2026-10-26 - Board of Finance

00:00And good evening. I will call to order

00:01the city of Burlington's Board of

00:03Finance meeting on Monday, October 26th,

00:052026. It is 5:02 p.m. Our first item is

00:09the agenda. Is there a motion on the

00:11agenda?

00:12>> I move to have the agenda approved.

00:15The agenda as presented on the city

00:17clerk.

00:17>> Thank you, Councillor Bergman. Is there

00:19a second? Seconded by Councillor

00:20Carpenter. Thank you. Any discussion on

00:22the agenda before we vote?

00:25Seeing none, all in favor indicate by

00:26saying aye.

00:27>> Aye.

00:28>> Any opposed? Nanny. Motion carries

00:30unanimously. On to our public forum. It

00:32is the practice of the Board of Finance

00:34to first go to members of the public

00:36in the room and then online. And you

00:38know,

00:39and I am seeing only city staff.

00:41Welcome. Hi.

00:43It's good to see you all this afternoon.

00:45So, no one is in the room for the

00:46public, so I'll go online and I see

00:49former city councilor Sharon Bushor. And

00:52Sharon, once you have the ability

00:56All right, it's just what working

00:57things. Okay. Sharon, if you you're

00:59ready

01:00we will pass pass it to you. Thanks for

01:02being here.

01:04>> Thank you. Um Mayor, um thank you for

01:07recognizing me, but I have no comments

01:10about the agenda. I'm just listening in

01:13to be informed. Thank you.

01:15>> Well, thank you, Sharon. It always

01:16throws me ever so slightly, but I'm I'm

01:18glad that you are here and still

01:20participating. All right, and I don't

01:22think there's anyone else

01:25online from the public. Is that true,

01:27Brad? We just go over and check.

01:30>> Yeah, so nobody else.

01:31>> Okay, great. So, with that, I will close

01:34public forum and we will go on to our

01:36consent agenda. Is there a motion on the

01:38consent agenda?

01:40All right, by Councillor Carpenter.

01:42Thank you. Is there a second?

01:43>> Second.

01:48>> I think Councillor Barlow.

01:50Quite a controversial debate here about

01:52who gets the second. All right. All

01:54right, uh it's seconded by Councillor

01:55Barlow. Is there any discussion on the

01:57consent agenda before we vote?

02:00Seeing none, all in favor indicate by

02:02saying "Aye".

02:03>> Aye.

02:03>> Any of those nay?

02:05Motion carries unanimously. Thank you.

02:07On to our our first deliberative item is

02:10item 4.1, a fiscal year 26, which is the

02:13fiscal year we just finished until then

02:14at the end of June, with the budget

02:17versus actual report from our Department

02:19of Finance and Administration. It's

02:21Mike, Mike is going to lead us through

02:23this presentation.

02:24>> Yes, well, thank you, Mayor.

02:26Uh okay, so this is a just an

02:29informational only presentation

02:33um

02:34that

02:37covers the results of our pre-audit

02:41um budget to actuals for fiscal year 26.

02:45Uh our audit firm uh Sebis

02:49is on site um

02:51this week and in 2 weeks from now to do

02:55some of their field work and then

02:57they'll finish up their

02:59um audit work in later November, early

03:02December and will provide an update and

03:05will review

03:07uh their work at that time.

03:09But uh currently it seemed um apropos to

03:14share

03:15the pre-audit results and so um

03:20the main

03:22high-level takeaway is that FY 26 was um

03:27a good year for operations

03:31and we had an operational surplus of

03:35approximately

03:37uh

03:372.7 million all told.

03:41Uh

03:42that's just essentially more revenues

03:44coming in than going out.

03:46Um

03:47and as a result um

03:51again, this is pre-audit which

03:54some items may

03:57be adjusted throughout that process per

04:00our

04:01you know, independent auditor

04:03recommendations.

04:05But all things being equal,

04:08uh

04:09that 2.7 million were to stand all the

04:11way through the audit process as a true

04:16operating surplus.

04:19We would be

04:20on track to be in the 9% or almost close

04:26to 10% which is our policy

04:30goal for our unassigned fund balance.

04:33Uh

04:33>> But if I could interrupt you, do you

04:34want to share the slides while we're

04:36doing this? Check something.

04:37>> Yeah, let me see my

04:38>> I'm happy to drive while you present.

04:41But these are there are some helpful

04:42slides that might

04:43>> Yeah.

04:44>> help people.

04:45>> Yeah, this should Yeah, one second.

04:48Okay.

05:17I will say is

05:19>> Recording in progress.

06:02>> He says he's going to be just asking the

06:03questions later.

06:05>> Yeah, I'm just taking a moment here to

06:06pull up my slides.

06:07>> Well, I apologize for not knowing that

06:09yet.

06:09>> No, that's okay.

06:11>> And for those who are watching, I hope

06:12you can find this on Civic Clerk. The

06:14slides that Brad is pulling up. You

06:16know, what's the number?

06:18They're already handy slides.

06:19>> This is

06:20sweet.

06:28>> I don't want to disturb Brad, but I'm

06:30wondering if

06:32where and if we can

06:35get a year-end big picture

06:38uh

06:38budget that would include non-general

06:41fund money.

06:41>> So, I'll certainly absolutely

06:44I'm going to share that with you. Um

06:48with you either uh we can put it in the

06:52um the next board meeting, but I can

06:54also update it um the board um by email

06:57immediately.

06:59But, so that is a good question. This is

07:01really just the general fund overview.

07:05Um and as I was saying, our our

07:07pre-audit surplus uh

07:10comes in at about 2.75

07:13million.

07:15And

07:16um if that were to hold, you can see our

07:20unassigned fund balance to the

07:22right-hand side,

07:24that increases year over year um since

07:292024

07:31from uh point of about 7.2%

07:35um up to what I'm expecting to be in the

07:38nines or roughly around 10% um depending

07:42on

07:43um the direction from our auditors over

07:46the next uh couple of months.

