City Council Special Meeting · Monday, August 13, 2018 · City Council Digest

2. FINANCIAL RETREAT

Financial Performance [50 min.]

Current Debt Review [10 min.]

Long-Term Financial Model [90 min.]

Financial Indicators [20 min.]

Current Revenue Sources [10 min.]

3589 segments .txt ↗

0:15 ↗ good evening and welcome to the Monday

0:19 ↗ August 13th City Council's special

0:22 ↗ meeting and we're going to meet hot this

0:25 ↗ is purpose of this meeting is told a

0:27 ↗ financial retreat we're discussing

0:29 ↗ financial performance current debt

0:31 ↗ review long term finance model financial

0:34 ↗ indicators and current revenue sources

0:36 ↗ so with that we'll get started

0:41 ↗ Thank You council president Mart's

0:44 ↗ welcome everyone tonight it's in a

0:47 ↗ nutshell everything financial and so

0:49 ↗ this is sometimes for finance

0:53 ↗ departments this is our most exciting

0:55 ↗ time is when we can have the

0:57 ↗ conversation and go through information

0:59 ↗ number by number I'm just kidding so

1:03 ↗ we're going to be talking tonight about

1:05 ↗ a number of different pieces of

1:07 ↗ financial information we've provided the

1:10 ↗ 2017 year-end report we've also have a

1:14 ↗ 2018 mid-year report due to some

1:17 ↗ staffing transition we would typically

1:19 ↗ have a quarterly report to the council

1:21 ↗ to give you financial performance

1:23 ↗ however tonight we're going to be

1:25 ↗ talking about that mid-year or some

1:27 ↗ often refer to it as second quarter of

1:29 ↗ the year so we're doing this in

1:33 ↗ anticipation of our budget development

1:35 ↗ cycle for 2019 this is to give a

1:39 ↗ perspective on where we've been how

1:41 ↗ we've performed and also to talk about

1:45 ↗ some planning going forward you'll note

1:48 ↗ in the information that the key section

1:51 ↗ of the book is the financial model this

1:53 ↗ is an item that the ad hoc long-range

1:56 ↗ financial committee has been working on

1:58 ↗ and as directed by the City Council

2:02 ↗ looking at ways to help with our

2:05 ↗ financial stability as the council

2:07 ↗ addresses transportation issues in the

2:09 ↗ community so with that there are

2:13 ↗ certainly projects that are identified

2:15 ↗ in the 2018 2022 capital improvement

2:20 ↗ plan

2:21 ↗ that document is not included in here it

2:23 ↗ is a separate resource that's available

2:24 ↗ for the community as well as a council

2:28 ↗ on our city website so with that we're

2:32 ↗ going to be talking about a number of

2:34 ↗ topics in my cover memo I alluded to

2:37 ↗ what those agenda items would be and so

2:42 ↗ that is financial review of the how we

2:44 ↗ have performed retrospective reports

2:47 ↗ we'll talk about where our existing debt

2:49 ↗ is just so that everyone can gain an

2:52 ↗ understanding of what it looks like talk

2:54 ↗ about the financial model and the

2:56 ↗ assumptions that were used as well as

2:58 ↗ some example scenarios that were

3:01 ↗ discussed by the ad hoc committee and

3:03 ↗ then we'll review some indicator

3:05 ↗ information this is a tool that was

3:06 ↗ created last year to help us pave the

3:09 ↗ way with understanding what warning

3:11 ↗ trends we might want to be monitoring

3:13 ↗ these indicators are not are not in it

3:17 ↗ in their entirety all the indicators

3:19 ↗ that a community might look at but we're

3:22 ↗ starting with trying to understand how

3:24 ↗ our financial condition might change

3:27 ↗ should the council make a decision and

3:29 ↗ then we'll be talking about funding

3:31 ↗ sources both existing as well as there

3:34 ↗ are some new source opportunities it's

3:36 ↗ not intended as you can see the time

3:38 ↗ allotted to funding sources or revenue

3:41 ↗ sources because this is something that

3:44 ↗ as part of our budget development we'll

