City Council Budget Work Session   11/12/2020

All right, I call this meeting to order.

Thank you, Mayor Walker.

I would like to begin this budget work session that goes over our capital budget by focusing on one theme tonight, and that is fiscal clarity.

As you all know, there are a number

of large scale capital projects that have been talked about in various iterations through the past few years.

But tonight, what I've asked our budget team to do is to provide you with some numbers that are going to demonstrate using your debt capacity for various projects.

These numbers are also going to quite candidly show that

If you start to use most of your debt capacity, there will probably need to be an increase in revenues.

I think these conversations sometimes

turn very quickly into sort of raise taxes, not raise taxes.

And I don't really, I hope tonight doesn't turn into that.

This is more informational for you all to get some hard numbers on debt capacity in these projects.

But I think it's important to understand these are council's policy preferences.

You know, obviously I think a number of you have interest in various capital needs, whether it's affordable housing, whether it's education, whether it's infrastructure.

And I hope tonight we can present that in a clear manner where you all can provide our budget staff with some guidance.

And I think

You know, hopefully this can also be a benefit when you are looking to fill your permanent city manager vacancy.

I think it's important that the council sort of helps set the roadmap, maybe starting tonight to say, in our next five years, this is what we're really looking at from a capital perspective, and this is going to influence future budgetary decisions.

And it's my hope that

Again, using this as the opening budgetary meeting, we can start to get that fiscal clarity that for future councils as well as the next city manager, they will have a, again, a good roadmap of where you're headed with your capital program, as well as the budgetary decisions related to revenue.

The other thing I did want to address, and we will get more into detail tonight, I know that

I'd almost want to say all five of you at various times have asked about the proposed parking garage and specifically other possible mixed uses for that structure.

When I assumed becoming Acting City Manager, and I know Chris Ingle can talk to you about this, I called Chris and I said, Chris, I would like

Quite candidly, I think we've had a number of counselors talk about using this parking garage and building either office or housing space above the garage.

And I wanted Chris to do a white paper, which he's provided to you, and I wanted him to come tonight and kind of lay that out.

So again, we can put the facts on the table for the decision makers to decide.

So saying all of that, I do want to turn this over to Ms.

Hamill.

But before doing that, I want to give a special thanks to Ms.

Hamill, Mr. Davidson, Mr. Oberdorfer, Mr. Engle, Ms.

Shelton, and Mr. Cullinan.

Various people have worked

on this presentation tonight.

And they've really done a good job.

And I really hope the facts you get tonight can help guide you in your policy preferences and decisions.

So with that, I will turn it over to Ms.

Thanks, John.

I'm going to actually toss it to Ryan.

Yeah.

OK, Brian, you can go ahead and start the PowerPoint for us, please.

So we're going to start off by going over a few key budget dates, talk about our long-term financial policies, because those are kind of the, they play in nicely and feed into the CIP and the CIP decision making.

And then we're going to go over the CIP spending overview, some capacity versus affordability, other considerations.

And then hopefully our goal is to get through and give you this information.

And then at the end, open it up

for further council discussion and talk about the decision points.

At any point, feel free to jump in and ask us questions, clarifying questions, but the goal is to get through this and then allow for a good amount of time at the end for your discussion and for you guys to talk amongst yourselves and with staff about these decision points.

Next slide, Brian.

So wanted to point out a few key budget process dates.

On this slide, these are the formal meetings

We have a planning commission, CIP public hearing.

Typically we've done both the work session and a public hearing, but because of the current pandemic situation and the virtual meeting situation, we're gonna combine those into one larger planning commission CIP meeting.

And that's gonna be on December the 8th.

March 1st is when we will formally present the proposed city and school operating and capital budgets to council.

We have our first,

public hearing on March 15th and our second one on April 5th.

And then finally on April 13th, we will adopt the budget.

So throughout that process, there's going to be several work sessions that we have scheduled.

The next one will be

on December 10th and that's on budget development.

We'll be focusing on, start to focus on the operating budget.

We'll deal with the budget guidelines at that point in time.

We'll talk a little bit about some of the agencies, the outside agencies and that process and other key questions and decision points that we may have as we move through the budget.

January 26th is our next one.

And that's just further budget development where right now we don't know exactly what that's gonna be focusing on because

We haven't seen the budgets that come in and the revenue situations and all of that.

So as we begin to develop, this will be our first chance to get in front of council again and start talking about those budgets.

January 28th is the joint council and school board work session that we have annually.

Typically the schools lead that conversation.

And so that's been scheduled for the eighth.

And then after the 28th of January, excuse me.

And then after that, throughout March after the budget is proposed, we have a series of,

work sessions, the first one on overall revenues and expenditures, then one specifically on outside agencies.

Then we have the community budget form followed by a CIP work session.

And then if necessary, we have our fourth work session, which is our budget wrap up.

We have this complete schedule online.

The December 8th, is that a planning commission day?

Yes, that's the December 8th meeting on the prior slide is the planning commission.

So we're just going to do, did I miss you stating that?

That's the public hearing where council normally attends and we discuss with the planning commission.

So we're just going to do it.

Okay.

Yeah.

And typically, as I was saying, typically we would have a work session before that as well with the planning commission, but because of the

the meeting regulations on the virtual meetings with these boards and commissions.

I remember you saying all of that.

I'm so tired.

It's been a long week.

I understand that.

Trust me.

Okay.

You can go on to the next one.

So we want to start off by looking at our long-term financial policies of the city.

These are,

Policies that we've put together and we have more detail behind these policies, but these are the ones that we have in our budget document and they're the ones that we use to guide our financial decision-making and make sure we're being financially responsible as we move through, excuse me, putting together our budgets.

The two that I would want to focus on for this particular work session that I want to point out is financial policy number five,

which is debt service as a percentage.

It puts us at our target of 9% with the ceiling of 10%.

And Chrissy is gonna talk about both of those a little bit as we move through the information and she talks about our debt situation and our capacity issues.

And then the last one is transferring 1 cent of the meals tax revenue to the debt service fund to be used for.

specifically for to pay off our debt service.

So those are the two financial policies that really apply to the CIP.

Obviously, maintaining the fund balance and the reserves is important as we look at maintaining strong cash balances in the PAYGO situation with our CIP.

But those are the ones I wanted to point

out with this.

These are all, as I said, these are all part of our budget document.

And we will bring these up and discuss these further when we talk about our budget guidelines as well.

Yes, sir.

Before you go any further, you know, we use the lexicon all the time, but when you use PAYGO, do you mind just

Sure.

Yeah, that is, Christy is going to get into this a little bit more, but just since I use that terminology, PAYGO is when we pay cash as we're doing the project, as opposed to financing a project.

And it's basically pay as you go, as opposed to long-term financing.

So that's we shorthand for our cash funding of our CIP.

Thanks, Ryan.

So next slide, please.

So what I want to do is just start by sort of summarizing the CIP plan that was put before you last year or this current fiscal year for the 21.

As you know, we adopt the 21 budget and then anything beyond 21 is a plan.

So looking specifically at 21, we had $25.8 million of projects that were approved in the 21 CIP.

The total five-year plan was just over 124 million.

Of that, we had departmental requests and other requests that came in that totaled 109 million that were not included in the CIP.

We were going to fund $84 million of this five-year plan with bonds.

And if you'll recall, due to COVID, just about all of the cash that was originally intended to go to the CIP was

instead held in a reserve in the general fund to help offset any of the COVID unknowns.

And that was originally $7.4 million.

We used some of that to give additional money to the schools and a couple other things, giving us a reserve of just over $6.6 million.

Next slide, please.

So of that five-year plan, this is just kind of a pie chart that sort of shows you where those dollars were functionally.

The three biggest areas here, as you'll see, transportation and access was just a little over $50 million.

That is comprised of several big projects.

Largely West Main Street was $8 million in this five-year plan.

There have been other dollars that were approved in prior plans, roughly $18 million, I think, which we'll get to later.

