[0:06] Okay, welcome everybody. We'll begin this evening with an executive session

[0:11] uh to discuss with legal council pending or potential litigation pursuant to

[0:16] RCW4230.110

[0:20] subsection 1 paragraph I. Executive sessions are closed to the public

[0:26] pursuant to state law. We will convene into executive session at 5:51

[0:33] for about 10 minutes and we expect to return to council chambers at 6 p.m. We

[0:39] invite city manager Pingle, HR Director Westman, and city attorney

[0:45] Schaefer. Thank you, to join the executive session. After the executive

[0:50] session, the council will

[6:31] and the council has reconvened. Um, the council did not take any action while in

[6:36] executive session. We're going to go into our study session

[6:42] about FS.

[8:55] Chris, can you hear us? >> We are still recording. So,

[9:01] » can't hear you. Hold on. >> IT person to figure out.

[9:06] » We'll get it figured out. >> You can hear us obviously.

[9:20] Try again.

[9:25] » Yes, we can barely hear you. So, >> that's good.

[9:31] » Now try.

[9:35] Oh,

[9:40] now go.

[10:24] It's still just coming out of here.

[10:32] Go again.

[10:37] » How well can you guys hear that?

[10:41] » I mean, I can hear, but it's not very loud

[10:44] » because it's coming through the machine. Um,

[10:50] » did you try all of them? >> I did. Um,

[10:55] » try again.

[11:03] Try again. >> I think he's just talking. Um,

[11:08] » it's only this is the only one that it goes through.

[11:20] » Yeah.

[11:24] » We can hear him through. Is it Is it going through the TV or is it going

[11:28] through the >> It's going through.

[11:29] » It's going through there. >> Yeah.

[11:32] » Um

[11:35] » Well,

[11:40] it's I don't know. I don't know. >> Yeah. Try.

[11:45] » It randomly works and it randomly doesn't.

[11:49] » Yes. >> Yeah, it's the same.

[11:55] Yeah, it's something with the mic in and the mic out. The audio. Yeah.

[12:00] » And which one you choose? >> It's something there. That's what it

[12:05] » change this one. >> I would just mess with all of them

[12:08] because I'm no way. >> Now go.

[12:15] » Same. Now go.

[12:22] That's not it.

[12:25] There we go.

[12:31] That's the only one that gets him.

[12:38] So, we can try your best to put that mic down by the speaker that's by your leg

[12:45] or we can I don't know call them on the phone and put that on speaker. Sure.

[12:50] It's one of those things that I don't know.

[12:53] » That might be easier. I'm going to call you.

[12:57] » Okay.

[13:11] » Hello. >> Talk some more.

[13:16] » Hello. Hello. It's gonna have to do.

[13:22] » All right.

[13:31] » As long as you can hear me. Okay.

[13:37] » What's that? >> He just said, "As long as you can hear

[13:39] me." Okay.

[13:46] » They pick up. I can.

[13:59] » All right. >> Okay.

[14:02] Well, we um are going to have a study session about fiscal sustainability.

[14:09] Um let the record show that all council members are present except for council

[14:15] member Berford. Um, city manager Pingle, are you

[14:21] starting us off? >> Thank you, Mayor. Um

[14:26] so as we talked about at the retreat and and since um we want to talk through

[14:33] potential options um as far as the fiscal sustainability model goes. Um

[14:40] we are super happy to consider um other expenditure reduction options

[14:47] if there are suggestions for those. we've implemented what we've put up in

[14:52] the past um as far as um things that are significant. Um and so we do uh we have

[15:01] been looking generally at revenue options um potential timing for those

[15:05] and what those look like. Um and so uh the other thing that we talked about

[15:11] at the retreat um and that um staff was um asked to provide is um a

[15:17] recommendation on a fiscal sustainability task force. And so in the

[15:20] packet was a draft charter. Um what what would be wonderful to get out of today's

[15:26] study session is um working the the council working through potential

[15:32] options um in an effort to provide some direction to that fiscal sustainability

[15:40] task force. Um if if we like the draft, I think that that's something that's

[15:46] easy to um put on the regular meeting, add it to the agenda and and adopt it.

[15:52] Um, if there are changes that you want to the draft charter, we can bring it

[15:56] back to a future meeting. Um, but what I would love to get out of the session is

[16:02] to walk through options. Um and um in an effort to dial up that task

[16:10] force, um it it's much more difficult to get some to get what we want out of the

[16:16] task force um if we're just um

[16:22] putting people on a task force and giving them um you know telling them go,

[16:30] but they're going blindly if if they don't know what where the council stands

[16:34] or what the council's preference is or direction is. Um it's much more

[16:38] difficult to get out of that task force what we want. Um and so what I would how

[16:43] however the discussion goes, I would love us to be moving towards some some

[16:49] direction um so that that task force can be put together and have

[16:55] a direction to go in from the council as they get together and and try to provide

[17:00] um help to the council and in looking through these options.

[17:05] » Thank you. Um, so we'll just kind of we we had a

[17:10] discussion about this at our retreat which was a good start. Um,

[17:16] does anyone have any clarifying questions from that

[17:22] discussion to start with or we can I'm just welcome to open the discussion.

[17:29] Council member Jacobs

[17:32] » just had one question. Um, so I looked at the population for 200 or

[17:39] the estimated population for 2027. Um,

[17:46] do we have any idea how many actual households encompass the 14,000

[17:51] residents?

[17:55] » Um, I can get a better number. I don't have that right off the top of my head,

[17:58] but we're in the the 3,3500 range.