3:47 ↗ continue to have discussions on

3:50 ↗ alternative revenue sources and then of

3:53 ↗ course other major projects that are not

3:55 ↗ included in the CIP so with that I

3:59 ↗ wanted to start on some financial

4:02 ↗ performance so I wanted to go into the

4:06 ↗ information and take a look at 2017 this

4:10 ↗ year-end report this does start on what

4:14 ↗ I think you have in your packet as page

4:16 ↗ 1 but is the 2017 year and report budget

4:19 ↗ versus actual so overall the general

4:26 ↗ fund

4:28 ↗ pretty robust ending fund reserves tax

4:32 ↗ revenues were strong in 2017 our

4:36 ↗ development revenue we saw increases and

4:39 ↗ we had general fund expenditures come in

4:41 ↗ 5% below

4:42 ↗ the budgeted amounts that were

4:44 ↗ authorized by the City Council our

4:46 ↗ utility operating our utility enterprise

4:50 ↗ funds are very strong as well in good

4:53 ↗ financial shape the one thing I did want

4:56 ↗ to note is that these are reports budget

4:59 ↗ versus actual these are different from

5:01 ↗ the formal audit of our financial

5:03 ↗ statements the finance department is

5:05 ↗ anticipating the state auditor's office

5:07 ↗ will be with us on-site for the audit

5:09 ↗ fieldwork in September and they will be

5:12 ↗ formalizing then those financial

5:14 ↗ statements and the council will be

5:15 ↗ invited to those sessions as well to to

5:19 ↗ see financial statements from a

5:20 ↗ different view but I wanted to talk

5:24 ↗ about with some highlights with regards

5:26 ↗ to revenue expenditures and our fund

5:28 ↗ balance the primary revenue sources in

5:31 ↗ the general fund are taxes and what we

5:33 ↗ call charges for goods or services so

5:35 ↗ these are other fees that that we charge

5:38 ↗ other entities residents and customers

5:43 ↗ these sources are about 82% of the

5:47 ↗ general fund and we had revenues for

5:52 ↗ 2017 exceed our our 2017 target of

5:58 ↗ revenue the final revenue budget was set

6:01 ↗ at almost 47 million we received 109

6:05 ↗ percent of that or about 51 million in

6:07 ↗ revenue sources the reason that we or I

6:15 ↗ should back up a little bit about the

6:17 ↗ revenue targets in 2017 the council did

6:21 ↗ authorize some amendments and those

6:22 ↗ amendments from the starting original

6:24 ↗ budget in 2017 ended about four point 1

6:29 ↗ million dollars upwards primarily due to

6:32 ↗ the fund accounting shifts that that we

6:34 ↗ did in 2017

6:36 ↗ one of the biggest reasons for some of

6:38 ↗ the what we call the fund accounting

6:40 ↗ cleanup was because we shifted sales tax

6:42 ↗ into the general fund and then the

6:45 ↗ council through their budget decides

6:48 ↗ where that money goes so instead of

6:50 ↗ splitting it up and being confusing we

6:53 ↗ wanted to show specifically all sales

6:56 ↗ tax in one place and then you decide

6:58 ↗ what to do with it into other funds the

7:02 ↗ sales tax was very it's the largest

7:04 ↗ source of revenue for the general fund

7:07 ↗ we received about fourteen point seven

7:10 ↗ million dollars and we were around

7:12 ↗ ninety nine percent of our estimated

7:14 ↗ receipts we collected all of these

7:18 ↗ retail sales tax along with all of the

7:21 ↗ different types of sales tax the primary

7:23 ↗ or the or the large part of our sales

7:26 ↗ tax comes from retail sales we also have

7:29 ↗ a strong showing of construction sales

7:32 ↗ tax as well and that came in at 17% this

7:36 ↗ is because construction is and continues

7:38 ↗ to be strong in Issaquah we also have

7:42 ↗ another type of sales tax just wanted to

7:45 ↗ point that out in the information we

7:47 ↗ don't take a deep dive into the details

7:49 ↗ about sales tax but our accommodation

7:51 ↗ and food services tax has seen an

7:54 ↗ increase increase and this was a 7%