But in the 21 through 25, there was an additional $8 million allocated.

We had just $10 million for the parking garage, $7 million for our normal paving plans, and then the Belmont Bridge was $7.5 million.

So those were some of the big projects in that category.

Affordable housing was just over 31 million.

Again, those were the two projects, both the Friendship Court Project and the CRHA agreements that we've been talking about.

And then education was just a little over 18 million.

Next slide, please.

So how do we fund the CIP?

Essentially, the CIP is largely funded through cash and bonds.

And cash is really the key.

It's the fundamental reason why our debt ratios have historically been so healthy.

Over the last, since 2010, the city's cash or PAYGO funding has averaged just a little bit over 37% annually.

That's made up largely by one policy that we have

and whereby we transfer 3% of the general fund right off the top as pay go to the CIP and then as you know our second policy is with year-end surpluses anything over our 17% also by policy goes to the CIP.

So kind of comparing 20 to 21, you'll see 21, the bonds are very large.

And that is largely because of that, we redirected all of that cash back to the general fund.

And then in 20, we were at just under 30% for bonds.

Next slide, please.

So looking at our cash funding, the CIP that we had proposed prior to COVID looked at an average annual cash contribution of about $8.2 million, which equated to approximately 4% of the general fund budget.

So we were projecting cash contributions a little higher than our 3% policy.

Typically, we like to put forth a plan where we don't have these ups and downs in the general fund.

We like to offer you a plan that sort of evens that out a little bit.

And you'll see under this, again, pre-COVID, you know, 22 and 24 were a little bit higher, which was reflective of the phasing of the Friendship Court project.

But again, you'll see that, you know, over time, even with this plan, that our cash needs are slowly creeping up.

Next slide, please.

So looking at the other piece of the equation is the outstanding debt.

And I do want to draw your attention, last minute review of this PowerPoint.

I did find an error on two slides.

And so this is one of them, and it's a pretty key point.

The city's outstanding debt, currently we have approximately $90 million in debt outstanding.

Of that, about 80 million of that is bonds authorized but not issued.

So that means that we typically issue bonds on a cash needed basis.

So we don't issue the bonds until the project is either imminent or well underway because we do have spending requirements that once we issue the bonds,

we typically need to spend that money within 24 months.

So here's where the correction is, is in the first version.

What I said was the $80 million was prior to FY21.

It's actually prior to FY22 because the 21 bonds are in that $80 million.

And then in summary, over the five-year plan, as I mentioned before, we were gonna sell $80 million in bonds.

So what does that mean?

Next slide, please.

Here's a table that we have talked about many times every year we bring this up.

There's a lot going on here.

First, as I always like to say, the really important part is this is an estimate.

It's subject to change.

Anything in blue here can totally change.

We had one pretty dramatic change.

If there's a good to come out of COVID is that interest rates

went down.

And so for the projections we were using last year, we're now looking at interest rates that are almost half of what we were projecting last year.

So what this table attempts to do is to sort of manage the two policies.

One is how are we comparing and what would our plans look like if we issued at our target of 9% and what would our plans look like if we issued at our max of 10%?

So for sake of the example, if you look at the columns to the left of the blue line,

What I did was I basically took, just made an assumption, again, for sake of example, how much could we issue to get to 9% and how much could we issue to get to 10%?

And I just divided that to make it even for sake of example.

So you'll see that if we issued $132 million a year by 2026 at $160 million, you're basically at your target of 9%.

If you issued another 32 million, which basically gets you to 190, then you are at your 10%.

So that's what the left of this table does.

On the right, what we're talking about here is how much does this cost you?

So to issue these bonds, we have to pay annual debt service.

And so this attempts to look at how would we smooth out the transfer from the general fund in a way that you could, you know, make it affordable and still pay off your debt.

And part of the thing that we've been doing for a while now is that

We've been able to transfer enough from the general fund that we were able to build up a debt service fund balance, so in anticipation of issuing additional debt for these larger projects.

And as we've done that, and as we move through this projection, you'll see that, for example, in 2024, the debt service is 15,000, I'm sorry, 15 million, but the general fund transfer is only 13.

So in that case, we're drawing down some of this debt service fund balance that we've been building up.

And this allows you to, again, sort of smooth out the requirements from the general fund for debt.

In doing this, I made two things I've highlighted for you in 21.

You'll notice that there's actually a negative there and that reflects our policy of the 1% meals tax transfer.

And because of the reduction in revenue for meals tax because of COVID, we are not gonna be able to transfer the same amount that we had originally intended in FY21.

So right now we're projecting that to be a little bit less than

$441,000 and what that means is we're drawing down on the debt service fund balance a little bit, you know, in a year when we didn't really anticipate that originally.

So at a minimum, if we went forward with this plan, our debt service continues to increase

What I've shown you here is if we made an assumption that a penny on the real estate tax rate is roughly $850,000, again, that's subject to change, then what we're building in, even if we stay within our 9 and 10%

target or maximum for the debt service.

You've basically built in the need for a penny, a revenue, additional revenue that it's equivalent to basically a penny a year.

So all that works great.

That's the minimum, keep in mind.

But if that's all we do, then by the time we get to 2027, you now have a debt service payment of 21 million.

You've only built in $18 million in the General Fund and so in that year alone, if we only did the minimum, we'd be looking at another $3.5 million need from the General Fund just to pay the debt service.

Again, all things being equal, there's a lot of assumptions here, a lot of moving parts.

We don't know what we don't know.

I've assumed that there's a one and a half percent growth of the general fund each year, which is built in here.

And again, interest rates are at anybody's guess.

Just to pause for a second.

Can you clarify, you just mentioned

Increasing a penny.

Could you clarify what you were referring to there?

On the real estate tax, right?

Yeah.

So we talk about this a lot, you know, our capacity versus our affordability.

What does that really mean?

So if we sort of break that down, the debt capacity is the maximum amount of debt that could be issued to stay within the parameters defined by the financial policy.

So in other words, how much debt can we issue before we reach the 10% max?

So Brian, can you hop back to that debt table on slide 12?

So basically, again, that's everything on the left-hand side of this chart.

How much debt could we issue, all things being equal, and assuming that my crystal ball worked, how much debt could we issue that would help us stay between our 9 and our 10 percent?

That's what we mean when we talk about debt capacity.

Going back to slide 13, affordability, that's the piece where council comes in, right?

That's the alignment of public policy and financial resources.

So in other words, when we talk about affordability, how much can we pay within current resources before having to raise taxes?

So if we pop back to that debt projection table,

that's everything on the right of that blue line.

How much can we afford to transfer from the general fund to pay for this increased debt service?

That's sort of the two things that we're talking about when we talk to you about capacity and affordability.

So moving on to slide 14,

If we quantify this a little bit, and again, I mentioned that there was an error in the presentation.

This is the other slide that had the error.

So in sort of following this conversation, we had 160 million that got us to our 9% policy or 192 million, which would get us to our 10% policy.

So what does that mean?

Let's just do some quick math here.

If we decided that we were gonna go to the max and we had $192 million worth of bonds and new bonds that we could issue, we know that you've previously authorized but we have not issued $80 million of projects that we intend to fund with bonds but they haven't started or they're not ready and so we haven't sold those yet.

So they come off the top.

That gets us down to the 112 million.

In the FY 21 and 25 CIP, this was where the error was.

We in total authorized $84 million worth of bonds, but I had already counted the 21 bonds and the 80 million in the authorized but not issued.

So that's why this number here decreases a little bit.

So if we take off what's planned, but not yet,

adopted, that's $60 million, take that off, and basically what you're left with is a debt capacity of about $52 million.

So again, what that means is that to get to your 10%, so I think Kevin's talked to councils before and referenced the credit card, if you have a credit card and you have a credit limit and we decide to spend all of the credit right now,

That's about $52 million that's left that has not been designated for a project previously.

So next slide, please.

Affordability.

Again, the thing we have to remember here is that in the plan and as we start looking at bigger projects and as we start planning out the CIP, a key point here is that our debt service in this current plan is rising faster than what we are paying it off.