07:49Um our

07:51policy goal is 10% with a minimum of 5%

07:56and a maximum of 15% and that is

07:59compared to the prior year's total

08:02expenditures. So, if our unassigned fund

08:04balance um should primarily be around

08:0810% of that

08:10for our stated goal.

08:11Um and those are important metrics that

08:15the rating agencies like Moody's and S&P

08:18look at uh when they're determining our

08:21annual bond rating.

08:23Um

08:24and it also is just a generally

08:27uh

08:29good

08:32due diligence to um adhere to that

08:35policy. So, I'm

08:37um happy that the work that everyone did

08:42to prepare the 2026 budget um

08:46has borne some good results from

08:50uh the city's general fund

08:53balance.

08:56Um

08:57this slide shows just uh a comparison of

09:01what we budgeted to what we expended

09:05or received in revenues depending.

09:09Um and this is pretty typical of

09:13the city of Burlington in that uh we

09:16usually do receive between 95 and 100%

09:19of our revenues and we often um come in

09:24around 95% of our budgeted expenditures

09:27actually expended.

09:29Uh the primary driver of the reason we

09:33don't expend everything um is mostly

09:38related to vacancy savings and depending

09:41on the year and the situation

09:43operationally for various programs,

09:46that might be less or more, but

09:49historically

09:51I don't see anything out of line for

09:55either our revenues or our expenditures.

10:02And we didn't have to use any of the

10:04unassigned fund balance in FY 26, which

10:09is just as important to note

10:11as we have

10:17Looking at the

10:20kind of more detailed look between

10:23where the surplus was generated from. As

10:26I mentioned, we had about

10:30depending on the number you use, we we

10:32budgeted a certain amount of vacancy

10:35savings

10:36and achieved

10:39more than what we had budgeted

10:43to the tune of about $4.7 million.

10:47A majority of that

10:50is

10:56in the police department and then a bit

11:00in public works and a small amount in

11:02fire. What I can say for the police

11:04department is while we budget

11:08the full

11:10uh

11:11staff for police officers,

11:14we can only

11:17we've only been able to hire

11:20so many each year, so that does generate

11:23good amount of vacancy savings and I

11:25will note that public works had kind of

11:28a run on engineers over the summer, but

11:31they have since

11:37But that generated some some savings in

11:40the meanwhile.

11:41Um

11:42just moving down the list quickly. Um

11:45CEDA

11:46uh

11:47had a budget budgetary savings really

11:49small.

11:50Um

11:52and

11:53there was other just kind of nickels and

11:56quarters down the way. Um

11:58proceeds from the sale of 200 church um

12:02some unspent funds for consultants and

12:05other services. We made some money on

12:07our bonds.

12:08Uh

12:09and small

12:11things like that.

12:13Uh

12:13on the negative side of the ledger, um

12:17it's primarily due to timing between the

12:19fiscal years and anticipated revenues

12:22mostly driven from grants uh that we

12:25expect to receive or receive on a

12:27reimbursement basis. And really this is

12:31I I'm labeling them as anticipated

12:33revenues because they continue to be

12:35anticipated. Uh they just were not

12:37received in fiscal year uh 26.

12:41Um we did have a technical error when we

12:44budgeted for uh 2026 and left out uh one

12:49of fire the fire department's or the uh

12:53fire fighter union. Um

12:57uh pay

12:59off centers um which we added back later

13:02in the fiscal year. Um you can see more

13:05on that on the slide below.

13:07And then the others were I would say

13:10within the margin of error of

13:14you know, what we could expect but we uh

13:18had a

13:19little bit

13:20underperformance on the building permits

13:23um our TIF increments and delinquent

13:26taxes and indirect cost recovery are all

13:30generally on a reimbursement basis or we

13:32do our best to estimate a number than

13:34the actual figure comes into us, but

13:37those are all making a difference.

13:42Um

13:44this is a

13:45broader look at just

13:47kind of high-level data on the

13:50departmental expenditures.

13:52As you can see at the top there, we um

13:56under budgeted fire at the beginning of

13:58the year, so they're appearing as 103%

14:02of budget spent. Really, that was taken

14:05care of um through a budget amendment um

14:09in the

14:11fiscal year 26

14:13um and has been corrected forward.

14:17Um

14:18I wanted to note the police vacancy

14:21savings number because while they are

14:24um

14:25kind of at the middle of the pile, both

14:27police and fire um

14:30represent about 55% or 60% of the city's

14:34overall budget, so I just wanted to call

14:36them out.

14:38And then um

14:39the regional programs had

14:42uh

14:43I wanted to call this out as well

14:45because it is not as if we didn't um

14:48expend all of the funds we intended to

14:53um through the regional programs um we

14:56had a 2.2 million-dollar state grant

14:59that was added throughout the middle of

15:00the year and only a portion of that was

15:02spent, which kind of skews these

15:04numbers.

15:05Uh but all of the areas like the band

15:09and the Hineberg Center and

15:12um GMT and what have you or not GMT, the

15:15Howard Center and what have you um all

15:18of those were were fully expended.

15:21Um and the mayor's office also came in

15:25um

15:25at a pretty small amount uh

15:28under or under budget by a large amount,

15:31excuse me, and that is related to um the

15:34position that was Ingrid Furniss's

15:36position.

15:38Those savings have been reallocated or

15:40were reallocated into the

15:42uh I said fiscal 28 budget, but now

15:45we're getting into

15:46the time of uh my life where there's a

15:49million different fiscal years ago. I

15:50mean I meant to say the fiscal 27

15:52budget.

15:54Um

15:56And that is kind of the end of my

15:58high-level presentation. I did include

16:01like a full summary

16:03uh

16:03uh

16:04or in more detail if you wanted to look

16:07through yourselves, and I'm happy to

16:09accept questions on those.