7:57 ↗ increase in 2017 over the same period in

8:01 ↗ 2016 so that is something that that we

8:05 ↗ have data on other category of revenues

8:10 ↗ for the general fund is the property tax

8:12 ↗ this is another large source a hundred

8:15 ↗ percent of our tax estimates were

8:18 ↗ collected comes through King County very

8:21 ↗ strong source of funds very stable

8:24 ↗ utility taxes are also a large source

8:27 ↗ for the general fund about 19% of all

8:30 ↗ sources that we received and these come

8:32 ↗ from our collecting of tax on sales of

8:38 ↗ electricity natural gas solid waste

8:41 ↗ water telephone cable television all

8:44 ↗ within the city limits

8:46 ↗ so in 2007

8:48 ↗ we collected about 4.5 million dollars

8:50 ↗ and that was about a hundred and one

8:52 ↗ percent of the the budget targets so

8:55 ↗ we're very pleased to see that our

8:57 ↗ targets were that that were getting

9:01 ↗ close to what we're forecasting via no

9:04 ↗ attacks is business and occupation taxes

9:06 ↗ on the business activity in Issaquah if

9:10 ↗ the council will recall that there was

9:12 ↗ an increase in sales or the excuse me

9:16 ↗ the be no tax rates we do have another

9:19 ↗ full year of you know taxes coming into

9:23 ↗ the city this comes from about three

9:28 ↗ thousand eight hundred ninety five

9:30 ↗ businesses who filed in 2017 keep that

9:34 ↗ in mind that we we do have over 6100

9:38 ↗ licensed businesses but not all have to

9:41 ↗ pay B&O tax we had year-end receipts of

9:45 ↗ over five million dollars and this was a

9:47 ↗ hundred and eight percent of our budget

9:50 ↗ forecast again shows a full year of

9:53 ↗ those increased rates adopted back in

9:55 ↗ 2015 this is a another strong stable

10:00 ↗ showing of our business climate and I

10:06 ↗ wanted to talk a little bit about

10:07 ↗ development fees these include building

10:10 ↗ permit fees engineering services plan

10:12 ↗ review inspection services we had a

10:16 ↗ sharp decline in development activity in

10:18 ↗ 2016 so 2017 development related revenue

10:23 ↗ surged in 2017 a hundred and eighty five

10:27 ↗ percent of the revenue target and this

10:30 ↗ primary reason was because of the

10:32 ↗ conservative estimate at the time of

10:33 ↗ budget because we were within or

10:38 ↗ involved in the moratorium in place and

10:41 ↗ so we wanted to be conservative on that

10:44 ↗ budget target however we did have

10:46 ↗ projects that still move forward one of

10:48 ↗ those was the Gateway Apartments their

10:52 ↗ sources of revenue and these are these

10:55 ↗ fall into that category of charges for

10:56 ↗ good and goods and services is

10:58 ↗ recreation fees

11:00 ↗ very positive showing right on target

11:03 ↗ with our 2017 projections of about 2.2

11:07 ↗ million dollars then we go into our

11:09 ↗ public safety fees so these are for jail

11:11 ↗ services and we received about 1.5

11:17 ↗ million dollars received of the 1.9

11:21 ↗ million dollar target this coming in

11:25 ↗ under the revenue target was primarily

11:28 ↗ because of the number of guaranteed beds

11:32 ↗ being reserved by local jurisdictions

11:34 ↗ then we have our final revenue source of

11:39 ↗ fines and forfeitures of about 220,000

11:43 ↗ this came in way over target this is a

11:46 ↗ this is different cult one to predict is

11:48 ↗ fines in fees because you don't know

11:50 ↗ when someone's not going to comply with

11:53 ↗ law so this is just one that I wanted to

11:57 ↗ show and also comment on difficult to

12:00 ↗ predict on the expenditure side then

12:04 ↗ again the general fund expenditures in

12:07 ↗ 2017 were under budget

12:09 ↗ the general fund includes levels of

12:12 ↗ service for police and fire protection

12:15 ↗ planning community development economic

12:18 ↗ development Parks and Recreation and