[18:06] Does that answer your question? >> Yeah.

[18:11] » Okay.

[18:14] » Can I ask why you're asking that question so I can understand where

[18:19] you're coming from? >> Yeah. No, I was just uh playing around

[18:22] with the numbers and using 4% as a starting point

[18:28] of the utility tax dividing that by the residents. I was just trying to get a

[18:34] handle on households which might be interpreted a little better than saying

[18:40] each person the tax would burden would be on each

[18:44] person versus the household. That that was the reason for that.

[18:47] » Okay. Yeah, that makes sense. Thank you. So, um,

[18:54] feel free to raise your hand if you have anything to to say, but, um, just to get

[18:58] the conversation going, I, um, and I'd ask, um, Chris to jump on,

[19:05] um, I don't want to speak for him, but, I really did like, um, during the

[19:10] retreat discussion, um, the

[19:16] he put out a I think an attainable goal of of

[19:21] being above that red line, that um kind of minimum fund balance for the general

[19:26] fund, but you know, at least through I I

[19:30] believe you said 2032 at the retreat um Chris, but um

[19:37] this the graphs we're looking at only go through 2030.

[19:45] » Yeah. So, I'm going to jump in here real quick. Um yeah, I was just looking at um

[19:50] the and let me know if you can't hear me very well, but uh I was just looking at

[19:54] that red line um out to 2030, which is what shows on our uh which

[20:01] shows on the on the um sustainability work sustainability worksheet. So yeah,

[20:09] that was I mean I think that from my standpoint my opinion is obviously we

[20:14] can't I don't think we can flatten it completely. I think it is I think it's

[20:20] going to have to move toward the red line over the next um five you know four

[20:27] uh starting in 2027 the next four fiscal years. Um, so

[20:33] that's where I am on that on this. And I think uh and and um and I'd be

[20:39] interested to hear um what other people saw as they as they went through the

[20:45] worksheet and tried some different scenarios. But um just being above the

[20:49] line at 2030 um just was was my go was my personal goal in analyzing this data.

[21:00] I do have one other question or one question. Um, what was the growth rate

[21:06] on expenditures that was used in the projections? Do you have an idea the

[21:11] average growth rate? >> So, I don't have an average growth rate

[21:14] because it was the projections are put together with the line item budget and

[21:19] projecting out each line item and so every line item is treated separately.

[21:23] So there's line items that stay fairly constant and so we kept those fairly

[21:27] constant and there's line items that go up naturally and so we grew salaries and

[21:34] benefits according to how we have a step chart and we have um and have generally

[21:41] provided a cost of living adjustment. And so we we escalated those line items

[21:46] accordingly and then anything that has a regular escalator we use that. And so

[21:51] not every line item was treated the same. We tried to project out based on

[21:56] what that line item's been doing, the history of it, and how it might grow.

[22:01] » So, but there would be like an overall um percentage that's probably remained

[22:06] somewhat constant year after year, wouldn't it? Or did it vary? not because

[22:11] most of our outside of the things that naturally increase

[22:15] » um there's we've reduced a lot of

[22:19] expenditures over the last three years and so there's not like if if we were

[22:23] going to trend that we would be trending backwards which we're not going to do

[22:27] that >> right

[22:28] » um and so we've tried to just we didn't keep things artificially low we tried to

[22:33] keep things at a okay we're this is a constant that we can um feel confident

[22:38] with in the projection And then those things with escalators, we tried to

[22:42] escalate them um sufficiently without creating a whole bunch of fluff. And so,

[22:48] you know, public safety increases, salary and benefits, insurance cost

[22:52] increases, those things we tried to keep on a on a on a trending increase. And

[22:56] they're all a little bit different. Um, but most of the bulk of line items are

[23:02] fairly constant or we've really tried to reduce um, and lean those out over the

[23:08] last few years. And so there's not like a a trend to follow and so we tried to

[23:13] just keep those safe without making them fluffy.

[23:16] » Okay. Thank you for the explanation to the manager.

[23:20] » Thank you. Uh, can we go to the model utility tax tab?

[23:29] Yeah. Where where do you want to go with it? There's six of them.

[23:32] » Uh I was I was just curious in the model utility text. Um

[23:36] » it's old. >> It's old.

[23:38] » Yeah. >> So it's not relevant to anything we're

[23:40] discussing. Okay. I was going to ask if we could uh stratify based on different

[23:44] utilities. Um and that's an option for us if we were interested in utility tax.

[23:49] » Um yeah, we can do that but not tonight. We haven't used that

[23:55] tab at least in the last three and a half years.

[23:58] » Yeah. So I I think um I was interested looking at so do we need to

[24:05] do we need to escalate or lower everything at a uniform rate or can we

[24:10] have you know say 4% for one thing and and 2% for another.

[24:14] » So you can absolutely implement a utility tax that way. Um, and I would

[24:18] imagine we could update that tab to do that. We haven't looked at it that way

[24:22] and so we haven't prepared to do that. >> Yeah.

[24:24] » But if the council implemented a utility tax, you could you could have different

[24:29] tax rates for different utilities. >> Yeah. Okay. Yeah. I appreciate that.

[24:33] Sorry. And I apologize for not flying ahead of time. I was interested in that.

