[2:19] We have a workshop meeting in the Jacksonville City Council order.

[2:24] We have a proposed agenda for tonight's meeting, and I would entertain a motion to adopt that agenda.

[2:33] I have a motion, second, any discussion? Here are none. All in favor, seated, fine by saying aye. All opposed. Next, we have the minutes from the February 22, 2022 regular meeting, and in seven consent items,

[2:52] a motion to include both.

[2:58] Second.

[2:58] Motion, I get a motion in a second, you know, here any discussion?

[3:04] All those in favor?

[3:05] Signify the saying aye.

[3:06] Aye.

[3:07] All opposed?

[3:08] Aye.

[3:08] Okay.

[3:09] So we have three workshop topics for tonight.

[3:12] The first one, the agenda, number eight on the proposed agenda for the adopted agenda for tonight.

[3:18] This is transit.

[3:19] So, Dr. Woodruff will be sent this item.

[3:24] Good evening.

[3:25] I'd like to ask if you don't mind.

[3:26] and Mr. Sosa is on his way from a meeting in Raleigh,

[3:30] and for transit we believe it's important

[3:32] for all seven of the elected officials to be here.

[3:35] Would you have any objections if we move to recycling?

[3:38] Council, you all right?

[3:38] I'll move in eight to the back of the...

[3:41] Yes, okay.

[3:42] We'll move it to be the last item, so take a moment

[3:46] just to recognize we have many of the people

[3:48] who currently are part of the operations

[3:51] of first transit who are with us tonight.

[3:52] We welcome them, glad to see them, sorry.

[3:55] So regarding recycling as we go into the FY23 budget, we're trying to nail down and

[4:02] have your concurrence on as many issues as we possibly can.

[4:06] So at the end of the presentation, I'm going to ask you to give us what I'm going to call

[4:11] a consensus vote on what you want to do relative to recycling, or if you decide you would like

[4:17] to postpone this to the next meeting, you certainly can do that.

[4:20] A little history. For more than a decade we had a contract with Sonoco and as you'll

[4:28] recall the city cost was zero. We simply picked it up. That was certainly an expense.

[4:34] But we were able to deliver it to the recycling center and at that time it was processed.

[4:41] Mayor, I'm going to do what my granddaughter does. I'm going to erase all of this. In courtesy

[4:47] to the folks who are here tonight with first transit, I think it would be more appropriate

[4:51] now that Mr. Sosa has arrived for us to to reverse what I ask you to do and to, so would

[5:00] that be acceptable to you?

[5:02] I'll be acceptable.

[5:03] Yes.

[5:04] Okay.

[5:04] With that, I'll ask the media folks and I'm going to ask the Anthony to come up.

[5:08] So please.

[5:13] Good evening, Mayor and Council.

[5:14] Thank you for the opportunity to be here again to talk about transit.

[5:18] Before we get into a follow up on some of the points that we talked about last time in February,

[5:23] I want to just go really quickly how we divvy up some of the responsibilities with the day-to-day operations of the system.

[5:31] As based upon some of the conversation that we had and some of the conversation and the most staff afterward,

[5:36] I want to make sure that's clear before we hopefully make some decisions this afternoon.

[5:40] Excuse me this evening.

[5:42] So with regard to the day-to-day responsibilities, the city is responsible for federal compliance.

[5:50] That's making sure that we follow all the rules to be eligible for the federal funds that operate the system.

[5:58] Whether that be procurement requirements or whether it be grant management, a number of different things.

[6:05] There's a whole lot of compliance that's involved.

[6:07] City also maintains all of our capital assets, whether that be buildings, bus shelters, or buses.

[6:16] We own all of our capital assets as well.

[6:19] So we do not lease or we do not contract for any of our capital assets.

[6:25] We conduct planning and we also, as you recall, took over the call center this fiscal year because we're getting ready to move into Jacksonville station.

[6:33] And we felt it was important that the face of that building be city employees.

[6:39] So we took that successfully, took that on this fiscal year.

[6:43] From a contractor perspective, and we have some of our friends from first transit here,

[6:48] they manage the day to day of the buses themselves.

[6:52] So making sure that they're on the road and they're on time.

[6:56] We also have another contractor, Osley United Transit, which provides our ADA pair of transit service.

[7:02] And they do that in a turnkey fashion.

[7:05] So they actually provide the vehicles, they provide the oversight, they provide maintenance

[7:11] for those vehicles, et cetera.

[7:13] And that's for the type of transit that's required door to door for folks with disabilities.

[7:22] So just to review where we left off last time, we talked about four different options for

[7:28] moving forward in 23 with transit operations.

[7:31] One was to negotiate with first transit and see if we could reduce the cost of the proposal that was submitted.

[7:39] Two was to consider options for operating with city personnel.

[7:43] Three we felt was an option that could be paired with either one or two,

[7:48] and it's very likely that we will do that before the budget is finally adopted.

[7:52] We're not going to talk about that tonight, but that is something that we're looking at very closely.

[7:57] And number four, while we didn't talk about it a whole lot last time, we really don't feel that this is a viable option.

[8:06] Mainly because last year, we transported almost 200,000 people.

[8:11] And so there's a lot of folks who use transit to be productive citizens in our community.

[8:16] But also the federal rules require, if we were to cut off transit service completely,

[8:21] then we would have to pay back the pro-rider share of the capital interest that they have in all of our assets.

[8:29] And, of course, that's a pretty sizable amount given that we've invested in Jacksonville station, the park and

[8:36] ride, the bus fleet, etc. It's not something that's common. Let's just say that.

[8:43] So, it's the follow-up items here. We're going to talk a little bit about insurance. There were some questions about what is covered,

[8:48] versus what it's not covered by the city's insurance.

[8:51] Mr. Carter is going to talk about collective bargaining.

[8:54] We learned a lot over the past few weeks about collective bargaining.

[8:58] We're also going to take a look at FTA and state of portionements, basically see how much money is coming in versus how much money we're spending.

[9:07] Every year and what the trend line has been like over the past several years.

[9:12] And then we're also going to present to you a wage analysis for the city operation option.

[9:17] And what that's going to show you is basically our recommendation if we were to take it in-house.

[9:23] And several scenarios that indicate the amount of tolerance between the cost that we feel that we can do it versus what the contractor's proposed price is.

[9:38] So from an insurance perspective, we talked about it last time it was unclear as to what was fully included in the city's insurance.

[9:48] We do ensure the vehicles in addition to having the contractor insure them as well as mainly as a double protection, but it also covers us for when city employees drive the vehicles to one way to another place is to have major service done.

[10:06] So the insurance, we did get clarification from the league that the 33,000 that you see

[10:12] there on the screen would cover bus liability as well as bus operations.

[10:19] Did I say that for a close enough?

[10:24] From a worker's compensation standpoint, we did include some of this in our last proposal

[10:28] but digging a little deeper into this with the league.

[10:32] We found that it was going to be a little bit more expensive.

[10:34] So, the proposal that we have has been increased by about $20,000.

[10:39] Again, one of the driving factors behind the cost increase, and rightfully so, based upon the information that first transit has given us, is the insurance.

[10:50] I can't recall the exact amount that it's increased, but it's increased substantially over the past three years to the point where the proposal that we have for next fiscal year has a cost of $129,000.

[11:04] dollars just for insurance alone. So the point there is, of course, that there's quite a gap

[11:10] between where we are from an insurance perspective versus where they have to be given their insurance

[11:16] carrier.

[11:19] All right. And this is where John takes over to talk about collective bargaining.

[11:26] Mayor and council, thank you. Good evening. One slide, but a pretty lengthy legal monologue.

[11:35] Let me begin with a disclaimer.

[11:39] The first thing I'd like to say is that nothing I'm here to say tonight has any implications

[11:43] to whether unions are good or whether unions are bad.

[11:46] That is not the discussion that we're going to have here.

[11:49] We're going to talk about what the first three bullets up there cover and that is what state

[11:54] law and what federal transit law say about unionization and about, again, the federal transit

[12:02] the law, what it says about unionization. The second thing we're going to talk about

[12:06] is equity among city employees, and I'll tell this together as I get down to that point.

[12:12] And then the last one is, why are we talking about all this? One of the reasons we're

[12:17] talking about all this is, we've only had one bidder, and you have bid this out twice this

[12:22] year and just one bidder. And we'll talk more about that in a moment. I like to build upon

[12:28] what we've done before with housing authorities and so forth, because we're going to talk

[12:31] about authorities in a moment, but the first statute you see up there is Northfront General

[12:35] Statute 95-98. Well, that's not in the city book. The city book is 168. We've talked

[12:43] about that before. That is the chapter that covers cities. 95-98 is there because it

[12:50] can't come out of the labor law. And this is the Northfront Labor Law as for a unionization

[12:56] that not only applies to city, municipal employees, but also applies to all employees, and I'm

[13:02] going to read pretty much from that statute, and I think you'll agree with me.

[13:06] This is pretty clear.

[13:09] Quote, any agreement or contract between the governing authority of any city, town, county,

[13:16] or other municipality are between any agency of the state of North Carolina and any labor union

[13:23] As a bargaining agent for any public employees that have set city, town, county, or other

[13:29] municipality or agency is hereby declared to be against the public policy of the state.

[13:36] These are important words illegal, unlawful, void, and no effect.

[13:43] City, state employees in the state of North Carolina are not allowed to unionize.