12:20 ↗ general government administrative and

12:21 ↗ financial services all that comes from

12:23 ↗ the general fund yes sorry before you

12:25 ↗ get too far into that can I ask a

12:26 ↗ question around revenues and I'm

12:28 ↗ actually sort of looking ahead at page

12:30 ↗ four but you know as I look at major

12:34 ↗ outliers you talked about building

12:37 ↗ permits and I'm so much I completely

12:39 ↗ understand so we were at two hundred

12:41 ↗ ninety six percent of projected and that

12:45 ↗ was with a moratorium for the whole year

12:47 ↗ so how did how did that how did we get

12:52 ↗ there you talked a little bit about a

12:55 ↗ couple of things that were ongoing

12:56 ↗ through the moratorium but I guess how

12:58 ↗ do we make sure in 2018 that we get a

13:03 ↗ more accurate number because he had a

13:04 ↗ total two and a half million bucks total

13:05 ↗ which is the largest share of the sort

13:08 ↗ of difference from what was projected

13:15 ↗ so for 28 for 2017 or I should I should

13:19 ↗ back up development fees are one of the

13:21 ↗ one of those also somewhat difficult to

13:27 ↗ predict and with a moratorium in place

13:32 ↗ because we wanted to be conservative

13:34 ↗ because it means something at the at the

13:36 ↗ end of the day or the end of the year

13:38 ↗ and and the the purpose for the low

13:43 ↗ estimate was was to do just that however

13:46 ↗ there were projects that were in the

13:48 ↗ pipeline that we were aware of and we

13:51 ↗ were monitoring that would continue to

13:54 ↗ move forward and sometimes projects move

13:58 ↗ faster than you anticipate and so

14:00 ↗ keeping up with that that budget target

14:03 ↗ it starts to smooth itself out and in

14:05 ↗ 2018 we go through this the same effort

14:07 ↗ of looking at what's in the pipeline

14:09 ↗ what do we expect is is going to happen

14:12 ↗ and in what year and so 18 is set and we

14:18 ↗ all we set revenue targets higher

14:19 ↗ because you know we improved our tools

14:23 ↗ for forecasting those projects but

14:25 ↗ nonetheless we still have new that

14:27 ↗ projects were in the pipeline so as we

14:28 ↗ continued as we start to look at 2019

14:30 ↗ we're doing the same thing is

14:32 ↗ understanding again what do we

14:35 ↗ anticipate coming forward and again that

14:38 ↗ the difficulty of that is is things

14:42 ↗ happen or things get delayed or they or

14:44 ↗ they move a bit faster so it's it's one

14:47 ↗ of those things eventually we start to

14:48 ↗ smooth out and and what we do when we go

14:53 ↗ into forecasting we don't necessarily

14:54 ↗ assume project by project specific but

14:57 ↗ whenever we start to take revenues and

14:59 ↗ increase those based on the general

15:02 ↗ economic inflator so if if that answered

15:06 ↗ your question about us our ISM I was

15:10 ↗ monitoring that but things in the

15:12 ↗ pipeline are difficult to predict where

15:14 ↗ they're going to land revenue wise got

15:16 ↗ it

15:17 ↗ a related question is the other large

15:20 ↗ but the other large differences in

15:22 ↗ miscellaneous revenue was that the

15:24 ↗ changing of accounting and where we put

15:26 ↗ things versus other funds or was that a

15:28 ↗ real unexpected windfall may have been

15:32 ↗ this is that's something that we can add

15:34 ↗ into the parking lot to get to answer

15:37 ↗ some questions and provide that to the

15:39 ↗ council we did have in 2017 some land

15:43 ↗ purchases or that had been anticipated

15:45 ↗ or not and so that's something that we

15:48 ↗ can certainly you know get provided the

15:51 ↗ deep drill down into and to make sure

15:55 ↗ that we're understanding what exactly

15:56 ↗ happened but fund accounting was quite a

15:59 ↗ factor in 2017 to get things planned in

16:03 ↗ the right place

