And at this time, I'll recognize Mayor Pro Tempush who will lead our ceremonial opening.
Thank you, Mayor. Good evening, everyone. Before we begin tonight's meeting, I wanted to take a moment to recognize and thank
the large number of remarkable teams that have worked tirelessly behind the scenes during over the past few weeks.
Our public works, our public safety, our communications professionals. There really are the heartbeat of this town
through snow and ice and freezing temperatures, you kept carry running, you kept us connected
and you kept us safe. Now the numbers tell an extraordinary story and I thought I would
share with all of our residents that over 20 days our teams logged more than 41,500 miles.
That's one and a half times around the world and spread over 1100 tons of salt.
using 75 plows, 28 spreaders, and 200 steel blades.
I actually got to see one of those blades broken.
They prepared 90,000 gallons of brine.
And if you want to know how much that is,
that is about six standard sized backyard pools worth of brine.
And they worked 18,500 hours across 16 separate 12-hour shifts.
There were over 400 staff members from every department and the communications team kept the
public informed through 225 updates on all types of social media from Facebook, next
store, Instagram, X, blue sky, and the carry collects app.
These netted over 2 million impressions by people watching live about what was going on in
It was an incredibly helpful and informational and safe set of reminders that were provided
to us and there were live interviews by many of our staff and there were over 10,000 views
on our live traffic cameras.
But thanks to everyone's efforts in the community's caution, we only saw a small number
of weather related emergencies.
We had about over those 20 days, we had about 30 calls to 3-1-1 and just a dozen really true emergencies.
Among those were eight traffic accidents, two with injuries and three accidents that involved stranded motorists.
One call however stands out though as a very powerful reminder of both the human courage and the importance of safety.
During the second storm, a young child ventured out into a frozen pond that gave way beneath him,
but fortunately, I nearby, I will say, hero.
Saw what happened, and ran to help, and together, they were actually rescued by our incredible team from Fire Station 5,
even though that they ended up in the frozen water for more than five minutes.
Reminds us that no ice is safe ice, and every second counts in an emergency.
And, though sadly, there was another event where we learned a loss of a family dog who fell through the ice at another neighborhood pond.
And, though this one occurred outside of our active snow response, it is a reminder for all of us that we need to stay vigilant.
We need to check on our neighbors and be mindful that this winter season is still lingering on.
on and on, so to every member of the town staff who answer the call of duty and to every
resident who helped, whether you helped a neighbor, whether you stayed at home like
you were supposed to, you all really showed resilience, professionalism, and heart, and
you really are the true spirit of Kerry, so with that, if you would join me
in the
Thank
you for all that data. I love data.
You should boast this and we'll share as well.
Okay, we've received a request to include a proclamation presentation in celebration of Ramadan.
Is there a motion to amend the agenda accordingly?
There's a motion on a second discussion.
I'll invariably say aye.
Aye.
Opposed.
Motion carries unanimously.
We're now at recognition to reports and presentations.
And we have troop to 13 working on their citizenship and community badge.
And if you would stand and be recognized, please.
Thank you.
We appreciate you being here.
And for your interest in local government.
All right, our first proclamation this evening is the Lunar New Year proclamation and now
I now invite Council Member Fwang to join her invite a guest at the podium for the presentation.
Yes, so I just changed to where Chinese traditional clothing to invite being Mr. Lee to join me.
Before I read this proclamation, I would love to recognize the North Carolina Chinese American Society members over there.
Could you please stand up?
We are going to celebrate the new year tomorrow and they prepare the red envelope for everyone.
So everyone of us get an envelope and there's a golden chocolate inside.
So, and also to the audience, if you can just grab a red envelope after the meeting.
Okay, please take.
Thank you.
And just in here.
Celebrating the Lunar New Year in Kerry, not Carolina.
Whereas, Kerry celebrates the rich cultural history and diversity of our citizens
through recognizing important and significant holidays, including the Lunar New Year.
Whereas, the Lunar New Year, also known as the Spring Festival, is a memorable holiday filled
with joy, festival traditions, family reunions, Thanksgiving, and reflection.
It's the most significant celebration for many communities around the world.
Whereas, the Lunar New Year also known as the Spring Festival marks the transition from one zodiac animal to the next,
with February 16 marking the end of the year of the snake and the February 17 marking the beginning of the year of the horse.
Whereas in Chinese culture, the horse is a symbol of strength,
vitality, perseverance, and freedom, representing energy,
resilience, optimism, and the spirit of progress and determination.
Whereas, movement of foundation, North Carolina Asian Americans Alliance,
and the North Carolina Chinese American Society,
hosts a vibrant celebrations and cultural traditions for local communities
to come together to appreciate the heritage of the Luna New Year.
Now, therefore, I, Balahon,
Council Member of Carey,
North Carolina, on behalf of the Carey Mayor and Council,
which, good fortune, health and happiness
to all those who celebrate this joyous new year,
proclaim this fifth day of February,
twenty twenty six.
Thank you so much and happy lunar new year.
Our second
proclamation is the Ramadan proclamation and I will now invite Council Member
Bonsel to join Mr. Williams at the podium for the presentation.
As we gather
today I want to take a moment to recognize the holy month of Ramadan, a time
observed by Muslims around the world as a period of fasting, reflection, prayer,
and service. Ramadan is a reminder of the values we all share, compassion, gratitude,
self-discipline, and care for our neighbors. It is also a time that brings families and communities
together in the spirit of generosity and understanding with that it is my honor today to read
this proclamation recognizing Ramadan and its significance in our community.
Whereas Ramadan is
In nine months of the Islamic-to-Unner calendar, and is considered one of the holiest months
for over 1.9 billion Muslims worldwide, including members of the Muslim community in
Kerry.
And whereas Ramadan is a time of spiritual reflection, self-discipline, and acts of kindness,
During which Muslims fast from dawn to sunset, abstaining from food, drink and other physical needs to cultivate gratitude.
This of Ramadan emphasizes the values of compassion, generosity, and community with Muslims coming
together to break their fast at sunset during iftar, and uniting in worship and prayers. And
whereas Ramadan fosters great greater understanding and mutual respect among people of all
and cultural backgrounds contributing to the rich diversity and inclusiveness that defines
carry. And whereas carry values the contributions of the Muslim community to our shared
prosperity, cultural vibrancy, and civic life, recognizing that our diversity is a strength.
Now, therefore, Icerika Bansal, carry council member on behalf of our mayor and carry council
due hereby recognize February 17th through March 19th, as Ramadan in carry not
Carolina, and increase citizens to learn more about this important month, join in building bridges
of understanding across all faiths and appreciate the reflection of the values of reflection,
kindness and unity embodies in Ramadan.
Proclaim the fifth day of February 236.
So, good evening.
Thank you so much to the mayor,
the council members and council member,
Bouncer for your leadership.
This means a lot to the Muslim community
as we continue to move forward to try to unite
as a human family.
Thank you.
Right.
We're going to move into the business portion of our meeting now
and we're at our next item,
which is the 2025 Annual Comprehensive Financial Report independent audit results and the presentation
of the annual financial results update so at this time I'm going to recognize Interim
Town Manager Russ Overton to introduce the item.
Thank you, Mayor.
I've got a slide clicker for me.
I thought it would be good to introduce kind of where we're at as we receive the findings from
audit tonight is that there are four different investigations or inquiries that are going on during
this transitional time. As everyone knows, the first one would be the North Carolina office
of a state auditor is investigating alleged cases of fraud, waste, and abuse of taxpayer dollars,
having independent of anything we are doing. One thing that the council has done is hired
Lomble Bond Dickinson to examine a procurement card usage reimbursement expenditures of the town funds by the former town manager.
Examination of the former town managers reporting of town finances and review a work environment created by the former town manager.
We expect that report in the coming months.
The district attorney has also called for an investigation by the North Carolina SBI to perform a criminal investigation.
And tonight, to highlight what you're receiving is Cherry Becker is Kerry's external independent
auditor that reviews financial statements for financial reporting and compliance related
to federal funds and internal controls for the fiscal year 2025.
I guess it's good to point out that they are looking back at the last fiscal year while the state
auditor Wumble Bond and anything else are looking at a multi-year effort.
So earlier today I had the privilege of meeting Lee Ann Waters with Cherry Beckert and she will be up later to talk about what our external independent auditor's review has been.
I think this slide's very important because all of this can be kind of confusing, especially when you're hearing of what our independent external auditor does.
So I wanted to take a moment to walk through this slide of how you get to an annual audit.
Staff, the close of a fiscal year, staff creates draft financial statements.
Again, give those to the auditor to come in and audit to those statements.
The auditor then shares their opinion with the town council and that will be tonight.
And then that information goes into something called the annual comprehensive financial
report or the act for that is ultimately shared with the public.
And I believe currently, it will go online where there are also, I believe, the prior six
years of that document currently online as well.
So, also earlier tonight, our Finance Director, Kim will be branched, walked through the draft
act for, and then after you receive your report tonight, and as they finalize that
work, the Auditor's opinion, will be added to that.
So, with that, I'm going to turn it over to Assistant Town Manager Dana Woodmore for a few
opening statements as well.
Good evening, Mayor and Council.
I'm pleased to be here tonight as part of a team sharing important information regarding
carries fiscal year 2025 independent external audit and year-end financial statements.
Collectively, this information reports on financial accountability and performance.
Please note, this information is specifically for fiscal year 25 only, so that was July 1,
24 through June 30, 2025.
I'll go straight to the headline.
The auditor anticipates issuing an unmodified opinion
often referred to as clean, which is the highest possible designation.
And the financial results for the year include very good news.
So I'd like to share some things that can help explain the contradiction between tonight's report and the recent negative attention on carry.
To adequately explain the positive financial results you're about to hear, we need to go back to the spring of 2024 when finance staff raised concerns about fiscal year 24 performance.
In response to those concerns, action was to actions were taken by staff and council in the spring of 2024 to ensure that carries performance met the fund balance policy that year.
Then in fiscal year 25, carries staff closely monitored financial performance, including revenue growth and net position.
While also taking comprehensive action on capital projects due to inflationary pressures.
Tonight's financial results reflect the many actions taken towards the end of fiscal year 24
and throughout fiscal year 25.
And of note, from the perspective of the auditor,
Kerry's financial department, finance department, has processed countless transactions throughout
the year in a new financial system that Cherry Beckert is able to obtain audit evidence
supporting the issuance of this unmodified opinion.
What these results do not answer are the many questions raised by the media and our citizens.
So as staff continues to respond to the many inquiries, we are learning something very simple.
Carries, former town manager, shared incomplete information and or different information with different people.
For example, when staff raised concerns related to performance in the spring of 2024,
for, we were given the impression that you counsel were told everything.
We now know that you did not know the full truth, because you were not told.
This key contradiction of incomplete information provided by the former town manager contradicts
our value of transparency and constantly undermines trust.
That reality, our reality, has been very difficult, and as you highlighted Mayor, very sad.
But it led Council to do the hard work they were elected to do, that you were elected to do, which involved a change in leadership.
It
also included a call in the fall of 2025 from the mayor to carries independent auditor
Cherry Beckert, where he shared his concerns.
From that and follow-up calls with staff, the independent auditor's findings and recommendations
include a material weakness relative to the controls environment due to the tone at the top
from the former town manager.
So, tonight, land waters from Cherrybeckert will share more specifically about the work they
were contracted to do for carry, how it is similar and different from the work that they do in other communities,
and then she will provide the results of this year's audit.
In addition to the anticipated Clean on Modified Opinion, Cherrybeckert will also provide recommended best practices
in response to Mayor Weinbreck's and staffs expressed concerns.
Essentially, Perry did a great job, did great work in fiscal year 2025, and there are growth opportunities.
And we welcome that.