So issuing debt at a 10% max

Over where we are now, we basically are doubling our annual debt service.

So if you went back to that table, you would see that our annual debt service is 10.5 million and getting to 192 million more bonds is basically 21 and a half million.

So that's doubling the requirement of the annual debt service.

Even at the 850 example that I put in the chart, and again we can run these scenarios in a million different ways, but just a reminder that our current

agreement with the schools is that the schools get 40% of any new growth.

So a penny is not really a penny, right?

You know, if a penny on the real estate tax rate was worth 850, because of the agreement, we're really looking closer at a 2% tax increase to cover the additional 850 a year for debt service.

so wherever you land you know and again this is where we kind of need some guidance from council is you know once we have some guidance from from council where you want to be and some other idea of where other things are firming up then we could definitely run a more specific scenario but just to give you some idea you know in order to get to

If we talk about doubling your debt service from 10 to 21, we see here that a 5% tax increase gets you less, that's only two and a half million.

You're going to make me do math in my head really quick.

It sounds like you're on the same train of thought.

Yeah, and again, those numbers vary.

You know, we're going to be getting a new assessment number come January.

And so I would say you're on the right track.

I mean, that's just very rough math.

If 2.5 million is five cents, then if you do that four times, that's 10 million is 20 cents.

Correct.

Okay.

No, I think that's good.

So additional,

So that's kind of the picture.

You know, the question then becomes

You know, how do you want to spend this money?

How do you want to move forward?

We know what we know right now based on the plan that you've adopted for prior years and then the plan that was sort of set forth last year.

But we've also been talking about some additional things that have sort of come up.

The school reconfiguration project, a couple of projects that John mentioned earlier,

And I'm going to pause here and let Chris Engle talk about the parking garage.

All right, thanks, Chrissy.

So as John mentioned at the outset, he asked me to prepare a kind of rough analysis in the form of a memo about

I think that's a good question.

potentially maximizing the value of the land, which is something that, you know, as an economic developer, we're always looking to do that anywhere, anywhere possible.

But anyway, John just asked to put together an analysis of what it could look like if you did something above the planned facility and what it might cost infrastructure wise to get you to a point where you could do that.

and then what might it yield in terms of housing units or office space or hotel rooms or something of that nature.

So the item is included in your packet at the very end.

It's about a five page document with some graphics.

I'm happy to walk through that entire thing.

We're just trying to summarize it and kind of summarize where we are on the parking garage project as of right now.

So,

I guess I'll just start with an overall summary of the document and we can jump in if you all have more questions or specifics as we go along.

Chris, can I ask a quick question?

It would be highly unlikely to eliminate it.

This is an estimate based upon guidance from our structural engineer and kind of talking with them.

But essentially what the five million represents is the structural integrity needed in the building to allow you to build over the top of it.

And, you know, barring some technology that's not developed, it's hard to believe that anybody could get around

get around that.

It might not be 5 million, it might be, you know, 4.8 or it might be 6.2.

We're not sure.

This is our best estimate as of where we are right now with a conceptual design.

When we go through the process of seeking a design-build contractor,

So yeah, there's a couple of things that were talked about the other night at the Planning Commission.

And there's a couple of decisions that have pretty much kind of already been made in terms of the route that we're proceeding.

And I mentioned design-build.

The city has not done design-build before.

This is our first attempt at it.

Parking garages are typically good candidates for design-build process.

The efficiency is typically a little better.

in terms of the cost and the speed at which they can be actually put in place.

But this is our first one.

But following the December of 2019, almost a year ago, direction from council to go ahead and purchase the land from the county and proceed with the conceptual design that had been put forth at that time and pursue design build.

That's the path that the team has been working on and we're getting closer to that point.

The point that you reference about a potential partner is if we had pursued what's commonly known as a public-private partnership or a development partner, akin to most recently the city embarked upon this with the property on Water Street, known as West 2nd.

which we that started as a design competition really and then led to a development agreement.

The path that we're on now is not that.

The path that we're on now is that this is a city owned facility.

We build it with our money and we own it and we control it.

And that's in part to eliminate risk.

It's in part to honor the contract, the agreement with the county.

and best control those parking spaces so that they have confidence.

Entering into an agreement with the third party complicates that a little bit further.

There are instances where public private partnerships or what's known as the PPEA in Virginia law ordinance can be put in place and it is advantageous to cities.

We don't have that in place at the moment

or cities have to adopt the ordinance to allow the use of PPEA which is essentially the ability to solicit or receive unsolicited bids for partnerships with the private sector.

That's not the path we're on.

We're on the path of

We're moving down the path of issuing an RFQ for qualified respondents that are able to build the facility and secondarily an RFP that will then kind of get their real concepts and real cost numbers and will choose one and they'll actually build it.

The nuance here that the white paper addresses is if we wished to add the additional infrastructure at this moment on our own dime, at our own risk, what would it yield?

And that's what's in the white paper.

We could potentially, you know, include in the RFQ and the RFP that there will be additional

development above the structure of the parking garage and add that to the scope of what will be expected of the design builder.

There's a lot of questions that would come with that because that's not the path we're on outside of the $5 million question, which is, do we want to add $5 million to potentially have the opportunity to build something above the structure?

That's more akin to the public-private partnership, the PPEA piece that I referenced.

That's the type of thing that you would see more commonly in that structure.

The design-build.

has a set of owner's criteria that are built in that pretty well lock it down.

There is room for creativity in the design.

And that's where you get some of the efficiency.

And if you get the design and the builder that are locked in together, you get additional efficiency.

because then they can't argue with one another if they're on the same page from the beginning and that kind of keeps the city out of having to referee those those kind of disputes which is where you get efficiency but that true kind of creative tempt us with something bold is another process more akin to the Market Plaza West 2nd effort that the city did a few years ago where we said

You know, it was a design competition to start with that led to a negotiated development agreement.

That's more akin to what you're talking about.

We even before December of 2019 last year kind of decided that wasn't the right approach for this piece of property at this time.

given the commitment to the county for the courts project that was driving this, the timeframe associated with that, the cost associated with that and the clarity that the county wished to have in terms of their spaces and things like that.

If folks have a recollection of the property on Water Street that Market Plaza and then West 2nd, we spent four years and we ultimately got to a point of

where the project did not proceed from there.

This parking structure, if we stay on schedule and we expect to, if we continue to proceed, is due to be in service in three years from today.

November of 2023.

I think it's November 30th.

So, you know, three years and some change.

So we really don't have a lot of time to do that.

And also when you do that, while you can bring a creative partner to the table and potentially some funding, you lose control with every, there's a trade off with everything.

And if the purpose is to provide parking for the courts,

and maintain our capacity, not really even grow it, just simply maintain our existing capacity by replacing parking spaces that we know we're losing vis-a-vis the Belmont Bridge, the Levy lot, the Water Street Trail addition that's already in place.

Having the city maintain control is a better position from that respect.

Anytime you add a component to the project, it's like pushing a balloon.

You know, you push in this side and it pops out the other side.

So if you bring a private partner in that wants to do a hotel, the hotel might need parking spaces.

It would need parking spaces.

It absolutely would.

So therefore, you know, if you're only building 300 spaces,

and then you have to accommodate the hotel with 100.

Well, then you've lost, you know, a third of your potential gain and you kind of go back and forth and then you start to really question, why are we doing this?

Are we doing this to have a hotel or are we doing this to provide parking for the courts, which is the primary driver?

I just want to kind of go back to your comments about just the affordable like just the cost of this project if it were to be something different because I mean what are your thoughts on if a developer would even think it's something they would push forward for because as the math shows if it's just five million dollars of additional cost just to create the infrastructure that we then haven't even built an additional square foot of this project yet it's going to be in another one what what kind of return do you get it certainly isn't one that we're going to see in an affordable housing structure without a lot of subsidy and so

Yeah, well certainly you're going to have, you know, those costs that you're incurring by the podium, the additional infrastructure automatically push you away from any concept of affordability and push you towards, if it's residential, it's high-end

you know, kind of the luxury end, if you will.