[13:48] That is against the law as I have read that to you, but now let's move from what state

[13:55] law says, what 49 in the USC stands for the United States Code, 53-33B.

[14:06] This little paragraph on a read from an article from the United States Department of Labor

[14:10] and it talks about this particular section of the U.S. Code and it says the following.

[14:16] When federal funds are used to acquire, improve or operate a mass transit city, that is

[14:22] public transportation, federal law requires arrangements to protect the interests of mass

[14:28] transit employees, and they cite this 49 U.S.C. Section 5333B. And this is part of the Urban

[14:38] Mass Transportation Act. This particular section specifies that these protective arrangements

[14:44] must provide for the preservation of rights and benefits of employees under existing collective bargaining agreements.

[14:51] The continuation of collective bargaining rights, the protection of individual employees against the worsening of their positions in relation to

[15:06] We're going to talk about that here in just a moment. Priority of re-employment and paid training programs, et cetera. That's what this particular section says. Now, the federal law has said, the Congress, when they passed this and other acts, never intended to establish a federal cause of action where the federal law has been

[15:30] Unionized employees can sue the state of North Carolina or the city in this regard.

[15:35] I said the proper jurisdiction to seek any kind of judicial relief is for them to go

[15:40] to the particular state courts.

[15:43] And the case, again, a Supreme Court case bore this out and said, quote, Congress made it

[15:51] absolutely clear that it did not intend to create a body of federal law applicable to labor

[15:56] relations between local government entities and transit workers.

[16:01] But it also says this and I'm reading here from again a document sponsored by the Federal

[16:07] Transit Administration and has this bottom paragraph.

[16:12] In other words, comma, the state is free to establish applicable labor laws and Section 5333b does

[16:21] not override that state's authority.

[16:25] Nonetheless, if a state or its political subdivisions desire those funds, the state must satisfy

[16:33] Section 5333B requirements. As indicated by the Court, a state is however free to prescribe

[16:41] whatever labor laws and policy it chooses and to forgo federal funds.

[16:49] State law, I think

[16:50] you would agree with me is a lot clearer than the federal law. But that last paragraph

[16:56] implies to me that if you want federal money, you've got to take certain actions to protect

[17:04] federal employees that are unionized. We've done a lot of research with Anthony, Richard

[17:10] and Ron and others on this particular topic and one of the persons that we've talked to

[17:15] And I talked to him three years ago

[17:16] when this contract came up, but his name is John Joy,

[17:20] and he's the Wilmington City Attorney.

[17:23] Mr. Joy was actually an assistant city attorney

[17:26] out of Charlotte before he became the city attorney

[17:29] in Wilmington.

[17:30] And as part of his responsibility,

[17:32] he oversaw the Charlotte transit system there.

[17:37] Transit systems, let's talk in particular about Charlotte.

[17:41] The Charlotte transit system began with the utility,

[17:45] the Duke Energy Company.

[17:47] Utility Company started the bus system.

[17:50] They started them because they wanted to get their employees from point A to point B,

[17:55] maybe from homes to work, et cetera.

[17:58] When the utility company in Charlotte was, excuse me, the transit system in Charlotte was

[18:02] taken over by the city, Duke Energy employees who were operating it were unionized.

[18:08] So, they had to figure out how to do that in light of the state law, which says you

[18:17] cannot reunionize the city employees.

[18:20] And they did that under what is a different here, that's 168, that's 575, 168 pertains

[18:28] to municipalities, to cities.

[18:31] But this is entitled Public Transportation Authorities, and I'm going to go over that in a moment, but

[18:36] And I think it's interesting to note, again, back to Mr. Joy, that in the city of Charlotte,

[18:40] when they brought it over, they established an authority.

[18:43] You're from me with authorities, and wases and authority, the TDA is an authority, housing

[18:49] authority.

[18:50] Remember, we went over that law, and all of the, it is a freestanding, if you will, and I

[18:55] use that term, it is legal entity, and in a moment I'm going to tell you they can be sued

[19:00] and sue, et cetera, and so forth.

[19:03] Now in Charlotte what happened is your bus system there is unionized and it's run by the authority.

[19:10] But you may be for me that Charlotte has something new in the last decade or two and that is light rail.

[19:15] Those employees are not part of that authority. They're city employees of the city of Charlotte.

[19:20] So again, and that's where we'll get to in a moment about equity.

[19:23] But you have city employees who are running the light rail system and you have unionized authority employees that are running the bus system in the city of Charlotte.

[19:32] city of Wilmington has a system that is city and county, New Hanover and Wilmington,

[19:40] and it is an authority and it is unionized.

[19:43] And Anthony's more familiar with that system and of course Mr. Joy talked about that.

[19:49] So Charlotte and other cities in the state, where unionization existed, were able to operate

[19:59] under this 168.575 at all. There's other sections here. It's called Article 25 of

[20:05] 168 public transportation authorities. And it sets out how you set up a public

[20:10] transportation authority. And these folks are not city employees. They work for the

[20:15] authority. They're not covered by 95-98. That's how they're unionized. This

[20:21] particular section says that a municipality made by resolution or ordinance

[20:26] It's created a transportation authority and the authority is to be consistent no more

[20:34] or up to 11 members as determined by the governing body.

[20:38] The council would, of course, appoint those members and they would at that point in time

[20:44] receive the federal funds, the state funds and the city funds and they would operate the

[20:49] bus system theoretically.

[20:52] Now it says what are the powers of the authority?

[20:54] First one, to sue and be sued, they can employ persons, they can acquire and maintain lands, buildings and buses.

[21:03] They can enter into contracts, they can operate a public transportation system, et cetera.

[21:11] Again, just like the authority that we talked about with the housing authority, all these things are delineated here in the statute.

[21:18] It says here the establishment of, and this is from the statute, 168-583, the establishment

[21:25] and operation of a transportation authority is here and authorized or governmental functions

[21:29] and constituted public purpose.

[21:32] And the municipality is hereby authorized to appropriate funds to support the establishment

[21:36] and operation of the transit authority, from bed, bedding.

[21:45] I won't do, now move over to equity, and I have a little personal knowledge about equity

[21:52] and unions, and no unions, and that is, and I have my wife's permission to tell this.

[21:57] My wife was an employee for over 30 years of Caroline Telephone, at least that's what

[22:01] it was when she was hired.

[22:03] I think when she retired, it was Sprint or Embark, one of those names, it has changed names

[22:07] as we all know.

[22:09] She worked in the commercial division.

[22:11] She was a service rep, and she actually ran times the phone shop, or you actually went

[22:16] in and you picked out what color phone you wanted to go on your wall, or if you wanted

[22:20] the prints as phone or you want the box phone and things a lot of young folks today

[22:24] would not even understand what they're all about but it was there was a life at one time.

[22:29] The commercial department of the phone company at that time for those 30 plus years was

[22:34] not unionized but right down here where she worked on the Ridge Street right beside her

[22:40] and the folks that shared the same break room where her were plant workers who actually

[22:45] managed what is called the switching equipment, where phones, calls were switched, et cetera.

[22:50] They were unionized.

[22:53] The gentlemen and ladies of the world at that time who drove the trucks and came to your

[22:57] home to figure out what was going wrong and why you weren't getting the calls or why the

[23:00] party line didn't work or whatever it may be, but again they were unionized.

[23:04] So you had here a section of the company that was unionized and a section of the company

[23:09] that was not unionized.

[23:11] I can tell you, during this 30 years, it was at least one trip.

[23:14] We made the new to figure out the unions wanted the commercial section to unionize.

[23:19] They wanted to do that.

[23:20] Again, there was always a feeling that somebody's getting a better deal, union or not union,

[23:26] and again, it comes back to classes of employees.

[23:29] The union employees, one class, the non-union employees were another class, and there was always

[23:35] feelings that somebody wouldn't get in the same shape that the other fellow was getting

[23:40] as far as employment opportunities and benefits and so forth.

[23:43] Equity among city employees, when you have the system like you have in Charlotte, I would

[23:47] believe.

[23:49] Again, you've got employees that are running the light rails that are city employees.

[23:53] And then you've got employees that are running the buses that are authority employees, but

[23:57] they all feel like that they work for the city in one way or the other.

[24:01] But again, there's those kind of issues.

[24:03] So why bring this up at all?

[24:05] Well, I always like to feel like I'm hopefully trying to educate.

[24:08] But there's also, we bring it up not because first transit has any union and there's no

[24:14] plans, but certainly when envy operated, there were discussions about unionization.

[24:18] We bring it up to talk to you about because I think one of the considerations that you

[24:22] need to consider tonight, such what all of us have said so far, is that having gone out

[24:27] twice, there's been only one bidder.

[24:30] There's only one company that's interested in operating the city of Jacksonville transit

[24:34] system.

[24:34] Now Anthony's told you before he felt like I'm sure he's right, that's because this

[24:39] is really a small operation compared to many of these companies that run systems in

[24:45] other places.

[24:47] But again at this point in time one of the considerations is what about next time, three

[24:54] years from now, if there's no bidders, or if there's a bidder that is unionized, do you have

[25:04] section I read to you, you have to protect those folks, et cetera, you know, that's what

[25:09] has happened instead of entering into situation for folks for accused of union busting, they've

[25:16] actually set these authorities up in accordance with the state statute, so it's not to circumvent

[25:20] that. It's not any issue there. But again, you get into classes of employees. But this,

[25:24] again, is just a one of several issues I think that y'all need to think about as you move forward.