Leon will then be available for any questions that you may have.
Following that our finance director, Kimberly Branch, will share with you the favorable fiscal year 25 financial results which includes the general fund fund balance at an amount that well exceeds policy and puts us in great shape to finish the current fiscal year 2026.
Kimberly will also be available to answer your questions.
Thank you all for giving me time on your agenda here tonight to discuss the results of the
2025 audit.
Excuse me.
I'm going to go through the agenda that we have here on the first slide.
And I will refer you to slide number 13.
They're a little different from my prepared slides because they go along with your
packet.
but this is your client service team this year. I am the engagement director. I will be the individual who is responsible for signing the audit on behalf of Cherry Becker.
This was my first year working with the town of Kerry in this row. Dan Goggerty is our second reviewer.
He is someone who is independent of our audit team, who has not worked on the audit, but who
reviews it at another level to ensure that our work conforms to all standards that your
report is prepared and compliance with GAP, and that we have provided or applied the proper
procedures throughout the conduct of the audit.
day and has been part of our audit team for three years.
Jennifer Moran served as the senior manager.
She worked closely with the staff here during the conduct of the audit.
She has also been with the audit team here at Carey for three years.
And we had a new senior associate,
Chandler Ward, who worked on the audit this year,
and new key staff, Cody Russ.
This is something that we try to do on a regular basis.
is rotate team members in and out of your audit team so that we preserve our independence.
That's very, it's one of our ethical standards that we have to apply throughout the conduct of our engagement is to remain independent.
We try to balance that with some team members who are more experienced so that your folks aren't training us on carry every year.
So, moving on to the results of the audit, one thing that, before I really get into the
prepared comments on the slide, I want to let you know that this audit is not performed
as part of an investigation of any means.
Our audit has a completely different purpose than what those investigative procedures are having
or what the inquiries you might call them.
The purpose of our audit is to express an opinion
on the financial statements as a whole,
and to be able to provide assurance
that those financial statements are materially correct,
meaning that they do not have what we call a material error
in those financial statements that if it were corrected,
would change the decision that a financial statement user makes
based on those financial statements.
And so to do this, we spend time, we make inquiries,
your mayor participated in one of those inquiries.
We talk to members of management, members of staff.
We gain an understanding of your processes and procedures
over your key transaction cycles.
And that helps us to determine where your financial statements
are at what we call risk of material miststatement. And then that's where we deploy most of our audit
resources, because we do not review 100% of...
Local misstatement are areas that have a high degree of estimation involved. We are management
judgment. And when I say management, I generally mean the management of the finance department
who are calculating and coming up with those estimates. We are there. There's a high degree
of judgment on their part. If there is a new accounting standards, there's also always
elevated risk around that particular instance as a team is learning the ins and outs and
how to apply that new standard. And then certainly this year, where the finance staff had a new
implementation of an ERP system that managed all these transactions, there is a lot of risk
around just that transaction, what I will call that transaction cut. So we, those are certain
areas that we do tend to spend a lot of our off it, our off, my last name was off it before
I got married. So our audit resources. So I'm going to take you to this slide here now and
speak more to this slide. But we have audited the financial statements of the town of Kerry
as of, and for the year ended June 30th of 2025, in accordance with generally accepted
auditing standards, and government auditing standards, and those government auditing
standards are like a second layer of auditing standards that are applied to governments,
and those standards are prescribed by the United States Government Accountability Office.
We have also issued or audited the town's compliance with the compliance requirements that are
described in the audit requirements of federal and state awards, you may have heard it called
uniform guidance, you may have heard it called a single audit, and also the annual audit manual
for governmental audits in North Carolina that could have a direct and material effect on your major
programs. So we do not audit 100 percent of your federal and state award programs. There is a
population, if you will, that is prescribed in the guidance that helps us identify which programs
will be audited as major each year.
So in doing that, we anticipate between now and February the 12th that we will be issuing
and modified opinions on the financial statements and on the federal and single audits.
we are currently in the final phases of our own internal quality control reviews as we are wrapping
that audit up.
This slide just identifies the programs that were audited as major this year.
We have your highway planning and construction program. We also audited the federal transit
cluster as a major program this year and there were two programs that were part of that cluster.
the federal transit formula grants, as well as the best and best facilities formal program.
And then you have one major state program, and that is your pow deal.
So all of those were similar programs, and that they're all related to highways and transit.
So I talked to this slide just a little bit earlier.
When we are planning and performing our audit, we consider internal control over financial reporting.
really is a basis for helping us design which audit procedures are appropriate in the circumstances.
We are not testing your internal controls to the level where we can offer an opinion on the
operating effectiveness of those controls and we are not offering an opinion on the effectiveness
of your operating controls.
So, this is getting into a little bit of oddities language and so I hope
you all will bear with me just a little bit.
There are certain control deficiencies that are defined by our auditing standards.
The first is a material weakness, and this is the highest level of standard or of deficiency.
It's the one that we consider to be the most, the most really significant.
A material weakness is a deficiency or a combination of deficiencies in internal control.
Such that there is a reasonable possibility that a material
misstatement in your financial statements would occur and would not be prevented or detected and corrected on a timely basis.
The definition of a significant deficiency is very very similar, but it's not as severe as a material weakness,
but yet we still feel that it is important enough to bring to your attention as members of those charged with governance.
This year we did note two weaknesses that we consider to be material weaknesses.
Dana referred to the first one just a little bit earlier.
During the conduct of our audit, Mayor Wombrecht reached out to me.
We had conducted an interview earlier during the course of the audit,
at which time there was nothing for lack of a better word,
exciting to report. But during the conduct of the audit, Mayor Weinberg reached out to me
on a weekend to just to let me know that he had concerns that concerns had been brought
to his attention and he wanted to do the right thing and bring them to Ira attention as
your auditors. And so from that point, he helped us to identify some other individuals and
employee of the town who wished to speak with us and provide information as a result of their
conversations and he provided us with some areas of concern and as a result of that we did
expand our testing to look at some of the procurement cards as well as the travel and training
and for fiscal year 25, we are focused solely on 2025.
And so, I guess you would say the results of those procedures
and additional inquiries, let us to believe that the town had a
deficiency in its internal control, specifically that control
environment in the town at the top.
And there is an entity called the Committee on Sponsoring,
It's the committee on sponsoring organizations.
I'm trying very hard not to use acronyms without defining them.
We call that COSO.
And COSO has done a lot of work on identifying the different elements of internal control
structure.
And almost every government that you would step 30 and you and as well as commercial businesses use
that internal control structure to design their internal controls.
And the very foundation of an internal control structure is the control environment with
the tone at the top, the tone that is set at the highest levels of management being really
important and the foundation of all of that.
So the results of our procedures did indicate that your former town manager did not always
consistently model or reinforce the expected ethical behavior that is laid out in your policy,
in your ethics policy, messaging from your former town manager, and not always adequately
communicate the importance of compliance with policies and procedures, accountability, and
other internal control responsibilities, and unfortunately, we learned that employees
did perceive that there was a risk of retaliation, if they raised concerns.
So we've given you more information there on the effect, but I think you all have been
dealing with the effect and know that very well.
So I will get down to the recommendation, which is that we recommend that as a body, we
the town, but essentially you all, as those who are charged with governance, that you periodically
evaluate the control environment by providing surveys, particularly anonymous surveys, that
really would help you to evaluate employee perceptions of culture, leadership behavior, and
the effectiveness of your internal controls as your team perceives it.
And we further recommend that you consider strengthening your reporting mechanisms.
So what you might sometimes call whistleblower mechanisms and particularly your anti-rotalliation protections that are provided to employees.
The second material weakness is one that is very, very common.
The following mistakement was identified during our audit, Kimberly talked to you all in the work session about closing out the audit and trying to identify all the transactions that occur in July, all this September before you close the books that are really related to the prior fiscal year.
This year, the results of our audit procedures indicated that there was a grant receivable
and related internal intergovernmental revenue in the amount of $2.1 million in governmental
activities and capital projects fund. That was a material audit adjusting entries that needed
to be recorded, so that would have increased both your grant receivable and increased your
or governmental revenue. I will tell you this was not material to the governmental activities but
it is material to your capital projects major fund and therefore that's why we're reporting
this as a material weakness. So our recommendation for that is just that we recommend that the
town enhance its financial close processes to include a reconciliation of their eligible grant
expenses as they are reporting it on your schedule of expenditures, the federal and state awards
to your intergovernmental revenue.
And then Dana mentioned that we did have some best practices to offer you.
We do have three.
The first being that we believe you should consider adopting a policy that governs benefits
that are provided to elected officials, I've laid out for you some of the things that you
to consider including in such a policy and we, we think the benefit of that is that this
would really serve as a buffer between staff and elected officials when difficult decisions
have to be made or advice needs to be communicated.
The second control recommendation that we have, I'm going to call that a best practices.
It's not a deficiency in internal control.
It's something that we see as we are conducting audits in other organizations that we think is good and that we like to pass on as advice to others.
And that is that you develop a policy addressing your chamber intercity visits.
We recognize that there are valid business purposes for these and that those purposes are myriad.
There are a lot of different business purposes and things you can learn from those particular
trips.
We would just recommend that you consider establishing a policy that clearly delineates
that information, just for transparency to your citizens, so that they too will understand
the business purposes and the benefits of participating in those types of trips.
And then the final recommendation that we have really relates to the dollar threshold for your
P card loss receipt form.
The town does have detailed policies for how to report loss receipts for charges that
are made on the P card, but it does lack this strong, defined dollar threshold above which
employees would be required to reimburse the town for any P car transaction for which they
could not provide a valid supporting receipt.
I'll kind of along with that, just to reduce the frequency of loss receipts and improve
record retention, we would also recommend that you consider adopting a cloud-based digital
tool for the receipt and storage of receipts just to make it a little easier on your
to retain those and get those turned in appropriately.
Okay, correct at Miss Statement.
This is a slide I'll go through very quickly
because I talked about this already when I talked about the material weakness,
but we did have the $2.1 million auto-digesting
entry related to grants receivable.
And then the incorrect at Miss Statement.
This is a, this really centers around the implementation
I'm a new accounting standard gasp statement number 101 compensated absences.
So just as a course of being an employer, the town provides certain benefits, including
leave paid for its employees, vacation pay, sick pay, there are a number of different
types of leave.
This standard changed the way that governments have to measure that compensated absences.
It is something that had to be applied by all governments in order to be in accordance
with generally accepted accounting principles.
So during the conduct of that, we did identify that the beginning balance was misstate
1,145,87 dollars. Let me back that up. When you apply one of these new standards, you have
to apply it what we call retropectively. So as if it had been in place at the beginning of the fiscal
year so that your years are comparative. So, your town...
It's required to make a change to the beginning balance. When you look at these financial statements in detail, it will say that position is previously reported and then it will have a restatement.
So that restatement is what we're talking about there. So there was about a million dollars that ran through current fiscal year that really should have been pushed to the beginning balance.
at the end of the day, your confidential absence balance is correct, your ending net position is
correct, and this is an immaterial dollar amount. So, you know, we brought it to the attention
of management, but it wasn't, it wasn't reclassified. I know that's a little complicated. It's
kind of an auditor thing, and probably not the most exciting thing we'll talk about tonight.
I did, I will go through this slide very quickly.
This is, again, you did implement gas-based statement number 101, compensated absences
this year.
I will tell you this was a heavier lift on your team than what we thought it would be when
the standard first came out.
So they had to put a lot of work into this standard, required a lot of historical analysis.
As part of our audit, we did evaluate the town's identification of accounting for and disclosure
of the town's relationships and transactions with related parties, understanding that
I have communicated certain issues with you related to your former town management,
town manager.
