[0:00] Apologies, guys. Won't happen again.

[0:02] No problem.

[0:03] Do we want to wait or start?

[0:05] I think we start.

[0:05] Okay.

[0:06] Yeah, I think we start.

[0:07] All right. It is 8:44.

[0:08] We're ready to go. Okay. We're ready to go. Okay.

[0:11] 8:44.

[0:12] Entirely my fault.

[0:16] No, no, no worries.

[0:17] Um, calling the meeting to order at 8:44.

[0:21] I think we'll start with the minutes.

[0:25] Oh no, first let's Um, Grace Bennett, Chair.

[0:29] Erik Milam, not Chair.

[0:32] And Steve Collie, City Manager. Great.

[0:35] Um, all right, I've not reviewed the minutes.

[0:37] We can do that now and see if we have any changes.

[0:39] Uh, it was a pretty, uh, open discussion.

[0:42] Uh, we didn't really have much, uh,

[0:46] much going on at that last meeting.

[0:51] Okay.

[0:53] There are no changes. Do I have a motion?

[0:56] Motion.

[0:58] Second? Second?

[1:01] I can second it. You can second it.

[1:02] Yeah.

[1:03] All in favor? Aye.

[1:04] All right. Uh, 2 and, uh, 0. So passed. Okay.

[1:11] We have signed copies for you later. Okay.

[1:15] Did you guys both sign it?

[1:17] Yes, we did.

[1:17] Okay, excellent.

[1:19] Okay. So we can move on then with our agenda.

[1:24] I just am walking it on,

[1:27] but you'll see here the template review of the investments.

[1:33] I mean, I think my big takeaway is the yield has gone up a

[1:40] little bit, or stayed about the same actually.

[1:45] Yeah.

[1:46] The duration has ticked up slightly.

[1:49] I think before we jump into numbers and like where the budget is,

[1:54] I know there's a lot of storm stuff.

[1:57] The as far as like duration and yield,

[2:00] I know we've been trying to go out a little bit further.

[2:04] I don't know if we would have that recommendation for stone is just to

[2:10] recommendation for stone is just to continue to

[2:11] try to take it out a bit. It's nice to be able to see.

[2:15] You know, since March of '25, that average duration was less than a year and a half.

[2:22] So we've certainly increased it.

[2:24] Yeah.

[2:26] I would be curious, like, what you all are doing and if there's—

[2:31] Yeah, no, I mean, it's— well, I mean, I would agree with you.

[2:38] I mean, I was expecting to agree with you. I think we— Sort of.

[2:46] We're not in the business of forecasting what the Fed is going

[2:53] to do, but I mean, all sign.

[2:57] I mean, on a lot of levels,

[3:00] extending duration makes a lot of sense,

[3:04] and it's it's likely the best decision to increase the yield

[3:12] within the parameters of our.

[3:15] Increase duration some that we can and not get outside the—

[3:22] our guidelines of what,

[3:25] what the city needs in terms of the money.

[3:30] Yeah.

[3:30] So just to recap, kind of, you said there's a lot of storm stuff.

[3:37] So, I mean, are we Needing to beef up our emergency fund above

[3:44] target, kind of, is the— to put a personal spin on it, like,

[3:50] like LGIP, are our targets still adequate given the current situation

[3:58] with the city?

[3:59] Yeah, what I guess it would be helpful What are the expected—

[4:05] so the last time we had kind of expected expenditures,

[4:10] $3 million.

[4:11] Uh, you know what, then we have the additional liquidity.

[4:16] My—

[4:16] this air conditioner is right in my ear and I cannot hear you because

[4:22] it's kind of muffled.

[4:24] So, um, so here's, uh, you're talking about the duration.

[4:29] Um, what happened there was we had those long, uh, low-interest, uh,

[4:35] Treasury notes and all that, that fine, and CDs that finally came due.

[4:41] Yeah.

[4:41] So if you'll— if you can go back and you'll notice that most everything we have

[4:48] you'll notice that most everything we have in

[4:48] there, we've gotten rid of that 1-point-nothing percentages except for one

[4:53] 1-point-nothing percentages except for one Treasury

[4:54] note in there that's going to come Come due soon.

[4:58] But, um, there's, um, um, that's, uh, how that duration had gotten improved.

[5:04] And we'll be able to do that as we go along.

[5:07] Sure.

[5:08] But, um, the, um, one thing that I don't know if I had shared with you all,

[5:14] and I meant to do it at this meeting, but I will send you—

[5:19] the board did a fund balance policy, uh,

[5:22] based on the request from the comptroller's office. Because we didn't

[5:28] comptroller's office. Because we didn't have one.

[5:29] And normally they ask—

[5:30] the comptroller has suggested somewhere between 25% and 30% of your current budget

[5:37] in fund balance. And our board wanted 50%, like we've always talked about.

[5:43] And is that what would be considered LGIP? Is that fund balance?

[5:48] That would just be— all of it really is fund balance.

[5:53] Everything that we have in reserve is considered fund balance.

[5:59] So we have plenty of, we have plenty of room there to be over that,

[6:05] meet that 50% of budget.

[6:07] So I will send you guys a copy of that after the meeting.

[6:13] So you'll have that for your file. Okay.

[6:17] Okay. Well, and I guess looking at the vehicles, like the holdings now,

[6:22] there isn't anything that's going to come due until May of next year.

[6:27] Right.

[6:28] So we'll just see that duration tick down slowly over time.

[6:33] I guess if, if slash when more money comes into Stone,

[6:37] then the ask would be that it gets on the furthest end.

[6:43] So, um, I don't want to digress on your report,

[6:47] but just about pointing out this, um, this report that I sent you all on the,

[6:54] um, on the winter storm, um, reimbursement.

[6:58] Um, our total spend, as you can see, was $3.5 million,

[7:03] and what we have requested for our reimbursement portion that we think we

[7:10] should get back would be $2.6 million.

[7:13] So our estimated out-of-pocket after we get our—

[7:18] we file at TEMA would be around $442,000.

[7:21] So that is really, if all this falls in place and works like it should, I mean,

[7:29] that's really dodging a bullet for our—

[7:32] Yeah.