[24:36] The um to for staff to prepare. I think I'd be interested in having a

[24:41] conversation if we're looking at that about uh a higher rate for the more

[24:46] energy intensive things. I know there's certain things like I believe uh

[24:51] telecommunications on there. I'd be interested in lowering that one because

[24:54] I don't think that's as energy intensive. cable TV I was curious about

[24:58] given the um I feel like a lot of folks stream things nowadays and I feel like

[25:03] that would go generally into electric and I know ju me speaking as a Gen Z

[25:08] person I know like none of my friends have cable TV so I think it might kind

[25:13] of unfairly target older folks potentially um so I was interested in

[25:19] looking at what is most energy intensive and then maybe putting a higher weight

[25:24] on that and Then personally I was I was um if we're talking about sort of things

[25:31] we're looking at the um I'd be interested in some combination of that

[25:36] uh public uh.1% public safety sales tax uh transportation benefit district and

[25:44] sort of uh taking a holistic approach to adding all that. So if you wouldn't mind

[25:48] turning on is the the new tenant space is that currently on or is that off?

[25:53] » It's it's currently off. I can turn that on.

[25:54] » Yeah. We turn that on and then turn on um transportation

[26:00] benefit district tabs.

[26:05] Uh public safety sales tax.1%.

[26:13] Then the utility tax would be some level of I guess it wouldn't be the flat rates

[26:18] show on the screen if we're talking about the energy intensive approach, but

[26:22] you could just do 3% I guess for for example.

[26:28] So, I think when I look at this, the uh public safety sales tax and

[26:34] transportation benefit district, well, transportation benefit district uh goes

[26:39] to more folks that are potentially financially able given that it' be based

[26:42] on vehicles that you own, right? I want to make sure that uh young folks that

[26:46] are renting, I want to make sure that older folks on a fixed income are, you

[26:50] know, those are the people I'm thinking about the most when we're looking at

[26:52] revenue options. Um 0.1% public safety sales tax. I think

[26:57] that's you know a small amount and that is something that uh could be more

[27:01] uniform and then if we're looking at utility tax too and then you know

[27:06] putting the sort of uh energy intensive options higher that could be folks have

[27:12] some agency and also as a you know when we're looking at how we reduce our

[27:15] carbon footprint as well. I think um that could be a potential approach. I'd

[27:20] love to hear what other other folks have too, but just to get the ball rolling.

[27:31] » Oh, I I um I too was approaching this from uh trying to look at a variety of

[27:37] different revenue streams because they are going to vary from year to year and

[27:41] I think it's best to have um kind of a broad approach to solving this

[27:44] situation. So I um turned on the utility tax at um 3%

[27:53] transportation benefit district tabs as well. Um also the public safety sales

[28:00] tax but in addition a public safety levy. I think um bringing something

[28:05] forth to the people um from the public safety standpoint um a levy could be um

[28:13] could be a very smart move on our part and then the use of REIT for street

[28:17] maintenance and preservation

[28:21] and that got let's see

[28:25] » so that adds so the current adds the rate for street maintenance is there a

[28:30] level of public safety levy you'd want to include

[28:33] Um I just started with the uh10 10 cents per thousand. Yeah.

[28:41] » So that that's that scenario >> and it got us really really close.

[28:46] We could um we could bump up a different Oh, go ahead.

[28:50] » Oh, I was just going to say so based on what the way Mayor Sherlock introduced

[28:56] kind of the goal that council member Seenor talked about at the retreat. Um

[29:02] if so if that's a if that's the goal and and maybe it's not. Um really what we

[29:09] want to look at as far as the charts is not the top one but this middle one. And

[29:15] so the middle one shows ending fund balance. Um and then the red line is the

[29:20] required reserve. And so, Council Member Vil Seenor's stated goal was to

[29:29] stay uh above the red through 32, not

[29:36] necessarily above, and that's the red line, the 17%. Um, and not necessarily

[29:43] um solve it forever. And so, I just want to restate that. So

[29:50] as far as the charts go and what and as far as scenarios and what their impact

[29:53] that was um anyway I just wanted to have you focused on the right thing. So the

[29:58] top one is revenues versus expenditures in each

[30:02] given year. Um the bottom one or the middle the middle one the one with the

[30:08] ending fund balance and 17% reserve would speak more to that goal that was

[30:14] talked about. Does that make sense? But I was also going

[30:19] » was um solving the deficit issue um as you can see up above.

[30:26] » Yeah. >> I I I also feel more comfortable than

[30:29] just having 17% reserve having more robust reserves. But again, this comes

[30:33] from my personal bias being a financial planner where I wanted to see a little

[30:36] bit more cushion and the fact that um you know, cities come up against very

[30:41] unexpected events. Um, I would hate to see us run into a situation where um,

[30:46] we're having to borrow money to cover those unexpected expenses.

[30:52] » Yeah, thanks for sharing that. >> Chime in here real quick.

[30:54] » Go ahead. >> Thanks. Um, to uh, Council Member

[30:59] Blakeley's point though, I think it's I think it's it's nice to know that we

[31:03] could flatten it, right? I mean that's I mean her her uh her

[31:09] suggestions would flatten would flatten the line essentially.

[31:12] » Yep. >> Which is which is great to know and I

[31:15] think that's an important thing to keep in mind that you know we do have the

[31:19] ability to flatten it. Now I think from my perspective it is how far do we how

[31:26] close do we want to get you know you know can we do this in a way that that

[31:32] that gets us a little closer to the line before we flatten it. I think that might

[31:38] be that might be my point. Um, in terms of we could fix it today, sure. But from

[31:45] a from a from a from a you know what what can we what

[31:51] can we ask of the residents in Newcastle like how much can we ask them to do now?