[25:29] and usually the time to think about and to make a decision is when you're not

[25:35] under the gun, you're not being forced to take it in, there's no bidders, etc.

[25:39] But again, I think you need to consider these points, and I'll be glad to try

[25:42] to answer any questions that you may have from this particular slide.

[25:47] Sorry, I was so long-winded.

[25:50] Thank you.

[25:52] I'll be around.

[26:00] Thank you, Mr. Carter.

[26:02] I think it's clear that we've been hanging out a lot together these days.

[26:06] No, Anthony, was that because this presentation took such a long time?

[26:09] Because it was such a concise and thorough.

[26:15] So Mr. Carter talked about one biter, and this is the first time that we've ever only had one biter.

[26:22] But what I did want to do is take you through kind of the history, progression here of what's happened over time when we put this project out or put the contract out for bit.

[26:32] So we started in no seven, the next contract was in 11, then 16, then 19, then 22.

[26:39] You can see MV ended up with the first three of those contracts.

[26:44] And then we were here just a few years ago talking about first transit and we're here again

[26:49] tonight talking about first transit.

[26:51] The cost of those contracts you can see on the right hand side and then on the far right,

[26:56] you can see what the percent changes between the first years of each of those contracts.

[27:03] And 11, 16, and 19, we had two bidders.

[27:09] One of those bidders was always onslaught United Transit. And while they put together a good proposal,

[27:15] they just were never found to be the lowest cost most qualified bidder. And in 11 and 16,

[27:22] That was found to be in the transportation and then 19 it was found to be first transit and we've had a great experience with first transit

[27:30] The the challenge that we have is when we put this out

[27:34] Excuse me in 20 and 21 and 22

[27:39] We had

[27:41] At the pre-bid six or eight at the pre-bid

[27:46] But when we got the bids back well and received one

[27:50] So we put it back out on the street again

[27:52] hoping to untie some additional competition.

[27:55] We actually call folks too and encourage them to participate

[27:58] and still only receive one bid.

[28:02] So again, the concern here is not necessarily just the cost.

[28:09] The concern is also getting a fair price

[28:14] through competitive award.

[28:16] And if you look at the percent change there on the side,

[28:20] And I'm not knocking first transit by any stretch of the imagination because they have been great to work with, but I'm not sure that the fair pricing.

[28:30] I'm not sure that there's enough competition in what we're doing in order to get a fair price, and that's just my opinion.

[28:39] Why is this important?

[28:41] This is important because of the way that we fund operations.

[28:44] Okay, we normally talk about capital like Jacksonville Station and Park and Ride and all of that and all we have to do is contribute 10%.

[28:52] But with operations, we end up contributing 50% or excuse me, 50% ends up coming from the Federal Transit Administration.

[29:02] 25 comes from the state and then 25 comes from the city.

[29:06] However, there is only a limited amount of state funds to support the operation that are

[29:14] allocated to us.

[29:16] So once we exceed that 25% allocation or the allocation from the state, then the operations

[29:24] ends up costing FTA 50% and the city 50%.

[29:27] And that's why you're seeing the even split in these previous slides that we've talked

[29:33] talked about before where the total is 350,000 and then the city share of that is half.

[29:42] Looking at the FTA apportionment, we also have a cap there.

[29:47] Now this does tend to move a lot more than the state money does.

[29:51] It's less volatile and it's continuously moved up.

[29:54] So you can see what the apportionment is there in 19323.

[29:58] You can also see in the middle.

[30:00] So what we budgeted every year to support transit and then what the balance ends up being of that annual appropriation once the budget is adopted. And from 2019 to 2023, you can see that we've seen a dwindling of that fund reserve or that carryover amount that's been a portion to us that we don't use every year. This is very important because the residual funds are what we use to accumulate over

[30:29] a period of years to go out and pay for bus replacement okay so the closer that we get

[30:37] to the FTA apportionment every year the fewer funds that we hold and reserve to then go

[30:44] back and replace vehicles the 23 amount that you're seeing there includes the proposal

[30:50] that we received from first transit and that's why it's at 1.349 and 2020 you see a little

[30:58] bit of a spike there, too, that's because we ended up buying subus' so that's a little

[31:02] bit more than just the operating budget. Are there any questions about this?

[31:12] Okay, so

[31:12] we did go back and work with first transit, the sharpened a pencil. They were willing, excuse

[31:18] me, to reduce the total first year cost by about $25,000 over the life of the contract it was

[31:26] It's going to end up adding to about $200,000, but that's over a period of five years.

[31:32] So with that revised proposal, the total increase from fiscal year 22 to 23 is about 346,000, and then the general fund is 173.

[31:43] You can see how that transiled over what we call the base period of the contract.

[31:48] If we were to sign it, they would assign it, then it's guaranteed to be in place for three years.

[31:53] So,

[31:58] are there any other questions about the revised proposal because we're going to shift

[32:02] gears just a little bit?

[32:07] So, here basically want to give you more information about the proposal that we have put together

[32:12] for in-house operation.

[32:13] And I know that we flashed some numbers on the screen last time but there were some questions

[32:17] about, you know, what does that actually include and how confident are we in those numbers?

[32:23] So, what we have here is what the city recommendation or the staff recommendation would be, is

[32:29] if we went in that direction.

[32:32] And that would be to match the base wage for

[32:36] the entry level driver that first transit has proposed at $16 an hour.

[32:41] We feel that that's market competitive.

[32:44] And it's within kind of the pay scale that we have for similar type of employees with the city.

[32:50] So the salary and benefits, it's a fully allocated cost or

[32:53] shown, then we also have direct expenses like uniforms and CDL, licensing and

[33:03] things of that nature that are relatively constant to a total $1.081 million.

[33:11] Compared to the revised proposal, it would create a savings of $164,000 total.

[33:22] If we were to increase this to $18, and again, what we're trying to do here is

[33:26] to show a tolerance between what we're proposing and where we would actually exceed the cost of the proposed contract.

[33:33] We were to increase it to $18,000, the savings would be around $66,000, and again, this is for the base, great employee.

[33:45] And if we were to increase it to $20 per hour, you can see that the cost benefit flips upside down, and we end up having a net cost instead of a net savings.

[33:59] So the good thing there is is that we've done a lot of the diligence on the proposal.

[34:05] We feel very solid about it.

[34:07] And there is a significant amount of tolerance between where we are with the first transit

[34:13] proposal versus where we feel like we would be within in-house operation.

[34:19] Sir, would you like to take it again?

[34:27] I'm going to go back a couple of slides.

[34:29] Oops.

[34:30] That obviously was the wrong direction.

[34:33] Would

[34:37] media please put back up the $16 an hour slide?

[34:43] My wife doesn't let me use the remote control with the house either, so just in front of

[34:48] the purposes.

[34:49] When Anthony talks about the $16 an hour, that is not a statement that says every employee

[34:54] is going to get paid $16 an hour.

[34:56] That is a scale where the lowest employee would be $16 an hour and the numbers that you see

[35:03] not only include the wages, they include everything that we pay in benefits.

[35:10] So in addition to the $16 an hour, these employees would become part of the North Carolina retirement system.

[35:16] That's figured in, they would be eligible for health insurance, that's figured in.

[35:21] So when you look at the number at $16 an hour of $164,000, that includes,

[35:33] or

[35:33] All of the employee benefits and expenses are included.

[35:38] And I want to stress again,

[35:41] if you take it to $18 an hour, it includes all of that.

[35:46] Mr. Thomas asked at the meeting I believe two meetings ago, at what point does the formula go in the wrong direction?

[35:57] Well, you can decide, does it go in the wrong direction at $16 an hour, $18 an hour, but we can all agree it goes in the wrong direction.

[36:04] direction at $20 an hour. But now remember that's not $20 an hour for every

[36:11] employee. That's the minimum that any bus driver would receive. The proposal

[36:18] that we have from the staff is $16 an hour because that is what the first

[36:25] transit proposal is also saying is that if we sign a contract with them they're

[36:31] going to move all of the drivers, and I think appropriately so, up to $16 an hour.

[36:37] Over the next several years, we're not sure of what they would increase, but what we

[36:44] are showing you is $16, $18, and $20.

[36:50] Some of the things from a management standpoint

[36:52] that concerns me is, first of all, just one biter. This is not about as first transit done

[37:01] a good job or a bad job. I can tell you, without being overly critical, that we were glad

[37:08] to move from MV. There were some issues, and we'll just leave it like that. First

[37:14] transit's done a good job.

[37:18] The problem is, we are a small transit system. We have five

[37:23] routes, five routes. We are not Charlotte. We are not Wilmington. We operate this system

[37:34] from only inside the city.

[37:39] The contractor currently makes all the financial decisions.

[37:43] That can be good, that can be bad.

[37:47] For example, the contractor can decide what they want to pay.

[37:51] They can also decide who they have insurance with.

[37:54] One of the financial decisions are partly yours, but once you sign a contract, that contract

[38:03] is the financial decisions.

[38:05] One of the nice things about first transit, there's no operational change.

[38:11] Five rounds, all the current employees stay employees of first transit.

[38:16] There's also shared responsibility because as you've seen from an insurance standpoint

[38:23] whether you go at first transit or not, the city does in fact cover all the buses and all

[38:30] of the employees.