[7:34] Our $2.6 million that we actually spent that we don't— that we'll get back.

[7:39] So, uh, when that comes back in,

[7:42] we'll just roll that back into Stone for a treasury note or CD,

[7:46] whatever looks best at the time.

[7:49] And, uh, and then keep the LGIP at around 1.5.

[7:52] Yeah. Keep the LGIP right. Kind of where it is.

[7:55] Okay.

[7:56] Um, I think that's, that was kind of our goal to get the LGIP there.

[8:01] Mm-hmm.

[8:01] And how we spent money to pay for the storm cleanup just kind of worked out that

[8:08] way. So I'm pretty encouraged by us getting the money back.

[8:13] Just this morning, we got all of the last part of the last million submitted to

[8:19] FEMA. So it's all submitted, and they're reviewing it now,

[8:24] and we just have to sit back and see if they cut a check.

[8:28] But I would I will say on the TDEC grant, if you all recall,

[8:33] the TDEC grant was $738,000,

[8:35] and we've received all of our reimbursement back from that.

[8:40] Oh, great.

[8:41] So it sort of went back into the checking account because we were

[8:45] just paying out of checking like crazy when we were doing cleanup.

[8:50] So is there anything outstanding?

[8:52] There's no outstanding bills at point to cover Fern?

[8:55] No, everything that— everything that— everything else from Fern has been paid

[9:02] everything else from Fern has been paid off.

[9:02] So we don't need additional liquidity?

[9:04] No, no. So that's, that's done.

[9:06] So, you know, the thing is, I mean, we always talk about this rainy day fund,

[9:11] and it's a good thing we had it, because if we hadn't had it,

[9:15] we would have had to go borrow money to do that.

[9:18] Right, half a million dollars.

[9:20] Yeah. Is that— is that—

[9:22] John, I think he's coming in.

[9:24] So, is there—

[9:32] so it seems like LGIP is where it needs to be. So our direction to—

[9:39] Morning.

[9:42] Morning, John.

[9:43] I apologize.

[9:47] Looks like we've got— let's see, what's coming due? I'm trying to find—

[9:52] Not until '27. So that's where once the— basically,

[9:56] I think the short of it is I don't know what the timing is on the $2.6 million to

[10:02] get reimbursed, but that would flow back into Stone.

[10:05] And I think our ask is then that it's on the higher end of the duration allowed.

[10:11] Yeah, right. Yeah.

[10:16] Do you have any idea when the funds might come in?

[10:19] Well, we had submitted this in categories,

[10:24] so we had about $1 million in one category that will come

[10:30] back, and then the rest of it will come back in another

[10:37] category. I got a feeling it'll,

[10:41] it'll kind of slow back in and increment.

[10:46] You mean they're not in a rush to give you all the money?

[10:48] No, they're not in a rush.

[10:48] Wow, that's so surprising.

[10:50] Um, but I will say this, you know, and I've always had, you know, real, uh,

[10:56] I don't know, I don't want to say be too harsh,

[11:00] but I've always worried with FEMA because they work really hard to find ways to just

[11:07] credit your, your reports. But they, they worked with us really well.

[11:13] They, they checked back with us, reviewed the reports.

[11:18] I mean, it was a huge undertaking,

[11:21] and Desiree has done a terrific job in keeping up with that.

[11:26] But, um, so we finally did get it all, uh, dumped in, uh, last, last part today,

[11:32] this morning, just as you guys were coming in. We were finishing that up.

[11:39] So that's great. So I'm guessing it's going to be minimum 60 days, probably.

[11:45] I would say maybe by Christmas, maybe by the first of the year, who knows.

[11:51] And who knows where rates are.

[11:54] I mean, today, you know, there's still a premium to go out to 4 years.

[11:59] I think the 3 years, 4.5, 5 years, 4 So yeah,

[12:03] I think that would be our direction to Preston.

[12:07] Yeah, because I mean, 1.8 at Stone is not—

[12:13] I'd like to push it out.

[12:16] It seems like a good time to do that.

[12:21] And then you've got a lot of things coming due,

[12:28] let's see, in 2027. We've got, um, the only— well,

[12:35] we've got about, um, right at about a million.

[12:41] Yeah, $1.075 million.

[12:43] So, you know, and then we can see if the city needs it or

[12:49] extend it further. Um,

[12:52] do we need to pull the $66,000 in cash and stone We just let

[12:59] that sit or we want to pull that in LGIP?

[13:04] I think we could do either or.

[13:06] If Stone has a good product right now, we could just move that over.

[13:12] I don't really think— the thing is right now,

[13:15] because our grants have been worked out, we've paid all of our bills.

[13:21] They're complete. I'm not looking at needing a big influx of cash right now.

[13:27] So I think, I think it's better to get it into stone because I don't really need the

[13:34] liquidity. And we've got $1.4 million— was it $1.4 million in there now?

[13:40] Yeah, I think that's plenty.

[13:42] And treasuries are liquid anyway.

[13:45] So worse come to worse, it'd be very easy to liquidate that without much friction.

[13:52] Are we telling them to put that,

[13:55] put that $66,000 into something?

[13:58] It's such a small amount.

[14:01] Yeah, they have it.

[14:03] But I think, I think I would— I'd like to make a suggestion to the,

[14:09] to the investment committee,

[14:12] is that sometime between maybe 4 Maybe before or after our next meeting,

[14:18] though we're already September.

[14:21] Maybe January, because December is a no meeting month.

[14:26] Maybe January or February we have a meeting, and then you all come to the—

[14:33] come to either one of the workshops,

[14:36] and let's talk about the thing that John's always talking about.

[14:42] Is let's, let's, let's push the board to designate a fund for capital investment,

[14:49] capital projects, CIPs, because if, if they don't get—

[14:54] if they don't get nudged to do it, I'm having a hard time nudging them.

[15:00] And, and I'm saying this on tape because I don't care if they hear it.

[15:07] Okay. I think that would be really important.

[15:09] I think we I think we need to nudge them to be able to take—

[15:14] because we've got crumbling infrastructure.

