City Council Budget Development Work Session   3/5/2026

Madam Clerk, will you please call the roll?

Councilor Payne?

Here.

Councilor Snook?

Here.

Fairway?

Okay, thank you.

And then intergovernmental revenue is about 5.63% is how those total revenues break down.

Just real quick, do you want questions as we go or do you want to come to the end?

Just fire away as you have them.

No, thanks.

It's a lot of

like four or $5,000 a year, $10,000.

and we've just summarized them here but we can provide you a list if you'd like to see that one.

Or is it referring to different set of charges for service?

That is just over $388,000.

What did you say, a way to reopen her?

And so we were able to reduce the city's annual required contribution by just under $1.3 million, which helped to offset the increase in healthcare for this year.

Do I have to do a disclaimer, just a statement?

and we'll look into it.

And question for Krisy, for the council pay increase with benefits, did our benefits get more expensive as our pay increased or how's that factored in?

There's been an increase in the worker's compensation insurance claims, and then we increased ever so slightly, although not ever enough our vehicle replacement funds.

I'm just curious, what's the budget for vehicles annually?

That varies depending on the replacement cycle of what vehicles need to be replaced.

That's not including fire.

But it does include like the light duty vehicles for fire.

And not buses.

It's in there once, but I gave you the total for the general fund, but I wanted to make the distinction that schools actually replace, actually pay that cost.

Got it.

Okay.

Any changes, any questions there?

That school building maintenance, the 232, I was trying to remember

capital repairs.

And so what's the 5.5 point?

Do you want to talk about things?

And we'll come back to you next year with additional increases to support that work.

I'll stop there to see if there's any questions or

Yeah, any questions?

how it would unfold if council determined that amount is too high to work within our budget.

If we were to say that we can't afford it, then we would have to prove that.

It would eventually come to city council to make a final decision on whether to fund it at that amount.

But if you were to end up in that moment, whatever the fact finder says is the end of the conversation from a negotiating standpoint, comes back to council and it would be up to you to make that determination.

But should city council say

We will probably end up needing to change the adoption date.

And so when you go into those negotiations, you have, you know, you have the information from Krisy and others about the budget and what you think the budget can bear type of thing.

And that's assuming a lot because I'm in making that decision, we're using the information that we have about transit investments, climate investments and other parts of the budget for being able to determine that.

And also pretty early, the way our schedule falls pretty early in our process in terms of what our revenues might look like.

So it is negotiating a little bit.

Is there anything we're not doing that are best practices or innovative programs that can bring that down?

Jason, do you want to speak to that?

the cost sharing between the city and employees and retirees and so there's probably not much that would affect you know three months from now but over the next six months all of those things are going to be revisited to see you know what efficiencies could be found.

For the other two, given that we kind of freeze hiring significantly, or pretty sure new positions significantly, how were those determined to be?

So if you wanted to add any further to it, but in our conversation, it was just

I'm not against it but I'm curious to know what is it helping with.

This person is gonna work with business license and business taxes primarily to be sort of frontline customer service type position that would hopefully free up my business tax auditors to actually go out and find money.

That was one of the deals that he made with me is that we should actually get a little more money in but he couldn't offset the position.

Find revenue that we're not collecting.

Right now, those people are chained to a desk, kind of managing customer service tasks, walk-ins, phone numbers, and I need them auditing and doing other higher level stuff.

but then this person's also gonna work on the, sorry, you just said it, not compensation.

I said tax relief.

Tax relief, yeah.

I got that confused because he asked for two.

Okay, got it, got it, thank you.

And then,

2-3 years from now.

another year plus they'll be renegotiating after that as well.

But that three-year projection does not include any analysis from them about addressing wage compression after their bottom pay scale went up over 30%?

I cannot identify it as a part of what we received today.

five to $10 million that we're just not thinking about.

It is a fair consideration for this decision.

Well, you know, when they go to the table, I guess their finance team from the schools, so they have to kind of check with, you know, the overall city finances.

That is part of the legislation that is under consideration that it would correct that and it would make it necessary, make it required that the school system would have to check with us before so that they would, that's one of the corrections that just doesn't exist at this time.

Right, so the information and decision makers who would fund it were just not involved in negotiation.

Okay, just checking.

And one final question, not that important, but curious, with the five-year general fund projections, how is 2.4% growth, what's landed on for the projections?

Anybody else here before we move on to talk about your favorite topic?

Just for, you know, we talk about state contributions along the way and in various boards and committee meetings we're in, but just to kind of summarize it nicely for the discussion here and for anyone who's tuned in, what are kind of the biggest areas of state contributions where we're, what are we doing on making the most impact, kind of like the top, you know, the top section?