[38:31] place. So if there's an accident out there, you have the city insurance through the

[38:37] North Carolina League of Ministers, there are MS risk management system, and then you

[38:41] also have the insurance company for first transit. If unionized, and again not speaking

[38:48] for or against, they are currently not unionized, they do have the right to unionize because they're

[38:57] government workers. Remember what John said. If you're a government worker in

[39:02] North Carolina at the state or local level, you cannot unionize. However, the

[39:09] transit employees could unionize today if they wanted to. If they unionize and at a

[39:16] later date, the city for whatever reason takes over the transit, those employees

[39:23] cannot become city employees. Why? Because the state law says what John said. What you'd have to do

[39:31] is set up the authority. And again, they would not be city employees. The other thing is the price.

[39:41] From a city operational standpoint, if we took it over, there would be modest operational changes.

[39:48] Now, what does that mean? Still have five routes. We still pick up the same. We go to the base. We're

[39:54] on the same schedule, the main difference is of the bus says Jacksonville, the ladies

[40:02] and gentlemen who drive the buses would then be city employees.

[40:07] So the operational change would be from a supervisory standpoint that instead of being

[40:12] supervised by first transit, they would be supervised by your employees, primarily Anthony, Deanna,

[40:19] and then Roy, and then obviously the current supervisory staff that's in place with first transit.

[40:26] The city would make all the financial decisions. Now, why is that important?

[40:32] Well,

[40:35] you're the ones who are responsible for how the tax money is spent.

[40:40] And if the system begins to get more and more expensive, then you have the ability to say,

[40:48] Well, folks, we're not going to have five routes.

[40:50] We're going to only have four.

[40:52] Or instead of charging this, we're going to charge that.

[40:55] Which you have the right under either to decide on the rights.

[40:59] But the financial decisions would be totally yours.

[41:02] The other is the city does assume full responsibility,

[41:06] whereas right now it's shared.

[41:09] The other key point, not only is there currently no union,

[41:13] if you bring them in house, you would be guaranteed

[41:17] that they would never be unionized. And again, that's not a statement, pro-orcon, regarding

[41:22] unionization. They would become city employees, and there would be a modest cost reduction.

[41:30] And I want to stress that. I don't believe that this is really about cost at this point.

[41:40] You saw a slide a while ago that had four options on it. We took the fourth one off because

[41:45] it really isn't an option. You know, because we have built Jacksonville station and because we

[41:51] have put up all of the transit stops and we have buses, if you were to get out of the transit

[41:58] business, then you would have to pay back a very large check. I remember when we were talking about

[42:05] building Jacksonville station, the city attorney, that's the handsome and talented John Carter as in

[42:12] the gentleman here. He made the statement and you can read it in the minutes that if

[42:18] you build Jacksonville station, you will forever be in the transit business. Why? Because once

[42:27] you've used that $9 million, the only way you get out of transit is to pay it back. Of course,

[42:34] you pay it back based upon depreciation. So five years from now to be cheaper to get out of

[42:39] than it would be today, 10 years from now cheaper than five years from now.

[42:44] So your options really are to negotiate further with first transit which we don't believe

[42:49] is really going to be successful.

[42:51] They did come down $26,000 and that's $26,000 of what 1.3 million.

[42:59] So we appreciate their consideration.

[43:02] The other is to operate with city personnel and then the third is whichever you pick one

[43:08] or two, and that's to modify a service to reduce cost. I don't think now's the time

[43:15] to be modifying service. I'm going to give you a sidebar.

[43:32] I'm very fortunate to have

[43:34] an F-150 pickup truck that gets 22 miles a gallon.

[43:41] A little over a year ago, let me start

[43:44] that differently, I'm going to erase that. My wife doesn't like for me to drive on the

[43:49] bottom half of the tank. She likes me to drive on the top half. So about every

[43:56] Saturday or Sunday I go fill the truck.

[44:01] You can relate to this. A year and a

[44:04] half ago to put in 13 gallons of gas cost 26 dollars. It's past Sunday I put in

[44:14] 13 gallons and it cost me $49.86.

[44:20] Let me tell you what's happening in the city budget.

[44:24] As you know, by your policy for more than 10 years, we have budgeted unleaded gas at

[44:30] $3.15 a gallon across all of our departments, $3.15.

[44:38] sense. Yesterday, Ed ordered 12,000 gallons of unleaded. Mr. Thomas, you are

[44:48] quite aware that we don't pay taxes like you would pay at the pump. But would

[44:52] you like to guess what we had to pay instead of $3.15?

[45:00] It's higher or lower? I was going to guess 315. You would be wrong.

[45:08] Dr. Washington?

[45:11] Higher is correct. No, exactly. How much higher are you going to ask me? I'm going to keep going down the line. It's higher. So how much higher? That would be $3.25. You got the wrong button anywhere.

[45:30] Mr. Jackson,

[45:34] I had it in at 3.16.

[45:37] Mr. Sosa, you had a trip today, and I bet you had to fill out.

[45:41] What would you get?

[45:42] About 3.30.

[45:45] Or you have to do that.

[45:46] 3.70.

[45:52] You're very close.

[45:54] Yes, today, for the first time in over 10 years,

[46:02] remember we don't pay taxes, $3.55,

[46:10] $3.55.

[46:15] Why don't I bring that up in relation to transit?

[46:20] It's part of the operating cost, it isn't part of first transit, it doesn't relate to your

[46:27] decision tonight on whether you're going to put it in the city or whether you're not.

[46:31] The point I'm making is there are costs that we can control, and there are costs that we can't control.

[46:41] From a city budget standpoint, not a transit standpoint, this really concerns me as your manager,

[46:48] that we're now paying $3.55 a gallon, and guess what, we're fortunate because as a non-city purchase,

[46:58] the price across the street this afternoon,

[47:01] Ron was what?

[47:05] 419, we don't know where that's going to go.

[47:10] Going back, though, to the operations,

[47:14] I'm going to give you some recommendations

[47:15] that I honestly did not believe I would give you.

[47:20] When we started this discussion a month or so ago,

[47:24] I was 180 degrees away from this.

[47:27] But as your manager, these are the recommendations I'm giving you.

[47:34] Because of the experience that we're having, I believe that it's in the city's long-term

[47:41] best interest to take this in-house, that we thank First Transit for their service, and that

[47:50] that you authorize the city transportation HR department

[47:54] to immediately contact and recruit the people

[47:57] that are sitting in the back and their counterparts

[48:00] and that we move this operation in-house as soon as possible.

[48:04] But certainly no later than July 1st

[48:06] because that's when you're contract.

[48:09] Let me talk about why.

[48:11] I go back to what John talked about, one bitter.

[48:15] I go back to control of your finances.

[48:18] is I go back to all employees or city employees.

[48:23] And there's the fourth one I didn't put down.

[48:26] Only today can you be guaranteed that the employees of transit

[48:32] are not unionized.

[48:34] That is not a statement that says pro or con about unions,

[48:38] but it is the reality that as long as you have this operated

[48:43] by private company, they have the right to unionize.

[48:49] Now, I will tell you, this is a tough recommendation.

[48:53] I can tell you, I believe you're going to have a difficult time with

[48:57] this decision as a council.

[49:00] This is probably other than some things like,

[49:03] the unimportant things like raising property taxes.

[49:06] By the way, I suppose to be funny.

[49:08] This is probably one of the toughest decisions that you're going

[49:12] have to make. If you're comfortable making that decision tonight, that's fine. We do need to have

[49:21] this decision made, if at all possible, on the 22nd of March, or at the very latest your first meeting

[49:29] in April. We're certainly not going to push it, because this is a very,

[49:39] I'd use the word drastic.

[49:41] It's a very unusual step that we are being faced with as an organization.

[49:50] Now Mr. Carter would you like to correct anything I've said?

[49:54] With that, what kind of discussion or questions can we answer for you?

[49:59] I'll slow up in further discussion.

[50:02] How many employees are we talking about hiring possibly?

[50:07] Anthony, would you step up, why don't you come up here and sit down a minute?

[50:10] Dr.

[50:17] Washington, we would look to hire a total of 22 employees, no ma'am, there would be a portion of them that are full time, a portion that are part time and a portion of them that are part time non-benefitted, and I had to break down if you'd like to have that.

[50:34] That's similar to the possibility, like around the holidays, when transit gets a little bit busy, you might have to hire seasonal workers.

[50:44] Or?

[50:45] Generally speaking, we would have these folks on board all the time.

[50:50] But the benefit of the thousand hour a year, non-benefit employee is, of course, we don't have to pay benefits and it's a good opportunity for a second part time job.

[51:03] Mr. Warden.

[51:05] you had the on the 16 and the 18 you had savings. Was that savings? How much of that would

[51:13] be split with FTA and how much with us? In other words, with FTA pickup, is there another

[51:20] with the city would not accrue the full 126 or the or the 60 go back to the 16 dollars

[51:26] an hour slide is that 164 is that a crew all to the city the 164 no sir right so it

[51:39] accrues 50% to the FDA and 50% to the city of Jackson okay and then the same it's okay it's the

[51:47] same thing with the $18 an hour so

[51:55] we are seeing a net increase regardless of which option

[52:07] I'll just reiterate what I said in the past, the last time that we've had experience

[52:12] bringing things in house and the projections didn't meet expectations.

[52:17] When we have city employees, I mean, understanding you can say we're starting at 16, but then

[52:21] we do a wage adjustment for the city employees, these are city employees, so they'll recruit

[52:27] the same thing. It's definitely a double-edged sword, but here we're tough

[52:38] decision. I just

[52:39] buy that and it's hard to know.