We noted no additional related party transactions or related transactions that were previously
and disclose to us and we did not have any issues with any other transactions of that nature.
Now sometimes governments will enter into transactions for which there is not any authoritative
literature that tells them how to record that transaction. However, all significant transactions
that you have in your financial statements are we were able to apply authoritative
guidance to those transactions.
So for the purpose of my presentation,
professional standards define significant unusual transactions
as those that are outside the normal course of business
for the town or otherwise appear to be unusual due to their timing,
due to the size or due to the nature of the transaction.
So something that a lot of governments
are participating now in, and you've probably heard a lot
about it or public-private partnerships, so those don't happen every day and we consider
something like that just to give you an example that might be significant and unusual
for you all. I talked about accounting estimates earlier and the fact that those do include
a degree of estimation and a degree of judgment. I've identified for you here those significant
estimates, the ones that we consider to be significant, and what we do around those estimates
is we review the inputs, we review the historical trends, we just really look at all the
assumptions and the calculations to make sure that those are reasonable in our opinion, in
relationship to the financial statement as a whole, and we found them to be so. We also like to
that those estimates are consistent from year to year, so we don't want to see governments
changing their methodologies for calculating those estimates from year to year, and yours are consistent.
Your financial disclete statement disclosures are neutral, consistent, and clear from year to year.
And then finally, this is something that I'm required to tell you all,
is that we do provide you with one non-attest service, a non-attest service is anything we do for you that is not strictly related to auditing the financial statements.
Because you are subject to a federal single audit, another step in that procedure is that you are required to file your financial statements with a federal audit clearinghouse into inter-information,
and relate it to your schedule of expenditures,
a federal awards into a data collection form.
And I tell people, it's not really the easiest form to use.
I know that's probably surprising that a federal website
would not be terribly easy to use.
But we do hundreds of those every year for our clients
and our team is very proficient in using that.
So we provide that service to your team here.
we download the information we give it to Kimberly and her team to review and approve and once they have done so that is uploaded and Kimberly will get on the site.
She will certify it and finally submit that.
So all that is to say, the reason it's important that I tell you about non-attest services is that sometimes if a firm provides too many non-attest services to you,
It can impair independence.
So we always make that known to you,
that we have that non-attest service.
We've evaluated that service.
It's nothing that we believe impairs our independence
and we are not aware of any other circumstances
or relationships that create threats to our independence.
As I started this presentation by saying,
we work very hard to guard our independence
by rotating new members onto this team every year.
During the course of our audit, we did not encounter any significant difficulties in dealing with the management of your financial staff.
Of your financial department, they provided all the information that we requested.
They provided it in a timely manner.
And to our knowledge and belief, they have answered all the many questions that we have posed to fully and to the best of their ability.
We did not have any disagreements with management on any kind of financial reporting, accounting or auditing manner.
Everything that we have been reviewed, every question we've had, the adjustment that we provided has been resolved to our satisfaction.
We did not have any matters ourselves that we had to consult outside of our engagement team
and get another opinion.
At the end of this audit, as we are getting ready to issue, we are going to request certain
representations from management that will be included in a management representation
letter.
It will be signed by Kimberly, is the Finance Director, Mr. Overton, is the interim town manager.
I tell people this is five or six pages of very specific information about the town's responsibility for internal controls.
The town's responsibility to report to us, known fraud, very specific representations about how the financial statement elements are measured.
And at the end of the day, those five or six pages
bull down to saying, we've provided you with everything
that you've asked for, and we do not know
of any information that would change the unmodified opinion
that you were receiving on your financial statements.
So that is the short version of that set five or six page letter.
In some cases, management at our clients
It's made aside that they want to consult with another accountant about auditing and accounting
manner.
It's really similar to obtaining a second opinion on certain situations.
Occasionally, one of our clients won't like what we're, like our interpretation of a
generally accepted accounting principle, or they'll disagree with us that an issue is a
material weakness, and they'll go out and get a second opinion.
to our knowledge. There were no such consultations with other accountants or auditors.
We generally discuss a variety of matters throughout the year, about the application
of accounting principles and auditing standards, all those discussions occurred in the normal course of our professional relationship.
But fraud and illegal acts, this is something that I just want to point out to you, because
I know you're concerned, management did report to us very early on.
I think it was maybe the second conversation I ever had with Kimberly and there, but management
reported to us that check fraud in the amount of $1.3 million was perpetrated against the
town on or about April the second of 2025.
So that was perpetrated by an outside party.
Upon being made aware of this incident, the financial department's management immediately
reported the incident to police to get that on record.
They also reported it to its financial institution.
The town did not suffer financial loss as a result of this incident as the financial
student institution credited the town's account for the amount of the fraudulent check
it went through the positive pay system and so we were able to see audit evidence of that
amount coming back into the town.
We did not have any internal control recommendations related to that particular incident
because it appeared to have happened external to that check leaving this building.
Additionally, as I stated earlier, Mayor Weinberg reached out to us during the course of
Our audit and report it to us, the potential misuse of the funds by the former town manager.
And as we have discussed, we did report a material weakness related to the strengthening
of the town's control environment, specifically the tone at the top.
And then I have identified the other investigations that have we have been made aware that
those inquiries or investigations are ongoing.
Going concerned, going concerned has to do with the town's financial sustainability
into the future, particularly looking at the next 12 months and know of the inter-conditions
noted that there was a doubt about the town's ability to continue as a going concern.
Kimberly talked to you all about the different pieces of your annual comprehensive financial report.
It's much easier to say act first, so I'm going to go with that.
You do have your required supplementary information.
Those are particularly your management's discussion and analysis and the schedules that
really give information on your participation in your employee benefit plans, your pension
and OPEP plans, other post-employment benefits, those documents that are as we call it,
not audited. We review that information to make sure it is consistent with the financial statements
and consistent with our audit evidence and we found it to be so but we do not express an opinion.
The financial statements also includes supplementary information such as your schedule of
expenditures of federal awards and federal and state awards. We do audit that schedule the
supplementary information and we anticipate that we will issue an unmodified opinion on
that supplementary information in relation to the financial statements as a whole.
Can we discuss other information?
Your introductory and your statistical section.
That information accompanies the financial statement.
It is not required supplementary information because the standard seter does not require
the standard setter being the government, accounting standards board.
But similar to the RSI, we do not audit or express an opinion on that other information.
We review it to make sure that it is consistent, again, with the financial statements and our audit evidence.
And finally, there are three new standards that will be coming online that your finance department will be working through.
Guests be statement number 103, financial reporting model improvements, there will be changes
to the contents, what is required in your management's discussion and analysis.
That's one of the key things that will affect the term.
Additionally, there will be some changes to your proprietary funds statements, particularly
your utility fund that you all talked about earlier.
None of these changes will change the numbers.
It won't change the way those numbers are measured, but it will change where they are presented
within the financial statements.
There will be some changes too to where your budgetary comparison schedules are right now.
You have them in statements.
They will move to schedules.
So things will just move around just as you've learned where everything is they're going
to move on you.
Gaspy statement number 104, disclosure of certain capital assets.
This, again, it doesn't change the way capital assets are measured.
There are some new disclosure requirements.
Do not anticipate this will be a problem for your staff and you are largely reporting
in conformity with that standard already.
And then finally, there's gas, be statement number 105, subsequent events that has to do with events
that might arise between the date of the financial statements June 30 of any given
this year and the date that the audit report on those standard is finally issued and whether
it gives you guidance and a definition on what qualifies as a subsequent event that should
be either recognized in the financial statements or disclosed in the notes to the financial
statements. I have my contact information so that if I do not answer something for you tonight
or you think of something after tonight you can reach out to my email or my phone number and I'm very happy to speak with you.
So with that, that is the end of my prepared remarks.
I know some of you all may have questions for me.
If you don't know that, then what if you don't know that, it's just a water.
Need it?
That's a lot of talking.
Not a lot of talking.
Yeah. So, this is the first time to go through the first audit as a new council member.
And my first question is, if this audit is like math calculation of all the financial reports,
you're just checking the numbers are correctly calculated.
but the use of these phones or some of the numbers you won't ask the question about why
this expenses is more than the previous years.
So I guess the answer to that question really hinges around the purpose of the audit, which is whether
or not the financial statements are materially mistreated.
So, and where we assess our risk of material misstatement.
So, transactions that fall below a certain calculated number have a lower chance of getting selected
as part of our audit testing and procedures.
We really tend to focus on those audit areas where we have assessed risk of material misstatement
to be high. One of the things that we do is we do do some comparative analysis between years
and we do ask questions and gain all the evidence about why transactions may have, why balances
may have materially fluctuated. I would have to look at my working papers, but between 2025 and 2024,
where there were not a high degree of areas
that had a lot of fluctuation.
Can I follow up just to be clear?
There are hundreds of thousands of transactions.
And you test certain ones.
So they just pull certain ones once that they think
might be risky or different.
So just to be clear.
Can I ask a question?
Yes.
So I'm pretty sure this is probably out of your scope, but I'm still going to ask.
So the two material deficiencies that you have identified, is there any potential impact
on our AAA rating?
Or do we need to be ready for that kind of impact?
I don't know that I can answer that.
That would be better for your bond and buzzer to answer.
I'm apologizing.
No, you're fine.
I didn't think so, but wondering.
So, I have a question, what is this scope of your audit engagement with respect to internal
town policies, with specifically compliance requirements, for instance, our policy 175
that says, you know, would speak to the need of keeping a third of our general fund expenditure
listed, is that reviewed for compliance as part of the audit?
When we review compliance, and when you get our report, you will also get what we call our yellow book letter, it's our audit, it's our report over
of your independent auditor on internal control over financial reporting in accordance with government auditing standards.
Really proud that I can say that from New York.
We read it 45 times this year.
What we're really focusing on are contracts,
grant agreements, statutes that are external to this
government, not your internal policies and procedures.
We're really looking more at third party-type issues.
And that is what would rise to the level of a funding.
So, follow on, it's mentioned within the Act for our policy 175, but actually maybe it's
part of the boiler plate, you know, that says, sure, you will keep to this.
If during your audit procedure, you become aware of a noncompliance with an internal
policy that isn't within your standard scope, would you communicate that to management for
counsel?
And the reason I bring that up is I went and looked at the act for for Raleigh, which you will do.
And they do have a section within their act for about their time policy or their city policy.
And it actually specifies where they were, right, and what percentage they're at and all of that.
So I'm wondering how maybe they ask for that as part of their statement of work.
I'm just surprised it was not part of our-
That is something we recalculate, you have a note.
It's called the unassigned fund balance in age 84.
There you go.
You actually describe that.
And so one of the things we do is we recalculate it.
So I recalculated it this year just to make sure the Kimberly wasn't misreporting.
The 33, you know, that she was there when she wasn't.
So, normally, yes, if we would probably say something, I think what we would say is not a finding that we would say,
hey, Kimberly, this amount isn't right. You didn't report the right percent.
So, it's not part of your standard alignment, part of your stated scope, maybe?
I would say that that is something we would recommend that you would change your disclosure on. It would not be something that would be a finding.
So, you happened to look at it this year because it doubled up?
Well, just, I'm just new.
I'm completely new to your audit.
So, I've read, I've read everywhere if you're independent of your financial statements
three times now.
So, because I was new, I was very cognizant of those things.
Okay.
and I'm curious how you would feel if I told you that we were out of fun
balance for a year that Cherry Becker did and audit for us.
What would you say to that?
Would that surprise you say because I don't know about the judgments that the
the audit team used or the conversations that they might have had.
But if I'm understanding correctly,
You were saying, it's not that you would say we were out of compliance with our policies,
but you would just note that what was documented was not calculated correctly.
I would dock, I would, so let me just back this up a little bit.
When we review your financial statements, we have a lot of back and forth with your staff.