16:12Um in fact, Councilor Bergman sent me a

16:14couple questions before this meeting,

16:16and if

16:17uh you don't mind, I would like to

16:18address them.

16:19>> Thank you to that.

16:20>> Yeah.

16:20>> Should we get to those questions if you

16:22don't mind or can I just um say a couple

16:24quick comments and then we'll uh

16:25transition into uh Q&A? I just first off

16:28just want to really thank you, Brad, and

16:30your team. We've also, while we've been

16:32hearing these kinds of reports, been

16:34building out the the uh DFA department

16:37over the last year. This first fiscal

16:38year really shows

16:40uh great capacity growth and some real

16:42cultivation of your division and your

16:44team, which I think has been um

16:46reflected in a lot of the diligence and

16:48ability to report on this level of

16:49detail. The other big takeaway I have

16:52from this is to really indicate that we

16:54are continuing to do very responsible

16:56fiscal stewardship of city funds, making

16:58sure that we continue to right-size our

17:00budget and be mindful of uh important

17:02policies that were set in place uh

17:04before my administration around our

17:06unassigned fund balance, which is a

17:08critical financial tool that we have to

17:10be able to weather budget gaps, for

17:12example, and other things to make sure

17:14we are stewarding resources in very

17:16unpredictable times, I might add. There

17:18are so many external factors that that

17:21impact Burlington as a city, that impact

17:23other revenue streams besides property

17:25taxes. We talk about that a lot here at

17:27the Board of Finance. So, I'm really

17:29proud of this. I know it's not fully

17:31audited yet, but really proud of these

17:33initial reports. It's really good news

17:34for Burlington to show again the fiscal

17:37stewardship and responsibility our team

17:39has been really um

17:41hyper-focused on and of course if

17:43Katherine were here too, I'd really

17:44praise our CAO for leading the entire

17:46team in this direction. It's been a it

17:49reflects a lot of hard work and I just

17:50want to reflect this is, you know,

17:53this is at least two years of budget

17:54building in different ways that that

17:56really gets into the details, that

17:58really gets into the why are we

18:00budgeting these amounts for all these

18:01various departments. And then of course

18:03department heads and their teams being

18:04very diligent in the spending side

18:06throughout the fiscal year. So, only

18:08have one department head here, but both

18:10of you, sorry.

18:12But it's it just reflects a real team

18:13effort and I get into this. So, Brad,

18:16thank you for letting me jump in there.

18:18And with that, let's go to Council

18:19Bergman's questions first and then we'll

18:21open up for more questions and comments.

18:22>> I think what I'll do is I'll I'll

18:25uh there was

18:26four question areas and um

18:30I'm happy to send this as a follow-up as

18:32well. I'll write it so you have it.

18:35Um

18:36but the first question area was

18:40um

18:40asking for some reflection on the gross

18:42receipts and local sales tax revenues

18:45from the last year

18:46um and what they might say about the

18:48health and direction of our

18:51uh local economy.

18:52And what I can say to that is

18:56um our local option sales tax in fiscal

18:59year 26 came in at 3.6 million

19:02which is 7% over budget and up 9.6%

19:07from fiscal year 25.

19:09The year before um

19:11so 24 to 25 it grew 6.5%

19:15which is indicating that we had

19:18you know, this is really just basics

19:19here, but we had uh

19:222 years in a row of sales higher than

19:25inflation,

19:27um which might indicate that taxable

19:29retail sales in the city are expanding

19:32in in real terms.

19:35Um in real dollars.

19:37For gross receipts, the city collected

19:40um

19:42the hos- generally hospitality taxes

19:45which came in at $6.6 million.

19:48That's uh 1 and 1/2% under our budget

19:52and up

19:534.3%

19:55compared to fiscal year '25, which is in

19:59the inflation zone. So, I think what we

20:02can

20:04reasonably pull from

20:06from these trends is that our retail

20:09sales um

20:11are increasing

20:13um

20:14and our hospitality type

20:17uh

20:18industry is

20:21you know, staying steady or at least

20:22keeping up with inflation.

20:24Um

20:26one thing I wanted to note about gross

20:29receipts is that we our office

20:32um and we've collaborated with this

20:34board um and given a couple of updates

20:37along the way, but we are

20:40pleased to announce that we will kind of

20:43very slowly

20:45uh be launching a gross receipts payment

20:48and collection system. There's

20:51communications. Uh our

20:53our office is partnering with CITO

20:56um particularly

20:58I shouldn't have heard of you.

21:00That does a lot of the collections for

21:01property tax. Collaborating with CITO to

21:04communicate to our business community.

21:07Um and uh those communications will be

21:10starting right along and the first

21:13payments will be due in December using

21:16the new system. Uh we're trying to give

21:19uh a long lead time for our business

21:22community and we're also um cognizant of

21:26our

21:27uh clerk's office front desk desk staff

21:31through um

21:32a uh

21:33an election a large election cycle year.

21:37Uh

21:38the second question from councilor

21:39Bergman or topic area was about fines

21:42and other permitting and inspections

21:45uh

21:46revenues.

21:47And uh what I'll say is that permitting

21:50inspections

21:52uh brought in 3.25

21:54million compared to a 4.1 million dollar

21:57budget. Uh this wasn't an increase year

22:00over year, but um

22:02that would also indicate that we might

22:04be missing our budget targets so we

22:06might need to look at at that um for the

22:09fiscal 28. Building trade permits

22:13uh are really the driver of those uh and

22:18uh it

22:20appears as though there's few the data

22:22suggests that there's fewer and smaller

22:24projects pulling permits, but we'd have

22:26to look at um

22:28kind of what is driving behind that, but

22:30overall we are staying steady um but

22:34maybe have some more to do on our

22:35estimations for budgeting.