[31:57] So, if we did it in if we got a little closer to the line before we flattened,

[32:02] I think maybe that's something that uh something to consider.

[32:06] um you know as we go forward here, right?

[32:11] » Yeah, Chris, you had mentioned I can probably play with it depending on where

[32:17] the where we want the conversation to go, but um Chris, you had you had

[32:22] mentioned um possibly looking at different implementation years for

[32:27] different things. Is that something that we want to try to play with?

[32:31] » Yeah, and I think that's an important things. Um, so

[32:34] » I can probably be nimble enough to do that in meeting.

[32:38] » Yeah. And that's Yeah. And that's and that's and again to to council member

[32:42] Blakeley's point, we can flatten this now, but I don't know if it's the right

[32:46] thing to flatten now. I think we could we could work ourselves a little closer

[32:51] to the 17% reserve number if and and then I mean, if we want to talk about

[32:57] that number, that's a whole different conversation. But if we wanted to get

[33:00] ourselves closer to 20% or maybe, you know,

[33:07] if we're comfortable being closer to the line before we flatten it, I think that

[33:11] would be that would that would make me more comfortable

[33:16] uh in terms of our in terms of how we how we look at this.

[33:20] Does everybody understand what, by the way, during study sessions, we

[33:26] can just use first names if everyone's okay with that, but does everyone

[33:30] understand what Chris is saying as far as flattening the line and

[33:36] um getting close to the line? Okay.

[33:41] Did you want to say something, Andy? >> I've looked at the numbers maybe a

[33:45] little differently. I started out with the 4% utility tax when I was playing

[33:49] around with the numbers because I think to Karen's point, sorry, Councilwoman

[33:55] Blakeley Frost um Frost Blakeley, sorry. Um

[34:01] » just don't call me Kevin. Yeah, I think if we can build up some reserve going

[34:05] into future years, um it might not be so stressful trying to figure out how to

[34:14] get to the point where we're um either flat

[34:19] um and not having any having to spend any money on the reserve side. Uh, I

[34:25] don't know if that makes sense to start at the 4 percent or work into the 4%,

[34:29] but we seem to be somewhere between the three and 4% utility tax as a starting

[34:35] point, it sounds like.

[34:40] » Yeah, go ahead, Karen. >> I had one other question. Uh, did this

[34:46] modeling also take into the fact that whatever additional reserves we're able

[34:50] to generate, we'll make money on? Did it did you factor that in like 3% or as

[34:56] we've been investing the cash reserves? >> Right. So it doesn't so so it plays out

[35:03] um investment income. >> It does.

[35:05] » Yeah.

[35:09] » So I think it's a good point to talk about reserves. Um

[35:14] um Scott, do you mind just turning everything off and just so we can see

[35:18] where we're at right now? Um,

[35:24] thank you. So,

[35:29] we have quite a bit of reserves right now. And I think the question is that

[35:36] between what Chris is saying and kind of what um Karen and Andy are saying is are

[35:43] we as a council willing to use some of that reserve

[35:52] for a little bit of time and maybe either

[35:58] do less now or wait till future years to do some things. but have a plan to do it

[36:05] or as as I'm hearing from you too is to keep those reserves

[36:12] because of whatever reasoning you know and I think that's something that this

[36:17] is for me this conversation like city manager said is really to have on

[36:25] record for this hopefully this task force that I personally I'll just say

[36:29] right out the gate I'm really supportive of the task force um for them to be able

[36:35] to look back to this discussion and understand

[36:42] cuz where we're at as a council because I you know they can recommend

[36:47] whatever they want to but in the end it it is the council's decision to act on

[36:52] anything and I think it is helpful to say as we're doing you know what we're

[36:59] comfortable with. So, I really appreciate you guys saying that because

[37:02] I think I'm more on um with Chris where I'm a I'm a little

[37:08] more comfortable not spending at all, not going all the way down to the red

[37:12] because I I do think it is worth having a conversation about where that that

[37:15] line is. Um

[37:20] personally, I feel like government takes in taxes from all of

[37:26] us. we should invest that money into our community pretty quickly. I know that

[37:33] there are emergency situations and we can talk through that. I don't know what

[37:37] that number is right now. We have to have that discussion separately. And I

[37:41] think that um I'll be honest, I think what we have in

[37:46] reserves is quite a lot right now. >> Yeah. Can that's just where I'm at.

[37:51] » Can I give some context to that just briefly? So, at the end of 2026,

[37:56] we'll have the the ending fund balance in the general fund will be the highest

[38:01] it's ever been. That's true today. That was that's been true for a few years.

[38:08] Um, we'll we'll be over 8 million this year

[38:12] in ending fund balance. That's a super positive thing. Um, and so that but that

[38:18] ending fund balance has been building for several years significantly as as

[38:22] the city has tried to tighten its belt a little bit over the last few years and

[38:27] um and so that it's worth have keeping that as part of the conversation I would

[38:32] I would recommend.

[38:36] So my question then is um it sounds like we're trying to get to a number

[38:42] uh on the um on the fund balance that everybody's comfortable with. Is it 5

[38:49] million? Is it 3 million? Whatever that number might be. I think that's going to

[38:55] be important to figure out before we

[39:01] I mean to me I have no idea what's going to happen in 2030 2029.