[52:40] Even with paid increases will be covered halfway by the pad, right?

[52:45] Yes, they're where to point where the 50-50 would be in place.

[52:52] Really it in a financial decision per se now. It's really about the future. Mr. Thomas

[52:59] makes a good point. If you give a cost of living increase to your employees in the FY 23 budget,

[53:07] this number changes if they're city employees. This number does not change if they are non-city

[53:13] employees and are the contractors employees.

[53:19] I would share one thing. I'll tell you about the

[53:21] Charlotte and about Wilmington, and this is from Director from Anthony, but the following are urban

[53:27] transit systems that are in-house.

[53:31] Salisbury, Fayetteville, Chapel Hill, and Greenville, North Carolina.

[53:37] The Great Bus System, if you want, to be there.

[53:39] There's four listed from Anthony, or in-house, with the particular cities.

[53:50] And not to belabor or advocate, but one of the things that Mr.

[53:54] Joy advised us is that we're in a very unique situation because we're not inheriting what's considered a legacy transit system.

[54:01] meeting we haven't had a transit system that was started by a utility company and then

[54:07] inherited by the city so we're in a unique position to not have to work with labor unions

[54:13] as an urbanized system.

[54:21] Does anybody want to make a motion at this point, which option you want to follow or do you

[54:28] want to?

[54:30] that we accept the manager's recommendations as

[54:37] said fourth in the presentation.

[54:45] Is there a second,

[54:53] any further discussion, all that?

[54:56] Is that out of the $16 an hour as well?

[54:58] No, there's different price options.

[55:01] That's the right answer.

[55:05] No, there's discussion.

[55:10] What is it looking like?

[55:11] Where the cuz we everything's concerning salary increases

[55:15] I mean I think about what McDonald's and what are fast food companies are doing now

[55:21] So I guess one concern is how much but we still sand at the cost will be split

[55:28] But how far can that number go?

[55:30] You only go up as you recall at $20. I think you're the

[55:36] The tip point is somewhere around $19.50, but again, I think your decision really needs

[55:48] to be long range for you.

[55:52] And that's the issue of how much gamble do you want to take on when will you eliminate

[55:59] having any bitters and when, how much gamble do you want to take regarding unionization?

[56:07] Because I will tell you that from a financial standpoint, it's for all particle purposes the

[56:14] same.

[56:15] I remember Mr. Warden's comment, or his question, that $164,000 is split equal.

[56:24] And then the $66,000 is split equally.

[56:28] So I say, this is not an easy conversation.

[56:33] What is the fact that we'll be in charge of the program?

[56:37] Is that the fact that we'll be in charge of the program?

[56:40] That's why I like about more really the financial decision, we'll be able to control the

[56:44] service and how it operates and everything and we'll be able to dictate that as years go

[56:48] on.

[56:48] Instead of being in the hands of someone else, where in a couple of years we put out for a bit

[56:52] again and if they're the only ones again, they're still in charge or they can change things

[56:56] on it.

[56:57] That's what I like about it personally.

[56:58] Very good point.

[57:00] We did the same little thing with our sanitation department, did we not?

[57:05] Commercial.

[57:06] Commercial.

[57:07] Yes.

[57:08] And Mr. Thomas is certainly correct.

[57:10] We did not do a good job in, because we had never been in it.

[57:16] I will tell you, it's a little different in that we have been very much immersed in the transit system.

[57:25] The only thing we're not running as Anthony showed you is the employee side everything else

[57:31] But that doesn't mean these projections are perfect not by any means

[57:39] Do have additional control, but we do have additional liability

[57:43] There are there are employees there are employees. I mean transit

[57:50] Those transit those employ they're employed by someone else, so there's a but if we're offering a service

[57:55] We still have the liability, regardless of whether they're actually

[57:59] area employees or not.

[58:00] Is that not correct, Mr. Carter?

[58:01] Yes.

[58:05] I didn't plant that question.

[58:07] But that statute about authorities that I told you, I looked at it today,

[58:12] and there is no case law in North Carolina.

[58:14] That was originally passed in 1975.

[58:17] But there was an opinion from the Attorney General that basically said the following.

[58:23] This while a public transportation authority created pursuant to this article

[58:27] has rights granted to it as a public, a body corporate, and

[58:31] politic, such as authority, such, and authority remains in the context of the article,

[58:37] an agency of the municipality which created it, period.

[58:40] Such an agency relationship between the authority and the creating

[58:43] municipality would subject to the municipality to liability,

[58:47] arising out of contracts and torts of the authority.

[58:53] One of the things, when we called the league on the buses, you were told last time buses were insured and what we believe, that was all insured.

[59:03] But of course the league said, you know, how many of you could go out and get a car today and I don't want to assure that car but I don't want to assure the drivers.

[59:10] Well, there's nobody going to give you insurance because somebody's going to be driving that car.

[59:13] Same thing with those buses, they said they had to have coverage there.

[59:16] So, that aspect is already built in.

[59:19] That's been there, even though we didn't know that there had drivers, had duplicate coverage.

[59:23] That is, first transit coverage and liability coverage from us.

[59:27] The addition would be through the workers comp.

[59:30] That's one thing that we would be taking on you and the figures that Anthony gave you there.

[59:35] But, again, there is a possibility that based upon that opinion, and that goes back to 1984.

[59:40] But, and again, there's been no case law in this area, but that there's liability even if there was an authority.

[59:45] But to Mr. Thomas' point, the contract certainly has provisions in it with First Transit.

[59:52] They would say, you take on the liability and that has been the case.

[59:55] There have been bus accidents.

[59:57] There have been people that have been hurt on the buses.

[1:00:00] First transit insurance is taken care of all that, and our folks, even though we had coverage and didn't even know about it, but they never had to step up and take care of it. So you're correct. I think my thought was more about employee liability, as far as, you know, our employees can sue us. Yes, sir. And their employees can't sue us, per se. They're independent contractors. Yes, sir. Are we assuming any employee liability other than

[1:00:27] with transportation system? I don't think so.

[1:00:31] employee?

[1:00:32] No, sir.

[1:00:33] When you take him in as your employees, you have the workman's comp issues.

[1:00:38] You always have issues where employees sue us.

[1:00:41] We've been sued several times.

[1:00:42] And, you know, EEOC compliance, et cetera.

[1:00:44] Employee negligence or whatever.

[1:00:47] And so forth.

[1:00:48] In fact, and this came from Ms. Marshman, sorry.

[1:00:51] But in Charlotte right now, the employees of the bus system

[1:00:55] are saying that the authority is not taking enough precautions to protect them.

[1:00:59] during the COVID crisis and we're picketing et cetera and so forth.

[1:01:03] So there's all kind of issues but there could be certain

[1:01:07] issues when you've got employees, there's no question about that.

[1:01:10] I remember in this correctly or not, we have in the discussion

[1:01:14] on a previous meeting, we were talking about some of the

[1:01:19] management positions that first transit that we were covering

[1:01:23] that probably would be negotiable or less the word you use.

[1:01:29] Sir Profilus, not necessarily Sir Profilus, they could be eliminated.

[1:01:35] I made a statement that I felt that they had a top-heavy management and I'm not sure that's the reason why they cut $26,000 out of their $1.3 million proposal.

[1:01:50] but- Is there any stipulation in the contract with First Transit that if we were to

[1:01:57] sever ties with them that we could not use their employees for a certain period of time?

[1:02:03] Not if the- not if the expiration of the contract. Now if there's anything that happens prior

[1:02:10] to that if the council would have- then that would certainly be up to First Transit.

[1:02:14] But again, First Transit has been telling you at least, at least, that there lives in money

[1:02:18] each month, so there may be negotiations if you took it in house that could be quicker

[1:02:23] than July 1, but presently, you have a contract with them as a city, and they are employees

[1:02:30] are obligated to them through June 30th of this year.

[1:02:33] And we could turn around and re-arm, right?

[1:02:35] If they want to come work for us and we're willing to take the conditions of employment,

[1:02:38] yes, sir.

[1:02:39] And they, speaking to them, they are a very honorable company and they've been a good partner.

[1:02:44] So being very candid with them and saying, it's hard to say which direction this is going to go,

[1:02:50] they're willing to support us in either direction that we choose.

[1:02:54] So they're going to fulfill their obligations if we decide to go in-house,

[1:02:58] and they will certainly continue to be good partners if we continue to do business.

[1:03:03] Let me also make one other statement.

[1:03:05] This is, I know normally in this particular meeting,

[1:03:10] the first of the month, we do not have public comment.

[1:03:13] If you're going to have a meeting tonight, I know that there are drivers here by our

[1:03:22] rules you can vote and they would have no voice.

[1:03:26] You may decide that you want to either allow them to at least give you a couple of minutes

[1:03:32] of their thoughts or allow them or push this off until the 22nd when they would have public

[1:03:39] comment. Again as a manager I'm not pressing you to make

[1:03:44] decision tonight.

[1:03:47] We do need a decision in the near future.

[1:03:53] Everything by way you got a couple weeks I don't think so.

[1:03:56] I don't. Other than the fact that I'm going to get more grey hair

[1:04:01] than that Mr. Bitton I'm not sure you're going to gain anything.

[1:04:04] There's a motion of the second one.

[1:04:10] I see by bringing in that group from, you know, for first, you know, any of the employees

[1:04:15] for first transit, we won't miss a beat, kind of, in terms of moving forward, either.