And we make recommendations to them.
We don't draft these financial statements, but we might say to them, hey, we don't agree
that this is reported appropriately, and you need to make a change.
We would like you to consider to make a change is how we would say that.
In the course of this engagement, your team has been very compliant.
I guess is the word, in making the changes that we recommend.
Both my changes as the engagement director who does the first level review as well as our second review or he had a number of
Recommended changes for their consideration as well and I just wanted to say, you know what we're always focusing on is
Are these financial statements materially correct in relation to government accounting principles?
I
have a
Wait, you look like you were going to ask them.
I'm not ready yet.
I know if I know your looks when you're going to ask a question.
Is there someone, if not you in your firm, that would be,
the can offer an opinion on the ERP that we chose?
Yes.
Yes, later.
Yes, not you.
Yes, it's not me.
I tell people, I'm real good with numbers, not so much with the ERP's,
but yes, ma'am.
there, we do have someone that could give you some information on that.
Not that I don't trust the team, but the team shows something excellent.
I would just like to have a sort of independent opinion on that.
And one thing that I would tell you that we had, we did have our IT team,
talk with the team here, talk about what they did,
what their controls were to ensure that the information transition
over appropriately but I will tell you just from watching teams, implement ERPs. It is a very
time-consuming, very heavy lift. No matter how good the product may be. Sure. Sure. Appreciate that.
And I think the this question I think is for our staff and then I was wondering if you could tell me
Just a little bit more so I better understand how the, I think there's 2.1 million grant receivable revenue, was, was not recorded or misrecorded.
How to ask it, because I saw it said, okay, but it was added to the ledger, I'm using the wrong words, I am not an account.
And it was clear that it was added and it's reflected currently in our capital fund balance.
But I'm just curious about, you know, how something like that can go unrecorded.
And in fact, what unrecorded actually means in these terms?
Well, I may need to let Kimberly answer part of that question.
But let me tell you the way we identified that transaction.
So one of the things that we need to do every time we do an audit at any, any government that has a federal single audit is we take because we're issuing an opinion on your schedule of expenditures of federal awards.
We want to make sure that it is correct.
And so one of the things we do is reconcile it back to your financial statements and back to your general ledgers.
And in this case, we were out by that $2 million, we just couldn't identify it.
And so we reached out here to staff, they investigated it more, and they were able to determine
that this expense had been recorded, but that the corresponding accounts receivable had
not been made.
I have something in my memory about why that happened, but I don't want to miss speak
on their behalf.
I appreciate that.
Other questions?
Thank you.
Thank you all.
I really appreciate your time and again,
if after today, other questions arise,
please feel free to reach out to my contact information.
Okay, good evening, Mayor, and Council is so happy.
I'm so happy to see you again this evening,
and very pleased to be before you to share financial highlights
from the fiscal year ending June 30th, 2025.
We have provided an update on the audit, including the audit process and key findings that support the results I will present.
I will provide a deeper dive into two of our major funds with a primary focus on the general fund with the summary highlight of the utility fund.
Before we move further into the presentation, I want to highlight a few important points.
This year's audit has been especially special because it included several major transitions.
First, we have a few new staff members who participated in their first year audit with the town.
And secondly, Dana and Lee Ann actually gave reference to this is our first year for producing financial statements.
using the town's new financial system.
We now, we are now using Oracle Fusion, a cloud-based system
that took us about two years of focus, deliberate work,
to finally say we are going live.
Despite these changes and some say challenges,
the team has worked diligently and collaboratively
and we are grateful to be nearing completion of this year's audit process.
I could not have asked for a stronger team.
If I may take a minute to recognize some of the superstars who have stuck it out and continue to say yes to this work each and every day.
I have with me tonight, both of the assistant directors, Dmitry Scheheris and Dera Schoffner, and also a member of our reporting team.
And without Dera, Dera actually leads off our reporting area. Without her, I will say we probably would not be where we are right now.
So we're very appreciative and I just want to say thank you all for that.
I also want to sincerely thank you all.
Each of you for your leadership, dedication, and steadfast commitment to carries financial stewardship.
Your engagement and guidance continue to be essential to carry financial strength and long-term success.
As a reminder during our quarterly meeting in November,
I provided an initial overview of where the Towns Financial Performance was trending for fiscal year 2025.
I am hoping by the completion of our presentations, you will also feel confident in what we're doing.
Sorry about that. First, I want to, as a takeaway I have for you,
Continue to show growth year over year, and we are able to add amounts to fund balance
for future consideration as of the end of the year.
Second, we met the policy that is set for the general fund fund balance.
Third, our utility fund, another major fund continues to...
Hello, positive results. And lastly, with all, with our anticipated clean, unmodified opinion that
Ms. Waters just discussed, we are well positioned to continue to build on our foundation of
growth, to advance further in our financial management.
As a result of the independent financial
audit, staff is able to compile and distribute the annual financial report. That is referred
to as our annual comprehensive financial report also known as the ACFER.
The ACFER is compiled with four sections in mind to keep in mind.
They are the introduction, the financial section, the statistical section, and the compliance
section.
Tonight, as part of our work session, each of you received copies of the draft ACFER for
the financial sections of the audit.
For purposes of the public, if you are interested in definitions of these sections, please refer to the most recent streaming of Kerry's work session from this afternoon.
Okay, reflecting on fiscal year 2025, several of these highlights may feel familiar.
A significant portion of the change noted this year was driven by increased property tax revenue resulting from the effective tax rate combined with the White County Revaluation that took place.
effective this fiscal year.
Cell attacks continue to show nominal growth during the year to remain consistent with the
towns broader financial strategy, carry state focused on cash flow, strategic investment
in existing assets, and careful stewardship of fund balance.
As a result, budget line items were monitored more closely and additional capital projects
were closed out.
to the reassessment work Council went through as part of the budget planning process, both of which
supported a stronger operational bottom line for this year.
To see the makeup of the general
fund, 59% is for property tax followed by 21% in sales tax, which is included within the other
taxes and licenses. Sales and services round out the top three, which is where sanitation and parks
recreation revenue is captured.
On the expense side, public safety is representing 27%
of total spending alongside general government, which is also at 27%. Public works representing
13% of spending, leaving about 33% for debt service, development, infrastructure, and other.
When reviewing actual figures from the audited financial statement, please note that the fiscal
year 2025, the general fund received $281 million in operational revenue and incur $266 million
in operational expenditures.
When including all fund activity, the general fund also had net transfers of about 7.8.
As a result, the positive net outcome comparing total revenues and expenditures was $23.6 million.
This amount represents the change in fund balance recognized for fiscal year 2025 and it is very positive and exciting news.
When highlighting this dashboard of results for 2025, operating revenues came in slightly over budget and increased 20% compared to the prior year,
The largest contributor to this revenue performance, as mentioned, was the property tax of which we collected almost 100% at year end by year end.
Sales tax recognized the nominal 1% growth year over year.
Current year trends in sales tax are shown a slight improvement, however fiscal year 2025 concluded with the slow growth.
Operating expenditures include items such as personnel, contract services and small equipment.
percentages spent are slightly different from previous year, spending was 98% of budget compared
to about 94% in the prior year.
Total expenses were up 1%, this increase is nominal and consistent with year over year in
previous year.
This change is related to departments, continuous thinking around monitoring costs, strategic
way to replenish, balance levels depleted by previous years investments.
For fund balance, current policy states that fund balance is to be 33.33% of budgeted
expenditures. When for fiscal year 2025, that amounted to $85 million and estimates about
4 months. As we have reference in a previous slide, we added an additional $23.6 million
based on performance during this year, increasing fund balance to 106 million. This
is more than the policy suggest. Now that Kerry is shifting to a more mature community,
we will revisit some of our policy statements such as this one to make assessment on if they
still relevant for today. Switching to our other major fund, the utility fund, it continues to perform positively.
Revenue increased about 2.5% compared to prior year. These results were in line with the budget expectations.
On the expense side, operating expenses decrease at the same rate as the revenue increase in that
So, that yielded almost a break even result for the fiscal year.
To bring us back to the key takeaways from our fiscal year 2025 financial results.
The town continues to be in strong financial position with an additional 23.6 million added
to the fund balance for the fiscal year.
We also met our financial policies and guidelines.
and our fiscal year 2025 fund balance results exceeded the town's fund balance policy.
As you recall from prior discussions, actions taken to support and maintain the town's
financial health included the timely closure of capital projects, which allowed residual
funds to be reverted back to their original funding sources, as well as the laying spending
on non-critical initiatives.
Going to next steps, staff will submit the final annual comprehensive financial report by February
12th, this year's updated deadline to the LGC.
You all will receive a bounded copy shortly after that date.
Simultaneously, we are working to finalize our citizen-friendly publication, the popular annual
financial report.
We call that a paper.
The Act for Along with the Paffer will be submitted to the GFOA, which is the government finance officer's association for reporting awards upon completion of this year's audit.
That concludes my presentation. If there are any questions, I am here along with Leanne, Dana, and of course, rest to answer any of your questions.
Thank you.
aren't you maybe yeah well my questions are not as much about what has been
presented which I think you did a very good job thank you is more for us we've
been in a maintenance mode so while it looks very rosy and nice it's really
not because we have unfunded police fire everything else and I don't know the
impact of that and we won't know until we get into the budget.
I think we'll have a very just as we are tonight.
Robust conversations about last year's budget.
We're going to have very robust conversations about next year's proposed budget.
But I think that's important to put out there because this looks like,
wow, we're doing great.
We've got a lot of extra money, not really.
Because we have a lot of unfunded positions.
I think it's a good point just jumping on to what you said.
It looks good right now because halfway through the year, we basically stopped everything
we were doing.
And so we had what 168.
Unfunded.
It's 68.
We unfunded capital projects that were not started that citizens expected.
Some of those even might have been from 2019 bond item.
So it looks good and we caught up, maybe, and we deverted from going up the cliff.
And now we have to get back on the road to doing what we do best, which is to fund police,
fire, parks, and give the services that are citizens and infrastructure.
And it's sidewalks.
Sidewalks.
Can I ask a clarifying question?
Can we really could you please tell us if there is a healthy proportion of our,
of our fun that fun balance we keep talking about?
It's a healthy portion of that that's not committed or as I learned earlier,
unencumbered.
As of June 30th, 2020, if you look at the statements that we talked about tonight, you will see
an amount that says unassigned. I think that's a safe number to look at. That's a healthy number
to look at as unrestricted. Okay, I'm unassigned uncommitted. I have a somewhat related question.
Kimberly, you've helped Bella and I read our
act for and understand that when meeting our
fund balance requirements, there is a point at which we
have too much in fund balance and that is also a
deviation from best practice. Is that a heart and
fast threshold? Is that somewhat subjective? And hearing
that we actually are now exceeding our fund balance? How
much are we exceeding it by or are we entering that territory or we're keeping too much
in fund balance. So it's not a hard and fast calculation. Most of the time we would hear
about it from say our local government commission who weighs who looks at our levels compared
to peers. However, what I will say is we talked about we're going to be looking at these policies going
forward and so I think those questions are great to ask like what level at what level do we
want to keep fund balance and what will happen to those amounts over fund balance.
And Kimberly, we did cover some of this in during our work session, but for the benefit
of those that are here today in the council meeting and those are, you know, have joined us
virtually.
We did have a slight dip in 2023 fund balance.
It was it went down by two percent, right?
So we were at 31 percent.
So our, our floor, our policy says 33.33 percent for 20, 23, we were between 31 and 32 percent.
So there was a slight, that's right. But we recovered and we got issues at the right time,
but things went hold. Yeah. And that's how we kind of recovered and now we're in a recovery
and maintenance mode for that reason. That is correct. Okay. Go ahead. Yeah. So for the
is remaining dollars this year going to add to the reserve. So that definitely going there or we
are still have opportunities to use this talk about that if you're with the budget ask questions
for next year.