[15:19] And that— when we started talking about infrastructure 4 years ago,

[15:25] we did a study. And the study came back and said— Was that Kim Owens?

[15:32] No, that was Barge Wagner did the study.

[15:35] And they said you've got $17 million of infrastructure that needs to be taken

[15:43] care of. Well, we spent $2 million and really just didn't make a dent.

[15:50] I mean, they were good projects and they will last a long time,

[15:56] but it's not enough.

[15:58] And so we just need to get this capital We need to be able to put some of this

[16:05] or designate it some way in a capital fund that we say,

[16:10] instead of just saying all of this is in reserve,

[16:15] we need to say capital project reserve and let it build on its own and add to it

[16:23] as we go.

[16:24] How can that— are there different stipulations on how that can be invested?

[16:28] Or is it the same limit?

[16:29] No, same limits.

[16:30] So the advantage would be just to bifurcate it and have a dedicated fund.

[16:37] Exactly.

[16:37] More intentional.

[16:39] From an accounting standpoint, the board can do it—

[16:43] I guess you'd call it internal restriction, but it's not really

[16:47] restriction, but it's not really restricted,

[16:48] it's just designated.

[16:49] Yeah, it's designated. That's right.

[16:52] Formally, the board could pass a resolution if they

[16:57] wanted to go that formal and resolve that this is to be

[17:03] put into this fund and then they could reverse that

[17:08] anytime.

[17:09] Yeah.

[17:09] But on the— one of my biggest fears for some of the nonprofits plus others,

[17:14] you know, you've got uses for But then some people pick up your balance sheet and

[17:20] see, well, you've got $12 million.

[17:23] Yeah, right.

[17:23] Investments. So why do I need to— why do you need more?

[17:26] Why do you need contributions?

[17:28] And, you know, I think a good number would be whatever the amount of money that

[17:33] comes back from FEMA that we get reimbursed.

[17:36] I think that would be a good number to put in.

[17:39] That small?

[17:39] Yeah. And then build on it, you know.

[17:42] But how do you— so I've got a question.

[17:46] So how do you build on it?

[17:48] And also, like, if you think about it with—

[17:52] Well, I guess what I'm thinking about, Erik,

[17:56] is as we see our investments come to maturity and they— and when we roll them

[18:02] maturity and they— and when we roll them over,

[18:02] we roll them over into that capital project account.

[18:06] Not that we're— because I've got I've got 2 capital projects on the budget right now

[18:13] for this upcoming year, the year— this fiscal year we're in now.

[18:18] Uh, one is about $150,000, $160,000, and the other one's about $290,000.

[18:24] And I'm probably going to need an extra $50,000 to $100,000 on both of those.

[18:30] Uh-huh.

[18:31] Uh, once we get them, um, off, off the drawing board and in into bid.

[18:37] But as we see these things, that's what I'm talking about building on.

[18:43] And so when some of these come due,

[18:46] then when they roll over or we reinvest them,

[18:50] we identify them at that time as capital project. Sure.

[18:55] Like, I think what my concern is, I understand it.

[19:01] I think we should do a capital project fund,

[19:05] it's $17 million 4 years ago.

[19:08] Right.

[19:09] What's that cost now? Double?

[19:12] At least. At least.

[19:13] So, yeah, I think, like,

[19:15] the concern I have is that our investment return isn't going to keep up with the

[19:21] inflation of these projects.

[19:23] So, like, at some point, the board's got to decide Like, you know, it's a balance,

[19:29] right? And I'm glad I don't have your job, but like, good Lord.

[19:34] I mean, it seems like we've just got a ticking time bomb if we don't—

[19:39] Yeah.

[19:40] Start to really attack it.

[19:41] And then the other question is, where are we going to get the extra, you know,

[19:47] dollars we need? But anyway, that's— I mean,

[19:50] I guess this is a long-term problem we've got to fix over the long term.

[19:57] Well, we have limited revenue sources.

[20:00] Yep.

[20:00] And so what I'm working on that I have been working on for a couple of years now

[20:06] been working on for a couple of years now is

[20:06] trying to see if we can increase— I mean,

[20:09] we are doing really well with our permit and our codes department.

[20:14] We're bringing in about a million, a little less than a million dollars a year.

[20:20] Has that improved?

[20:22] The run rate on that, is that improving?

[20:24] Yeah, it is improving.

[20:25] But we could take on the MEP, the mechanical, electrical, plumbing.

[20:31] And so we're doing some research now with Metro to see what they're taking in and

[20:37] what the numbers are.

[20:38] But that would mean that we've got to hire an inspector, hire another office person.

[20:45] And maybe— and have some larger office space.

[20:48] So let's say we could bring in another million dollars,

[20:52] but we're going to spend $300,000 under, you know, with overhead because we've got,

[20:59] you know, everything, you know, you know, one person,

[21:03] you think one or two persons is not going to be a lot in salary, but you got—

[21:08] Benefits.

[21:09] Insurance, office space, vehicle, all the things that go along with it.

[21:15] But still, if we could net out $500,000 or $600,000 a year in additional revenue,

[21:21] that would be huge for us.

[21:23] Mm-hmm.

[21:24] So I think that's a, uh, you know, that's something that I've got, uh,

[21:29] our coach department working on. We're at— we talk about it every day.

[21:35] And so we're getting very close to having some good hard numbers to throw out there

[21:40] and, I floated this to the board and they're, you know, they're like,

[21:45] they've got to put their lawyer heads together on it.

[21:49] But, you know, but we've just got to keep hammering it.

[21:53] And the only thing that's going to make this work are the numbers.

[21:58] If the math works, we can make the rest of it work.

[22:02] So, A couple of questions.

[22:04] One is, you were proposing,

[22:07] or maybe the state did come up with some definitions of these

[22:13] different funds. As I recall,

[22:16] you were working on that a few months ago.

[22:21] I mentioned to the other 2 before you came in that we did pass a resolution for a

[22:27] Fund balance policy, and it identified those different types of funds—

[22:33] those different types of funds— restricted,

[22:33] unrestricted, unused fund balance, and all that.