22:37Rental registration

22:40fees were up 6.5%

22:42in total 4.15 million

22:454.6.

22:47For parking, this is the other like

22:49fines and fees area.

22:52Uh parking fines um were down 26 to 25,

22:57but we're still uh showing a lot of

22:59healthy growth within our parking

23:02facilities and traffic budgets Um and

23:05appreciate the

23:07uh

23:08uh assistant super- flexibility uh that

23:11he offered so far as the that team looks

23:15to expand some of those capital um

23:19renovations.

23:20I don't think that was the right word,

23:21but

23:24The last question had to do with

23:26franchise fees, and franchise fees were

23:30basically spot-on. Our budget

23:33at 2.85 million, up 8.3%

23:37from fiscal year 25.

23:40Uh franchise fees, just as a reminder,

23:42are

23:43uh anything basically underground or

23:46that uses

23:48uh

23:50our streets, for lack of a better

23:52term, to get from one place to the next.

23:55So, cables, pipes, anything that some

23:58other company uses to do business using

24:00our streets is in that franchise fee.

24:04Um and that, I think, was

24:07all of

24:08Councilor Burton's questions, and I'm

24:10happy to take any others or

24:13>> Speak of the devil, Councilor Carpenter.

24:15Councilor Burton, do you have anything?

24:17>> I I just think that this area where we

24:20look at the numbers and we say, "Okay,

24:23what does this mean for our economy?

24:25What does this mean for our projections?

24:28What does this mean for um our

24:31possibility of getting more revenue

24:34in in different areas is something that

24:37we should be doing and it

24:39it partially is DFI, but it it also

24:42involves CEDA.

24:45Just like any and other departments

24:46having them. So, I I'd love for us to

24:49have those more informal

24:51conversations that are really getting

24:53these numbers as we're projecting

24:55forward and as we look at

24:57yeah, budget

24:58making a system that is more robust and

25:04gets to where where we need to go and so

25:07I look forward to that.

25:08That's the transition. Thank you. I

25:10apologize for being so late and

25:13request but it was before the meeting.

25:15>> Yeah, that counts and then and then I

25:16appreciate that Councilmember because I

25:18know one of the things we'll be talking

25:19sooner rather than later about is

25:20multi-year budgeting, um finally

25:22bringing that forward and that will be a

25:24critical planning piece around really

25:26getting sound formulas and assumptions

25:28that we can have around revenue so that

25:30we can get out of this one-year cyclical

25:34joyride everyone wants. I say that with

25:35sarcasm because it's very hard. Um

25:38Councilmember Carpenter.

25:39>> Thank you and thank you Brad. That was

25:40really helpful to me. A little bit of a

25:42long the side, I know you sent your data

25:44on permits and I'm just curious if

25:47we can have maybe a little more

25:49anecdotal analysis of why that happens.

25:52It's always awkward

25:54to know why you didn't get something.

25:56Presumptively, we budgeted based on

25:59information Bill and Charles had about

26:02what might be coming in and then it

26:05didn't come in and so I'm just sort of

26:07curious

26:08understanding of saying it over what

26:10kind of what didn't it come in in the

26:12permit area that

26:15so we just kind of got to get a sense of

26:17it.

26:17>> Yeah, I'm I'm curious as well and I

26:19think that's something that we'll look

26:20into what

26:22you know

26:23our current experience suggests to me is

26:26that

26:27we might have one of our inputs wrong or

26:31are mis- estimating something or

26:34um you know, we'll just take another

26:36look at it to to get our budget more in

26:38line because the

26:41the actual trajectory of the dollars is

26:44positive for what we would expect given

26:47what you know, you can see with your

26:49eyes.

26:50Um but the the comparison to the budget

26:53is a little off, which might mean that

26:55our estimating inputs are incorrect. So,

26:58I'm interested in that question.

26:59>> Yeah, and part of it I guess is probably

27:02timing. I mean, certainly having

27:04had to do that at VHFA is, you know,

27:07what years are going to probably will

27:09come in, but why not this year?

27:11And I and I'm and then in the estimating

27:15world have those projects we got permits

27:18from, have they died or are they

27:21a year late, you know?

27:22>> Yeah, I'll uh reach out to our friends

27:25over at DPI and see if we can get you

27:27some more info.

27:31>> I'm able to say that I was having a

27:32conversation recently with Bill Ward.

27:34Um, you'll see it at the next council

27:35meeting, but we have been going through

27:36each department setting annual goals,

27:38and we'll do a summary like we've done

27:40for the prior 2 years for this upcoming

27:42third year.

27:43Uh, and one of the things included there

27:45is getting even more

27:47um granular with like formulaic ability

27:49to get permitting or more accurately,

27:52uh, and with the revenue that would come

27:53with certain type of permits. So, it's

27:55it's in line with both the board uh

27:57facing comment that Council brought up

27:59and presented, but also just

28:01looking a little bit retroactively right

28:03now about what's coming.

28:06Any other questions or comments?

28:08Councilor Brallier.

28:08>> Um, no. Thank you. I I It was helpful to

28:12to see this presentation. Um, we did

28:14receive, and I didn't I didn't ask you

28:16at the end of the meeting, so I'm not

28:17sure if I sent you a response,

28:19but we received a

28:21Everybody on the council received an

28:22email about sales tax revenue, which

28:24seems to be a little bit different than

28:26It comes to a different conclusion than

28:28what you presented. So, I've sent that

28:31forwarded that email to you,

28:33and it could be a matter of we're

28:35talking apples and oranges here.

28:37>> Yeah, I can explain that. Yeah, there's

28:38some there's some weird timing things

28:40with that data, but I'm happy to look at

28:42that email.

28:43>> Yeah, yeah. So, I sent forwarded that

28:44along to you, and interested offline to

28:47hear um

28:48your thoughts on

28:49>> Very good.

28:51If you could send that to us offline.