If it's office, it's gonna be, you know, it's gonna have to be pretty nice office to, you know, be able to pay for itself and accommodate those costs over a long period of time.

So anything is possible.

If you throw enough money at something, you can do it.

You can make it happen.

But, you know, just because you can doesn't mean you should.

And yes, I mean, you're right.

The city would essentially be,

be offering a subsidy and potentially taking the risk of the whole 5 million if it chose to go that route, that it may receive some of that back, it may not.

If we were to decide

that we wanted to at least explore one of these public-private partnerships.

How much of a delay would that exploration process alone put into the calculations here?

I mean, you've said three years to November, 2023.

If we said, okay, the courts aren't actually going to be built until 2025.

and we've got sort of a slowdown in parking needs at the moment because of COVID and working from home and all the rest of that stuff and that some of that's going to likely continue for a couple of years.

Maybe we don't desperately need to get things done by 2023.

Maybe we work something out with the county to say, okay, 2024 is fine.

I mean, this is all hypothetical here, but a question, if we were to decide we wanted to explore that other option,

How much additional time are we adding to our decision making process?

It's hard to say, to be honest with you.

But the most recent example of Waters Market Plaza was four years.

Rick Siebert, who's on our team, has some experience with doing some of these.

And it's not untypical to have a negotiating period of a year or more once you get a partner.

And getting a partner,

is a good six months to a year.

So it's a considerable amount of time in the hypothetical world of could we jiggle some of those things.

At this moment, the path that we're on, the RFQ is to go out next month with the RFP to follow in January, and that gets the ball rolling to a completion date of the November 2023.

You know, the train that we're on gets us there, barring any unknowns underground or otherwise.

Yes, so the county's leading that project with our input from our facilities folks.

We do have a overlap from our team to their team.

Scott Hendricks and Crystal Rittervold are the primary folks there and they are participating in that.

They have a designer on board.

They are engaged in developing the program and are proceeding to meet that same timeline that we're on.

Those two timelines were synced up

One thing I suppose I ought to make clear I've been one of the more passionate defenders of this project and I still am

And I don't mean my comments to suggest any weakness or waffling as it pertains to the merits of the project.

So if anybody in the county is sitting there thinking, what the heck is Lloyd Snook thinking?

I thought he was on our side.

I haven't changed.

They're good questions to ask.

I mean, it's a significant project.

And it's a valuable piece of real estate.

If we were not looking at building a parking structure, we would be entertaining a public private partnership potentially to build something that is desirable to the city if it was under city ownership, which it is.

But the parking structure in itself complicates matters considerably.

And I haven't even really gotten into the operational components of if we were to go a different route and if we were to put the 5 million on top of it to build something,

you know, and still maintain the current schedule.

So you build in the infrastructure now to then build something at a later date.

You have some real challenges when that later date comes.

So you've got a fully functioning parking garage at that time, and then you want to build something on the roof of it.

So you're putting that into jeopardy at that time for whatever period of construction there is.

And then thereafter you have that additional demand that's generated by whatever use you add to it.

that is then permanent.

And if you can't accommodate that within the spaces you have, you're not going to get a partner because almost everything requires some kind of kind of parking.

So it's this push pull thing.

So we could get a partner and do something a little bit different, but then we're not going to maximize the number of parking spaces we might have gotten to begin with.

The other item I should mention is that the Market Street parking garage is

Aging.

It's nearly 50 years old and parking structures typically have a lifetime of frankly less than that.

But this one's been well maintained and it was solidly built when it was built.

But in its best case scenario, it probably has 20, 25 years, maybe less, maybe more, but somewhere in that range in its life cycle, expected reasonable life cycle, at which point there will be nothing that can be done to it probably other than tearing it down.

and that presents both a problem and an opportunity, a problem in that it's a nearly 500 space garage that serves the government complex as well as all of the downtown.

It was put in place a year before the mall was built for that very purpose to allow the mall to continue to survive with available parking.

So it presents an opportunity to redevelop that into something neat and potentially more intense and potentially not a parking structure.

25 years from now, things might be a little different with respect to parking demand.

But if you get to a situation where it's time to do that and you don't have anything else available nearby, you're really in a pickle.

If you build this facility and have a 300 space facility fairly nearby, you know, that helps with demand.

It doesn't absorb at all.

But if things happen as we think they might happen,

there could be a lessening of demand in the out years as more public transit and more efficient vehicles and things of that nature happen.

That's yet to be proven, but that could happen.

So, you know, in essence, this is the replacement or the temporary replacement for Market Street as it ages out and presents an opportunity to do something there if you have something here.

One of the questions I have is whether the

The feasibility or possibility of meeting the agreement through there's 63 spaces of that existing lot.

Whether you could just provide around 30 additional spaces there and what that cost would be and whether that's feasible as a way to meet the agreement without building a $10 million, 300 space structure.

because I think the the intent of the Planning Commission's recommendations I think were always to try to reduce the cost of the project rather than add additional costs which is a situation we'd be in and trying to build a stronger foundation that could allow housing or something built on top of it but that's something I've wondered about because it seems like there's something we should disentangle of

What could be feasible for just meeting the bare minimum of the agreement, either just providing those 90 spaces by building a much smaller structure providing 30 spaces or so where those existing spaces are

and there's that and it seems like there's also a policy component separate of the court's agreement about the desirability of providing more total parking spaces, both with parking spaces that are going away in some other areas as well as you're thinking 20, 30 years down the road with the Market Street Garage.

And I just think that's important to disentangle because it seems like in part,

You know, a commitment to this specific $10 million structure is in part driven by policy considerations of wanting more parking spaces and

That just seems to be a relevant point in our decision that, you know, perhaps it's the rational way to go, given the parking situation, what the park analysis would be, but we are, it seems, making a conscious policy decision beyond just the courts agreement that we're prioritizing investment in parking spaces over

school reconfiguration, housing, and some of our other CIP policy priorities.

Yes, the initial consultants that looked at it did do a couple of options, one of which used either of the lots independent of one another, and then the concept that we're working under now uses both the lots and is the larger structure.

They did look at those.

They're less efficient.

They cost more per space because

you know when you squeeze it down you start spiraling up and you have four levels to get to 100 spaces as opposed to you know two levels when you when you have a longer span so you lose efficiency there uh for sure but but that was looked at and and sure you you could build a small 90 space garage to to satisfy uh the the county uh specifically um

The other challenge to that, if you just did that on that one site, which you referenced correctly, the 63 spaces that are there now in the surface lot.

Well, the challenge is that those are part of the downtown inventory capacity, if you will.

So if you displace them and didn't replace them

You're making the problem worse at the moment by not replacing them.

So the concept that is here is that you build the 90 for the county, you replace the 63 that are there so you don't lose any capacity.

And then those others that I referenced

are the Belmont Bridge, which is 50 spaces that go away, you know, starting next year.

And those are, you know, vital to downtown workers.

The Water Street Trail, which I referenced is in place now, that's 11 spaces.

The Levy lot, which is owned by the Housing Authority, which is expected to be developed upon is 61 spaces.

And so you add all those up and you get to 305 spaces.

And

They've conceptually suggested that 306 is the number that could fit in this facility.

So you're, you know, one net space over at the end of the day, if all works out.

Now, it's not fully designed, it's not built.

You know, those details are there, but at least based upon

The information we know now about the existing capacity of that expected facility and the known losses, that's not even factoring in any level of increase from additional demand.

Yes, there were some rough estimates with each of them.

And it was certainly obviously a little bit less, but the cost per space per unit, if you will, was greater because you lose that efficiency.

I'm just curious what, because again, I think, especially at this moment, our major challenges, I think, you know, when we're looking at our CIP budget, we're going to have to

There's no way around trying to revisit past decisions and figure out what to prioritize or readjust in order to make our CIP budget sustainable even in the midterm.