[22:37] And that was based on a suggestion, not a rule, but a suggestion by the comptroller.

[22:44] And I will send you all a copy of that so you'll have that.

[22:48] That's just set up the terminology, but you didn't make any—

[22:53] did you make any allocations?

[22:55] No, we didn't make any allocations.

[22:57] It's just a policy of how we operate and handle our fund balance so that it'll just

[23:04] put some more guardrails around it so that, you know,

[23:08] people don't come in and start deciding they want to give the money away.

[23:14] Well, most of the entities that are capital intensive,

[23:19] like hospitals and others, not for profit,

[23:23] They do set these funds up with a board resolution, usually based on,

[23:29] you know, if you have a plan like you said, or an engineering study,

[23:36] or a capital project, it's easier to say, okay, that's $17 million.

[23:42] This—

[23:43] you've got this building and this project,

[23:46] and the architects have estimated $15 million, and they will move that.

[23:50] They would pass a Board resolution and then move $15 million into this board or

[23:55] building fund.

[23:56] Right.

[23:57] And then, then as that gets spent down or changed, you can, you can designate it,

[24:02] undesignate it, but it gives you some— well, it gives you discipline,

[24:06] budgetary discipline.

[24:07] Yeah.

[24:07] But I mean, the thing that I would like you all to see is, is—

[24:11] and I think there's members of the board that are concerned about Putting an

[24:17] estimate out there, but that's what accounting is.

[24:20] Just go out and do your projection. And, some things are more solid than others.

[24:26] You know, that you might have this project for sure,

[24:29] and you have an architect study, and that's what it is.

[24:33] And then, others are, you know, that in the past,

[24:37] there's what it costs to replace them.

[24:39] So, I mean, you could—

[24:40] It doesn't It could be redesignated. It's not externally restricted.

[24:45] So when your auditor— when the auditors come in, they—

[24:49] as long as they have a resolution, they could come in and on your fund balance,

[24:54] instead of showing that you have $15 million undesignated fund balance,

[24:59] they can bifurcate that and say—

[25:01] Right.

[25:02] Here's the different levels.

[25:04] And a lot of companies will put in this emergency fund of like

[25:08] 4 months of operating expenses.

[25:10] Yeah.

[25:10] And they'll, they'll kind of segregate those out.

[25:13] And, and that, uh, that new policy, uh,

[25:17] stated that for 50% of our, um,

[25:21] of our operating budget will be held for reserves for that.

[25:27] So you do need me to allocate,

[25:30] and I physically go ahead and Do that for at least whatever

[25:36] was set up for the policy?

[25:38] Yes.

[25:39] You should designate, or at least on the financials have that designated then.

[25:46] 50% would be the emergency fund?

[25:48] Or like if there's 3 different buckets, emergency fund, operating,

[25:51] and capital projects, is that what you're suggesting?

[25:53] Yes.

[25:54] So 50% has to be held in emergency or between—

[25:57] For operations. Yeah. So we haven't talked about emergency funds.

[26:02] I think the way the board looks at it right now,

[26:06] that everything that's in investments is emergency funds.

[26:11] And maybe the distinction really could be you need 50% of the budget between

[26:17] operating and emergency,

[26:19] but a certain amount of that 50% needs to be shorter term.

[26:25] Yeah, right.

[26:26] Yeah.

[26:30] And, and, and our budget for this fiscal year is

[26:36] just over $3 million,

[26:38] and we've got very close to $150,000 in LGIP,

[26:43] so that sort of takes care of that.

[26:47] $1.5 million.

[26:49] Yeah.

[26:51] How much is in cash in the bank?

[26:53] Uh, I think about $1.3 million, something like that, last time I looked.

[27:00] So LGIP has $1.5 million,

[27:03] but in a bank account we've got $1.3

[27:07] million.

[27:09] Okay.

[27:11] Are we at all— is that Like the expenses and

[27:15] everything, is that about the right number?

[27:19] Yeah, yeah.

[27:20] Is that just a check?

[27:23] Because we— see, we, um, we start having, uh,

[27:27] expenditures before we get revenues.

[27:30] See, our revenues like state sales tax and sales—

[27:35] local option and sales tax, it comes in by the month.

[27:40] So we don't get all of our $500,000 at one time.

[27:45] It just trickles in by the month.

[27:48] Mm-hmm.

[27:48] Same way with street aid.

[27:51] Metro aid, the Metro street aid comes in at one lump sum,

[27:56] but it doesn't come in until late in the year.

[28:00] We won't see it until August of next summer.

[28:04] So you see, It just takes— it's a shell game.

[28:09] It's kind of— you just got to— it's kitchen table math.

[28:14] You've got to see, do we have the money to pay for this now,

[28:20] or we've got to wait for the state money to come in?

[28:25] Say, on this permit revenue,

[28:28] which is part of the When you do the annual budget,

[28:33] how do you set that revenue number?

[28:37] Is there a calculation of that, or do you just kind of say, okay,

[28:44] the last 3 years we've had—

[28:47] We look at that, and we look at the open permits,

[28:51] and then we usually set that number We look at that number,

[28:56] that revenue number, at probably 60 or 70% of what we usually take in.

[29:02] We lowball that number as a revenue number because it, I mean,

[29:08] it could drop out. I don't think it will in Oak Hill, but it could drop.

[29:14] How big a lag time is—

[29:16] I've always asked the question of it would be nice to see some volume numbers.

[29:22] Numbers like the number of permits or something that gives you an indication of

[29:29] something that gives you an indication of the

[29:29] volume?

[29:30] So I did— I haven't updated it, but I did this a while ago because I was curious.

[29:36] I did it through '23, the number of permits and the percent change.

[29:42] So I could do '24 and '25 on here and start to see,

[29:46] but you get an idea of like It kind of goes up steadily.

[29:50] Like, for instance, we started in 2010, there's 110,000 permits, right?

[29:56] Yeah.

[29:56] And kind of keeps creeping up until about 2019,

[30:01] 488,000, and then it jumps to 868,000, 1 million.