[39:08] Uh I hope we're all still here to figure that out. But um it strikes me that the

[39:14] more money we have in the bank today, the less issue there might be in 2029 or

[39:22] 2030 with some of the things that could happen by then with the city. Um but I

[39:31] think at some point we have to decide what we're comfortable with leaving in

[39:35] the reserve and make a decision on that because that will impact everything

[39:40] else. that we do or talk about or give to the um panel to discuss

[39:55] » anyone. >> I I would say that that's I think that's

[39:58] a um I think that's a doable thing. So,

[40:06] um, if if 17% reserve is not the number, we needed to figure out what that number

[40:11] is. Um, and I I don't think, um, while it's hard to think in

[40:17] percentages, I think that's the way that you need to

[40:21] think about the reserve. So, right now, we have about a $13 million general

[40:25] fund. Um, and we're and we're at about $8 million in general fund fund balance.

[40:33] That's that's a a healthy dose of the total general fund, but the general fund

[40:38] expenditures are going to expand over time. Um, and so that as that $8 million

[40:46] diminishes, you got to think about it in the

[40:50] percent, you know, $8 million out of 15 million is a smaller percentage. If

[40:55] you're $5 million out of 15 is a much smaller percentage. And so you want to I

[41:01] don't know that you want a dollar amount to keep in reserves because that

[41:03] percentage is always going to change. You want to make sure you're comfortable

[41:07] with the percentage and fund balance that you have um per general fund

[41:12] expenditures because that's going to change as you move forward down the

[41:16] line. And so

[41:22] and so if if 17% is the number, great. How close to 17% are you willing

[41:29] to get before we have some kind of an adjustment that takes it back the other

[41:33] way? If 25%'s the number, okay, how close to 25 are we a bit going to get

[41:38] before we have to do something to make it go back the other way?

[41:43] » Uh just another comment again, the the financial planner here. Um, I remember

[41:48] the days of cities going through recessions and um, having to really

[41:53] tighten the belt and we have a lot of municipalities right now that are in

[41:56] tough shape and we're very fortunate to to be in uh, such a flush position. So

[42:02] again, my comments are always coming from that framework is that I want to

[42:06] make sure that we have enough in reserves that we're able to weather

[42:09] those storms um without having to to um be too lean or having to take out loans

[42:15] or other dire u situations because recessions do happen and unusual things

[42:21] happen and we just need to to plan for them and we need to remember that that

[42:25] money that we we have set aside it's not just sitting idle. will be making money

[42:29] for us. So, or money for the city. >> That's a good point. Tom, did you have

[42:35] anything to add? Haven't heard from you yet.

[42:39] » Well, we were at 25% u and scale back to 17%

[42:45] since uh I've been on the council. U we were we were some time ago thought that

[42:52] we needed the 25%. And I think that caused us to look at we

[42:57] need to maybe have a utilities tax because we we can't get uh down close to

[43:03] that 25%. And then since then we've changed it to

[43:09] the 17%. And I think sometimes we look at the reserve and say that's not real

[43:15] money. We can't spend that money. Well, yes we can. It's what we have it for is

[43:20] to spend it if we need it. Um, you know, I've heard some people on the council

[43:24] say in past is, "We're not a bank. We shouldn't have money in the bank." Well,

[43:29] yes, we have to have money in the bank because we have staff that we have to

[43:33] pay and sometimes we don't have our tax coming in to cover that. So, you can't

[43:39] just all of a sudden say everything is u even. you know, we get our tax in a

[43:44] couple of times a year. And um we've been very fortunate to be uh in as good

[43:49] a shape as we're in. It's if you look around us and you see the other cities

[43:53] that are struggling, we're not at that point yet. And whenever and 20 we were

[44:00] talking about a utilities tax and a couple of says we need to wait because

[44:05] uh if we wait two years, we we can see that we won't really need a a utilities

[44:10] tax for a couple of years. and uh but we went ahead and went after it but didn't

[44:15] get it. So, here we are. We're still in better shape than we thought we would

[44:19] be. So, I uh I don't know uh how we we guesstimate exactly what we're going to

[44:28] do. You know, the this year is a kind of a prime example. We could have had a a

[44:34] two week snowfall and we could have spent a lot of money on cleanup. uh we

[44:40] didn't have and so we don't know where we're going or or what's going to what's

[44:44] likely to happen. So um granted we need to be sure that we're

[44:51] able to take care of the the place. We need to have money to pay people and

[44:56] we've got plenty right now. Uh we're better off than what people projected we

[45:02] would be by now. So I don't know how we project it. We have to find a bunch more

[45:10] in order to keep things going. We as long as that if we keep control of the

[45:16] expenses and watch what we're doing, uh we

[45:19] shouldn't have a a real big problem of of getting through this. You know, we

[45:24] wound up last year with uh probably what $100,000 at uh to the good

[45:34] » for 2025 we're we're a little over a million to

[45:39] the good, but that was, you know, 2025 was one of the biggest development

[45:44] revenue years we've had. So that was >> well, you know, we didn't have some

[45:47] development revenue for quite a few years there. So,

[45:51] » yep. And so, and that's a lot of factors, but

[45:54] » found money. No, that was onetime money because we had a one-time loss. We had a

[46:01] time of u we didn't have much development going on.

[46:05] » Okay. >> It's not probably too far in the future

[46:08] that we may not have much development going on because we're running out of

[46:13] places to develop. >> That's right.

[46:15] » So, that would be a concern that we need to have. Yeah.

[46:19] » And to some extent that's played out in the in the forecast as far as

[46:24] development revenue diminishing. Um, so

[46:32] » maybe I'm missing something, but we got a problem going into 20127

[46:38] and somehow we need to figure out, are we going to spend the money out of our

[46:41] investment to not have a problem next year? or are we going to look at what

[46:48] our options are to keep the money where it's at growing in case we need it as we

[46:56] get into the next few years. Um, we're not going to be in good shape next year.