28:53>> Yeah, I'll res- I'll respond to this

28:55bullet.

28:56>> I think just to be clear that was just a

28:57one month

28:58>> Just looking at it again, it's just a

29:00>> That's what I was I was trying to It

29:01wasn't exactly what I meant.

29:03>> Right.

29:04>> So

29:05so and also yeah, from the state versus

29:08what we're getting

29:09>> Correct.

29:09>> Yeah.

29:10>> Okay. Thank you.

29:14>> That feels better.

29:15Any other comments or questions on this

29:17item?

29:18It's just information.

29:23Okay, seeing none, I think we'll close

29:25that item and move on to item 4.2. Brad,

29:27thank you very much. Thank you.

29:29Which is an authorization for the use of

29:31water fund 460 fund balance to fund

29:34additional phases of drinking water

29:35system strategic capital planning

29:37projects

29:38DTW and our water resources.

29:44>> Yes.

29:45>> You can keep going while Brad figures

29:46that part out.

29:47>> Welcome, Jayden.

29:48>> Thank you and we need to promote Megan

29:50Moyer, division director of water

29:51resources, when you have a moment, Brad.

30:00This is a an item about team water well

30:03pivoting when the landscape moves

30:05underneath us.

30:09Let Megan talk through the details here.

30:22>> Hello.

30:24>> We can hear you.

30:25>> Oh, yeah.

30:25>> Okay, sorry.

30:28I apologize for not being there. I've

30:30caught a very terrible cold while

30:31traveling. Um

30:33so and I don't think my screen is

30:35popping up, but that's fine.

30:37Uh

30:38so for a variety of reasons um I guess

30:40hopefully some of you recall we brought

30:42forward two substantial planning

30:45projects on the drinking water side. Uh,

30:48as many of you know, we've been focusing

30:50very very heavily on our wastewater

30:52systems um, and their aged

30:54infrastructure, but, uh,

30:56our drinking water systems are also old,

30:58um, and so we had endeavored to advance,

31:02um,

31:03two planning projects, one for our

31:0540-year-old drinking water plant and one

31:08that was sort of a comprehensive look at

31:10the entire rest of the drinking water

31:12system.

31:13Um, in part cuz it's the right time to

31:15do it, but also in preparation for the

31:17housing growth that Burlington deserves

31:20and wants to see happen to make sure

31:21that we have all of the tools in place.

31:24Um, since we got that approval to

31:26advance that project and apply for a

31:29drinking water SRF loan,

31:31um, state revolving fund loan, there's

31:33been some

31:35some changes at the at the drinking

31:36water SRF, um, largely well, somewhat,

31:41um,

31:42instituted by,

31:44um, EPA, uh, who did an audit and

31:47required that the drinking water SRF

31:49make some changes.

31:51And so it's put our ability to apply for

31:54or be eligible for planning funds, um, a

31:58little bit up in the air. Um, we're not

32:01entirely dead in the water. We're

32:02monitoring. There's a possibility that

32:04later on in fiscal year 27, we may, uh,

32:07be able to access those funds. Um,

32:11but these planning projects are too

32:13important and really can't and shouldn't

32:15wait for that. And so, uh, together with

32:18Chapin, we're recommending, um, that we

32:22leverage our, uh, fairly healthy, uh,

32:25cash balance to fund the initial phases

32:27of the project.

32:29Additionally, even if we are able to get

32:32SRF, um, loans, there's a portion of the

32:35project that that, um, SRF won't pay for

32:39because they view it as redoing work

32:42that we've already done, which is not

32:43the case. We fought it as hard as we

32:45could, but we were able to get them to

32:47reduce the ineligible amount, but we

32:49still have a small amount of ineligible

32:50funds.

32:52So, at the end of the day, we are

32:52proposing to use up to

32:55$558,500

33:00of our cash balance,

33:02as I described in the memo, because some

33:05of the numbers our cash estimates are up

33:07in the air until the audit is finalized.

33:09We'll be monitoring that and making sure

33:11that our estimates are either as good or

33:15better

33:16than those that we proposed in the memo.

33:18And with that, I don't tape in if I

33:19missed anything due to my

33:22ill state.

33:24>> I think the only thing I would add

33:27beyond this leaving us well above 180

33:30days of cash on hand, half a year,

33:33this does allow us to still leaves the

33:37door open for using SRF funds if staff

33:40is able to work our magic and get uh

33:43the state to prioritize these planning

33:47grants. So, I just want to thank staff

33:51for their flexibility. As soon as the

33:53the landscape changed underneath, we are

33:55finding a way to get this done so that

33:57we can give you planning numbers on the

33:59water side as you're evaluating phase

34:02two on the wastewater side for

34:04wastewater upgrades, that we can be

34:06giving you an overall picture between

34:09all of our water utilities so that you

34:12and the rate payers can help us better

34:14plan and make decisions with long term.

34:18>> Yes, thank you, Stephen. Very important.

34:20Yep.

34:21>> Yep.

34:23>> I thank you both of you. Are there

34:24questions or comments from the board on

34:26item 4.2?

34:30Councilor and then Councilor Gardner.

34:32>> Um, I I just had a question about what's

34:34the the current policy on the number of

34:38operating cash on hand

34:41at any one

34:42And then I seems like from the memo I

34:44think we'll still have 201.

34:46>> Okay.

34:47Yes, um, we we we do not have an

34:50official policy. Um, I generally or with

34:54our financial advisor we've been

34:55targeting at least 180. Um, it is an

34:58important metric related to the Moody's

35:01um, rating, the excellent rating that

35:03water has and so we don't want it to

35:06drop much lower than it has been. Um,

35:09but that's why

35:11uh,

35:12as I said, if if everything holds true

35:14with my analysis of FY 26, the amount

35:17that we're actually going to be using

35:19should be less than the surplus that we

35:21seem to have in FY 26. Um, but I want

35:25the the books to close before that.