And so I think that even if it's less efficient per space, if it's significantly less as an overall project cost, it's perhaps something for council to at least think about.

And I do think whether we agree or disagree with it, I think it's important for us as a council to acknowledge that

Prioritizing the investment in this particular structure at $10 million, 300 spaces, goes beyond the court's agreement and is a policy decision that council is prioritizing spending CIP money on

replacement parking spaces that goes beyond just the consideration of what's necessary to meet the court's agreement.

So again, whether we think that's right or wrong, I think that's an important thing to disentangle when we're thinking about what we're going to have to prioritize in our CIP budget because we are going to have to make some tough trade-offs and figure out what it is we're really going to prioritize and

Well, we can certainly come back to the

So I think the next thing we had to follow up on was some additional information on the Dogwood Memorial and or the Fifth Street traffic calming.

I am.

I'm here.

Let me turn my video on.

So I think there was an email that was sent out to, can everyone hear me?

Okay, before I start rambling on.

There's an email sent from the Dogwood veterans basically asking for us to revisit what was kind of presented to council about this time last year as far as improvements to the Dogwood Memorial.

I'm not sure you know I think David Brown was supposed to be here and talk to it but you know a lot of it is kind of stuff that we we had gone over in that meeting you know the there's really a few options that are viable you know we can

build I think the the main recommendation that staff had was to you know work on building a parking lot that would be on the northeast corner of the intersection there and that one was a few hundred thousand dollars I believe to to build that some of the other options that the veterans were not in favor of were you know just setting up kind of a almost a park and ride with a

golf cart or something that would you know go from the parking lot over off of rugby and take people up to the memorial.

That one from my recollection was you know ten thousand dollars a year or something like that to staff a person to do that and then the the larger you know

I guess big picture option that the veterans really were pushing for was to have that pedestrian bridge that would connect the parking lot over top of John Warner Parkway to the memorial.

And that was a several million dollar project to do that.

Outside of the events that happen, the demand is pretty low.

Maybe one or two people a week that we're talking about that would be going up to visit the memorial specifically.

And again, I don't know how many of those actually might have a disability that would need assistance getting up to it.

But yeah, I mean, conservatively speaking, we're probably not talking more than 10 or 15 a month.

Now, during actual, you know, Dogwood Festival and, you know, veteran events where they're up there, you know, there can be several hundred people for those, but we've also made accommodations with Parks and Rec and with police in the past where, you know, we open up the kind of emergency access where the skate park is and

and people drive around parking the grass.

We've shut down the on-ramp to 250 there and allowed veterans to park in that before.

So those are all accommodations that we do for events.

But yeah, on a daily, monthly basis, the demand is relatively low.

So, I mean, I'm just curious if this might just seem like too simplistic of a solution.

I don't know, but if we generally have a staff member around, a Parks and Rec staff person at the skate park, I mean, and there was a golf cart there for someone to, I mean, I could see where, you know, people are worried

because they might have to call a phone number.

There's not somebody there.

They might have to wait for 15, 20 minutes before someone comes out there and not, you know, not clear.

Yes, ma'am.

We had that version of a request type of thing where they could call or we also came up with that we would basically get done there once an hour, every hour on the hour.

and go down and check, just drive the car down there and see if anybody needs a ride if they didn't want to go through the request.

I see just given that option and the amount of staffing that's there during the

predominant parts of the week.

And I think there's a lot of things we can do proactively for those things outside.

And obviously events are already being handled.

I just think for the demand that we're talking about, we have to be realistic, especially as we're considering priorities about where we're going to spend this kind of investment.

And I know that's not going to be viewed favorably by many people, but I just feel like the accommodations that staff is working to make to provide safe, accessible,

Transportation doesn't involve crossing the 250 bypass, which is, I'm sorry, not 250 bypass, John Warner Parkway is my preference.

And I think that what we've got with the skate park and the accessibility on rugby is, is more favorable.

And I think that we should continue to work towards schedules that will allow us to accommodate that.

Knowing the way, if people want to park at the rescue squad, that they can still do it as they, as they wish.

But I don't, I don't know that I can get behind any significant capital investment here.

Was there some history behind how we came to have this site cut off from handicapped access?

I remember having heard something about plans not having been vetted with that in mind or whatever.

What can you tell me about that?

So it came to be, I mean, it was back in the early, late 60s, early 70s, I forget exactly when the Dogwood Memorial was created, but it was created to be, you know, something that could be seen and not necessarily visited.

And, you know, people would kind of walk up the grass hill to get to the flagpole.

And then when John Warner Parkway interchange went in,

You know, we worked with the Dogwood Memorial veterans and stuff and created what was there today.

You know, the height at which it was up there kind of made it so that it's not that it doesn't have ADA access per the trails.

You know, it has to be at five percent and it's at five percent.

But it is, you know, again, if you have a disability, it's a long trek.

at five percent.

If you try and do that in a wheelchair, it's not exactly the easiest thing.

And could you talk a little bit about the parking lot option?

Yeah.

So, so back to the, I guess the council meeting a year ago, we kind of showed, there's kind of a, a small hill on the Northeast corner.

When John Warner Parkway was constructed, the contractors used that as a kind of lay down and storage area.

So there is still kind of almost a gravel driveway that's there today.

So more than likely we'd have to do a little bit of moving of some dirt and leveling it off and stuff, but

It wouldn't be completely unreasonable to build a small parking lot up at the top of that.

Really all that does is it moves you a couple hundred feet closer than the parking lot that's there today, but you would still have to navigate without a bridge option.

You'd have to navigate back down to the roadway

you know, cross John Warner Parkway at the traffic light and then still get back up the hill.

I think that they like that option only if, you know, at some point in the future, the bridge would get built as well.

Yeah, I mean, at minimum, it would probably be a million and a half to $2 million to do the bridge.

No problem.

So Fifth Street, we're on the agenda to speak with you about Fifth Street.

One of the options that will be presented in that is kind of a midterm solution to try and calm

Some of the traffic and break up the long straightaway that's there is a roundabout option.

That would go just north of where Bailey is, kind of where the community gardens are today.

Keith Woodard owns Pretty and they have plans to develop that.

I've talked with them.

They're actually on board with donating land that would be needed for a roundabout with the caveat that they would have access for their development coming off of it.

So, you know, that would be probably a three to four million dollar project.

Give it too much credit if I say it's a concept plan.

It's really just an idea at this point.

You know that other projects that are really would depend on so how we wanted to move forward.

We could go the route

of SmartScale.

We've said in many meetings at this point that that's a long process.

We just did applications this last year.

So we'll find out the results of those next year, the next application.

This process is two years out from that, or two years out from earlier this year.

So it would be 2022 before we would apply, 2023 before we would hear before funding, and then another three or four years after that.

So, you know, we're talking 10 years out, you know, if we try and go that route with the demand of, you know, there's a 1300 signature petition that I'm sure a lot of you are aware about now, you know, kind of demanding that things be done on Fifth Street.

But none of those would address any of the fatalities that really happened over the last four years.

Yeah, I don't know how much we want to get into, you know, the report that will be given on, on Monday night.

But, um, but yeah, so that that's a consideration, you know, if we wanted to do it sooner than, am I, I'm, I'm sorry.

We didn't hear you.

That might help.

I can hear you better now.

Okay.

So, sorry, I'll go back and say a lot of that again.

You know, the roundabout option is one that, you know,

would help to break up the corridor.

Right now it's a mile long straightaway.

Installing the roundabout would put a force point for traffic to have to slow down based on the studies that CPD had done out there as far as traffic speeds and stuff.

We don't really have a traffic problem or a speeding problem for the majority of traffic, but we do have a long straight roadway that will allow for people to get up to high speed if they choose to do so.

So this would kind of break that up.

Like I said, it'd be a three to $4 million project, more than likely.

Smart scale would take eight to 10 years to go that route.

And so a light at that Bailey Road, Fifth Street,

So a traffic light there does not meet any of the traffic warrants.