[47:02] I mean, the numbers play that out. So, we either got to figure out if we're

[47:06] going to spend investment money to make it right

[47:11] or do something about it now going into the next four years.

[47:19] » Yeah. I think u I think I'll share my frustration since I've been on the

[47:24] council. It feels like we've always just looked at the year we're in and maybe

[47:30] the next year. And for me that

[47:38] doesn't uh feel reassuring.

[47:44] Um, I think looking at a six-year forecast like we're looking at here or

[47:50] fiveyear, I guess, um,

[47:55] I I think that that's how we should be planning our budgets and revenue

[48:02] sources. I think it's important to at least

[48:08] know that we're we're going to be able to pay our bills 5 years out. That seems

[48:15] reasonable to me. Um, so I personally am in favor of

[48:23] through this task force coming up with a plan

[48:28] that likely will be some new revenue um

[48:35] to be able to look at that second graph with the blue bars

[48:41] um and have it I I It sounds like I'm hearing

[48:48] from a few council members

[48:53] they would want to be well above that red line and that's that's good

[48:56] information to to know. Um I'm not opposed to that. I think I'd

[49:03] probably be maybe maybe I'm more comfortable getting a little closer.

[49:09] I'll just you know just in honesty. But if everyone is really feeling like we

[49:15] should be we should have a healthy reserve, I I would be I think that's a

[49:20] discussion we have and I'm I'm definitely willing to listen to that

[49:24] discussion and understand where everyone would feel comfortable.

[49:30] Um I'm not comfortable with just waiting to see what happens next

[49:37] year. I I personally I think we need to do something and I really think that

[49:44] having a a task force established um and getting a really a a a wide range

[49:51] of people on that task force with differing opinions to really um look at

[49:58] what we're dealing with and understand the forecasting. Like Karen's asking

[50:04] great questions. What is in the forecast? we should know that to make

[50:08] these decisions. And so really allowing that group to ask those questions and

[50:14] dive in uh to Paul's point, you know, maybe it's

[50:20] even more nuanced with the utilities tax. Um how do we get to a place where

[50:26] we're all comfortable with the five-year outlook?

[50:32] And I think to Chris's point, I would support

[50:37] getting to where we're comfortable with the least amount of added revenue as

[50:42] possible just because from my you know six plus years on council I have heard

[50:48] from our community that it is important to not

[50:53] ask for too much and I I really take that deeply into account. We shouldn't

[50:59] just do it just because we can. I I agree with that. So I think taking the

[51:04] time to really look at everything, look at all the

[51:08] options, understand the why and the reasoning behind and where people are

[51:13] comfortable or not comfortable in why. That's what needs to happen so that we

[51:17] can hopefully come to a a place where everyone maybe not

[51:23] everyone gets everything they want, but we're all at least comfortable that

[51:27] knowing that we're putting this this council in this moment is putting this

[51:31] city in the best place that's reasonable for us to to to do. And for me, that's

[51:37] looking 5 years out and saying, "Okay, we're all comfortable with that

[51:41] projection. We feel like we're putting the city, we're leaving the city in a

[51:45] place that um is sustainable at least for that time period because that's what

[51:50] we were all elected to do for that time period.

[51:56] We've got about 11 minutes. Um but anyone can I don't have the last word.

[52:04] Go ahead. Did you want to speak? Uh Paul, did I see your hand?

[52:08] » Sure. I think Yeah. Yeah, I mean candidly I've looked

[52:11] at this same Excel sheet for four years going on five now. I think uh very

[52:18] little has changed, right? We've talked about revenue options. We've looked at

[52:22] different things. You know, we've added some expenditure reduction options,

[52:25] right? Tenant space, REIT. Um I think

[52:31] it's it's been it's felt like talking in circles on it for for quite a while. I

[52:36] think what it sounds like, you know, not coming to any decisions

[52:42] tonight. I think what it sounds like is we all there's a consensus that we don't

[52:46] want to be operating at a deficit and that we

[52:50] want some level of reserve. the specific amount we can figure out. But I think

[52:54] there's a general feeling that like we need to

[52:58] diversify our revenue and we want to take a longer

[53:02] term holistic approach than yeartoear and I think I've I've heard that

[53:07] hammered on sort of again and again and I I think I want to you know get moving

[53:12] towards the action action part and the action stage because these things take

[53:16] time to implement. they take time to engage with.

[53:19] And I think what I what I'm like I think it's very clear the approach

[53:24] that we'd like to take is we've had these conversations early. We've had

[53:28] these conversations often. We have council members still in their first,

[53:32] you know, barely in their second quarter of council service deeply having these

[53:35] conversations on budget uh to their credit. And it sounds like the approach

[53:39] is moving forward with a task force that would have members of the community to

[53:44] study it independently as well before we move forward with that action. Right? I

[53:48] have actions I'm comfortable taking with a little bit more study. But if we marry

[53:54] the idea of uh action with some more community input as well and engagement

[53:59] on that process, um yeah, I would like to take action at some point this year

[54:05] or some point early next year. uh because I don't want to wait to plan for

[54:10] the long term and I don't want to uh yeah I I don't the prospect of operating

[54:15] at a you know 1.5 million def close to 1.5 million deficit in 2027 that's not a

[54:20] sustainable practice. So I'm like I think I've talked in cir like

[54:26] we've talked in circles with this Excel sheet for so long that literally parts

[54:29] of it are not updated from 2022. like that is if that does not elucidate that,

[54:33] I don't I don't know what does. But the um

[54:38] yeah, I'd like to move start moving forward with action. I feel like I've

[54:41] beat on the same drum over and over again for for quite a while. So, let's

[54:45] get the task force going. Let's make start making this happen and stop um you

[54:50] know, stop living in the theoretical side. start actually practically doing

[54:55] something and having the um confidence and sort of um

[55:01] you know doing what our jobs are quite honestly to go and figure out how to run

[55:05] the city in a in a sustainable way.