16:03 ↗ and accounted for in the right place

16:05 ↗ because here's why I ask these questions

16:07 ↗ that sort of the overall point is that I

16:10 ↗ mean how wonderful that we brought in

16:12 ↗ more money than we thought were going to

16:14 ↗ and we spent less than we thought and I

16:16 ↗ wish that my budgets from my personal

16:17 ↗ finances worked that well they don't but

16:20 ↗ what that does is it drives up our

16:22 ↗ ending fund balance right and then when

16:25 ↗ we go to correct that by spending money

16:27 ↗ and this isn't this isn't a problem per

16:30 ↗ se but we've seen recently in the

16:32 ↗ community confusion about as we go to

16:35 ↗ balance our various funds and keep our

16:37 ↗ funds at at the right levels you know

16:40 ↗ that can feel that can get confusing to

16:43 ↗ the public right so in a you know in a

16:45 ↗ perfect world you know we would bring in

16:49 ↗ what we think we're gonna bring in and

16:50 ↗ we'd spend what we think we're gonna

16:51 ↗ spend and those and that ending fund

16:52 ↗ balance I mean again it's a wonderful

16:54 ↗ problem to have oh no we have too much

16:56 ↗ money at the end of the year but you

16:58 ↗ know at the same time we I think you get

17:01 ↗ my point

17:02 ↗ so the extent to which as we get into

17:04 ↗ budget season for next year I mean I

17:05 ↗ think historically we almost always are

17:09 ↗ cautious in our budgets and so we end up

17:11 ↗ spending less than we thought we were

17:13 ↗ going to and make more than we thought

17:15 ↗ we were going to but I I want to

17:17 ↗ understand going forward how that

17:19 ↗ relates these conversations about our

17:21 ↗ ending fund balance and making sure the

17:22 ↗ community understands that when we you

17:25 ↗ know we're not running deficits if we

17:27 ↗ you know correct acrost our funds

17:29 ↗ and and bring you know bringing our

17:32 ↗ numbers in line with our long-term

17:33 ↗ financial policy so they sent to achieve

17:35 ↗ you talked about that further as we get

17:37 ↗ into budget season would be helpful

17:38 ↗ absolutely and you just alluded to the

17:42 ↗ how you tackle fund balance when your

17:45 ↗ reserves are over your target and

17:47 ↗ reserves when they're under the target

17:49 ↗ and so in your financial policy and

17:51 ↗ that's something that the council

17:52 ↗ addressed was updating financial policy

17:56 ↗ to be very clear on the the reserve

17:59 ↗ target moved last year from that 8% to a

18:02 ↗ range of 15 to 20 percent policy also

18:06 ↗ was very very clear in those sections of

18:08 ↗ it that said when the council has more

18:11 ↗ revenues and or more reserves and they

18:14 ↗ they they want to have in the in their

18:18 ↗ butt fund balance then that's where the

18:21 ↗ council has to have discussions about

18:22 ↗ how to spend that money that can be done

18:25 ↗ at the budget development time same

18:28 ↗ thing or it can be done throughout the

18:30 ↗ year knowing where you're at if there is

18:33 ↗ something that like building permit fees

18:37 ↗ that came in way over that's something

18:39 ↗ that the administration can start to

18:42 ↗ work on to say okay now we have this as

18:44 ↗ part of your your budget amendment

18:46 ↗ process is to say let's amend the budget

18:48 ↗ and then let's use it for something same

18:51 ↗ thing in the budget development where a

18:53 ↗ council would maybe be under their

18:55 ↗ revenue there reserve target is where

18:57 ↗ you would in your in your budget then

18:59 ↗ want to correct that bring it up and so

19:02 ↗ something may not get done in the year

19:04 ↗ because you are just going to leave more

19:07 ↗ in your ending fund balance to meet your

19:10 ↗ financial policies so we will continue

19:12 ↗ as we work on the 2019 budget is to

19:16 ↗ address the fund balance issue we will