Let me go back.

There's three that are big.

They're several million dollars.

What would it look like to implement zero-based budgeting and how would that process differ for, well, for you all and for the staff?

Sam, Liza.

That's how we found $500,000 in savings.

Is there, so.

Wheel tax, if you will.

Okay, thank you.

What's the number?

Okay.

Thanks.

Jen or Lloyd, do you have any questions?

13% less revenue making.

I'm getting this, jump in if I'm getting this wrong.

They give us a list.

It's only like three or four.

There aren't very many of them.

No, it's $4.7 million.

That's the people transportation that they pay us for the people transportation.

Okay, thank you.

It might be transfers from schools.

So I know there is a schools line item and then separately there's a transfers line item.

I can look at it.

Otherwise everything I have.

Lloyd, you didn't have anything on it.

And then I'm gonna pause here and let Todd speak about the tax relief programs and what we've done with those.

It's a number I get out of the assessor's report in January, I think.

Is that a limit set by state legislation or is that, I can't remember?

It's just a sort of a way to kind of make sure that we're targeting the right folks, not folks in mansions and McMansions.

Are we spending all of the money we allocate for it?

Kris, you probably did better.

Then it's structured correctly.

And we came up with, made some recommendations that we had turned into this.

and so, you know, they are a lot of work but they're a lot less work than they used to because I would come into these meetings and we would spend 20 to 30 minutes haggling over, you know, where the income thresholds need to be or where the home value thresholds need to be and then this way it's just, it's all baked in.

More than anybody in the state.

Yes, sir.

Do we have stats on that?

So just think about that.

Thank you.

It's not just cars, but it is also machinery and tools and business tangibles.

And remind me, they all have to be the same rate.

Not anymore.

I mean...

They're separate GLs and SAPs, so it's a lot easier to, it's not easy, but it's- What an acronym is for this?

Do they have different rates?

It wouldn't really reel many businesses in, right?

You can use that tool to do that as well.

Other questions, comments?

What do you need from us now?

Do you want anything else specifically?

So Natalie?

You're going to know more than that.

Yeah, Michael?

Other things are higher, but if it's two, then that's fine.

Two for me, please.

Kind of, sort of, but

on the list we're needing to hear is that what you want us to do is to do the work to identify alternatives to avoid a tax increase altogether so that you can see what that is.

The first is, does doing that automatically raise red flags for our bond rating folks?

to make sure that you're structurally balanced.

So if there was something catastrophic, it's useful as a Band-Aid, but not as a... And I'll give you the flip.

Because it would be them looking at us and saying, well, you're just not as disciplined about this as you need to be.

We're bringing in roughly 12 to $14 million more a year, therefore more than offsetting the two and a half million dollars that we're talking about for the real estate.

So it wouldn't make up your two and a half million dollar operating deficit.

and every year to the capital program.

About in total or just for schools?

Either number.

In total it's well for this year's budget is 8.4 million in cash.

Where are we expecting that money to come from if we don't get a tax increase sales tax?

So it's in our debt service projections.

And the debt service, of course, does get paid by general funds.

Correct.

Debt service is also a permissible thing for which tax revenues can be spent.

It has to be.

How are we proposing to pay for those things if not with money from the general fund, whether the money from the general fund goes directly to the project or goes to the debt service for the project?

either in terms of debt service or cash.

Why would that not be seen as a plan that's a good plan?

I think it is a good plan.

And we need to worry about the politics.

And that's the concern.

Right.

OK.

So, yeah.

Can we zero out our line items now before it passes so that we could add them back in after the sales tax is passed?

I don't know how that's viewed in the spirit of working with our friends in this legislature.

We wouldn't get mad at us for that.

No, because the legislation isn't final yet.

But just from the draft, was there any reference that you can remember?

but you could tuck in new bonds being sold.

That would be supplanting depending on the parameters they put around when.

It doesn't mean we can't use money from the taxes.

I would argue that with you, but it all depends on what they write.

Yeah, that seems like it would be a big problem.

It would be a problem if you take it out and then get punished for it.

Well, or if we're not allowed to use new money on projects that haven't been realized yet, they've just been planned.

So when it makes it into the hands of the departments that we will be working with is when we will learn how hard it is.

Surely we know something from, or can learn something quickly from their experience.

There's a lot of eyes on this right now I imagine every single bad behavior the general assembly might want to curb will be considered and will be in the final bill but we can we can look and see what it says now see what what's proposed I can take the temperature down in Richmond because it would make sense if they're like if the bond has already been issued that's different than it can already got a school planning process underway because our CIP is the plan right it's only the one year that is real

but we don't know how they're looking at it from that perspective.