One of the things that was also brought up when we talked about the expert is that this is a new year
that are current contract with Cherry Becker ends this year.
We have the opportunity to go back out.
Does that mean we also have the opportunity
to talk about what that statement of work
or contractual agreement might look like?
Absolutely.
Yes, because I think that, you know,
less and less in learn what I think might be great
is to be able to have a detailed understanding
of where we are in the fun balance
so that we don't have to go back and forth
the pages and do the math ourselves, having the auditor or finance department highlight
to us where we are and also that way we have the transparency associated not just with
us but also with our residents and as we move forward and have the discussions about what
is the right number for fun balance.
You know, when Raleigh's fun balance percentage is 17%
right, and ours is 33 and a third.
Yeah, we're sitting at it.
There's there's there are 41.
There are different methods, right?
And we'll bring options to you.
So like with Raleigh, they look at unassigned,
which is a category.
Our policy is based on total fun balance.
So you know, there's so many differences there that we'll have to
allow you guys to consider.
So that I think as we negotiate and look for a new contract, that extra visibility,
extra accountability, extra transparency would be really helpful.
I think our Mayor Prudem, Lori Bush also made a comment in work session, which I want to share with everyone with the
permission to color code the fun balance so that we know that you know it is in alignment
with the policy so that we don't have to go look for it and you know to the point we don't
have to calculate ourselves but you know it could just become a second habit where we are
just you know we look for that color coding and we can identify that number easily yeah I have
to say that when I was trying to understand it a little bit more I looked at other municipalities
and what I enjoyed reading was actually Raleigh's because they actually talked about what their
fund balances, how they got there, where they moved money from and to in order to keep the fund balance
and how to support the financial allocation of general fund revenues.
It was quite transparent in a way that says, you know, we were getting a little bit low. Here's what we did, and here's why we did it. And it was written in a way that anyone could understand.
Lord, I want to make a comment that I was hoping to make, which I think speaks to somewhat what you're saying.
Clearly, you and the other, any other finance or budget staff that I've interacted with was
incredibly knowledgeable, and, you know, never guesses which I love, you know, brings back
the information when we ask a question. I'm only speaking for myself here, but I'm sure some
of my colleagues will agree. What I would like to have more of is your context to your opinion.
And in such, I feel as though we probably would have gotten a lot more of this kind of information
in previous to now if there was just a different attitude
or with our leadership, right, at the very top sort of being
the filter sometimes, I would really like to, you know,
a lot more here what you think if that makes sense.
Because are you sure you want that?
I want to hear it.
I can't tell you how much.
I believe because we have conversations and you know if I've asked you a question directly or whatever
you give such incredibly hopeful context and it not just tells me what that number or the
answer to the question is but it makes me understand relative to why I'm asking where we are
or what it affects, what the number actually means. And so I just wanted to invite you to
or of course your very specific information
that you tend to deliver to us.
But I'd also like to hear your color commentary
in your opinion.
Very good.
And Kimmery, for the benefit of people who are listening
and who are watching this meeting today,
could you explain the process?
Like, I know that in the previous meeting,
we kind of covered this in more detail.
Nick, when do we conclude this?
When do we strive our next discussions?
So that, you know, we can track those timelines?
I know that's probably not part of you.
So I'm talking about the timeline for how we get our report.
So how do we conclude this like right now?
And what is the, I know you have next steps here,
but then what does it like exactly
to what Gonsolman Con Johnson said,
like translate this for us a little bit more?
So we're continuing our audit.
Most, the financial piece is complete.
We're still working on the compliance piece.
That piece, just as a reminder, was deferred because of delayed because of the federal shutdown.
As a result of that, the local government commission extended the formal deadline for submissions of jurisdictions financial reports to them to February the 12th.
So, between now and February 12th, we are hoping to land wrap up this year's audit.
So then we'll just start. We'll start all over again. But February 12 is our deadline that we have to have things submit it formally to a local government commission
And we can call it done from an audit perspective. Okay. Thank you. Yeah.
Just one more question about the recommendations that were made by our auditor. Some of them were in the process of doing like the surveys.
But there were a couple of other comments associated with protections, ensuring no retaliation.
Is there a group that is working on implementing some of these recommendations?
We're going to add them to the implementation group that will be working on policies and procedures.
Right, so then we will see that back as kind of a follow-up to the recommendation?
Yes, at some point.
and also I think it will be fitting to find out what Wambabond Dickinson recommends to you
so that we add those to the list as well. Well, they do be iterative, iterative, or are you going
to wait until all of that? I guess. Thank you. Other questions?
Carissa asked the question earlier about the $2.1 million dollars. Yep. And she said that you could
provide more insight. So I can tell you that from our review process that we normally do, it was an
oversight. Because what typically happens is we know we spend money during the year. Technically
we should go through all of them and say, is this eligible for reimbursement? If it's
eligible for reimbursement within a short period of time, we should agree back as a receivable
and a revenue. And so then in this case, it didn't pass the sniff internally, which is why
we immediately said, yes, we should book this entry.
other
questions. Can I bring up the last question? Because we are talking about to the
phone balance a lot, but that seems to be especially for the staff or the council in
the mayor. We care about that a lot, but as a citizen, they may want to just to hear
always spending healthy wisely and the private tech they paid and did they get cover all
services could you give us a more a description, a conclusion about that? We're doing a good job
or we still have to fund more. So when we look at for fiscal year 2025 when we look at our revenue
compared to our expenses and this is going back to our general fund because that's our operating fund.
Reminder we are adding revenues minus expenses was about 23.6 positive. That means we had no use of our reserves
of fun balance. That means we could add to fun balance. So that's why we were able to add.
Now if we have a year and sometimes we do is planned, we may have expenditures over revenue.
But again, it would be planned by you all the authorization through some type of budget action.
If that's the case, if it's a negative number, revenues expenses, that's when we are eating
into fun balance. But for the past couple of years we've had positive results. So we have had
We have not had that need.
So I want to put that in layman's terms
the way I understand.
You have to have more money at the end of the year.
If you don't, you have to dip in the savings.
It's savings as your fund balance.
You ask question earlier, is it bad to have a high fund balance?
I have a personal opinion because if you're collecting revenue
and you're taking debt and instead of using the revenue,
if you got too much, then that's not a good use of taxpayer dollars.
but that's a personal opinion, we're gonna go there.
We're gonna have this discussion, but it's a danger
that we're in, I think, if we have, we're at 41%, I think.
For as of June 30, 20, 25, yes.
41% of operations, you know, cities on the coast
that have to deal with hurricanes, or at 35%.
And we're higher than that.
So that's a discussion we definitely have to have.
So I appreciate that very much.
I think that's why it's so important what Kim said about revisiting the policy statements
to see if it's still relevant for us to maintain that percentage of fund balance, because
things have changed. Our community has changed over the years and it may be that that
number isn't the right amount for us to maintain, which goes along with what you're saying.
Are we meeting the needs of the community and the expectations and finding that balance?
Other. I would like to just thank you and your entire team.
Doing your job every day is hard enough, but to do it while you're under the scrutiny of so many people, including us.
And the United States.
And you know, the state auditor, I mean, you do your job as transparently as possible all the time, but this is an additional level and some of our questions are hard enough, but hearing your job,
you know,
for putting together a presentation.
I don't think I've ever heard such a very detailed walk
through of the act for and the amount of passion
that you all have really does translate into what makes
scary great.
So I'd like to thank you all for what you do every single day,
especially with everybody looking over your shoulder
at the same time.
Thank you for those comments.
We appreciate it.
Okay.
Great.
Thank you.
And I would like to close us.
Thank you.
Close us out by repeating what Russ said earlier.
This is an investigation.
This is a report of our finances.
And they explained very well what this report is.
It's not an opinion.
That will be the state auditor.
They're an elected body.
They will certainly have an opinion.
And I have a feeling it won't be very rosy.
but we will hear from them and we also have the DA and the SPI looking into things.
Don't know if they'll find anything. We have no idea, no information what's going on with them.
And then we have the internal investigation where they will try to come up with additional policy
and procedure changes to make us stronger to make sure this never happens again. Did I cover that?
Yes, sir. So this basically takes one of the four kind of concludes that information for us.
So there's more coming. If you're here and wondering, is that it?
No, if there's more coming. Anything else before we move on?
All right. Thank you.
If I can get my agenda back hold on just a second.
Here we go.
All right. We've reached the public speaks out portion of our meeting.
What's that?
I skip right over the manager because I already called on the manager.
I like to the last topic.
I have an update as well.
Okay, please.
It's going to be eerily similar to Council Member Bush's ceremony opening comments as well.
Because you may have seen there's lots of staff up in the seats tonight.
But I wanted to take a few minutes to talk about a response to the winner, weather response.
also that we've seen over the past few weeks as we were hit to buy back to back storms,
winter weather storms, which they obviously name now, Furn, and then winter storm,
Gianna. And together they made it for a challenging week for a stretch of two weekends
a row for our staff. So employees are out treating roads. I don't have all the data.
I can't remember Bush already gave it, but responding to issues, keeping critical services running,
often during long hours and tough conditions, and what really stood out as it normally does
during any kind of emergency operations that we do is how many people step up and go beyond
beyond their regular roles, taking time away from their families, and the personal commitment
to work, extra shifts, and help wherever they are needed. So we want it to be sure to take
time tonight to thank those staff members and recognize a special group that are here that
above and beyond to help and I'd ask Cheap Cooper to come up and say a few words. And then
I also say that I expect that they have learned a lot about our financial statements as they
were up there for the last hour and 40 minutes. So thank you all for being here.
Good evening, Mayor and Council. Thank you, Mr. Overton. And Ms. Bush, you did a great job,
summarizing the statistics, great job. So good evening, Mayor and Council. I'd like to take a moment
to formally recognize and thank the more than 400 employees
who worked extended hours over two consecutive weekends
during the recent storms.
This was very challenging stretch for our organization,
responding to whether like this requires more
than reporting for a regular shift.
It means employees coming in on short notice,
working long and often overnight hours,
and setting aside normal responsibilities
to support the town and our residents.
Despite the difficult conditions, these employees stepped up without hesitation to ensure continuity
of operations and kept essential town services running smoothly.
Excuse me.
Their efforts were critical in maintaining public safety, supporting residents and ensuring
that our facilities, infrastructure and communications remained operational throughout the
storms.
Many staff serve, many staff members served in the Emergency Operations Center, some for the first time.
Participating in special meetings, coordinating response efforts, and helping ensure decisions were made quickly and safely.
Others worked overnight and extended shifts in the field or behind the scenes while balancing time away from their families and personal commitments.
Through out both storms, staff work closely with our neighboring jurisdictions and partner agencies,
reflecting the strength of our emergency preparedness and our regional partnerships.
The names of the staff who supported storm response are listed on the screen.
If you're here this evening and worked there in either of those storms,
I would ask you to please stand so you can be recognized.
Thank you.
I would also like to offer special recognition to our Public Works team, the A-plus team.
The Public Works team, whose long hours and hazardous conditions helped ensure roads remain
passable, infrastructure functioned, and critical services uninterrupted.
To everyone who supported the storm's response, thank you for your dedication, flexibility
and teamwork.
Your efforts made a real difference in this community and exemplify the
high standard of service, our residents expect and deserve.
Thank you for your support, Council.
Chief, thank you.
I-I-I-I-I-I-I-I.
To say that when I talk about Carrie and talking about the best of the best, this is a perfect example. There's nobody compares to you guys, where the first ones were the roads clear, and that really impacts the citizens. They really notice it and they really talk about it. So thank you, I can't imagine going, especially after the first storm, I think I talked to you and I said, you guys got to really be tired, and here we go again.