[1:04:20] So that would be a great thing as well.

[1:04:24] One thing to point out as well, is that many of our employees, I say ours, but many of the

[1:04:30] transit drivers have been with us for a good long while, and they're heavily invested

[1:04:34] in the system.

[1:04:35] I felt like I had to say that because some of them are here tonight.

[1:04:39] Some of them were with N.V., in fact, and then went with first transit.

[1:04:47] Of course, they're eager to see what's going to happen.

[1:04:50] But the amount of time that you need to take is what it is.

[1:04:55] The team are looking at the management as well now.

[1:04:58] Well, before did you have that?

[1:05:01] Because we didn't actually bring anything in house.

[1:05:03] we just had to drivers before correct.

[1:05:05] I'm sorry, could you repeat that, sir?

[1:05:07] Before when we kept drivers but no management in place.

[1:05:12] When we switched from the other company.

[1:05:14] It was basically the same exact arrangement,

[1:05:17] just a different company.

[1:05:19] Okay. They provided the management,

[1:05:20] they provided the drivers.

[1:05:22] And in many cases, I don't recall how many didn't make

[1:05:26] the transition but a majority of them did.

[1:05:32] Call the vote.

[1:05:33] There's a favor of the motion.

[1:05:35] I raise your hands 4 or 3 or 4 or 2 motion carries stay in the house with that

[1:05:48] Presentation a

[1:05:58] 15 minute break and they'll come back for recycling. Yes, get a chance to stretch your legs a little bit

[1:06:03] We'll stand adjourn for or recess for a few minutes

[1:21:53] Council, we're back in session and we're going to move on to the recycling. Dr. Woodruff will be presenting this item.

[1:22:17] The difficult decision you just had. So let's go to that. You saw this before. For 10 years, we had a contract with Sonoco. There was no cost, no cost to the city, no cost to the customer. We know that in 2022, we signed a new contract. And that was based on $95 a ton going up each year by $5.

[1:22:40] dollars to $115 a ton and at that time we implemented fees to the customers.

[1:22:46] We assume based upon history 2,500 tons that's from residential, small business and commercial.

[1:22:55] So on FY22 at $95 a ton we had to budget $158,000 and remember that was not for a full year.

[1:23:05] If you'll remember, the contract started November 1st, so $95 a ton for those months.

[1:23:14] So that meant July, August, September, October, and yes, I did count on my fingers in public.

[1:23:20] That meant it was an eight month contract.

[1:23:23] We're now into 12 month contracts coming up, and you can see what the fee will be, $105,

[1:23:31] $110,000, $115,000.

[1:23:33] When you look at the budget for FY26, which is the one that will begin July 1, 2025, you will need to have $287,500 of money in your budget to cover the tonnage.

[1:23:51] I want to remind you in implementing the fee, the contract is a cost per ton.

[1:23:59] It also, when we talked to you last year at this time, we were looking at the FY22 budget,

[1:24:05] we were saying the fees that we were looking at cover the tonnage, it covers the equipment

[1:24:11] and maintenance, it covers any reduction in subsidy, and it covers all of the increase through

[1:24:20] to FY27. You may remember this. One of the options we reviewed with you was to go ahead

[1:24:28] and implement the fee in FY22 that would cover all of the cost increases up to $115 a ton

[1:24:39] and those other equipment costs. At that time one of the options was a $4 increase. This

[1:24:47] This is what you actually adopted.

[1:24:50] You said we're going to adopt a contract going from $95 to $115, but you also said we're

[1:25:00] not going to move to $4.

[1:25:03] What you adopted was $2 per month, residential, $2 per month, small business, and $0.30 a tip

[1:25:12] for commercial, and you said you will revisit these in the future, recognizing that these

[1:25:18] fees did not cover all the cost, but also recognizing you did not want to impact your

[1:25:24] customers that substantially. You can see the tonnage. Remember it was an eight-month contract.

[1:25:33] We're now going to a 12-month contract, but let me share with you a reminder of the assumption.

[1:25:40] Because we had not been in this situation before, we assumed that the product would be worthless.

[1:25:50] So what you budgeted was $158,000, assuming, again, nothing for the product.

[1:26:00] Why do we do that?

[1:26:02] We believe, and your philosophy has always been physical conservativity, highly pronounced

[1:26:09] that.

[1:26:09] be physically conservative.

[1:26:12] You knew there was no guarantee on the value of the product.

[1:26:15] You know that historically the product value has been low.

[1:26:19] And you also knew that because you subsidize sanitation,

[1:26:24] that if there is a savings, that savings goes where?

[1:26:26] Back into your savings account called the fund balance.

[1:26:30] I want to show you the commodity trends.

[1:26:35] The most important line to look at is the solid blue line that goes from left to right.

[1:26:43] That's basically zero, meaning that you got nothing for it.

[1:26:49] I want you to notice how many of the lines stay under that blue line consistently.

[1:26:58] I also want you to notice on the far right side,

[1:27:01] But there are only three lines that are above the break even.

[1:27:06] So when you made the decision as a policy that you would assume no money coming from

[1:27:13] the product, that was a very wise decision.

[1:27:20] These were the fees you approved.

[1:27:24] The budget was roughly $19,700 in $91 per month.

[1:27:31] So, in a three-month period, and that's now November, December, January, the first three

[1:27:41] months of the new, how have you married?

[1:27:45] You should have paid Sonoco $59,373, but keep reading.

[1:27:52] Amazingly enough, the products have completely offset your cost.

[1:28:03] In one month you had to pay Sonoco not $19,791, you paid them $39.39 and $39.

[1:28:14] And in one month, the product had enough value to fully offset the $19,000 a month, and

[1:28:24] the city actually got a check for $1,317.60.

[1:28:31] So in the first three months, which that's not a forecast of what's going to happen, but

[1:28:37] For the first three months, you've actually had a budgetary savings of over $58,000.

[1:28:45] That's not a guarantee about anything.

[1:28:49] Moving forward, we have no idea.

[1:28:53] The commodity market has been the best in the last three months, even with everything

[1:28:59] that's going on with the national and international economy, we're very pleased with these numbers.

[1:29:05] on the other hand, we can't guarantee that those numbers are to continue.

[1:29:10] So I think it's important for you to assume that every month you're going to be paying not getting.

[1:29:18] The product value has fully offset the cost.

[1:29:21] And again, for the next five months, we're assuming that you are going to be paying.

[1:29:27] With all of that said, let's get to the bottom line.

[1:29:30] The

[1:29:34] draft recycling budget for FY23 assumes, and let me go back one, for tonnage $100 a ton, $2,500 tons, it assumes $250,000.

[1:29:51] We know that equipment and maintenance, we will be buying trucks and maintaining them another $250.

[1:29:57] And for the personnel that

[1:30:00] Just operate the recycling. We have three recycling routes. We have three people per route, or per team, so you have nine employees. So you're looking at $825,000 for just the recycling budget. Now, your current fees are actually producing $315,000.

[1:30:27] Remember, this year, in FY20,

[1:30:31] 22, your cost potentially was 158,000, and in FY23 your cost potential is 250,000.

[1:30:45] I can see Mr. Thomas is already smiling because he knows the punch line here.

[1:30:50] Bottom line is there's no need to increase your fees for recycling this year.

[1:30:58] There will come a point most likely in FY24, because remember your current fees are 315,000.

[1:31:09] Every year that amount you potentially have to pay is going to go up.

[1:31:15] Bottom line recommendations are this.

[1:31:18] Keep your residential, no charge.

[1:31:21] Keep your small business.

[1:31:23] I'm sorry, no charge, that was the wrong word.

[1:31:25] residential at $2 per month, no change, small business $2 a month, no change, commercial $0.30 a tip, no change, recycling bins go up $5 per month.

[1:31:39] Now this says equals $5 per month, that should say that the increase goes up $5 a month.

[1:31:48] Our recycling containers that we issue, you know, we rent them.

[1:31:55] The cost of an 8 cubic yard recycling dumpster has gone from about $72 to over $130.

[1:32:06] Even at these rates that you will see in the rate schedule that you'll eventually have

[1:32:12] to adopt as part of the budget.

[1:32:13] A $10 a month increase for every size we are still below what the other competitors have.

[1:32:22] And then, if you agree with these numbers, your general fund subsidy is going to be about

[1:32:30] $510,000.

[1:32:32] And that's about where it has been.

[1:32:35] So let me go back real quickly, I'm going to show you, again, current fees, general fund

[1:32:41] subsidy, total budget, and that's just for the recycling side of your sanitation, that's

[1:32:49] not your full sanitation budget.

[1:32:51] So here are my recommendations.

[1:32:55] At some point in the very near future, we'd like for you to say yes, you agree with those

[1:33:00] or no, you want to do something else, you do not have to make that decision tonight.

[1:33:05] Any questions on where you are?

[1:33:08] I hope you feel like you're in a good financial position on this one.

[1:33:12] Good

[1:33:16] questions. Good news,

[1:33:23] okay. We've been through transit. Would you please now pull

[1:33:27] up the before and after school recreation fees?

[1:33:39] Susan and her staff, I think, do an outstanding

[1:33:41] job of providing assistance to parents. Susan, why don't you come on up to the microphone

[1:33:47] if you don't mind? The purpose of our before and after school program

[1:33:52] is very important.

[1:33:55] Safe environment, assist working parents with student care,

[1:33:59] offer education and recreation programs for students

[1:34:01] have a reasonable cost.