[30:06] 2022, you'd expect to be a little lower, 550,000.

[30:11] 2023, 857,000.

[30:12] Well—

[30:13] Like, to your point, to start to see trends.

[30:15] Yeah.

[30:15] And understanding.

[30:16] And the thing is, you got to be careful with just raw numbers because we

[30:23] have a lot of roofs, siding, kitchen rehabs, things like that that are—

[30:31] is a number for a permit.

[30:33] But the ones we got to look at are our rebills or our new bills,

[30:40] and those are, you know, Their value is somewhere in the millions.

[30:46] Oh, and you know what I just realized too is I did—

[30:50] that's the dollar amount that came in, not the number.

[30:53] So that, to your point, could be interesting to see breaking out between

[30:58] interesting to see breaking out between the number.

[30:59] How big a lead time?

[31:00] So somebody comes in, and I guess I may be getting this—

[31:05] may or may not be getting this right, I may not be heading down—

[31:09] We're heading down a project. I just didn't know if it's requiring a permit.

[31:15] But, how long a lead time?

[31:17] Does somebody come in here— I mean, typically, if it's done right,

[31:22] somebody will come in and have a dialogue with you and say, hey,

[31:27] we're considering this type of project, and understand the ramifications of that.

[31:33] First of all, you know, is a permit required, or is it— I mean,

[31:38] I guess whether there's a— this is viewed to be a repair versus—

[31:43] Yeah, any project really, however small or however large,

[31:47] is going to require a permit.

[31:49] And the permit cost is based on the value of the project.

[31:54] So you have a project It's going to cost $400.

[31:58] It's going to— it's going to— we're going to bill you on $400.

[32:03] Or the next guy comes in, his project's $4 million,

[32:07] we're going to bill him on $4 million.

[32:10] Well, it's tough because I think if you sent a questionnaire out and asked the

[32:15] sent a questionnaire out and asked the board

[32:16] and others, okay, I have to replace my roof,

[32:19] is that required a permit or is that viewed to be a repair of—

[32:24] depending on if If it's a repair, like a hailstorm comes and does some things,

[32:29] I think you'd have a diversion.

[32:32] I think there's just not knowledge out there,

[32:35] or understanding of what requires a permit from a repair standpoint, versus—

[32:41] it used to be. I'm not a codes guy, but—

[32:44] Yeah.

[32:44] So, if you have a hailstorm, and you damage the roof,

[32:48] usually you have insurance Right, coverage from that.

[32:51] Nowadays the deductible is huge on those, yeah, those things.

[32:56] So, um, is there— sometimes there isn't a requirement, is everything.

[33:01] So if you have to just repair the roof, but one time I thought that that was—

[33:07] If it's just— if, if you, if you're having a guy come over and, uh,

[33:11] take off some damaged shingles and just put some on,

[33:14] you Probably don't have to have a permit.

[33:17] It just has to do with the scope of the project,

[33:20] and the contractor would be able to tell us that.

[33:23] But if it's a full roof replacement, yeah, it's a permit.

[33:27] So are we thinking then at our next meeting maybe making it kind of a mini

[33:33] meeting maybe making it kind of a mini working

[33:33] session between our group and come with the goal being that we come up with a

[33:39] recommendation on the buckets?

[33:41] Yeah. I think that's a good question.

[33:44] And I think we should try to have a meeting before we go to the board and have

[33:50] meeting before we go to the board and have our

[33:50] ducks in a row about what we want to do.

[33:54] And I think you just sort of laid it out as operational and emergency and capital

[34:00] projects.

[34:01] Well, and I was thinking, I was iterating on it further.

[34:04] I think if you have 3 projects, you've got operation, operating,

[34:08] which includes emergency, And that is a hard 50% of the budget.

[34:12] Then you have the reserve, and then you have this capital projects.

[34:17] And it sounds like the latter, the capital projects,

[34:20] would be an absolute dollar amount that we'd start with,

[34:23] and then basically everything else then would go into the reserve.

[34:27] Right.

[34:28] And I guess the question I would have is,

[34:30] how do we determine what's an appropriate amount to start the capital projects with?

[34:35] To your point, it could be easy to just say whatever is coming back from FEMA,

[34:40] say whatever is coming back from FEMA, 2.5,

[34:40] but is that really—

[34:41] Well, you know, we have a— we have this $17 million, right, you know,

[34:49] project ahead of us.

[34:51] So any amount that we could put against that would be—

[34:58] I think would be So my question is, why not more?

[35:01] So $17 million is based on the study that was done a few years ago?

[35:07] Yes, at least 3 years ago.

[35:09] From Barge? From Barge, yeah. And that relates substantially to the road repair?

[35:15] No, it's mostly culverts and ditches and stormwater.

[35:21] And the thing about that is They also did a, um,

[35:27] in that report they did priority projects and they did other

[35:34] ongoing projects like just cleaning ditches and pulling

[35:40] ditches and cleaning out cleanouts.

[35:44] But priority projects, the, um, we did 1, 2, 3, 4, 5.

[35:51] 6.

[35:53] 5, maybe 6 of the 20 priority projects, and we ran out of money.

[35:59] We ran out of the 2 ARPAs that we were operating on.

[36:05] And those 2 ARPAs, the ARPA was $1.3 million that was just giveaway

[36:12] money, and And the city decided to put that against stormwater.

[36:19] And then because ARPA had more money that they brought back to the

[36:26] states, we could apply on a non-competitive bid.

[36:31] And we, um, we, uh, qualified for $730,000,

[36:36] but we had to pay 35% match, and that was $285,000 of our money.

[36:43] Okay.

[36:44] So that was another million dollars for the project.

[36:48] So we had $2.3 million to do those 6 projects.

[36:51] So, so unlike other municipal and governmental entities, you're having—

[36:58] you're trying to have the discipline of have the money,

[37:03] cash or investments, before I make versus Going out and getting in debt.

[37:09] I mean, other people could pass some sort of bond offering or whatever

[37:16] and get debt.

[37:17] Okay.

[37:17] So do you want to see that? Which is a great philosophy if you can do that.