There's not enough volume coming out at Bailey.

The other thing that that wouldn't do is more than likely that would be a semi actuated signal.

So it would only trigger the red light on Fifth Street if there were people that needed to come out from Bailey.

And so, especially, you know, a lot of these are happening later at night where there's a lot fewer vehicles on the roadway.

So, you know,

If you have any questions on those three, we can pop back to the PowerPoint.

So as we talked about, you know, all the things about the CIP, those are three issues that you've been talking about that are before you that currently don't have any money included in the CIP.

So that would be for further discussion.

Additionally, this week you all talked about the comp plan housing recommendations that there's, you know, beyond what we have in the CIP for the CRHA and Friendship Court, that would be an additional add.

We also have the $109 million of unfunded departmental requests from last year as well.

And then next slide, please.

Just moving on outside the CIP, you know, departmental budgets are due tomorrow, so we don't know what they look like yet.

That's still an unknown.

We don't know what requests are going to come forward.

We have employee compensation and benefits to look at.

We also are not clear on the school operating budget needs yet or outside agencies.

So next slide.

What does all this mean?

What are the decisions?

As we start to plan for the CIP, that's sort of the first piece.

And really what we need from council are two things, really three things.

One is to talk about this process.

We need you to set priorities.

And based on those priorities, be willing to anticipate that without cutting something out, we are anticipating the need for tax increases.

Not this year necessarily, but soon in the future.

So moving back to number one for the CIP process, as we've talked about the school reconfiguration project, you know, what is Council's commitment to that project or even the West Main Street project?

They are two of the largest projects that are currently contemplated in the CIP.

The school reconfiguration beyond the $3 million that was allocated in FY20, there are no further dollars for construction or what may come out of the design piece on that.

And then for West Main Street, we currently have on the authorized but not issued list, I believe it's $18.25 million of bonds allocated that have been authorized previously.

and there was $8 million additional in the 2125 and I believe staff, a preliminary request was another two and a half.

So in excess of $26 million of city money allocated to that project.

So, you know,

How would you like for us to move forward?

for the West Main Street project.

They were supposed to come back to us with a- Is that the value engineering thing?

Yes.

I'm going to let Paul or Brennan speak to that.

I can jump in on that if that's all right.

So the value engineering study is underway right now.

We did move forward with that.

It is not complete.

And then I think there was a couple other issues about like the statue.

I don't know if we've really landed anything about the Lewis and Clark statue, but those things are underway.

We just don't have anything to provide as far as informative information at this point.

I just did want to clarify that for West Main, it was about 13 and a half million of local funding that was committed for phase one.

and a little bit over 7 million that was committed for phase two of local funds with another $2 million that they were still looking for.

So it was right around about 22, $23 million.

And then just a reminder that we do have the smart scale application for phase three that we have not heard about yet from VDOT.

For all phases combined, there's, let me see here, for phase one and two at this point, we've got about $5.2 million of revenue sharing and about $2 million of smart scale funding.

for phase one and two.

And phase three, if that is funded through the SmartScale process, if it's funded 100%, that'll probably be about $2 million of funding from the state and federal for phase three.

And then phase four is pretty far out there right now.

So the question that I had was mainly about the school project.

It's been rumored.

It's been talked about for years.

Numbers have been bandied about 50, $60 million over five or six years, whatever.

So at this point, the green light has been given for the

them to be negotiating with their design partner because that kind of got paused when COVID hit.

And that there'll be a first kind of pass at kind of making some estimates that we have allocated a full 3 million, but there's like a checkpoint that can be had under a million.

And that work is commencing and gonna take place so that we all have much more clarity around the scale of the costs that we're talking about.

But I would just say that even aside from reconfiguration, I don't think any of us can disagree that the schools are going to need a significant investment in their facilities regardless of whether it's a reconfigured model or if it's just literally us investing in the facilities that we currently have.

And so I think this is a reality regardless of any decision making there.

In terms of the decisions that we're being asked to make or the guidance that staff seems to be asking for from us tonight, I don't know much else that I can say other than as a general proposition, it's hard for me to think of anything that's more important that we do than educate our kids.

and that we ought to be allocating significant resources to educating our kids.

But whether significant resources mean $60 million over six years or $3 million next year, and we'll see, or anywhere in between, I don't know how to answer that question.

And in terms of the number, the West Main Street project, I don't know how we could answer that until staff

It's helpful, right, as we plan the CIP and, you know, is there a desire to go back, you know, in your packet on that last page, there are $80 million worth of projects that were committed to be funded with bonds previously.

Is there any appetite to going back and revisiting any of that?

Are there any projects that were contemplated in last year's CIP that were planned with bonds or cash that you want to go back and revisit priorities as a give or take?

I think you're right, it's hard to make a decision tonight, but I think what we're hearing from you all is that schools are a priority, whatever that looks like, and so are there areas where

So, Chrissy, if some of this reconfiguration or modernization work happens with the schools, then some of these items that are on

This list should come off too, right?

Well, the schools are here quite a bit.

So the HVAC replacement plan, like if some of those schools are getting under this, that should cover, depending on, I don't know which schools, you know, they are, but I've been asking

So that's a good question.

I think that's something we need to get from facilities or if someone on the call tonight is willing to speak up about that.

So I can speak generally to the schools in terms of the ongoing HVAC projects.

Those were postponed depending on what the outcome of the reconfiguration was, but certainly the bulk of those projects were not involved in either of the facilities being reconfigured.

So there was really not a whole lot to cut out of the HVAC

Correct.

And so what they did was they basically shuffled or juggled the schedule.

Otherwise, it should remain the same.

And basically, if they're not going to do HVAC work because of the reconfiguration, those funds would be shifted over to other schools to bring them back up on the schedule.

So they've been funded for a while.

And I know

It shows a balance.

If you look at the account, it shows that we carry a balance in that account and some of its capacity for them to deliver projects.

And so I've been working with Mark Zavokar in general to make sure that they have the adequate capacity to deliver the projects and we're not sitting on those funds.

So another just question to that.

That would be my recommendation because we're so far behind.

And again, it's, um,

It's two things, I think two reasons we're behind.

Number one is funding level.

Number two is capacity to deliver projects, which is kind of an ongoing theme.

But I would fear that if we did remove the funding, you know, it's hard to plug that back in.

And with it being HVAC, that's wholly dependent on the schools being operational.

And if you have a unit down, there's really nowhere else to send the kids if you have a made cooling tower down.

So I would personally be reluctant to remove that.

The other thing to do is that we don't know what the consultant's final determination is going to be based on their assessment as to whether it'll be scratch and build, build next to the facility.

And I don't think, I wouldn't recommend taking it out.

I was just trying to get a feel for like this five-year, you know, outlook that we're trying to consider if some of this money would, if, you know, what has already been kind of approved, if that would be reduced any.

Right.

I'm looking at this list of the

I guess the authorized but not issued list.

And a lot of them I know were done or approved back before I was on council.

So I don't really know what's going on, but I'm struck by the fact that we've got a lump sum from fiscal year 17 to the schools, a lump sum to the schools fiscal year 18.

Was that money spent?

So that's a, um,

Let me explain how this works a little bit.

I agree that looks a little funny.

In theory, and in practice, we allocate a lump sum to the schools every fiscal year through the CIP.

In practice, that basically acts as one pot of money.

And so for the purposes of this list to track which bonds we're selling and which we're not, and to tie it back to a CIP, I have these accounts listed here.

Well I guess I

It just seems to me that if something is on a capital budget, maybe it's simply that having a lump sum without being apportioned to specific projects is not a very sensible way to be allocating capital funds.

So I can speak to that.

There is a list behind that lump sum quantity, and it's held within facilities development.

And for the ease of the CIP, because there are a lot of small projects behind that, they have an ongoing list that's negotiated with CCS over what rises to the top.

And a lot of times what they have programmed may shift during the year based on priority, whether it's changes in their programming or changes in the facility.

And so that hasn't traditionally been a part of the CIP.