I didn't see anything in the bill that suggests they're changing the standards from the implementation.

and then my second question is are there any one-time expenses that are currently be paid from the general fund that could be paid with plus money instead since I know things have to come from specific buckets is there any shuffling there that can be done I don't know what one-time expense I don't know if there's any one-time expenses that are already in the budget that would be getting paid

maybe we could shift i.e.

does my question make sense yeah i.e.

That's now, if we do that, you still got $2 million hole that when we get to next year and we need to replace another round of vehicles, now that's either an add back to the budget or we've got to try to find another source.

Are we really spending $5 million a year on this?

$5 million was the shopping agent.

$2.6 million, as you said.

Yeah.

None of those things are like perfect because even though buying a car is a one-time purchase, it is a recurring business operational need.

The demand for that particular car is one time, but the overall need, the same way that like student demand is constant, even if the specific- And it's on the schedule.

There's a trade-off for that.

We have to- Unless it was less like scheduled

What are we backing up to?

And I just want to add, I double checked that one cent sales tax legislation has died in the state Senate.

Well, now that they know it'll go signed.

Do you want to switch seats since you got the bad news?

Jen, you want to chime in?

Which in the assessment, we can't help that.

Why would the renters not be affected by their demand towards actual payment instead of, only why would it matter whether it's an assessment or a rate increase?

It would be, yes, rolled in, but the proportion wouldn't be significantly different than what the assessment is creating, than the change the assessment is creating.

I would think, right?

Yeah, I mean, I didn't math the math that way, yeah, but potentially.

But I read your point.

That's what I'm saying.

Well, yeah, it's $348 plus, $157 increase in total.

So from the assessment, it would go up roughly $29 a month, and then you would add on top of that another

Natalie, did you,

That's fair.

You don't have to figure out which ones to go unlock and how do we move them to produce dollars that are materially missing the replacement of those funds.

We've gotten it as small as we possibly can while still being able to provide the benefits and services to our community.

I would offer to you that I've done that because I brought $500,000 in cuts to this conversation.

And that's not me doubting the effort of our staff because I do see how hard you are with just being able to assure the community that should we do decide to go for the two cents that we have done everything.

That's what we'll be trying to find, because that's what it's going to take to find $2.5 million.

Right, right.

The more positive option.

Grow the base instead of deep in the base.

Grow the pie higher.

Sure.

I mean, I, yeah, that's fine.

The revenues from this tax should not be used to reduce the plant or offset any amounts of local appropriations or local funding for capital projects described as subdivision one, which is just construction renovation schools on the date such tax is first imposed in the county or city.

Because it says that the Davis had a touch tax for it to be imposed.

So we could wipe it.

You could strip your CIP and then recommit it to that action.

I think it's inelegant, but it gets the job done.

I think it would challenge your conversation.

Does John's gonna let that fly?

It's not the right spirit.

We let out a name, negative attention is different than negative preparation.

Just don't commit it to the CFP.

So we'll have more to talk about, but there's some work to be done there.

And we can use our surplus money for debt service as long as it's like additional payment, it is not replacing payment, right?

Yes, you can use it, but if you're not increasing your base to get you closer to what your actual debt service payment is, it's a little bit kicking the can and it's gonna keep compounding.

Okay, I was imagining it more like, you know, over the course of a year, you've added one more, you paid off one more mortgage payment than you needed to and so it cuts your term.

Okay, thank you.

Thanks.

Any other questions?

Did you already say what you were thinking on this?

ideas but I would say at this point I'm very skeptical that using one-time surplus would be wise or feasible and I'm okay moving forward assuming a two-cent real estate tax scenario.

I would like to wait for him to return.

Sure, I'm trying to think of what can I say.

Somebody vamp.

It's gotta be half of a penny in those increments to make it make sense.

How many were requested?

I know it was well over four.

It felt like at least 31.

And I mostly say no to that anyway.

Especially if salaries are already going to be the big driver in that.

So that comes at a cost too.

What different things this year

So those three together is why we have a need for additional revenue or an offset of expenses.

you know, told the public, that's the reasons for those three.

play out in very different ways within two or three years.

Other questions or comments?

And I guess we'll try to see if we'll be ready for the CIP or the Community Budget Forum work session because your deadline for advertising will be shortly thereafter.

For the community, sometimes we have a lot, sometimes we don't, so.

When we're going to have the 100% certain picture of where our revenues are at before we need them.

Day before that?

We'll have another month of sales tax.

But for sure, the work session on the 2nd.

Okay, can I get a motion to adjourn, please?

Motion to adjourn.

Opposed, please say no.