19:19 ↗ be talking about that some tonight when

19:22 ↗ we talk about the financial model and

19:24 ↗ the the assumptions and a pathway

19:27 ↗ forward for tackling the transportation

19:29 ↗ issue great thanks

19:34 ↗ we can keep going I will thank you

19:37 ↗ let's see expenditures just want to give

19:39 ↗ a brief overview about spending

19:41 ↗ appropriation the requirements that the

19:43 ↗ City Council authorizes during the

19:46 ↗ budget development cycle are typically

19:48 ↗ for these major categories their salary

19:51 ↗ and benefits just like a business we

19:53 ↗ have operating supplies we have cost

19:56 ↗ allocations and that's one fun charging

19:58 ↗ another fund for some service and then

20:01 ↗ we have professional services we have

20:04 ↗ capital outlay and I just wanted to just

20:06 ↗ make a quick note the capital outlay it

20:08 ↗ can be different while it's still a

20:09 ↗ capital purchase there's a difference

20:11 ↗ between capital outlay and capital

20:13 ↗ projects and it's all because of a

20:15 ↗ threshold number that policy states and

20:18 ↗ then we have transfers from one fund to

20:21 ↗ another primarily for capital projects

20:23 ↗ or debt service obligations so in the

20:26 ↗ information I'm not going to go through

20:28 ↗ department detail which starts on page

20:32 ↗ six but I just want to generally comment

20:34 ↗ about 2017 and our expenditures we had

20:40 ↗ expenditures at about 95 percent of the

20:44 ↗ 2017 budget of 52 million dollars we

20:47 ↗ came in about 49 almost fifty thousand

20:50 ↗ spent the expenditure allocations were

20:53 ↗ amended from the original budget up

20:55 ↗ about 5.2 million and this was primarily

20:59 ↗ due to again the fund accounting cleanup

21:01 ↗ of transactions that we added because we

21:04 ↗ we put all the revenue in the general

21:06 ↗ fund for sales tax but we also added in

21:09 ↗ a transfer out for debt service so it's

21:11 ↗ clear that all of that limited general

21:17 ↗ obligation bonds that payment comes

21:20 ↗ directly from the general fund we also

21:22 ↗ had some budget amendments in 2017 that

21:27 ↗ were connected to expenditures for the

21:30 ↗ talus slide the trader Joe intersection

21:33 ↗ improvements central park pad one king

21:36 ↗ county roads property purchase the

21:38 ↗ Gilman lofts development as well as some

21:41 ↗ you know professional services for

21:43 ↗ working in our development services

21:44 ↗ department the original budget then I

21:47 ↗ have listed out the ordinances for the

21:51 ↗ the public to note that these changes to

21:54 ↗ the budget happened throughout the year

21:58 ↗ so then that leads us to fund balance

22:01 ↗ and fund balance is basically a measure

22:06 ↗ of the of our liquidity and it's

22:09 ↗ important to note that this is always a

22:11 ↗ forecast of the mount until our

22:12 ↗ financial statements are audited so when

22:16 ↗ when you're looking at it's kind of like

22:17 ↗ reconciling your checkbook because fund

22:19 ↗ balance or fund accounting is like

22:21 ↗ little checkbooks all the funds has a

22:23 ↗ beginning balance you put deposits in

22:25 ↗ you write out some checks for some

22:27 ↗ expenses and then after each line you

22:30 ↗ have an ending fund balance that's the

22:32 ↗ same thing that we deal with in fund

22:34 ↗ accounting and so that every time we

22:37 ↗ take in a deposit and every time we

22:39 ↗ spend some dollars on goods or services

22:41 ↗ that fund balance changes and so I

22:44 ↗ always like to make it be known that the

22:47 ↗ the ending fund balance is something

22:49 ↗ that we always try to have that that new

22:52 ↗ number as we go through record the

22:54 ↗ reconciliation process available for

22:56 ↗ counsel so the fund balance is it is a