[1:34:04] Who are our clients?

[1:34:06] Well, the programs are offered to all city residents,

[1:34:09] and then after the city residents,

[1:34:11] to non-city residents.

[1:34:13] And I believe I didn't check this one with you.

[1:34:15] It is grades one through eight.

[1:34:16] No, it includes kindergarteners.

[1:34:18] It includes kindergarteners.

[1:34:19] Okay.

[1:34:20] The locations, it's the Ansel County schools that are inside the city, the commons gym,

[1:34:28] the youth center, and sometimes other city facilities based upon availability.

[1:34:33] Bottom line though is our programs are predominantly run out of schools.

[1:34:37] And one of the great things about that is, for example, the Carolina Forest Elementary School,

[1:34:43] It's the only before school program a parent gets the child there we take care of them for a period of time

[1:34:51] Then they go to school after school they stay right there and in the same location. We take care of the parents come and get them

[1:34:58] We also have new bridge middle school. We have seven elementary schools for after school

[1:35:04] one elementary school before school and then we have new bridge school and

[1:35:09] And currently what Susan and staff are doing are picking those folks up and transporting

[1:35:13] them to the commons.

[1:35:15] Pre-COVID, we had about 3,200 students a year.

[1:35:21] Now that's picking the number you want and multiply it by 300.

[1:35:25] So it's not that you have 3,250 people every day.

[1:35:30] You have roughly 250 or so and you have them day after day after day.

[1:35:34] that. During the COVID that dropped not significantly because many parents still worked.

[1:35:42] And our projection is now that COVID is beginning to be part of our society, not being

[1:35:48] solved, but part of our society, we think your yearly is going to be back over 3,000.

[1:35:55] The City Council policy. In FY17, the City Council, and I believe that would have meant

[1:36:02] that Mr. Jackson, you would not have been part of this policy.

[1:36:07] I believe you were elected in 18 and Mr. Social, obviously, you would not have been.

[1:36:15] But the council at that time, and remember policies are only good for the time that

[1:36:19] they're there.

[1:36:20] They're not lost.

[1:36:22] The programs are to be self-funded for all direct costs.

[1:36:26] Direct costs are shown in direct costs or things like buildings and utilities.

[1:36:31] fees. So the fees that we have traditionally had are designed to cover the direct cost

[1:36:37] only. Before school, the current city fee is $30 per month and $60 per month non-resident.

[1:36:52] I will tell you $30 a month. Okay. After school, $75 per month and $150 because your policy

[1:37:04] has been in the past city residents because the taxpayer pays for all of the gyms and

[1:37:09] other things, non-city residents, okay.

[1:37:15] What's the issue?

[1:37:17] The issue is part-time employment and hourly wages.

[1:37:23] We run the program with six program assistants and 10 rec aides.

[1:37:29] They're currently paid $12.50 and $10.

[1:37:32] dollars. And Susan, how many times in the last year have you had every one of those positions

[1:37:38] filled? Not many. That's including the challenge of getting people to the table to even

[1:37:45] apply. So we've had quite a bit of turnover. Very fortunate that in 2020 you authorized those

[1:37:50] folks to come on city, but filling them with still bit of challenges with everybody else

[1:37:55] in the market. And the turnover rate has been significant. You know, one of the important

[1:38:02] things in anything we do is consistency.

[1:38:05] John always tells me that the most important word in management is consistency.

[1:38:11] When you take your child to a before-after-school program and one day it's this person and the

[1:38:17] next day it's somebody else, that's just not a good idea.

[1:38:22] What's the solution?

[1:38:23] Well, first of all, there is no solution to the part-time employment.

[1:38:27] We can't make these people city employees eight hours a day because we don't need them eight hours a day

[1:38:35] But in order to cut down the turnover, I think we have to address the wage in addressing the wages

[1:38:43] Go back to your policy that the program is supposed to pay for itself

[1:38:49] In order to change the wages from 1250 to 1450 and from 10 to 13

[1:38:55] It means what? A higher expense, going to have higher revenue. Where does the revenue

[1:39:02] come from? The policy says it's supposed to come from the people who use the program,

[1:39:08] not from the taxpayer. So what we're recommending is that before

[1:39:14] school goes from $30 to $45 a month and non-city from 60 to 75. Now recognize that's not the

[1:39:22] normal doubling. The last time you had a fee increase was 2017. I can tell you in checking

[1:39:32] with the other programs, these fees are very reasonable programs. After school, we're

[1:39:42] recommending 75 go to 95 a month and 150 goes to 175 per month, and again the last fee

[1:39:50] was 2017. Assume it's one month, and again we're talking about the new fee. So this is after

[1:40:00] school. Remember the after school program, I'm sorry, the after school program was 75, it's going

[1:40:07] to 95 if you approve it. Assume one month is 20 days, two hours or 40, 20 times two hours is 40.

[1:40:17] If you divide $75 a month by 40 hours, currently, it's $1.87 an hour for having your child

[1:40:26] taken care of. At $95, it does go up 51 cents an hour.

[1:40:34] For non-city residents, you see

[1:40:36] it goes up also.

[1:40:41] So the recommendation is that before school, it goes from 30 to 45 for

[1:40:47] for in-city and up to 75 for non.

[1:40:52] The after-school program goes up to 95 and 175.

[1:40:58] That you would implement these fees and wage adjustments with the start of fall school

[1:41:04] that would be August.

[1:41:07] So again, you do not have to address this this evening, but as we are getting ready, I spent

[1:41:14] spent the entire weekend studying all of the detailed budgets that Mr. Thomas enjoys

[1:41:21] looking at. And today I spent the entire day meeting with departments and we'll do

[1:41:26] that again tomorrow and Thursday. We are very close to bringing to you the detailed

[1:41:32] budgets. What we're trying to do in these sessions is to cover some of the longer discussion

[1:41:43] items like this. So this is going to be the recommendation at some point that we're going

[1:41:50] to ask you to take. Now if tonight you feel comfortable saying we're not in favor

[1:41:54] of any of this change, let's leave it like it is. Or if you're in favor of these changes,

[1:41:59] we'll go ahead and build them in the budget. But at some point we're going to ask you to

[1:42:02] make this decision on these fee changes. Any questions that you may have?

[1:42:10] So did you do calculations so that it was a, I mean, so this is what it equals, you said

[1:42:18] if we do this increase in wages, then this is what we need increase in revenue.

[1:42:24] That's correct.

[1:42:25] Did you do the numbers, any factoring of price demand that you would lose some, that you

[1:42:32] would take an account or did you go strictly?

[1:42:34] We have a waiting list.

[1:42:36] Oh, okay.

[1:42:36] But you will lose some.

[1:42:38] I will also say to you though, if you move from these programs anywhere else, you're

[1:42:43] going to have sticker shock.

[1:42:44] Right.

[1:42:45] I understand that.

[1:42:46] There will be, when I say sticker shock, I'm not talking about sticker shock of staying

[1:42:50] with us.

[1:42:51] I'm talking about the sticker shock, you're going to have to pay some others.

[1:42:55] And fairness, the Boys and Girls Club does have lower fees in a modest way, but remember,

[1:43:03] they have grants.

[1:43:04] let's talk about grants a second. We also have very fortunate over the years

[1:43:10] that we've had the River of Life Church. Mayor, I don't remember the actual

[1:43:14] number but you received a check on behalf of the council just a couple of

[1:43:18] months ago. That money is specifically set aside for grants to help people in the

[1:43:26] before and after school program or in other sports programs that Susan and you

[1:43:32] sponsor so yes it's going to be it's going to be an impact some people will

[1:43:39] feel the impact is just some people will not but this does cover the cost of

[1:43:44] the wage increases additional grants no sir not for this program is it

[1:43:52] possible that we could I don't think it is and I'll be quite frank with you there

[1:43:56] There are very few grants available for this type of a program.

[1:44:01] Now talk to your church, and a lot of the other churches in town and ask them to think

[1:44:07] about the fact that they get city services without paying property tax.

[1:44:11] And they would like to make a contribution to help offset this, that would be much appreciated.

[1:44:17] Yeah, because my concern with this is that it might not seem like a big increase for

[1:44:26] We're just the average person, but if you are a young mother, that's a widower and you

[1:44:33] got two or three kids in this program that lost her job doing COVID and trying to get

[1:44:37] back on her feet, that could be a whole lot, because we don't have a graduated, you pay

[1:44:41] to pay for every child.

[1:44:42] Correct.

[1:44:43] You do have a couple of options for folks.

[1:44:45] We do actually offer financial assistance for city residents if they provide the need.

[1:44:50] We can look at that and offer that.

[1:44:53] We also offer a third child discount.

[1:44:55] So there's a couple of opportunities for folks to, if there are city residents.

[1:45:00] And we certainly will keep that in mind to make all of our patrons aware. Currently, we don't have a lot that participate in the afterschool program with financial aid, but we still certainly offer it.

[1:45:11] The

[1:45:16] decision in the future on this.

[1:45:17] So I assume this would be included in the proposed fee schedule when it comes time.

[1:45:22] Yes sir.

[1:45:24] I'll make a motion to approve it.

[1:45:27] I was going to make a motion to approve it.

[1:45:29] My son is in the program and he loves it.

[1:45:31] He loves Mr. Xavier and it's a fantastic him for the price.

[1:45:35] We've looked at it before we put him in this.

[1:45:37] You can't touch this.