We've just used the lump sum figure.

Well, I'm not sure that I want Council to be investing Council's time in trying to decide which $50,000 expenditure the schools want to do.

I'm simply noting that if we are in fiscal year 2021

Well, and I think this gets back to part of what Paul said originally is, you know, there's a capacity issue for what you can get done.

And so, you know, as each year they, facilities has a list of projects that they intend to spend for these lump sum dollars.

And then as those priorities shift,

We have sort of the same issue that came up

six months ago, and we're talking about the budget in terms of sidewalks and bike trails and so on, where the bike ped community was saying, well, why aren't you allocating the money that you've been allocating year upon year?

And the answer was, well, we haven't spent the money we've allocated year upon year.

Which isn't a terribly persuasive answer to anybody either.

I mean, I understand the capacity issue and there's, we talked earlier about the financial capacity issue.

but if there's also the work capacity issue, that's a different management problem that I think we ought to ask the city staff, not city council, but city manager and below to work on so that we are hopefully no more than say a year behind on what we think we're gonna get accomplished, not two and three and four years.

Yeah, Councilor Snook, I'd like to add to that that, you know, we're building infrastructure and a lot of bike ped infrastructure.

And I think what happens is there's crossover between, you know, what we get in subsidized funding through smart scale and things like that.

City CIP funded projects that don't have it broken down within the CIP to show what is exactly going to pedestrian infrastructure, bike infrastructure, you know, things like that.

So that the CIP might reflect a street improvement that has those items within the scope and then outside of that we have these other pots of money that are used to subsidize projects that are either linkage projects or identified on the

Sidewalk plan.

And so we're delivering some of those smaller projects, but we're running a balance within that funding cost center.

It's an interesting mix of metaphors, a running bucket.

Anyway, my concern overall is one of if I have to call up somebody and say, what the heck does this mean?

And I'm supposed to know this on city council.

Imagine what people out there who aren't on city council are thinking when they don't even know who to call to find out what's going on.

And that's part of what we experienced six months ago.

with the people complaining about the bike ped situation.

And we could explain, well, don't worry, there is in fact money that we just haven't spent it yet.

But that's not a very satisfactory answer, but that's not a discussion we need to continue to have right now at this point.

I think it's a matter of reporting as much as it is anything else and trying to figure out a way to make sure that our budget information

is more expansive, more extensive, more intelligible, more transparent.

Not that council is going to invest its time in nitpicking individual amounts, but that people out there in the community ought to be able to look at it and have a sense of what the government is doing.

Our formal presentation, I don't know if there was further questions or discussions.

I guess I just want to make clear a couple of things in my head here.

So, you know, unallocated

money that we're looking at.

We're looking at $109,000 in unallocated staff requests.

We're looking at... Million.

50, yeah, that's what I meant, million, yes.

109 million.

We're looking at 50 to 90 million for school reconfiguration, depending.

Or more.

The 50 to 90 million?

Could be more.

Could be more.

Yes.

We're looking at three million for a roundabout to make, let's see, what else was on there?

The Dogwood.

Portable housing, which is 100 million over 10 years.

So 50 million in the next five years.

That's where am I at?

I'm at 215 million now.

And we have at most 52 million more than we can borrow.

Okay, just wanted to make sure that I'm really clear on like,

the largeness of the asks to even at if we went to our capacity, to our borrowing capacity.

And that's, and paying our borrowing capacity would require approximately 20 cent tax increase on personal property tax.

Given what we know right now, right?

That's not subject to change, but that's the picture basically.

Just want to put that out there that, you know, there is no way we're getting out of this without cutting things that we all care about tremendously.

Um,

and that's even with a 20 cent tax increase.

So if, you know, the other thing is if we do use a tax increase to pay for school reconfiguration, we should have a serious talk with the schools about that the entirety of that increase then goes to paying on the school reconfiguration and not 60% of it.

because if 40% of that tax increase is additionally going to the schools, that's kind of, that's not double dipping, I know, but that's kind of where that's feeling like it's going as far as, you know, population.

And frankly, we need to hear more from the public then.

If- Go ahead.

I just, I mean,

I will ask for any additional comments.

I just had one.

Correct.

Right.

So I would just echo Councilor Magill's point that I think, as well as in the context of COVID, which I think is creating greater uncertainty for us in terms of our revenues could be worse than what we're thinking, the composition of the Senate at the federal level

should make us at least contemplate the reality that there will not be additional support coming from the federal government to bolster state and local governments.

Even if we assume tax increases, if we're just taking an honest look at it, I think our only path forward is to look at some of our

Previously committed expenditures and evaluate what the trade-offs are and make cuts and I think as a council we need to figure out what our priorities are going to be and what we're prioritizing because we're going to be half to staring down some difficult trade-offs and I would just again offer that

Perhaps areas to think about are things like do we want to prioritize investment in replacement parking or transit-oriented infrastructure or car-oriented infrastructure versus prioritizing investments in housing, schools, and people.

And I just don't think there's any way where we're going to be able to avoid looking at those kind of trade-offs and making those decisions.

But that's all I had.

I would also like to offer a, what may seem to some to be a heretical thought.

And that is that if we think about other sources of funding other than taxes or other than raising taxes, increasing the tax base is a good way to be thinking about it.

Council has over recent years killed or somebody has killed at the top level of government

projects that could be bringing in $3 or $4 million a year in tax revenues that we don't have and that we're likely to find in retrospect that we would have wished that we had had.

There may well be some decisions like that to make in the future.

And I think we have to recognize that increasing our tax base is a better way in many instances than increasing the tax rate, which affects everybody.

Yes, Mayor Walker, we have about 10 people in the audience.

If you'd like to make a comment to council, you'll have up to three minutes.

Just click the raise hand icon in the Zoom webinar.

Going once.

If you'd like to make a comment,

Click the raise hand icon.

Going twice.

Okay, so we have 10 minutes left to continue this discussion then.

If we could just get an update of when the value engineering study will be completed.

That would be helpful for the two pointers, but I still think that maybe between now and the next meeting that council can go through this list.

But every time we've tried to go through lists before, whoever has

you know advocated and got these things put on the list in the first place or wherever they are at on the top of the list as you know current priority it's been hard for us to you know make you know make those decisions but I see that some things like I'm looking at the ECC that's three million dollars but this is probably aligned with other university and the county right also contributing for the radio

Mayor Walker thank you thank you for that because I think what my hope is is that

you all as a council kind of give us your ideas of how you want us to approach the next budget meeting where we'll address the capital program.

Because I think, and I also wanna say this, I think it's also worth pointing out that as Ms.

Hammel said and Councilor Snook you mentioned about economic growth,

I mean, some of these projections are based on, I believe, one and a half percent.

Right.

There's a one and a half percent growth rate built in here.

So that's one assumption that's there.

Also, there are bond interest rate assumptions that are built in here that could be higher or lower.

I think it's awfully difficult where we are right now globally.

You know, there's a school of thought that says that basically, as the world's investors gray, they simply, just like Japan, people are going to still want to invest more and more in bonds rather than riskier equities and therefore rates may stay low for a decade to come.

you know, who would have ever thought in our lives we would see negative interest rates for any government bond and yet we've seen that in Europe and Japan briefly.

So there are assumptions here that could change and change this.

You know, obviously we want you to know that but at the same time when I talked about fiscal clarity, I think it's also just worth pointing.

I mean, when we've put out these numbers that

There are going to be some choices that need to be made and more than likely there's going to need to be revenue that sources that are increased to pay for schools as well as the other projects that you want to continue.

So if you all have a preferred

method or if you want to email us with how you'd like to go about, you know, looking at these decisions when we have a proposal for you.

Yeah, I think just for me, if we are being asked to remove something just based on how the conversations have gone in the past when we attempted to do that,

It would just be helpful to know, I mean, like the Belmont Bridge is on here, but we know that nobody is probably gonna touch that, right?

Because the 1 million years that we've been trying to get it done.