[37:23] Well, I've been in jurisdictions where we've had bad situations where all the

[37:30] streets were bad or all All the buildings were dilapidated and we went out and did

[37:38] an $8 million street paving project and we borrowed the money and then we paid—

[37:45] Through a bond offering or something?

[37:48] Yeah, we got a very,

[37:50] very good price on a bond and we paid that back with the state street aid that came

[37:57] in. So that serviced the debt.

[38:00] Now it would take, you know, 5, 6 years to get that done,

[38:05] but still you get the advantage of local day pricing and the advantage of getting

[38:12] all the streets done at one time.

[38:15] If you do it over 5, 6, 8, 10 years, by the time you get to 10 years,

[38:22] it's going to be—

[38:23] You're redoing the old ones.

[38:24] Yeah, you're going to have to start— yeah, you're buying—

[38:29] you're Your cost is triple.

[38:32] And the one variable is the bituminous,

[38:35] because that's the price that is flexible in the contract.

[38:40] Every paver in the world, their bituminous cost is flexible. So it's spot cost.

[38:47] Mm-hmm.

[38:47] So we may get a bid today for it, and then by the time we get around to paving,

[38:54] saving in 3 months, that price could have gone up,

[38:58] as you can well see what's going on right now.

[39:01] You know, Venezuela bituminous is very expensive, and it's hard to refine.

[39:07] Well, the prior city manager, I guess— I forget what his name was—

[39:14] after Jeff Claussen.

[39:16] left was big on, well,

[39:18] it's better to do the capital expenditure now so it's not going to

[39:25] cost as much down the road.

[39:27] Yeah, right.

[39:28] Even though there's probably more of a balancing going on.

[39:32] But I think this, if I put my citizen hat on,

[39:35] I think this information is valuable to the citizens, should be educated,

[39:40] and my opinion is Management and the board should do an estimate of what future

[39:46] capital expenditures are,

[39:48] and the extent that it could be based on an engineering study from Barge or

[39:53] whatever, you get a little more substance to that than to just—

[39:58] but you also have history,

[40:00] and you also can walk around and see the potholes and whatever.

[40:04] Yeah, right.

[40:05] It should be management's best guess, and then Then,

[40:08] it gets allocated back into those funds.

[40:11] You have the operating fund for 4 months, 6 months, whatever.

[40:15] Then, you have whatever, you have a solid capital project, this,

[40:19] and then you have the others that are more of an estimate.

[40:22] And then, you just monitor that.

[40:24] Anyway, I think that's owed to the citizens,

[40:27] is to not just look and see that you have, what, $12 million?

[40:31] No, yeah.

[40:33] $10 million?

[40:35] Yeah, so what do we— if we end up picking— we can do it at the end of this meeting,

[40:40] but if we end up picking a time in January to meet, what do we need?

[40:44] Could we— could you recirculate the barge study?

[40:47] Yeah.

[40:48] It would be interesting. And maybe I'll take a crack at it.

[40:53] It is huge. I'll skim it.

[40:56] I don't know if I can send you a link,

[41:01] but I will try to send you a link.

[41:05] Okay. Because it sounds like, again,

[41:08] if we came out of our January meeting with a recommendation that was bolstered with

[41:13] some information from that as well as like data you can provide,

[41:18] then that is what we could take to the board following that meeting.

[41:23] Yeah. And if we haven't done all those capital projects, like the question would

[41:28] capital projects, like the question would be,

[41:28] do we really need another study done that's going to cost Oak Hill a lot of

[41:33] that's going to cost Oak Hill a lot of money 3

[41:34] years later? It's like, well,

[41:36] we haven't done all this $17 million worth of projects,

[41:39] so we know it's at least $17 million. Inflate that number.

[41:43] Yeah, you've got a good idea.

[41:45] I don't want to cost us a bunch of money for another study if it's not—

[41:50] Yeah, that study was pretty expensive.

[41:53] I mean, from our standpoint, it was $280,000.

[41:57] So, I mean, that was a lot of our ARPA money to go out.

[42:02] I want to ask a stupid question because I'm not an accountant and I'm not Grace

[42:06] Bennett, so I may not be following this.

[42:09] She's both.

[42:10] But I would say, so help me understand,

[42:13] the goal of Having a capital improvement project fund specifically and carving

[42:20] out dollars. I understand like the designated funds and that makes sense.

[42:26] Is it to try to compel the,

[42:28] the commissioners to spend that money on capital projects over like a certain

[42:35] amount of time? So to say like,

[42:37] we are going to put extra money over here and we want this to be spent.

[42:43] Yes.

[42:44] Or we suggest it to be spent, but that's really their decision.

[42:48] I mean, isn't all of this basically for capital projects anyway?

[42:53] Slash emergency.

[42:54] Yeah, slash emergency.

[42:56] So like, what's the goal of just—

[42:59] other than just bifurcating it on paper, what's the goal?

[43:03] I think from my perspective, it's to create discipline.

[43:08] with your funds so that you have certain things that are

[43:13] restricted, that are earmarked for those specific things.

[43:19] Because we'll get people in here that will come in and say,

[43:24] we have so much money, why don't we—

[43:27] Gotcha.

[43:27] Why don't we buy a leaf truck to suck up all the leaves on the side of

[43:33] the road? And I I think that's a great idea,

[43:36] but it's not practical for us.

[43:39] Well, I think if you have a plan, to John's point, if you have like—

[43:43] got it.

[43:43] If you've communicated a plan that says, well, in both directions,

[43:46] both to the board to say we're going to be more disciplined about spending the

[43:50] dollars and then being able to communicate it to citizens.

[43:53] And these are the order of priorities and where all of this money is slated to go.

[43:56] But it also plays into that there should be I mean,

[44:00] why are permit fees as high as they are or as low as they are?

[44:04] It helps you determine what you should charge for these services,

[44:08] the same way with trash, which you have in a separate fund.

[44:12] Well, and people complain about the permit fees too being high.

[44:16] Yeah, so you've got—

[44:17] To build a pool in Oak Hill for a lot—

[44:20] it costs a lot more money to build a pool in Oak Hill than in Metro.