[1:45:39] I mean it's just and he loves it.

[1:45:40] He doesn't even like to get picked up by us.

[1:45:42] I'm going to go get him because he's having so much fun over there.

[1:45:44] and he's made a lot of good friends.

[1:45:46] I think it's a great system that you'll have.

[1:45:48] I mean, I think the price is extremely fair

[1:45:51] and he enjoys it greatly.

[1:45:53] So.

[1:45:53] Thank you, sir.

[1:45:54] I'll blow the second on hand.

[1:45:56] The motion is second.

[1:45:58] Any of this further discussion?

[1:45:59] I'm not ready to make a decision on this.

[1:46:03] We have a motion in a second.

[1:46:04] All those in favor signify by saying aye.

[1:46:06] Aye.

[1:46:07] All opposed.

[1:46:08] Motion carries.

[1:46:13] All right, Mr. Carter, I think that was it for the dying.

[1:46:16] I think you've got some information to pass along

[1:46:18] to the council regarding the election schedule?

[1:46:23] Yes, I did.

[1:46:26] You watched the news that the United States Supreme Court yesterday turned down the legislatures

[1:46:32] appeal of the congressional, U.S. congressional districts that the judge and the panel of judges

[1:46:41] imposed and that was accepted by the North Carolina Supreme Court.

[1:46:45] So having said all that, we look like we're going to have an election.

[1:46:48] And the filing period has ended and the election is set for May the 17th.

[1:46:54] So staff has begun thinking about what about the swearing in.

[1:47:00] The elections on the 17th as a Tuesday would not have a meeting that night, but it would

[1:47:05] rather be on the Wednesday, May the 18th.

[1:47:08] Hopefully by May the 18th, you will have adopted your budget or will adopt it on May the 18th.

[1:47:14] Review the plans.

[1:47:14] from the 17th until your next meeting June the 7th is actually three weeks.

[1:47:20] The concept would be if you believe there's adequate time that on June the 7th

[1:47:27] the council members who have been elected would be sworn in. That gives three weeks.

[1:47:32] My question was going to be is that adequate time for those of you who've been through to get those folks invited

[1:47:39] because the concept again would be that the June 7th would be a swearing in ceremony exclusively with a reception, no business and so forth.

[1:47:48] Now, there will probably be a second meeting in June, because it's won the schedule, but normally in July, the first meeting has already been off the books.

[1:47:57] And sometimes, y'all, at least for the last year or so, have done away with the second meeting in July.

[1:48:01] So, again, it's important, I think, to consider getting the council back on June 20th,

[1:48:08] where the second meeting in June is, and so forth.

[1:48:11] But, again, does that sound reasonable to have the swearing in to be on the 7th and...

[1:48:18] What does state election law require?

[1:48:22] That requirement, as far as a period of time, it could be on the second meeting in June

[1:48:29] if you want to do that.

[1:48:30] The 7th of June is a workshop.

[1:48:34] The concept mayor would be to do away with the workshop.

[1:48:37] You've already adopted your budget theoretically.

[1:48:39] That's how you're hoping you'll have done.

[1:48:41] And if that would be solely a swearing-in meeting and so forth.

[1:48:46] Because I know y'all like to visit with your folks who you call,

[1:48:49] who supported you during the campaign and so forth.

[1:48:51] And so forth.

[1:48:52] And then we could have a workshop and whatever agenda items

[1:48:55] that need to be addressed at the second meeting in June.

[1:48:58] So everybody good with that?

[1:49:00] I was mean.

[1:49:02] I just want to give you a play and make sure you're comfortable with the time to, you know, if you said what?

[1:49:07] Okay, but we'll continue to work in that direction.

[1:49:10] Did we have a one city moment that I have one of the matter?

[1:49:14] Amy, would you please come on?

[1:49:22] Wherever you would like to stand.

[1:49:23] Okay.

[1:49:25] All right, so on Monday we had a award ceremony at the beginning of our officers meeting

[1:49:30] and we recognized our firefighter the year, our officer of the year, and a

[1:49:34] meritorious unit citation. Our firefighter the year was Logan Ruta. She's a

[1:49:39] firefighter too with us at the fire department. She was recognized for her

[1:49:43] dedication, her positive attitude, her hard work. She came in with no

[1:49:48] certifications since then she's gotten her firefighter, she's got her EMT, she's

[1:49:52] working on a technical rescue, and also her fire inspector. So she's definitely

[1:49:58] I'm going to be one of our upcoming leaders in the department.

[1:50:01] Next, we have Jimmy Davis.

[1:50:03] He's a second time recipient of this award.

[1:50:06] He has 25 years with the department.

[1:50:09] He's very dedicated to the department,

[1:50:12] to the personnel that serve under him.

[1:50:14] He's a mentor, and he helps develop personnel

[1:50:18] to enter into the engineer role, and also the tenant, and captain.

[1:50:23] He's also an advocate in the community.

[1:50:26] He helps with all the Christmas programs.

[1:50:30] He helped kind of disperse the Christmas angels where a lot of the crews participated this

[1:50:35] year to help out people in the community.

[1:50:39] He was also recognized for on a particular call.

[1:50:43] He walked a homeless person to McDonald's, bought them dinner, and then bought enough gift cards

[1:50:47] to make sure that he would be able to eat for the rest of that week.

[1:50:51] So he has a heart of gold and he's definitely deserving of this award.

[1:50:56] And then last but not least, we have a large group here, and they received the

[1:51:01] Maritories Unit citation for a call on West Francis Street in September.

[1:51:06] The members were Battalion Chief Kevin Davis, Assistant Battalion Chief Sean

[1:51:11] Kisner, Captain Brandy Bruns, Lieutenant Chris Gandy, Lieutenant Roger Parker,

[1:51:17] Firefighter 2, Kevin Hallowell, Firefighter 2 Logan Ruta, and Firefighter 1 Benjamin

[1:51:21] in Yeager. They responded to someone who was having difficulty breathing. They got there.

[1:51:29] They knew right away that they were going to need more resources in order to be able to help

[1:51:33] the patient and get him out of his dwelling. And we actually, you can't really see it on the

[1:51:39] picture, but we had to cut the front of the house in order to extricate him from his residents.

[1:51:45] So it was very involved incident and this group is definitely deserving of the award as well.

[1:51:52] So we're proud of these people, we're proud of the crews, we're proud of everyone that works

[1:51:56] at the fire department and we're happy to serve the citizens.

[1:52:25] You know, the interesting thing about that is that's the second time we've had to cut that same

[1:52:31] person out of the house, very large person. For more than 52 years, Gwen and I have experienced,

[1:52:38] For

[1:52:50] more than 52 years, Gwyneth and I have experienced life journeys together.

[1:52:55] During that time, we have been blessed with three amazing and successful sons.

[1:53:01] They're wonderful wives, six fabulous grandchildren.

[1:53:07] We've lived in Florida and happened North Carolina.

[1:53:16] We've been blessed to travel in Europe and Asia for the past 11 years.

[1:53:21] First, it's been honor and privilege to be your manager.

[1:53:35] Happy holidays.

[1:53:37] Under your leadership, much has been accomplished, yet much is still to be done.

[1:53:42] The city is fortunate that they have 560 plus dedicated and

[1:53:46] professional staff.

[1:53:48] They believe in ethics above all else, service to others before self, and

[1:53:53] quality and all that they do.

[1:53:55] and they're all committed to TNT today, not tomorrow.

[1:54:01] With that said,

[1:54:13] it is now time for Gwen and me

[1:54:15] to continue our lives and spirits.

[1:54:20] The last two with you will be May 23rd,

[1:54:25] so we get the budget adopted.

[1:54:28] In closing, I want to thank you for the fact

[1:54:30] you're committed to the Councilmanager Forum Government.

[1:54:33] You've always placed the needs of the many

[1:54:35] over the few and the powerful.

[1:54:38] I thank you for being people of honor and integrity.

[1:54:42] May the wind always be at your back,

[1:54:46] please come.

[1:55:11] Unexpected that everybody to hear this tonight, but Dr. Wooder, we've got still got you for

[1:55:19] a couple of months, okay, so we're glad of that as a council, I think I speak on behalf

[1:55:24] the council that you have done a tremendous job as the manager of this city.

[1:55:32] Right now I can't

[1:55:34] even put into words you know my feelings as far as you know what I've seen happened under your

[1:55:39] watch here. I know that you credit the council with a lot of the direction and guidance but without you

[1:55:47] at the helm as the manager there's not much of this would ever got done and that we can be very

[1:55:54] I'm very thankful to you as the manager, city manager of Jacksonville, North Carolina.

[1:56:03] And like I said, we still got you for two months, so we still expect great things.

[1:56:12] I'm sure you'll get us there.

[1:56:15] Councilor, I'm going to ask the clerk to put a closed session on the agenda for the March 22nd meeting to discuss the path or process in which we're going to head now.

[1:56:30] as far as making a name and an interim manager after Dr. Woodruff, please, the 22nd of May,

[1:56:41] and also look at what process we'll use and determine who the next city manager of Jacksonville

[1:56:47] will be. But until that time, Dr. Richard Woodruff is the city manager of the City of Jacksonville,

[1:56:54] and I think we're still in good hands with good leadership and again thank you

[1:57:01] and at some point time I will have the words that I need to say

[1:57:10] so we will this

[1:57:12] time take a motion to adjourn so move second all in favor all the post

City Council Workshop

Agenda

Transcript