23:00 ↗ source of revenue though as we just

23:02 ↗ talked about is that when there's a lot

23:05 ↗ in reserves you can spend it and when

23:07 ↗ there's not a lot reserves you've got to

23:09 ↗ put it back there so in 2017 the the

23:12 ↗ beginning fund balance was sixteen point

23:15 ↗ five million dollars our 2017 revenues

23:19 ↗ exceeded expenditures by over 1.5

23:23 ↗ million dollars and so that improved our

23:25 ↗ 2017 forecasted ending fund balance of

23:28 ↗ eighteen million dollars now we're

23:30 ↗ getting ready to go to through the audit

23:33 ↗ fieldwork and so when we get to that

23:35 ↗ point at this time of the year were the

23:38 ↗ two thousand ending 17 fund balances is

23:42 ↗ pretty we're pretty close in that unless

23:44 ↗ there's something that we've seriously

23:46 ↗ missed and significantly missed but

23:49 ↗ there's always a challenge I'm if I were

23:52 ↗ to talk about prior

23:53 ↗ adjustments we could be here all night

23:55 ↗ so 2017 and the fund balance equates to

23:58 ↗ about 36% of our 2017 expenditures so

24:03 ↗ you can see that when we compare that to

24:04 ↗ our target our reserve target of 15 to

24:08 ↗ 20 percent we have a significant level

24:11 ↗ of reserves at 2017 so with that I'm

24:15 ↗ going to just point out for those who

24:19 ↗ are looking to understand this financial

24:21 ↗ report some of the information with

24:25 ↗ regards to revenues are summarized and

24:28 ↗ show in the different categories on page

24:31 ↗ four of the report the 51 million

24:34 ↗ dollars taken in and then the next page

24:37 ↗ is a summary of expenditures by the

24:40 ↗ department showing a 95 percent of the

24:44 ↗ amended budget spent or utilized and

24:47 ↗ then at the bottom of every fund and

24:51 ↗ you'll see this because all funds are

24:52 ↗ included in this report so our general

24:55 ↗ fund special revenue funds capital

24:57 ↗ project funds debt service funds and our

25:00 ↗ utility funds and other agency funds are

25:02 ↗ all included and you can see the same

25:04 ↗ format it's kind of like an income

25:05 ↗ statement if you're more familiar with a

25:07 ↗ private sector you can see revenues

25:09 ↗ expenditures and you can see then the

25:12 ↗ impact to the funds balances so there

25:16 ↗ you can see the actual revenues over

25:19 ↗ expenses were 1.5 million dollars

25:22 ↗ beginning fund balance changing from

25:25 ↗ balance and an ending fund balance I

25:26 ↗ just wanted to point out to the

25:28 ↗ designation of fund balance this is a

25:31 ↗ Gatsby requirement to note the type or

25:35 ↗ the designation of fund balance because

25:37 ↗ we can't spend it all we have non

25:39 ↗ spindle non spendable items so if you're

25:42 ↗ familiar with inventory that's an amount

25:43 ↗ that's associated with inventory we

25:45 ↗ can't spend it's not cash we have

25:47 ↗ restricted dollars because in the

25:50 ↗ general fund we do have some dollars

25:52 ↗ that are associated with seizure or

25:55 ↗ forfeiture dollars and for the police

25:58 ↗ department and then everything else is

26:01 ↗ unassigned that's to be used at the

26:04 ↗ consuls discretion so with that I would

26:10 ↗ be happy to answer any questions about

26:12 ↗ the 2008 or 2017 year-end report

26:19 ↗ questions for my fellow council members

26:25 ↗ all right that's our seat well we're

26:27 ↗ moving right along then I'm gonna move

26:29 ↗ to the 2018 mid-year report this is on a

26:34 ↗ page I went too fast I was over clicking

26:36 ↗ page 49 again this is a same format I'm

26:44 ↗ going to I'll go through again some

26:47 ↗ major highlights of this but I just

26:49 ↗ wanted to let the council know on page

26:52 ↗ 49 that again this is a emphasis and

26:56 ↗ it's on the general fund it is a

26:59 ↗ snapshot of the fund activity prior to