And you had back to back, and you did both of those excellently, and I'm so proud to be a citizen, let alone the mayor, so thank you for all the work and your team did during these storms.
Thank you, Mayor.
Okay, did I skip anything else?
Sorry about that.
Our next item is public speaks out, and we've included instructions for speaking at this forum online and on the printed agenda.
There's three opportunities for you to participate in public speaks out.
You can do it through written comments or by calling in or by attending your person tonight.
And if you're here in person and would like to speak, I would ask if you please take a seat in the rows to my right that are highlighted.
Public speaks out have three minutes each for their comments and you may speak on any topic that is not a public hearing.
And that's to your benefit because public hearing speakers get more time.
The three-minute time limit will be enforced not to be rude but to be fair to all of our
speakers.
We have a timer on the podium.
It will start off with a green light.
And when it turns yellow, that's a signal that you have 30 seconds remaining and you should
try to wrap up.
And when it's flashing red, that's the point I'll interrupt you again, not trying to be rude,
just trying to be fair to all of our speakers.
I would ask that all speakers please be respectful and address the council as a whole rather than individual members.
And I'll remind everyone that this is a business meeting even though we just had a pause.
This is the business portion of the meeting and we would ask that you treat it as such.
Public speaks out has one hour for this at actual part of the agenda.
I would ask that you please refrain from applauding, speaking from your seats, using props or engaging in any behavior that may distract from the council listening to the speakers.
Interruptions including applause actually take away from that one hour time limit that we have.
and that would reduce the available time for public speaks out so we ask you please don't do that.
Thank you in advance for adhering to our guidelines in keeping this meeting effective and respectful.
This form is intended for council members to listen to public comment, not for discussion.
And while we may direct staff to follow up, we won't respond to your comments at this time.
Each council member is available to meet with you.
I've met with individuals today as a matter of fact.
And we welcome those conversations.
You may reach out to us via email, 311,
or just the direct meeting request form.
So now that I've said all these things,
now is the time for public speaks.
I'll start off by calling on our clerk to read
any written comments and call on any registered speakers.
We received five written comments. These comments have been emailed to Council,
prior to the meeting, provided to Council when they arrived, and also attached to the
online agenda for accessibility. We have two registered speakers. Our first registered
speaker is Philip Cotrose.
Hello, my name is Philip Cotrose. I'm a long-time resident of
Kerry. Thank you, Council, for allowing me the opportunity to speak out. This is actually the
Second time that I'm going to speak to you on this topic, which is about merit pay for the
town of Kerry staff.
I spoke here last year during the budget process, and I asked you to consider maintaining
the 5% merit budget that the former town manager had proposed cutting as a way of helping
to balance that year's fiscal budget.
My message then had three main points.
Number one, cutting the merit budget is never going to be enough to solve the town's budget
challenges.
I believe Kerry's going to face these for several years due to a combination of inflation,
slower growth, and aging infrastructure, among others.
Number two, as someone who's had the distinct pleasure of volunteering and working with staff from numerous departments,
I believe that Kerry has the best to the best, who performed well beyond the norm.
Anyone who drove the roads from Kerry to any neighboring city or town during the winter weather,
or anyone who interacted with 3-1-1 who worked extra weekend at evening hours saw two very recent
examples of why our town staff is the best. In a high-performing number three, sorry,
in a high-performing and a lean staffing environment, one in which carry has the lowest number of
full-time employees for a thousand residents in an immunosuppity and weight county. These cuts are dangerous.
They spur, or they may spur, well-trained top-tier staff in our town to leave for other
neighboring municipalities, some who are experiencing now much higher growth rates and have
significantly higher property tax rates, which would enable them to drive employee acquisition
away from the town of Gary. Unfortunately, the budget for this year was passed with the aforementioned
reduced merit budget for town of Gary's staff, but I looked at this as an opportunity to come
back here again during budget process and try to persuade you once more.
So fast forward and I was very pleasantly surprised to see that our interim town manager
will be making a proposal, or at least I hope you still plan to make that proposal, to
bring the current year's merit budget back to 5% consistent with years past.
I applaud him for taking that action.
You all as counsel have to decide if the various shifts in the funding that are proposed
in order to bring that budget back to where I believe it should be, or the right ones.
I haven't studied that, I don't have an opinion on that part, but having watched the increased scrutiny that you all are rightfully given to proposed expenses,
I suspect that you have or will drive that action with that proposal as well.
My ask is simple.
Regardless of how you get there, get there, particularly for non-executive staff, who are likely the ones most impacted by the current cut.
The dedicated staff of the town of Carrey are in many ways what make this place great.
Let's keep it that way.
Thank you.
Our next registered speaker is Thomas Pavlet.
So I'd like to speak about the financial malfeasance in the news in Carrey.
I'm going to start out by saying we can't blame everything on Sean Steegel.
On December 9th, WRAEL, WRAEL News, quoted Laurie Bush saying,
I also want to state clearly that there is no connection between the tuition,
miscommunications I have described, and the questions many of you understand
we have about the town managers leave.
But WRAEL later reported that the questions revolving around Sean Stiegels'
actions began from a public information request for emails regarding the $37,000 for
Lori Bush's master's degree among other things.
So actually, because of Lori's actions, that's how this financial malfeasance came
to light.
And I would actually like to know why the town council has not exercised their right
to replace Lori as Mayor Pro Temporary.
I was also surprised to learn recently that Mayor Weinbrecht was being paid under a contract
by a local engineering firm, a firm that does millions of dollars of work for the town
of Kerry, which is competitively procured, and also works for private developers.
Developers you need approvals from the town for their projects, including rezoning, permitting,
site plans, and traffic studies.
By the way, I noticed in the mayor's recent State of Carrier Dress, his former firm was
prominently shown in one of his slides.
The mayor was the same conference in Texas as Sean Steele.
He says it'd be expensive, his engineering firm, where Sean misused his spending account.
The mayor says he knows nothing about that.
these things that I'm talking about are clearly a conflict of interest, so I will conclude
by saying that I'm not old enough to be the father of either one of you or any of you,
but I am a father and so I'm going to give you some fatherly advice, same thing that I would
give to my own kids. Number one, you should write a memo about everything that went wrong
and how this situation can be prevented in the future. Number two, you need to resign.
Next speaker please?
No additional register speaker.
If you are here and would like to speak a public speaks out now as your opportunity.
Can you move to your left please?
Thank you.
Good evening, I'm Annuala Priser.
I've been here before.
I'm here to talk again about the lack of accountability
and the toxic environment that the town has created and is ongoing.
I have been defined as an angry woman
and have been forced calls to civility by our mayor
When a reality he's trying to avoid accountability,
the last gentleman has spoken to a lot of that.
I'm here to talk about something that has to do with accountability.
In the past few weeks, I, myself and others, have brought
to your attention, what happens with the Tano Carey Theatre,
the Carey Theatre, which is owned and operated by the Tano Carey.
I was told that the Tano Carey follows a master plan
and that the single employee who makes all the decisions for this theater is being supervised.
This is an employee who has shown in the past a shocking,
lack of common sense, a shocking lack of good taste.
She was behind in 2022, a show that never happened.
He was a drug-wind story hour that was supposed to be family friendly with people with stage names that were
slowly bulger. And there was a public outcry, I was part of that, and we
foil that never happened. Recently, your employee has decided to show a
movie, which is a bloodlible against juice. I brought that to your attention, and
I was told you, follow the master plan. Well, I have proven you do not follow
the master plan. The master plan is simply a fig leaf, something that you
to use as a paper shield.
This employee has made the decision herself.
The reason why we, as Jews, are concerned about the movie,
is because we know history.
Just not too long ago, in 2020, a similar child
died in Gaza.
His name was Mohamed Al-Dura, the media,
the Western media portrayed him as being killed
by the idea of.
Long story short, it was the catalyst for the second
or some have been laden, spoke about Mohamed Al-Dura as a justification for 911, a terrible
terrorist attack against our country that caused it as thousands of lives of our citizens
was sparked for wars and then we found out that the Western media had lied, they had edited
video, the child lived. They never showed that. But it cost us human lives, not just Jewish lives.
And when we bring to your attention and movie, the similarly is possibly the spark,
the catalyst for violence. When they have already been Jews killed on this soil recently,
when they're being called in our town for global antifada and you dismiss it as sorry I'm not done
I have I'm sorry your time is expired you need no it is a mother of fact I still have a few seconds you have no time left I'm sorry
Thank you
Next speaker please
Members of the town council Mr. Mayor Mr. Overton my name is Elliott tardiff carry residents since 2014 and it's
privilege to speak with you again. I have two orders of business to bring before the
stay as to ask for your consideration in action. First, that town leadership and
staff worked to improve pedestrian safety at the intersection of
Kilder Farm Road and Kilnain Road, which is heavily trafficked by both vehicles
and pedestrians alike. There's two go-carry bus stops on this part of Kilder
one on either side of Kilnain, nearby businesses, some of whose staff walk or take
public transportation to and from, as well as a daycare and a church, yet unlike the
maynard and kill their intersection a few hundred yards of the way, there is only one
marked pedestrian crosswalk and no pedestrian crossing lights to speak of. I worry this
is an accident waiting to happen. Please be proactive and fix this now.
Second.
In regards to the $250,000 agreed to be spent by the town in the last meeting, number 1, all invoices
from the outside firm investigating matters involving the former town manager at all be made
a matter of public record if they aren't already. The $150,000 was stated as a payment of services
to come. So what's been spent already? My fellow taxpayers and I deserve to know what this is
The $100,000 agreed to be spent by the Council for an employee engagement survey needs to be rethought and broader issues you raised need to be addressed.
To be crystal clear, I want this town staff to be heard and they in the town to be better off for it.
I say this as a former employee of this state whose agency also, quoting from your last meeting,
Did a lot with a very lean workforce close quote, but whose department did, and to my understanding, still does, annual employee engagement surveys,
drawn up, administered, and finding summarized to senior management and staff all in-house with no additional expenditure to outside firms as was agreed here.
If I heard correctly, you say the communication section is too understaffed to carry this out.
Yet, quote, there's been a hiring freeze.
Close quote.
You say you want to spend money to drive participation, but you state staff quote is really great at responding to surveys because they've done it before.
Close quote.
You want this quote unquote health check and quote you need the state and now close quote.
But I see a data that seems content with urgency, a taxpayer expense while kicking the
can down the road rather than fixing what's wrong.
Do right.
By everybody, fix the issues at hand while instituting a regular survey schedule as policy.
So staff have a permanent certainty of being heard in a way that's responsible by taxpayers too.
That's a better record to have.
Thank you for your time.
Next speaker for Public Speaks Out.
Good evening Mayor and Council, I am Renee Miller and my concern today is the proposed
increase to the merit budget, proposed in tonight's discussion item.
There are a few things I'd like for you to consider as you are reviewing this matter.
The first is that the reasons that employees leave when employers ask this question is usually
answered as pay. But when outside surveyors ask this question, pay is typically 5th or 6th
on the list. This has held true for the 30 years that I have been certified as a senior
professional in human resources. So I question whether an increase will actually have the effect
expected. Secondly, I was pleased this afternoon to read that Kerry has a policy in place
Let's suggest that executive staff be exempt from this merit pool.
During that first budget hearing last year, Mr. Kochers, who spoke earlier, suggested
that this might be limited to lawn and lower management, and I agree.
By spelling this out more clearly through your policies and citing those for the public,
I believe you can demonstrate transparency, and we can see that you can make adjustments
to ensure that we continue responsible spending in this area.
I believe citizens support this policy and are especially interested in
recognizing the excellent work of our staff.
