don't

4:03:29think we had uh I don't know if you had

4:03:31it prepared or printed for real estate

4:03:33or not. We can push it to you is what

4:03:35I'm saying. Yeah.

4:03:36>> The slides is what I think you're saying

4:03:39>> because especially real estate. I want

4:03:40to go and like read about the

4:03:43>> the property and map and all

4:03:46>> except the first couple of slides

4:03:47because it's spoiler alert for his

4:03:49trivia he's going to do.

4:03:51>> Oh yeah.

4:03:51>> Yes. Maybe we'll take those out.

4:03:53>> And Russ just to the setup for this

4:03:55discussion was more to have you all

4:03:57talk. So there is not a lot of detailed

4:03:59information. Correct. Okay.

4:04:00>> Smart just like here's a piece of land.

4:04:02And here's some information about the

4:04:03land. Here's how you could sell land.

4:04:05>> It's really to get your thoughts if you

4:04:07want.

4:04:07>> Okay. Thank you.

4:04:08>> Y

4:04:10>> um

4:04:11>> you can just give me

4:04:13>> All right.

4:04:15Unless y'all have anything else you

4:04:17would like to discuss, I'd like to give

4:04:18some thank yous and get us out of here

4:04:20on time if that's okay.

4:04:22>> But if y'all have any burning questions

4:04:24or thoughts, take five minutes and ask

4:04:26them. But just what I'm going to do,

4:04:29what you're going to do is thank

4:04:30everyone for doing this. I know it's for

4:04:33those that are watching. This isn't

4:04:34something trivial. It takes a lot of

4:04:36staff time and effort to put this

4:04:38together and it's very valuable for us

4:04:41uh to make these decisions and it helps

4:04:44us move forward. So

4:04:46>> anyway, thank you Russ and the team

4:04:50>> in this room and and others.

4:04:52>> Yes. And kudos back to y'all for taking

4:04:55the time out to do this. I know it's

4:04:57hard to get everyone together,

4:04:58especially for an entire half a day. Um,

4:05:01and it kind of goes the same with staff.

4:05:02So, thanks all for all the staff of

4:05:04being here. Um, some special thanks, I

4:05:06guess, to our tech team. And you see

4:05:07what goes to put this on, but uh, Kayn,

4:05:10Jeremy, Brandon, Sean, and Jack. Thank

4:05:12you [applause] very much.

4:05:14Good to see everybody. The clerk's

4:05:16office team obviously, um, Jenny and

4:05:18Sarah um, do a lot of work in

4:05:20preparations for this. Um, you know, my

4:05:22team and the manager's office is

4:05:24obviously Dana, Scott, Stacy, Susan, and

4:05:26Carrie. Um, with the consultants who it

4:05:28looks like have already left, but it's

4:05:29good good for y'all to see um Davenport

4:05:32and the Davenport team, which we mostly

4:05:34catch up with them quarterly, maybe a

4:05:37little bit more for Kim and team, but um

4:05:39virtually a lot of times and they have a

4:05:42lot of good information. Anyone watching

4:05:43online, thank you for watching online.

4:05:45It's great that everyone can see this

4:05:47now and go back to the record of what

4:05:49was talked about. Um, all the

4:05:51presenters, thank you. I know, yes, it

4:05:53does take some time. We typically form

4:05:55groups and there's a lot of work, as you

4:05:57mentioned, mayor, that goes on behind

4:05:58the scenes to get us to this point. And

4:06:00then parks and wreck, obviously, we've

4:06:02taken up, you know, most of Herb Young

4:06:04for the day to do this. And that's no

4:06:06small feat with um what John and team

4:06:08have to do kind of organizationally,

4:06:10operationally. Um, but and you can see

4:06:13how this is then different. This room

4:06:14setup is different than a work session.

4:06:16And I think this works better when when

4:06:18we're all here. So, uh, I think our next

4:06:21quarterly is also here, um, in November.

4:06:24And, uh, that's really all I had to say

4:06:27other than thank you for everything you

4:06:29do every day and thank you for what you

4:06:31were, um, as the mayor said with

4:06:32misinformation and information that's

4:06:34going out there. As even, we talked

4:06:36about from the emergency response event,

4:06:37how just how hard it is to communicate

4:06:39to everyone on the same topic and the

4:06:42same issue with, there's just so many

4:06:44distractions that are going on, not only

4:06:46in Carrie, but probably in life. Um, so

4:06:49I hope folks will watch this video and

4:06:51see what happened today. So, thank you

4:06:52very much. And with that, Mayor, I'll

4:06:54turn it back over to you for any closing

4:06:56remarks.

4:06:56>> Anybody else has anything? We are

4:06:58>> I just hope to see everybody um dressed

4:07:01more casually at the next quarterly.

4:07:04>> Make it so

4:07:05>> pajamas.

4:07:05>> I I [laughter] need to go straight

4:07:07pajamas, but I I'm not going suit next

4:07:10time. So, if any of the staff wants to

4:07:12join me,

4:07:13>> order zip for you, girl. [laughter]

4:07:17I'm going to buy a quarter zip.

4:07:19>> I was just thinking we should all buy

4:07:20them.

4:07:20>> We should all buy quarter zip.

4:07:21>> Carry gear. Come on. Car team carry.

4:07:24>> All right. Thanks everyone. We are

4:07:26journ.

4:07:27>> Thank you.