[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.