Finally, I ask you to consider the tax implications of
making this move.
The grand total of this project is $2,815,000.
That sounds insignificant when you think about
dollar budget. By moving money from one pot to another, there's no immediate tax
implication. But the base payroll will change as you consider the fiscal year,
2027 budget. The current published budget and my notes from last year's process indicate
that 1% per mill equals approximately $5.3 million in revenue. So the effect could be
An additional 1.5 cent per meal needed to cover this cost in fiscal year 2027.
That's before any merit increase is a lot for next year.
I ask that you keep in mind that most carry citizens who work for private employers haven't had a merit increase above 2% for years.
And those on fixed incomes have had some recent years with no adjustment at all.
Council should hold the line for now at 3% and limit any increase adopted now to frontline
employees and then review further increases as part of the fiscal year 2027 process.
Next speaker, please.
Good evening.
Mayor Council members, Madam Clerk.
I stand before you with deep humility and great gratitude for the Ramadan Proclamation
that we received at the beginning of this meeting.
I want to thank Councilman Bonsoir for her leadership on that.
28 days ago I stood before you.
And I had some remarks that was covered by multiple media outlets.
I stand here with an acute sense of the power of words and the impact that they have
and the different perspectives that words can change.
I was here, the last meeting for the entirety of this meeting.
I can't do that now, because you'll have your little niece there,
that does have a two hour delay tomorrow,
so I have to leave shortly after this.
I will be balanced and just,
And my statements, I have been grilling you all, if you want to say that, but I'm somebody who is somebody of justice and fairness.
And when I was here last meeting, I watched the specifically the Farrell Road zoning.
In each and every one of you starting with the mayor, you listened with an attentive ear.
You were empathetic to our residents that dealt with the fellow road zoning and it is my hope that
that same humanity that you showed when it's time for you to vote even though you haven't
voted on it yet, that you do not allow ambitious developers to come in on this private
property into certain families, it is sacred property to move in and create all of the problems
that was mentioned by the residents before. I hope that when the cameras is off the
that takes place. But with that being said, I was profoundly impressed by hope that carry
has with each and every one of you. And I know we don't mention names, but I was very impressed
with the interim and town manager, Mr. Overton, his knowledge, his death, the way he understood
it, and everyone, I was very impressed today. So I have to be just and say I was proud of that,
but I also want to say in closing, this community is still expecting transparency and accountability
And hopefully we can get that Ayyomata.
Next speaker for public speaks out.
Anyone else for public speaks out.
Saying no one I'll close public speak.
We now move to I'm for on the agenda,
which is the consent agenda.
Please keep in mind one.
Motion improves all of these items.
For those watching on video or streaming,
I'll take a moment to read these items on the consent agenda.
We have minutes, while not street parking deck, we have a lot of improvements, amendment proposal,
adjustment to the adopted meeting schedule.
I know we have a council member that would like to speak to one of these, but I would entertain
a motion to,
I would entertain a motion to approve the consent agenda.
No, I'll move the way approved, a second.
It's a motion in a second.
I know we move to discussion.
I was reading notes while I pause, and I know Ms. Wong wanted to speak to one of the issues.
Thank you, Mayor. I'd like to begin by thanking the residents who reach out to the council
regarding the WONO Street parking lot item. Ask that we recap the entire process and we
listen to our people's voices and we value your input. Transparency is important to us. That's
why I want to take a moment to walk through everything. Beginning October 23, while the town
as repairing the Wona Street parking deck. We constructed a temporary gravel lot to support
overflow parking and construction vehicles. This property is owned by Academy Park,
Commercial ILC and the lot was always intended to be temporary until the property owner
begins construction on its project. So that means we're using someone else's property for the parking.
Under the downtown development project agreement approved by the Council on June 26, 2025, the town is permitted to continue using this gravel lot until construction on the new building begins, but only if we make certain visual and safety improvements such as sensing and landscaping.
If we decided not to make those improvements, the agreement requires that the lot be removed and returned to the grass by September 11, 2026.
Then on January 8th, the council was presented with two options, one is for $125,000 for the improvement to the gravel lot.
the other is $20,000 to remove the gravel lot and return to grass.
At that time, the consensus was that maintaining the parking lot
because it would benefit our citizens.
However, our councilwoman congencin raised important questions about the cost,
which prompted us to take another look.
And then we asked the staff to revisit the proposal
and ensure that any improvements still meet ADA requirements
and find a more cost effective solution.
Our staff did exactly that.
They brought back a significant improve option,
which is 75,000 for the necessary upgrades.
And this is 5,000 more than returning the log to grass.
And it preserves much needed parking for residents and businesses and visitors.
Please let me know if anything has been incorrect.
I would love to share that.
I drive to the downtown every day.
I saw that parking lot is always full, which is 100% using.
Thank you, Ms. Wong.
I would just add to that.
This is just my point of view.
I think staff originally thought, because the worst case scenario it years before something would be built there,
they were treating it sort of as semi-perminent and we had built to the carry standards.
And that's why we got the 125 proposal and Council said, you know what?
It's temporary but it's permanent.
So yeah, let's move more toward the temporary and spend less.
And that's what happened.
It's not that staff just threw out a number and that was crazy.
They were meeting our standards, just wanted to point that out.
So thank you for bringing that back.
Thank you, sir.
Any other comments?
We have a motion on the table.
All in favor, please say aye.
Any opposed?
Motion carries unanimously.
All right.
There are no public hearings, so we now move to discussion.
We have fiscal year 2026 budget adjustment budget again, no budget adjustment to restore funding to the employee merit program our interim town manager
Russ overdone will present the item and council may take action Mr. overdone.
Thank you, Mayor and council. As we now know this year, our merit program was underfunded compared to prior years.
Tonight, I would detail a request to restore funding to our employee merit program to match the rate of the prior budget year 2020 FY 2025 at 5%.
It's fitting that tonight we recognize the efforts of our staff that went above and beyond to work last two weekends for the winter storms.
Holding true to our statement of values that employees are our most important resource, and part of really carries DNA and having a high-performing workforce who deliver exceptional services to our citizens so much so that 66% of our general fund expenditures are for personnel.
Staffing was not added in the last two budgets, and during current year budget, we also now know that
29 positions were actually unfunded.
Further lowering are staffed to sit at some ratio, which are lower than many in the state
and further straining resources as the community continues to grow.
Carry utilizes a pay for performance policy that rewards the highest performing staff.
This policy has served us well and at the same time hasn't been evaluated in over 10 years
So also part of this. I'm asked. I've asked for a group of staff to reevaluate this policy and determine if any changes are recommended
Which if they are then would come back to council for review
Prior to the end of this fiscal year.
In order to fund this merit increase, staff is proposing to reallocate existing appropriated funding in the current year's budget. To be clear, that means no additional taxes, fees or other new appropriations to the current adopted FY2026 budget.
And now that we're just passed the midpoint of this budget year, we are well positioned
to assess where we can reallocate funding with the least disruption to operation and services
to fully fund our merit program.
Again, this is a reallocation to existing resources.
And in that, and as the table shows, 500,000 is proposed to come from contract services from
the Town Manager's office, $450,000 from your mid-year appropriation monies, traveling training
at $250,000 reduction in a reallocation of the Found Manager's office.
Historic Preservation of a study that is not planned to be performed this year of $200,000.
Contract Services in Parks and Recreation Reallocation of $200,000 solid waste, contract
and services reallocation of $150,000 and a utility fund remote water infrastructure division
of $280,000 in parts funding from the fleet department at $35,000 as well as a $750,000 transfer
to the general fund from the utility fund.
In detailing,
I'll see this.
This is a summary of your mid-year appropriations today, and it includes the action you just
took for the Walnut Street gravel parking lot, as well as what would be the merit adjustment
So I just want to keep this chart going to be show the balance of the mid-year appropriation funding that was a million dollars and you currently have a hundred and eighty five thousand dollar balance
So with that staff recommends that the council recognized and appropriate
$750,000 of miscellaneous utility revenue to cover an additional indirect cost reimbursement from the utility fund to the general fund and
Additionally, that Council reallocate $1.7 million from the general fund as earlier discussed
and $280,000 from the utility fund and $35,000 from the free fleet fund to increase
the fiscal year, 2026 pay for performance and police compensation program budget from an average
3% to a 5% award and with that, I'll answer any questions.
I'll start off by saying that carry staff is the best of the best and I'll stand up to anybody anywhere until them that.
I honestly believe that.
And I work for a man for 29 years and he had a saying, my biggest asset walks out the door every day of five o'clock.
And that's what I think about the carry staff.
They go home every day.
That's carry's biggest asset.
That's why we're the best of the best.
Just to give you a clue, carry gets recognized annually each year.
This year, there are 40 awards that I talk about in the State of Carrier Dress.
That's not from the people sitting at the table, that's because of our staff, that's because
they're that good.
And if we want to keep the best of the best, we've got to step up and take care of the best
of the best.
Now, I can also tell you from a business perspective.
When you have high turnover rate and less retention,
you're onboarding time, cost money,
and you're actually losing money by spending less
if there's a lot of turnover.
So it's important for retention,
and our think our retention is low for the field
that government work, we're pretty low.
And so to have the best of the best,
And take care, I'm just make sense.
And if you go, I don't know.
We're not really efficient by doing that.
Well, Kerry, somebody mentioned that earlier
has less than seven employees per thousand residents.
There is nobody around us that comes close to that.
I think rallies may be seven and a half.
But so they're doing a lot with less.
And now with the extra work pounded on them by the public records request.
It's just unreal and the storms they have to deal with.
So to me, this is the no-brainer, especially when you're talking about reallocation of funds.
And some of those things will disappear, but a lot of those things will come up in next year's budget discussions.
So we'll discuss that again.
But I was really impressed by a total of $750,000 coming from the manager's office.
That was very impressive to me.
That's like putting your money where your mouth is, if you believe in your employees, you're going to step up and do that.
And so I love that part of the presentation and that part of how do we pay for this?
But it's to me, it's no brainer than if you're going to have the best of the best.
You've got to take care of the best of the best.
And Carrie has the best of the best.
I said a lot.
you said it well. I do have some strong opinions here of myself really. If I could share an
next I'd appreciate that because when things started going awry for this council and
our staff in November, one of the, you know, we were reacting to a lot of very negative
information coming at us very quickly. But I got to thank, I've got to thank Res.
for his leadership in others, especially in the town manager's office because while we were trying
to work kind of caught on our back foot sometimes as far as like what do we do first and whatever
so we were really trying to get a handle on things and he says yeah and we've got a you guys made
a mistake with the the production in the merit pool and as soon as he said it I realized I made a
very, very dumb mistake myself, because when we were told staffs on board and you can reduce
it and everything's okay, I cannot blame that on bad information being given to me because
I know better. I got a cost of living race last year. I got a handsome merit race. I think
at one point I came in saying, oh my God, I got a race I didn't even ask for. And that is
absolute, just such a lack of paying attention to what's going around me on my part.
I want to personally apologize for staff for that.
It shouldn't have taken what you said to make me see that.
That of all the things that we were trying to do to keep our tax increases low as humanly possible.
Touching staff patient have been one of those things.
And for that, I really do apologize.
That being said, one of the things I ran on the first time and then again, this time is affordability.
And I feel very strongly that, especially, we'll call them, rank and file.
I've been rank and file most of my adult life.
I absolutely know what it's like to have a car repair derail your entire financial health or wondering,
can I really afford this house setting where should I move in with my friend Amy?
That kind of, that this is not, you know, 30 years ago for me, this is 15 years ago for me.
So I do understand the struggles and I think here in Carey, we have a new stat, we have a new council and I think we have an opportunity to revisit how we approach pay in general because I believe that we should be paying every single one of our staff members a livable wage for Carey.