[55:10] » Well, to look back just a little bit a couple years ago, uh the finance

[55:15] committee felt sorry for the city manager and having to put a budget

[55:18] together and decided that we ought to get a little more revenue. So, we got

[55:23] the admissions tax going and we've added that to it, you know, and that obviously

[55:29] helped quite a bit, did it not?

[55:34] » It helped. 330,000 worth.

[55:37] » Yeah. We were guessing it'd be 250 $250,000.

[55:40] » Yep.

[55:46] Maybe I'm mistaken, but I haven't heard the criteria that Scott's looking for to

[55:51] get started with the task force. Isn't that what we were talking about

[55:55] originally? Some framework to give them the opportunity as a starting point.

[56:04] » I think we ha I think we have having this discussion and being able to hear

[56:09] where everyone's at. It was that part of that goal.

[56:13] Um, I think before our time is up on this, I would like to

[56:20] understand how people feel about this. Um, in your packet,

[56:25] there's a draft charter for our task force. Did anyone have any

[56:33] Do we like that? Do we have any things we would want to change?

[56:38] um

[56:41] would love to hear thoughts on that. Personally, I I think it looks good, but

[56:47] I'm would love to hear what others think.

[56:51] » How do will that task force be determined?

[56:59] I I see the criteria, but my question is, is that a

[57:06] is somebody going to apply for the task force? Are we going to put it out to the

[57:10] public and how many people and so on and so forth?

[57:15] » Yeah, I think so. in here. And now it's it's up for debate, but um in here

[57:23] in this draft, it's suggesting it would consist of five to eight members

[57:28] appointed by the mayor with confirmation by the city council. I personally would

[57:32] um I see that as similar process as our like commissions where people we'd have

[57:38] an application period um and then as the mayor I would appoint but then

[57:45] that the council would have to confirm those appointments. Does that answer

[57:50] your question? >> Okay.

[57:54] Does anyone have any issues with this draft task force?

[58:00] Go ahead. >> I uh not issues just a suggestion that

[58:04] perhaps a start date be added so that that like a um that it would be formed

[58:11] say by June 1st um and then come back with the first recommendations by such

[58:16] and such a date so that we could review. To everyone's point, it sounds like we

[58:20] don't want to kick the can down the curve any longer down the road,

[58:24] whatever. We want to actually um initiate some action. And so I think by

[58:28] having a timetable built into this then we're more likely to get pull the

[58:32] trigger on something towards the latter part of this year.

[58:38] » Um can I suggest that we make that so if

[58:42] the count we want to adopt the task force by council vote

[58:48] I would suggest that we make those dates a part of the motion. I don't know that

[58:52] they necessarily need to be in the charter just because that would depend

[58:55] on okay when are we bringing them back to be confirmed and all those things. Um

[59:00] and so whether it's tonight or whether it's maybe we add those dates when we

[59:05] make the when we have the confirmations of those um just so that we're um

[59:14] I think we're always going to be with the with the charter itself. I think

[59:18] we're going to be dealing with a moving target until we get applications out and

[59:21] have when they're going to do we're going to confirm them on May 19th or we

[59:25] can confirm them on June 2nd. I I wouldn't want to put the dates in the

[59:29] charter just because it'll be a we don't have the process for it in the

[59:35] charter. Does that make sense? >> So you're suggesting the motion not in

[59:39] the charter, >> right? or either in the motion to

[59:42] approve the task force itself or maybe even when we confirm as we confirm

[59:49] members of the task force will say okay the start date is June 1st and the

[59:55] recommendations are due by the you know second meeting in August or the

[1:00:01] by January or January whatever we decide but

[1:00:05] » does that make sense so just to clarify we it's not in uh notice for us to make

[1:00:12] any motions during this study session. But if um if the council wants to add an

[1:00:20] agenda item to our regular meeting during agenda approval

[1:00:24] to um establish this task force, then we could add that

[1:00:30] um then and then discuss and and potentially take action.

[1:00:37] Any other thoughts? Uh Chris, we haven't heard from you for a while. Do you have

[1:00:41] any thoughts on the task force charter?

[1:00:47] » Great. >> Yeah. So, as far as the task force goes,

[1:00:50] I think that um I like I like the charter. I like I mean I like the scope

[1:00:54] of work. I think it makes perfect sense. Um I was trying to in my mind just sort

[1:01:00] of clarify the the budget calendar for this year. Um,

[1:01:07] city manager Pingle, do you have do you have a sense for those dates when when

[1:01:12] when those first drafts are due um from your from the budget from your

[1:01:18] desk? >> Yeah, I mean the budget calendar um

[1:01:22] generally goes along the same lines each year. We we plan on we want to have um

[1:01:30] we we post a preliminary budget by the last Friday

[1:01:35] in September. >> Okay.

[1:01:37] » So that we're prepared to have those uh budget study sessions starting in

[1:01:42] October. >> Right. So any so any work that a formed

[1:01:48] task force we'd want to give them at the very least I would think three months.