[44:25] Yeah, but Like, I'm looking at this and I'm going, this— all this money spoken

[44:31] I'm going, this— all this money spoken for,

[44:32] you know. I mean, uh, and so we don't really— on paper we have money, but right,

[44:38] we need to invest it.

[44:40] And see, that's how— that's how everybody here on the board feels about it too,

[44:43] you know.

[44:44] Yeah.

[44:45] And, um, it's easy to come in and look at your— look at the, uh, annual budget—

[44:49] I mean, the annual audit And you look at the annual audit, you say, oh, hey, look,

[44:54] the city's got all this, all this money and all these assets, but we really don't.

[44:59] I mean, it's—

[45:00] But on the audit report, if you do the board, if you,

[45:04] if you follow your policy and put these items in the funds, right,

[45:08] your fund balance then just doesn't show $10 million.

[45:12] Yeah, that's a good point.

[45:13] It would be bifurcated.

[45:15] Yeah.

[45:17] I like that. I think,

[45:19] I think my only just kind of follow-up question on this is like,

[45:24] I know we want to meet in January and we want to look at studies and all that

[45:30] want to look at studies and all that stuff,

[45:31] but like, are we— is it not fair to say, and I could be missing something,

[45:37] we have $1.3 million in the bank, which is what kind of our target needs to be.

[45:44] We have 50% of our annual budget In LGIP.

[45:47] So why not just say this is our capital improvement project fund and call it a

[45:54] improvement project fund and call it a day?

[45:54] Yeah.

[45:56] I mean, that's like—

[45:57] that's a good point.

[45:58] I mean, do we really need to make it complicated?

[46:00] I'm wondering if you feel like there's not appetite at the BOC level for designating

[46:05] all of that for capital projects.

[46:08] I think, I think, I think some people would, some people would not.

[46:14] But I think, I think this, the board would be,

[46:19] I think they would be plenty happy with designating,

[46:24] designating all of that as restricted. Because, I mean, we don't—

[46:30] Designate.

[46:31] Since I've been here, I have not Seen it, having not been asked for it,

[46:36] and I have stood guard against, hey, let's use this money for this,

[46:41] let's use this money for that.

[46:43] Hey, here's a nice— here's a nice charity,

[46:46] maybe we could just donate to the charity. I mean, and I just— I fight against that.

[46:53] You know, that discussion comes up, I said, well,

[46:56] I think that's not what this money's for.

[46:59] Yeah. I think it would have to— whatever we land on,

[47:03] I think it just has to also then play alongside your plan for here are the

[47:09] alongside your plan for here are the projects

[47:09] we're doing in which order on top of the regular maintenance.

[47:14] And so having those side by side, then it says, okay, we've got—

[47:19] You know what this guards against?

[47:21] Several years back when they had some challenges with Austin McMullen and

[47:27] others, and then a new group came in.

[47:30] They, they did not make any capital expenditures for like 5 years,

[47:35] 5 or 6 years.

[47:36] Yeah.

[47:37] So there was zero on that line, and then all of a sudden—

[47:40] And we're living through that now.

[47:41] Yeah.

[47:42] So this creates—

[47:44] You know, it's like anything else.

[47:45] If you don't take care of your house, it falls down.

[47:48] If you don't take care of your car, it breaks down. It would be awesome.

[47:52] If you don't take care of your city, it crumbles.

[47:54] It would be interesting to kind of come up with, and you might already have this,

[47:59] but if, you know, out of that study that was done, 6 of the 20 were—

[48:02] 20 projects were highlighted, you know,

[48:04] to be able to have some communication that goes out annually that just says, hey,

[48:09] we've completed 6 out of 20.

[48:10] We're slated to do 1 more in 2026, 2, and, you know, and you start to show—

[48:14] Yeah.

[48:14] And show the, like, ticking of that.

[48:18] And I understand the fear of not— of like, if I'm a commissioner or,

[48:24] you know, it's— there's probably a little fear of, well,

[48:28] what if we need this money for something else?

[48:32] There's probably a mechanism for a true emergency.

[48:37] Right.

[48:38] Where the city can't— can't— yeah,

[48:41] there's probably a clause you can put in there,

[48:45] but it's either for capital improvement projects or a unanimous board

[48:51] decision to use it for a true emergency where we can't get access to

[48:57] other funds for a short-term— or short-term loan, or I don't know.

[49:02] Yeah, I mean, just take the storm for instance.

[49:06] Yeah, I mean, after the first week and a half,

[49:10] When the snow melted and people could get in and out, the emergency was really over.

[49:17] Right.

[49:18] So cleaning up debris was not really an emergency.

[49:23] I mean, you know, people's lives were not in danger,

[49:28] but it was creating huge problems for trash collection,

[49:33] emergency vehicles, So where did that money come from?

[49:39] Did it come from Stone?

[49:40] Well, yes. We had partly LGIP,

[49:44] partly Stone, and partly from the

[49:48] operating budget.

[49:50] Okay.

[49:51] Operating checkbook.

[49:52] So we actually did ordinances to move or amend the budget by $400,000. $4 million.

[49:59] We started out with $1 million, then it turned into $2 million,

[50:05] then it turned into $4 million.

[50:07] So, but we didn't spend the $4 million, we spent the $3.5 million.

[50:13] But, um, yeah, so we had some stone that was in the sweep account, we had some—

[50:20] How much?

[50:20] And we had LGIP, and we had, and we had some cash in the, in the checking.

[50:26] So we were able to To do it without—

[50:29] but if we had not had that cash available to us,

[50:33] we'd have had to go out and borrow the money,

[50:37] or we would have had to do it piecemeal, and we'd still been picking up debris.

[50:43] Right, right.

[50:44] I mean, that would have been awful.

[50:45] Yeah.

[50:46] You know, but it would—

[50:47] but there was a lot of debris out there on the side of

[50:52] the road that was really not Sure.

[50:55] Sure.

[50:55] Well, there's a great education or need for education for transparency and

[51:01] disclosure to the full citizens of the city.