That's my opinion, actually, that's the hell I'll die on.
No one can change my opinion on that.
And I think that this is an opportunity for us to start moving in a direction where we
can all feel really good about the fact that we are setting what I would call a very good
example for other employers here in carry.
I have spoken to quite a few residents about this and I've had one person tell me, well,
you know, they make enough.
if it's, you know, whatever everybody understands
that affordability is incredibly problematic right now.
I do understand that that has ongoing tax implications.
I do read the budget.
I do understand the piece of that pie that our staff salaries
takes up on our budget and I'm okay with that.
I just want, for me it's a values judgment.
And for me, again, I won't make the same mistake twice on this.
I'll make all kinds of mistakes, but this is not a mistake, I'll make again, and then I just wanted to just go on record with, you know, how I really see the entire topic of how we pay our staff and culturally, I would love to be able to get the ball rolling on that being a really core piece of the culture as we reexamine absolutely everything here in the ton of carry.
So, I want to piggyback on that, and I'll share some more information on what Councilman
Conjonson said and give her some credit, but she's not giving it to herself.
But this conversation kind of, and I want everybody to have context about this.
This conversation was really between Council, during one-on-one discussions, and Shon's
people who was our town manager back then. And the conversation was, how do we have a balancing act?
How do we make sure that the taxes are not, we don't have to go to a three cents up and give enough
merit increase to the staff so that we can balance both sides well. With the given information that we
at that time. It was proposed that from 5% to 3% could be fine. Yes, spoken to the staff members
and for this year we can stabilize things that would be better. And then in future we can
start identifying areas for opportunities where we can get down caused and we can find those,
you know the money and you know reallocate funds.
I was told, and I don't know, I didn't confirm with anyone of you,
but Councilwoman Conjonson and especially Councilwoman Craig were the two who said,
who were very hesitant with this move and how Mayor Harold.
Um, and I think, um, they were very hesitant with this move because, um, especially, I remember
having conversation about councilwoman Craig, and she kept saying that, you know, my heart
does not agree to this, and you know, are you okay with the staff is fine and if it is
okay with just 3% but, you know, please let them know that and I'm coding you, I'm sorry, but
So this is what I know about your conversation.
And I felt that there was a gentleman, there was some
gentleness, like everybody cared, we did care about the staff,
and we did care about how the tax implication
is going to be on the residents because of the affordability
factor.
So we were torn on both sides.
And when the conversation kind of, a lot of things
started coming out, and there was so much information
out there we sat down with us and you know who actually gave us the true picture of where the
financials are and we started talking about the merit increase. We were supposed to bring this
conversation in December or maybe January. December 1st and then we made it to January.
Yeah, so but then I said let's slow this down, slow the process down and let's identify where the
And that way, the council will have enough time to ask questions and think through everything without
listening into any decision.
So I want this to have to know that you're very appreciated.
Everything that you do is, you know, like Mary said, we are very proud of that we are part
of this organization, but we also want the residents to know that we care and we were very
a full about how to move forward but we had only sort of a limited information to work with.
So, I think with the given information that we have today and I know someone mentioned about,
you know, how private corporation works where people don't have merit increase.
But private is very different from public sector and the kind of work and the hours that public,
downstaff puts in is far more than private. So the expectations are different, life is
different and the work is very good out different. I can say this because I worked in private
sector pretty much all my life. I do feel that looking at where how you manage the budget
us commendable, because you cared for the people who work for you, and I have to say that
we gave him a hard time about where the funds are going to be from, how we're going to manage this,
but he made it happen. And thank you for being that person, because that's exactly what is needed
today. I understand a lot of residents have their hesitation and you know a lot of
you probably are thinking what are we doing?
But this is intentional.
There was a lot of thought that went into this.
And at this point, we really need to move forward
with a lot of care.
And I know that for us, you have put that emotion
and you're hard into it to make this happen for this staff.
So thank you for your leadership.
Thank you.
I also would love to weigh in.
So public, I believe our public sector
and I also want to explain why.
First off, a national surveys have already shown
that public servants make about 15 to 20% less
than their private sector comparisons.
So they're already getting a smaller salary base.
But that comparable private sector workers,
There's...
They have the same education and experience and they're getting more money. So asking our public
servants to accept or reduced or stagnant merit increase on top of that already deepens the pay
penalty that they have. Now let's all be honest, public servants do it for the passion, but they
also still have to have a livable wage and we want them to be able to afford to live in the
And merit pay is just one of the tools that we have to recognize strong performance and reward
people like all of the best of the best, as you say, who go above and beyond and keep,
and we want to keep those experienced professionals here and keep them from being pulled
away to higher pain, private, employers.
But for me, and more importantly, this adjustment is about writing a wrong.
As you probably can tell there was a miscommunication between what we understood staff's recommendation was and what staff believed our recommendation was.
Council previously acted under information that didn't reflect staff's recommendation or the realities of what the labor market really are and our employees shouldn't bear the consequences of that miscommunication.
We're storing the merit pay increase really corrects that earlier decision and I'm glad our conversations, our group conversations have brought that back and it also honors the commitment that we intend that we say every day at this day it's about the best of the best.
It sends a clear message to our employees that when we see something is wrong and unfair, we fix it in the open and on the record.
So I absolutely support where we are with this record staffer.
Other comments?
I know we're being very repetitive at this point.
this absolutely weren't being repetitive because staff needs to hear from
every one of us.
Our thoughts on this. I'm not going to speak for everybody
because I don't know how everybody's voting. I've hear the comments, but from
me personally you need to hear that I'm animistic and to reiterate what's been
said, I believe it's safe to say, others have said they do the miscommunication is where
we landed here. As someone who works in a profession that has absolutely not been adequately
compensated for their professionalism and everything they give to the community, I knew
better. As Sureka said, I knew what I'm at gut,
and I didn't question enough. I absolutely
should have gone to staff. And I remember hearing the recommendation on the 101, and then
at another time, and literally I'm sure my mouth must have dropped open. And I should have
better and, as has been stated, we have to, in my opinion, we have to correct the mistake that
we made and at a time when our auditor is saying, it's suggesting that we consider anti-retaliation
protections, whistle blowing, protections.
We, I think we can understand how this miscommunication
came to be and now it's time to take action. I also want to say that it is unfortunate that a lot of
people in the community are not getting merit increases, but that doesn't mean that we act in
the same way. It means that we step up and we bleed. I'm happy overall that our theme
of the evening seems to be that there's a lot to be reevaluated for the future in all
policies, and also wanted to point out that it's written in the staff report, in my case,
everybody watching has it read all of the staff reports and everything, that these reallocation
of funds that we're looking at here do not, it's not a lack of support for particular programs
or whatever. For example, his door preservation is listed in here. As soon as I saw it, I said,
I'm not going to make a mistake that I did prior. I went straight to my board and said,
there's been some discussion about possibly taking $200,000 out of his door preservation fund for
the master plan. We had a conversation, we had a conversation with the community board and the
just to make sure everybody understands so that they're not sitting and they're
not listening to a meeting and saying oh my goodness like you're just
taking out money and so that it's clearly written in here that the intention is
for in the future to ask for that money back again this is a year where we're
not ready to use that money so it's an appropriate action and I'm sure they're
stories for other areas. So I had obviously had a lot to say tonight.
But this is an opportunity
to do something that we should have done last year. Any other thoughts?
I'd like to commend my colleagues who made this previous decision and now feel that you have
opportunity to write a wrong and you've spoken so eloquently about standing up to do the right
thing. So thank you for that. I also hold our staff in highest esteem. So I think we have consensus
there. I think it could be natural at this time of increased scrutiny for residents to say,
is this really the time to be rewarding employees and I think in one regard what has happened with our
town manager isn't pertinent in that you know this was a previous decision this is restoring our
merit pay as it had been. But in some ways I think it is especially relevant that at this time
of our employees working under some dearest.
And I think it's fair to say, even before our employee survey,
anecdotally, we can hear of low morale
that this is a way for us to publicly and literally
put our money where our mouth is to show our appreciation
for the staff, especially during such a difficult moment.
I also want to say, for the benefit of residents listening,
we've had robust conversations
about how to do this as fairly as possible, even looking at other ways to compensate employees
at this moment. And we landed on this decision because this is looking back retroactively
that it makes the most sense to use the current rubric we already have in place, which
Russ, I think it's fair to say is fairly complicated, is not easy to distill exactly who gets
compensated how much in which ways. And so for now, we were going to use that existing rubric
to, as Mayor Protem said, write this wrong. But I appreciate in your presentation, you noting that
this is yet another opportunity for us to reevaluate going forward. So this is sort of looking backward
And so we're going to use the best tool that are disposal now and have an opportunity to perhaps refine that tool going forward.
My turn.
Thank you everyone for your input.
It's really a moving moment.
I would love to share my personal experience because small business owner.
And AFA staff is employees not satisfied with their salary.
They would just come to us and say, I want to raise.
But as far as I know, you never received that message before, right?
So that means our staff is pretty, like under the hat of the A-plast team or the best of the best,
so they have the passion to serve our community to remain that reputation.
Even though they feel the pressure of the living cost is increasing,
And especially, I appreciate your 75,000 from your top managers office because if I was thinking
my when I grew up, my mom doesn't have enough money, I would think, I'll have to
save someone and spend on something.
So you're like this feeling, you feel our budget is tight and you don't want to spend more
and just use your office money to benefit our staff.
And I appreciate that and absolutely I feel this is
that the merit program needs to be a 5% and move forward
and appreciation for our staff hard work.
And especially before last year, I was a citizen.
And I feel whenever I talk to any staff,
their face is always a smile.
like the high standards service that makes me feel really lucky to live in carry.
Thank you so much.
I also want to acknowledge a few more people, Mayor.
Danowid Mar, Susan Scott, Ginny, for your leadership,
because I know you have been the biggest advocate for the staff and you,
you all your entire team worked way hard in finding money from different buckets and trying
to come up with a perfect case scenario for us.
Thank you so much for putting in all this hours.
Thank you.
Are we ready for motion motion?
Yeah.
That's right.
No, no, no, no.
I'm not.
Okay.
You got this.
Laura is sitting next to me, that's very, very good.
So up at the motion to go by staff recommendation that Council recognize and appropriate
750,000 of miscellaneous utility revenue to govern additional indirect cost reimbursement
from the utility fund to the general fund additionally that Council reallocate 1.5, 1.75 million
from the general fund $280,000 from the utility fund and $35,000 from the feed fund to increase
the fiscal year 2026 pay for performance employee compensation, program budget from an average
3% to 5% award.
There's a motion, is there a second?
A second?
Second.
I'll invariably say aye.
Aye.
Any opposed?
The motion is unanimous.
Thank you.
Thank you, council.
Thank you to you and your staff for everything that you do.
All right.
We need to go in the closed session.
Can I get a motion to go in the floor?
We're soon to GS-143-1811A-136.
I made it.
We hold a closed session and to consult with attorneys.
employed by and or retain, by the town in order to preserve the attorney's claim,
privilege, between the attorneys and the town, and to provide the disclosure of information
that is made privileged or confidential pursuant to the laws of the state and not considered
a public record within the meeting of chapter 132 of the General's statute, and to consider
the qualifications, confidence, performance character, fitness, conditions of employment,
or appointment, or conditions of initial employment, of one or more individuals, public
officers or employees.
There's a motion.
Second.
And the second.
Discussion.
All in favor, please.
Say aye.
Aye.
Did you pose?
Motion carries.
And we now move into closed sessions.
Being our council meeting, we've concluded our business. I would entertain a motion to adjourn.
So moved. Second? Motion and a second.
discussion. All in favor, please say aye. Aye. Aye.
Opposed, motion carries. We are adjourned. Thank you.