You know, but, and then the two big items we're waiting for

We're waiting for feedback from consultants from both of those items.

Well, I think the comments we received on schools are helpful in that, you know, we know that everybody has spoken positively about that and that appears to be a priority.

So if there are other requests that come forward that maybe, you know, we have a gauge now to know that we need to be not putting forth brand new stuff, that this is a priority for you.

So that's helpful.

And that's one of the things that we are, I mean, and that's an update we will give on Monday too, but we've counseled the strategic planning session for next week.

The one for December 15th is it hasn't been counseled yet because we're just trying to figure

That's something out there, but that'll possibly be Council and maybe delayed until about April after we get through this budget season.

Okay.

And how would we need to do that?

Um, I think it's, I think doing it via work session is fine.

I don't think it has to be as official.

Um, as long as it's a public, you know, everybody weighs in kind of thing.

I'm getting out of my league though.

And so that was my point with, um, before I lose it again, just setting the priorities, you know, to, um, which was an important part of going through this, um, strategic plan, like you're saying, um,

Council needs to come up with whatever that list is, whether it's a list of two things, three things, five things.

We made a significant commitment to how affordable housing we made.

We're saying now that schools are a priority.

Do we add something else to that list so that we'll know what that focus is, understanding that there'll be different categories like during

the vibrant communities process and stuff that's going to come up that will be more broad.

But those are the type of decisions that we have to decide.

And then if we make that list, however many items are on it,

and then we are asked whether we continue with something like school reconfiguration or affordable housing and West Main Street.

Then it should be clear.

We shouldn't even have to get staff to go back and do that additional work.

We already know based on what we've said that there's something that we need to decide.

How are we cutting it?

How much are we cutting it?

And getting that information about staff about what

of the repairs and maintenance that's needed and get those dollars in.

But I think we just keep sending staff kind of spinning their wheels and getting us information, but we never just commit to whatever that list is.

So that's some of our work and what I think that we're going to have to, whether it's

in a session on the 15th or would have been next week or at the end of a council meeting before the end of the year, we have to decide that.

So just a little bit of context for timing.

You know, if the calendar stays as we put forth originally, we would be going to the Planning Commission and talking about a proposed CIP budget of sorts on December 8th.

So I don't know where that puts us in terms of this conversation.

You know, as staff that gives us, we have some direction here, you know, we know that as requests come in, we have to make a decision and how we weigh that in terms of

You know, schools, you know, schools are important and we weigh that against that.

I don't know if there's other things in between there that we need to talk about or provide counsel or if there's some direction there.

And then certainly it's all subject to change with the work sessions before you finally adopt a budget.

Okay.

Can we I mean, can we use the time that we had for the strategic plan that we just canceled?

That was Heather's original proposal.

You know, to talk right strategic planning process.

Next Friday.

All right, so we'll, I'll work with Kina, Ms.

Thomas on that.

Cause it's already been noticed at least, and so.

Maybe if she didn't, I think she started counseling stuff today, so we'll see what would happen with that.

Okay.

And I guess in between there, if we could sort of frame up what your expectations would be for that time, you know, are we going to go through the authorized but not issued list?

If we could sort of frame up what would be most helpful for you all in terms of this conversation, what information could staff provide to sort of help guide that discussion?

Well, you know, honestly, if you take something off the authorized but not issued list and spend it right away on something else, you really haven't accomplished anything except traded one thing for another.

If the goal here is to take the authorized but not issued list, this $80 million, and trim it down so that you have more capacity to allocate

I mean, there are a fair number of things on that list that as I look at it, I can't possibly tell you what's going on there.

Lumps some for this, that, or the other thing, not just the schools, but maintenance and or whatever all else, which also brings to mind another point, which is

I think we need to emphasize that a lot of the capital needs that we're talking about now, replacing buildings or renovating buildings or whatever, in many ways are a function of having deferred maintenance too long.

And that we've got a lot of, it's easy to defer maintenance expenses out of your operating budget and therefore you get to balance your budget

in the short term, but in the long term it comes back and bites you.

I think we're seeing that in a couple of ways.

The only other general point I wanted to make is, although I said all kinds of great things about wanting to support the school system and all that, don't interpret that as meaning I want to give the blank check to the school system.

I do not know the school, the educational theory behind the

reallocation of the grades and all the rest of that stuff.

I express no opinion on that whatsoever.

That's the school division's expertise, presumably, but that's the case that if they're going to want us to spend $60 million plus on, they're going to have to help make that case because I don't know how to make that case.

So just want to make it clear that I'm not saying whatever the schools want, they get.

It's whatever I think, but it is fair to say that what schools can justify, I'm willing to vote for.

I would envision with this list is that we have some work to do.

For example, you know, the lump sum example that you brought, we would come to the table with, you know, what are the lump sum balances?

You know, the ECC example that you brought up, for example, I know that project is well on its way.

and it may be that we've allocated bonds in a different way and so some of that can come off or it wasn't as expensive.

So there are updates that we can provide you and need to provide you on each of these to give you more context.

I'm not sure if there's a desire to look at other things that may not be bondable if there's some way we can facilitate that conversation.

I'd like to see if there's anything we can cut.

And I can't make that, I guess it's very hard for me to see that individually.

And I mean, there's also, you know, I would also like recommendations from experts, from the experts, which I'm saying is, you know, as our staff of, is this a project if it's been on hold for this long,

Does it need to rise up to the top of the pile then because it's like on fire?

Or have we totally pivoted to something else and that's kind of obscure now?

As well as, yes, this would be the best way, but is there another way that we can shave, you know, a million off an $18 million project or five million off an $18 million project?

Now, sometimes that shaving isn't worth it because it means we'll lose revenue from another potential revenue down the road.

I mean, for the parking garage, I'd also like to see what the revenue projection is for that, what the anticipated revenue projection is for that.

Because we're talking about this $15 million of bonding for it, but no one's brought up how much it's going to offset with its revenues.

both.

I can actually speak to that if you'd like.

We did an analysis, a 20-year pro forma of the 300 space facility, and it, over 20 years, it actually, it covers its debt service and makes about a million dollars based upon current rates, and that's with no charge to the county for their 90s.

So the other spaces generate revenue.

and would contribute to potentially it covers its debt service if you were to do it on its own.

Although this is wrapped in with all the city's other items.

I'm sorry.

I was thinking about tax revenue, parking revenue.

No.

And I'm also, and what about the commercial space?

Is that just like replacing the exact amount that we're making now on the current commercial space that will be taken away?

that covering its debt service over 20 years includes a rent factor from the replacement commercial space with just kind of a plug number of estimated fair market value.

And just one clarification or distinction.

Your comment about the $15 million for the parking garage.

So we have 10 in there now.

So the five would be sort of if that was, you know, based on what Chris talked to you earlier, if the 5 million would be the additional cost if you were going to do mixed use.

We don't have 15 in there now.

Because if we go up, oh right, if we, that's another on my list of $215 million, we'll just drop it up to $220, $225, you know.

All right, I got, yeah, no.

So those, aside from, I guess I just need

Don't mean to sound like an idiot right now, but it's just, it's so big that one, when looking at each, a lot of times we're looking at the pieces separately, but when we're doing that, it's very hard to say, okay, well, of course we have to be able to compare, you know, schools against affordable housing, against infrastructure, against, you know, and where can we shave some things off?

Where can we,

Prioritize, because we're gonna want to do it all, but we can't do it all.

And it's very hard if we look at it just one piece at a time, versus if we look at all of them together and start, it's like, okay, well, no, we can only put 20 million towards this and we can put 10 million towards this then.

And that's what we can do.

All right.

We'll work on it.

OK.

If it's OK, I think it might be helpful just to connect with staff.

In the meantime, just to talk through just any details, is that all right?

Just to reach out to you?

Sure.

OK.

Thank you for bringing us very hard realities.

Yeah, reality check.

It's good.

Thank you.

I'm sorry.

All right, so meet and adjourn.

Thank you all.

Thank you.

Thank you.