[51:04] They understand that, and whether they get it through the workshop that you shared,

[51:11] but anything that's internally designated by the board is not technically

[51:17] restricted. A restriction is a legal restriction usually in the county,

[51:22] like if somebody makes a contribution to whatever school,

[51:26] it's restricted to this building or to this place.

[51:30] But if this is internally designated,

[51:33] if the board says I want to use this for these funds,

[51:37] that's internally designated and can be undesignated.

[51:41] Yeah, so to your point, there's a reverse—

[51:43] With a resolution. But it does build into discipline as to how you're allocating

[51:48] this versus showing $10 million of undesignated funds and everybody comes in

[51:52] undesignated funds and everybody comes in here

[51:53] and says, well, then I shouldn't have to pay. Well, they do do that.

[51:56] They're saying I shouldn't have to pay for trash collection.

[52:00] Well, so then I recommend we pick a date in January and ahead of that I

[52:06] might draft something that then we can discuss and tweak live at that

[52:11] meeting.

[52:12] Yeah.

[52:12] I don't know how January 22nd feels to anybody. It's a Friday.

[52:21] Feels like early in the month is going to be hard?

[52:25] No. I don't think so, right? Isn't it the 18th?

[52:28] Is it around President's Day? I think it might be.

[52:30] Steve might be at the Super Bowl.

[52:32] No, I won't be. Unless Kansas City— Unless Kansas City's playing, I might be.

[52:39] I don't think they'll get there this year.

[52:42] So 29th looks good.

[52:45] Okay, that's right.

[52:46] You want— you guys want to shoot for that?

[52:48] I was thinking the 22nd.

[52:50] 22nd, that's okay too. What is that?

[52:55] Is that a Friday?

[52:56] Friday.

[52:56] Is it got a— is that a holiday or something?

[52:59] Standard.

[53:00] You have standard—

[53:01] oh, like Martin Luther King is usually Monday or something.

[53:04] I just want to make sure it's not around that weekend because sometimes—

[53:06] So 22nd is Monday, the 18th is MLK, so it would be the weekend.

[53:12] Yeah, the 22nd is great.

[53:13] So the 22nd would be okay following.

[53:16] Okay,

[53:20] 22nd.

[53:25] And then just so you know,

[53:28] the workshop will be On Wednesday at

[53:33] 1 o'clock.

[53:34] On the 20th?

[53:36] On the 10th.

[53:36] Of February?

[53:39] Of February.

[53:39] Okay, so that would be enough time.

[53:41] Um, how long is the workshop?

[53:44] Uh, it starts at 1 and usually goes to about 5 o'clock. What?

[53:48] But I bet we could convince them to put us on the schedule earlier.

[53:52] We'll put you guys up front.

[53:53] There's no reason to meet that long at all.

[53:56] You're telling me you haven't attended one? Yeah, you have.

[54:01] You need to come and attend one and say just what you said.

[54:05] That was feedback that I also provided as to why I could not be on the BOC.

[54:11] Um, 9 AM on the 22nd?

[54:13] 9 AM is good. Yeah.

[54:15] Or would you prefer 8:30?

[54:18] I prefer either.

[54:20] All right, let's do 9 AM.

[54:21] 9 AM. 9 AM. For me, the earlier the better, because that's usually—

[54:27] I can do early.

[54:28] Give me plenty of time.

[54:29] All right, we can do 8:30.

[54:31] 8:30.

[54:31] All right, despite current—

[54:33] sure.

[54:34] All right, I'm not, you know, all is forgiven. Just, you know, what about—

[54:39] should I do a report out of this ahead of—

[54:42] because we had planned on my attending a workshop and doing this earlier this year

[54:46] and it didn't get scheduled. Do I need to do one before February 10th?

[54:50] Do you want to— do you want to come and do that report at a BOC meeting?

[54:57] Sure.

[54:57] Yeah, I'm happy to do that.

[54:59] Just come to a BOC meeting for that and we could do that.

[55:02] I think that makes sense because you don't—

[55:07] Because I think it'd be good to keep that on the record.

[55:09] Yeah, they usually do it like once a year or something.

[55:12] Because we report up to the BOC.

[55:19] Yeah. So I think January 25th is the BOC meeting.

[55:25] You don't want me to do one before that?

[55:27] Oh wait, I'm in the wrong year. Hold on a second. I've already overshot their year.

[55:34] I'm sorry.

[55:35] Well, you can let me know if you want me to come before January 25th.

[55:41] I'm happy to do that.

[55:42] Yeah.

[55:44] Let's just— you pick a day. It's the 4th Tuesday.

[55:49] Okay.

[55:49] And I mean, you could come this—

[55:52] unless you want to wait and have more information

[55:57] to put in there.

[55:58] I do— well, I'll circle back. I have carpool on Tuesdays, but I can plan in

[56:03] carpool on Tuesdays, but I can plan in advance.

[56:04] Okay. So we've set our next meeting. I don't think there's any more business.

[56:09] Entertain a motion to adjourn. Do I have to enter?

[56:13] That's it. That's all you got to do. Okay, great.

[56:17] Meeting adjourned.

[56:18] Okay.

[56:19] 9:40.

[56:21] 9:40.

[56:21] Okay. All right, good.

[56:23] 50-minute meeting. We started at 8:44.

[56:31] This is your signed version?

[56:32] Yes. I'm just going to hand that to Steve.

[56:36] I feel like we've streamlined this to where we don't— like,

[56:41] after we get this done, then, yeah, I mean,

[56:45] I think we've made a lot of progress here.

[56:48] Yeah, I think adding build to worst, we can put that in there.

[56:51] That should be a simple formula.

[56:53] I would like to know, yeah,

[56:56] just should we replace any of those things?

[57:02] And then— Yeah, right.

[57:10] Yeah.

[57:18] All right. Thank you all.

[57:22] Thank you.

[57:55] Yeah, I mean, yeah, I'm going

[58:02] to get rid of the work stuff.

[58:10] Okay, unless I have 2 new board— don't forget we have 2 new board members.

[58:16] Oh yeah, yeah, I talked to Jen about she wanted to be on

Investment Advisory Committee

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