[1:01:55] So that would mean that would give them July, August and then September. So

[1:02:02] depend I mean if that if that task force is going to meet on a monthly basis that

[1:02:08] would give them three meetings is that enough? um is that um I mean these are

[1:02:13] these are these going through my mind in that you know what small adjustments can

[1:02:19] we make as a council uh for the 27 budget and then take into

[1:02:25] consideration larger changes for a 28 budget. So again, not I mean we do have

[1:02:33] some room to glide down a little bit. If you look at the you know if we look at

[1:02:38] the if we look at it it's you know 2027 looks like ending balance is 7 and a

[1:02:45] half then six at the end of 2028. Uh and then you know at that point you

[1:02:52] know if we give the task force some time more than three meetings in

[1:03:00] 2026 and trying to come up with something for 2027.

[1:03:03] I'm comfortable going to 2028, making maybe a small adjustment outside

[1:03:08] the task force for us as a city council to make a decision on, and then leave a

[1:03:14] larger decision um for debate amongst the task force and a recommendation for

[1:03:19] a 28 budget. That would give that group a lot more time um more than three

[1:03:28] meetings. It would give them perhaps a year and three meetings, right? that

[1:03:33] would give them maybe a dozen meetings. So, um that's that's how I feel about

[1:03:38] it. I think that forming it um relatively quickly is fine, but I don't

[1:03:44] I I wouldn't expect a recommend a fully formed recommendation from a task force

[1:03:50] for a 2027 budget.

[1:03:58] » Go ahead. >> Just a comment. My my concern about that

[1:04:03] would be if we go into 2027, something's going to happen and all of a

[1:04:09] sudden we're into 2028 or or whatever. I'm not suggesting that they have to do

[1:04:14] their job in 3 months, but um the longer we prolong this, the harder it's going

[1:04:21] to be to get it done, especially going into 2027

[1:04:25] for the 2028 budget. We're already now two years out from where we need to be.

[1:04:31] So that would just be my concern with prolonging it

[1:04:36] » and and if so what I what was in the draft um as far as timeline was that

[1:04:42] they would operate for they would operate for approximately 6 months. If

[1:04:46] we want to do something different um we can certainly have that discussion and

[1:04:51] and we don't necessarily have to

[1:04:56] approve this at this meeting. um if if if we're not ready to and we want to

[1:05:00] discuss that timeline more as far as how they how they operate. I I agree with

[1:05:06] Chris that 3 months is quick. Um

[1:05:13] I I would also add though that implementing new revenue

[1:05:19] doesn't have to be at the same time as adopting a budget. you can because it it

[1:05:26] takes time to do things. I mean, it's ideal to do it that way, but it's not

[1:05:31] you don't have to have enacted the new revenue.

[1:05:39] We can always do budget adjustments, I guess, is what I'm saying. And so

[1:05:43] we can because it also if we're if we're looking at anything that's going to go

[1:05:47] to the ballot that's going to take quite a bit of time

[1:05:52] because you have to go through that process. Um so I would personally feel

[1:05:57] more comfortable with splitting the difference a little bit

[1:06:02] and giving that giving Apple time not rushing. But I I agree. I think we can

[1:06:08] hash out the timeline later. I think it's really more of do we

[1:06:13] like the idea of this task force and do we want to establish that as kind of our

[1:06:20] next step. >> To me that's the question that we're

[1:06:23] we're facing right now.

[1:06:28] » So okay I do um agree that this is a good step to take. Um uh not only is it

[1:06:35] um very helpful to get additional information from um the citizens but um

[1:06:41] other experts out uh in our community that uh we perhaps haven't engaged

[1:06:46] before. So I would say moving forward with that and then working perhaps in

[1:06:50] the next meeting on a timeline makes sense so we have time to noodle this and

[1:06:55] think because we could also um task them with coming up with um some

[1:07:02] modest income um uh increase that we could implement for 2027 and then a more

[1:07:09] comprehensive package um for the 2028 budget because I agree three months is

[1:07:14] not enough time. Um, one last comment regarding reserves. Again, in my world,

[1:07:19] financial planning hat, we typically ask people to have three to six months in

[1:07:23] reserves. Um, because too many unexpected things occur and um, your

[1:07:29] budget gets blown. So, all right, we're we're over time. I'll I'll shut up now.

[1:07:34] » No, you're good. >> Okay.

[1:07:36] » Can I summarize what I think our marching orders are? Um, so we'll I'll

[1:07:41] we'll plan on bringing back a discussion item for the Feb or for the April 21st

[1:07:46] meeting so that we can hash out a timeline any any at least initial

[1:07:52] marching orders for the task force and have it on for action so that the

[1:07:57] council can hash that out and then take the action if you're ready to do that.

[1:08:04] » Does that uh does anyone have any opposition to that instead? So, you're

[1:08:08] you're suggesting instead of adding something to the agenda tonight,

[1:08:11] um taking some time and bringing it to the next meeting.

[1:08:15] That makes sense. Sounds like I've got all head nods, including Chris. Thank

[1:08:20] you. Okay. Well, thank you everybody. That was really a great discussion. I

[1:08:24] appreciate everyone uh participating. Um, I know we are over when we norm over

[1:08:32] time when we normally start, but um I'm going to ask for about let's uh let's

[1:08:38] start the regular meeting at 7:10 so we have time to get on um Council Member

[1:08:43] Brford on Zoom and maybe have a little quick bio break. Thank you.

2026-04-07 Council Special Meeting

Transcript