35:28But we don't we don't have an official

35:30policy as to how much days of cash on

35:33hand we have. It is typical to want at

35:35least um, 180.

35:38>> And and we'll have 201 if we do this

35:41stream line.

35:41>> Yes. Yes, which is why we feel confident

35:44this is a good use of that money.

35:46>> Yes.

35:47>> Thank you, Council Early. I had the same

35:49question earlier. Uh, Council Gardner.

35:51>> Is this planning um, work and I know we

35:54said we were going to do it um,

35:56likely in anticipation of another bond

35:58project?

36:00>> Yes.

36:01>> Um, yes.

36:02>> [laughter]

36:04>> Our

36:05>> Go ahead, Matt.

36:07>> Um,

36:08as I believe we discussed during the

36:10wastewater bond and even with the

36:12initial 20 million dollar bond, uh, we

36:15had acknowledged that our drinking water

36:17plant is 40 years old and has not been

36:19substantially upgraded since the 1980s.

36:22Uh, we don't know the magnitude of

36:25that upgrade. You know, we are hopeful

36:27that

36:28we are not looking at something uh in

36:30the order of magnitude anywhere near the

36:33wastewater plant, but we don't know

36:34until we start um doing that planning.

36:38Uh there are some slight changes

36:40happening with their source water.

36:42However, there's no major regulatory um

36:47changes that we are aware of at this

36:49time. Uh but it is very important to me

36:51believe it's very important that we do

36:53that work so that when we are coming

36:55back

36:56asking for money for stage two, which is

36:58the consolidation of East Plant to Main

36:59Plant, uh we had, you know, promised the

37:02ratepayers that we would have

37:04some some idea of the amount of money

37:06that would be necessary for the water,

37:08so that we're able to present a full

37:10transparent picture about rates.

37:13>> Okay, thank [snorts] you.

37:17>> Are there questions or comments by the

37:18board?

37:25Okay. Um well, this item does have a

37:27recommended action. Is there a motion?

37:32>> The action is recommended on civic one.

37:35>> Thank you, Councillor Barlow. Is there a

37:36second? Seconded by Councillor Bergman.

37:38Thank you. Any further discussion on the

37:40motion at item 4.2?

37:45Seeing none. Okay, all in favor indicate

37:47by saying I.

37:48>> I.

37:48>> Any opposed nay. Motion carries

37:50unanimously. Thank you very much, DPW.

37:53>> Thank you very much.

37:54>> Thank you. Sorry for my camera not

37:55working.

37:57>> Okay.

37:58I am moving on to our last deliberative

38:00item, item 4.3, which is an approval

38:02needed for the Fletcher Free Library

38:03transformational renovation uh project

38:07construction manager at risk for CMAR

38:10with Riarch Construction. And

38:13Is Mary there? Thank you.

38:14You're here.

38:15>> Might be on the screen somewhere.

38:17>> Can you check to see if she

38:18>> Going to try to call in.

38:24Uh don't sleep.

38:27Last season Lindsay Lohan.

38:29That's how it makes sense to me.

38:33Happy to you.

38:34>> Will you start and I'm going to get the

38:35cards straight on this? This is yeah,

38:36just let it

38:39>> Um

38:40Well, I am not

38:42um

38:44the the expert. Uh this is a

38:48recommendation for or a request for

38:51approval for a CMAR or construction

38:54manager at risk

38:55for the Fletcher Library's renovation

38:58and the funds of the first phase.

39:00Uh

39:02working alongside the architects

39:04during the design to price phase and

39:06value engineer to uh the project towards

39:10a $35 million budget. Um this company

39:13ReArch or ReArch scored highest of the

39:17three finalists and had the lowest cost.

39:20Um

39:21the cost of the CMAR will be covered

39:25entirely by the Friends of the Library

39:27under the existing capital campaign

39:30um with no city money and the contract

39:33has an off-ramp

39:35if uh the city or others are not

39:37satisfied um etc.

39:41I don't know.

39:43Kim you say something to me.

39:45>> I said yeah, I

39:46uh

39:47uh the library's planning department

39:49currently and um

39:51maybe you have any questions I certainly

39:52can help out. There's um or hopefully

39:54can. Um but basically I I and I think

39:56the council maybe have seen us before.

39:58The difference with this right now is um

40:01this is just a contract for kind of the

40:03pre-work

40:04uh with CMAR. So this is a little bit

40:06less than this is like 60,000. Uh but we

40:09wanted to bring it just to make sure you

40:10could see you kind of like the whole

40:11plan uh and the fact that you know,

40:13they're going to be helping along

40:14construction management um as as the

40:18library goes through this process.

40:22And Mary might have joined us.

40:23>> Mary's trying to get her her way online

40:25with a weak Wi-Fi connection point. So,

40:28we should keep an eye

40:28>> We should actually promote Eemer right

40:30there. Eemer will will be able to add

40:32anything as another library person.

40:35John, thank you for the

40:36solid help back there.

40:38So, Eemer, you're And can we put her up

40:40on panelist

40:49Hi, Eemer. Thanks for being here.

40:54Eemer, we have And Mary's not able to be

40:55online quite yet. So, if there's

40:57anything else

40:57>> Oh, no.

40:59>> Oh, you clever person, you. Director of

41:02the library.

41:03>> It's the

41:04the Zoom account is under Eemer. Sorry

41:06about that.

41:07>> Oh, Eemer, aka Mary Denko. Welcome,

41:10Mary. If you want to If you want to add

41:11anything, um we just had a I think a

41:13very high

41:15>> Yeah, we I've made a bland overview.

41:17>> Bland, okay.

41:19>> And add it's more color, but please

41:22>> Okay, great. Yeah.

41:23>> Thank you.

41:24>> Yep. I guess the not knowing what you

41:26said, I would say the only thing I would

41:28add is that this is new for us having a

41:30construction manager at risk as part of

41:34this process, but we know that this is

41:37the better way to go because we will be

41:39able to value engineer throughout the

41:41process using their expertise. Instead

41:44of a closed bid where we don't see all

41:47the different sub contract sub contract

41:50or bids, we will see those through this

41:52process. And it's also really great to

41:54have them in this design phase because

41:57they bring their expertise, too. And we

41:59are going to have to do value

42:01engineering at this design phase. So,

42:03it's just part of the process, and I'm

42:05really grateful to

42:07uh the city attorney and to facilities

42:10that are embarking on us with this

42:12process, and it's just been new to

42:15figure out how to do the contracts and

42:18how to do the memos, but we know that

42:20the school when they use the

42:22construction manager at risk process,

42:24they were able to save tens of thousands

42:27of dollars. So, I think that that's one

42:30of I think of the more exciting and

42:32different things that probably is is new

42:34to us.

42:38>> Thank you, Mary.

42:40So, we've got a lot of questions on this

42:41item. Can you report?

42:43I promise.

42:48>> Maybe you can catch us up on where this

42:50overall project is

42:52life is

42:54rolling out.

42:55>> Wait, Mary, why don't you start with

42:56that? And then if it's okay with the

42:58board, I might also invite the friend

43:00the friends representative Jonathan up

43:02to if that makes sense. But you want to

43:03kick us off, Mary, just for just a

43:04general update for contextualizing where

43:06we are?

43:07>> Yep, that's a great question. So, we are

43:11in design development phase that will

43:13turn into construction documents. So, we

43:17have a memorandum of understanding with

43:20the city that for the capital campaign

43:23between the friends and the city. And I

43:27think we had a good idea of how things

43:30were going to go because we broke off a

43:32tiny piece of the project, which was the

43:34preservation piece, which people

43:36probably saw that happened outside the

43:38library, and that really gave us a good

43:41idea of how these two entities were

43:43going to work together, the friends and

43:45the city. And so, it was great because

43:48the city

43:49took on the bill paying, and then what

43:52the friends did is they paid in

43:54quarterly payments to the city as was

43:57laid out in the memorandum of

43:58understanding. So, moving forward,

44:01that's how this next phase is going to

44:03go as we get to design as we're going

44:06through these um design development and

44:09construction document phase, we've hired

44:12the architects so far. Um

44:15the Board of Finance approved that.

44:16We're moving ahead with that. And now

44:19we've got this construction manager at

44:21risk.

44:22The idea being hopefully by

44:26uh sometimes I get the timing a little

44:28mixed up. By next fall, we will have

44:31those construction documents in hand. I

44:35I do want to add another thing that is

44:37This is a big project. It's a $35

44:40million project um and it's a

44:42partnership between the friends and the

44:44city. Uh but we're so grateful because

44:47we're bringing in all the different city

44:49departments as we move through this

44:51design development phase because it's

44:54the library is a big city asset, of

44:56course, and we want everybody's

44:58contribution as we, you know, get this

45:01library ready for the next generation.

45:06>> Thank you, Mary. And John, can you want

45:07to introduce yourself and anything you

45:09want to add from the

45:10Friends or something?

45:11>> The Board of Trustees or

45:13>> I'm Jonathan Shaw, so called the

45:14president of the Friends. I'm on the I'm

45:17on the capital campaign committee. I

45:18don't chair the capital campaign

45:19committee.

45:21We're all one big happy family.

45:23Um we have

45:24um

45:26just shy of $20 million has been raised

45:29for this for this uh project to now.

45:33Um and we anticipate a

45:35uh

45:37getting another

45:38$4 million of private funding at at

45:41which point we think um there will be

45:44asking for a public contribution of some

45:46sort beyond that. Um we hope to have all

45:50this as Mary says by the fall. We should

45:53have enough

45:54We should have enough capital to start

45:56construction, which according to the

45:58memorandum of understanding is 85%

46:02um of the cost.

46:04So, we anticipate being at that point by

46:06that time.

46:07Um

46:12>> Have a good night. Thank you.

46:13>> It's a great I mean we are right now.

46:15And all this off that is a remarkable

46:16achievement and I think one of the

46:17things that we are so fortunate to have

46:20is such an engaged friends group for our

46:23library. This is as I have learned along

46:25the way, it's really unheard of how much

46:27support we have from this very savvy

46:30group to come out there and fundraise

46:33in such a robust way for our public

46:34libraries. We're very fortunate about

46:36that and as we get to the next part of

46:37the conversation on public contribution,

46:39we'll certainly be engaging the board

46:41and others in the public as well since

46:43this is really is as Mary said a strong

46:45and important partnership for the city.

46:48There's okay. Okay,

46:50excellent.

46:50>> So, we'll be and I again I could just

46:52say

46:53sure we'll keep an eye on Williston

46:55next week because they'll be going back

46:56for their third

46:58request

46:59to bond for their library. We don't want

47:02to find ourselves in any way in any

47:04situation like that.

47:07>> Exactly. Uh Counselor Burton, do you

47:09have any other questions before you

47:10talk?

47:10>> No, I would just Mary offline follow up

47:13with me on that electric

47:15thing that we were you know that

47:16innovation where we were trying to bring

47:18a few million bucks

47:19into this project and maybe we can get

47:22it and maybe we don't. So,

47:24thank you.

47:25>> Thank you, Counselor Burton. Yeah,

47:26sorry. Counselor Carpenter.

47:28>> Uh

47:30the public contribution, is that an

47:32expectation that we would bond for it?

47:35>> It's that would be our our desire. That

47:37would be our hope.

47:38>> Okay, that's that's fair. Is the

47:40timeline

47:41of a false start relative to gathering

47:45the capital and where would the public

47:47aspect in that timeline?

47:50>> Well, we we were thinking about the time

47:52meeting day.

47:53Um the timeline is actually timeline is

47:55actually

47:56predicated also on completion of D and C

48:00D which we think will be done.

48:02You know, it's a 9 month project

48:05that should be starting very soon once

48:07we get the C bar in the room and start

48:10working. And we're actually even this

48:11week we're we're starting to look at

48:13value engineering activities to get us

48:15to the $35 million point of the project.

48:19>> What what time meaning 27 or 28?

48:24>> On that point, I mean we're working

48:26actively to make sure that we're

48:27right-sizing the the bond request and

48:29you'll hear a very shortly some more

48:30information on that. Of course, because

48:32time in 20 2027 is right around the

48:34corner. As with all bonding, we've been

48:36in having very good conversations not

48:39only about where we're going to land

48:40with the end goal, but obviously bonding

48:43when we need it and because of the

48:45strong work that the friends are doing

48:46and all the cash cash that's right

48:48phrase for that.

48:49>> Money that you've raised so far and

48:51being very mindful in the spirit of

48:52partnership of not bonding until we

48:54really need those funds so that the city

48:55isn't unduly holding those those

48:58finances and paying interest etc. But

49:00really making sure we're doing this in

49:01the smart and savvy way. So,

49:03you'll hear a lot more very soon. We're

49:05literally meeting I think

49:07this week so yeah.

49:09>> We've been meeting with Brian and with

49:10Catherine to work out

49:12>> Right. And by me I mean the mayor is

49:13finally in the middle of the loop, but

49:15the teams that I'm working very astute

49:17together so I really appreciate it.

49:19>> We do too.

49:21>> I'm

49:23fully supportive and I think I will be

49:26in the bond when it goes to the voters.

49:28I think it's a pretty short timeline so

49:30I'm just very concerned

49:32about the public not the I I understand

49:35why you need the number first. Those

49:37always help, but but

49:39you know, that's a short

49:41window and I I [clears throat] think it

49:43will be a surprise to the public. That's

49:45all I'm

49:47cautioning that they probably are not

49:50aware

49:51of that ask. And I don't I don't have a

49:54personal sense

49:55of

49:57you know, how that will fly. People are

50:00obviously concerned about affordability,

50:02but you know, this is a very important

50:04project. So, I just

50:06have a little concern that that's a

50:08pretty short window

50:09to

50:10to do the ask.

50:12>> And I am very confident in our again,

50:14strong partnership with the friends will

50:15be very helpful in a public education

50:17campaign wrapped around this for town

50:19meeting day.

50:20Um we also, you know, there's other

50:22questions that are going on this ballot

50:24that we are mulling over to be tonight.

50:26There's some questions as we build this

50:28this ballot all the items together to

50:30make sure that it works within

50:31affordability lens.

50:33Um I'm the piece that we just heard at

50:35the first at the top of the hour on this

50:36agenda is a really important one for the

50:38context of the state of the city

50:39finances. So, weaving this all together

50:41to make sure that folks and we as a

50:44council and mayor can put together a

50:46package that makes sense in terms of

50:49what does the next year's budget gap

50:50look like? Um I'm expecting there will

50:52be one and it will be smaller than in

50:54years past, I am hoping. As we do those

50:56estimates, we have a healthy fund

50:58balance that we just reported on. They

51:00were anticipating you know, again,

51:01auditors will make that specific. So,

51:04putting all those pieces together in a

51:06way that can really present an

51:08affordable ballot is really the goal. I

51:10will You're shaking your head so I'm

51:11going to say the friends and the mayor

51:13and I'm sure I will be able to

51:15understand that making that all work

51:16which is back to making sure we

51:17right-size this amount so that we're all

51:18successful in and doing this on one run

51:21rather than not to not to like bring

51:23Wilson back up, but I wish them the

51:24best. We want to make sure that we're

51:26putting something out that's justifiable

51:28and affordable for Arlington taxpayers.

51:32I think we take questions. Okay, more

51:34very soon.

51:35All right. Anything else on this item

51:374.3 which is not the bond, but it is but

51:39it is I actually want people to ask me

51:40about that, but it's related to the

51:42construction manager at risk position or

51:44or a role.

51:48>> Just again, comment. I am a big

51:50supporter of construction managers and

51:53have have worked with them as

51:55a preferable system for me

51:57personally as a former developer. But,

52:00again, with the public, they're sort of

52:03always fixated on

52:05"Why didn't you go out to bid? Why

52:06didn't you go out to bid?" So, I think

52:08that will be a very important

52:10educational piece for the public.

52:14Cuz I

52:15in the past at least I've heard it a lot

52:17with

52:18a lot of people don't understand what a

52:19construction manager is.

52:21And it is preferable in my opinion, and

52:23so you may want to do voices

52:26supporting that concept.

52:31>> Thank you.

52:31>> [clears throat]

52:33>> Anything else on this item?

52:37>> You need a motion?

52:38>> We do need a motion, and I am and I am

52:40being very respectful referring to

52:42speaker cuz these are meaty ones, so

52:44anyone like to

52:45>> I mean, if you I would move to approve

52:47it as the recommended action as stated.

52:51So, then clerk, are you wanting to read

52:52the whole

52:53>> It's okay.

52:54>> paragraph from top to bottom or no?

52:55>> Feeling generous today, so it's okay

52:57people can make the motion. Councillor

52:59Bird made the first second. I think I

53:01can see Councillor Carpenter. Thank you.

53:02Any further discussion on this item

53:03before we vote?

53:05Seeing none, all in favor indicate by

53:07saying I.

53:07>> I.

53:08>> Any opposed say? Motion carries

53:10unanimously. Thank you very much. Thank

53:12you, Mary. And with no other discussion,

53:14thank you for the Board of Finance. We

53:16will adjourn the meeting at 5:55 p.m.

53:24>> [music]

53:36[music]

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