27:02 ↗ audit and for 2018 we have no budget

27:06 ↗ amendments so this is something that the

27:08 ↗ council will be addressing some proposed

27:10 ↗ budget amendments coming but this report

27:12 ↗ does not include those so for 2018 as as

27:17 ↗ we are at the mid-year point we continue

27:21 ↗ to have your best reserves our tax

27:23 ↗ revenues remain strong the general fund

27:26 ↗ revenues are at 48% of budget and

27:29 ↗ general fund expenditures are at 45

27:31 ↗ percent of budget utilized again utility

27:34 ↗ operator operating revenue is strong so

27:41 ↗ with that we have that we have the same

27:44 ↗ categories of revenue we have received

27:47 ↗ about twenty four and a half million

27:49 ↗ dollars in taxes again we have our large

27:54 ↗ taxes being sales tax B&O tax utility

27:57 ↗ tax and property tax there isn't

28:00 ↗ anything that is kind of hanging out

28:04 ↗ there that that we're seeing that would

28:07 ↗ be problematic for us to remain in that

28:10 ↗ robust and strong economic cycle here

28:15 ↗ property taxes our at the four point six

28:19 ↗ million dollars in collection that's

28:21 ↗ fifty two percent of what we have

28:24 ↗ anticipated and one thing to note about

28:26 ↗ property taxes is that we don't receive

28:30 ↗ revenues route you know consistently on

28:33 ↗ a month-to-month basis this is kind of a

28:36 ↗ big windfall in May and a windfall in

28:40 ↗ November and then property taxes then

28:42 ↗ trickle in so that's why sometimes when

28:46 ↗ you see revenues are under or over it

28:49 ↗ could be because of other agencies who

28:52 ↗ provide that and you might see that in

28:53 ↗ the case of shared revenues where

28:55 ↗ sometimes from other agencies we don't

28:57 ↗ receive that revenue until the third

28:59 ↗ quarter or even the end of the year and

29:01 ↗ so when you say why are why are we not

29:03 ↗ on target there's nothing that alarms us

29:06 ↗ with regards to why we wouldn't be

29:09 ↗ meeting or exceeding our revenue targets

29:16 ↗ any questions on 2018 revenues before I

29:20 ↗ jump into expenditures at the moment

29:25 ↗ okay well we can go back to any to any

29:28 ↗ any question that comes up there I'm

29:34 ↗ going to move around my page here oh

29:37 ↗ sorry

29:38 ↗ councilmember Rey I do have a question

29:40 ↗ so you mentioned that property taxes can

29:43 ↗ be lumpy that is we get them here and

29:45 ↗ there and a little bit in between what's

29:47 ↗ the pattern for other sources of taxes

29:50 ↗ I'm thinking about sales tax is it a

29:51 ↗ linear distribution through the year

29:53 ↗ does it skew one way or the other

29:55 ↗ you know I'm just looking at these

29:57 ↗ things and so is 49% mean we're gonna

30:01 ↗ have a 49% year or does it you know do

30:04 ↗ we get a Christmas bump for sales tax it

30:07 ↗ comes in monthly but there are because

30:12 ↗ we have yes the Christmas bump we have

30:13 ↗ you know we have the holiday bump but

30:16 ↗ there is they're pretty consistent in

30:18 ↗ the city of Issaquah so that's that's

30:20 ↗ kind of a good thing

30:24 ↗ so do we have any ability to have in

30:29 ↗ addition to what we've adopted as a

30:31 ↗ budget in addition to having our accrual

30:33 ↗ do we haven't made near the ability to

30:35 ↗ do a projection for well weeks how we

30:37 ↗ expect to end the year how that might be

30:39 ↗ different than either of those other

30:41 ↗ numbers that's what we're starting to do

30:43 ↗ is we start to develop the budget

30:44 ↗ because it's it's a component of the

30:47 ↗ budget development is where we start to

30:49 ↗ do those year in projections and so

30:52 ↗ certainly that that's something that

30:54 ↗ you'll see when we start having those

30:57 ↗ conversations but for this reports

30:59 ↗ retrospective so we would not have any

31:02 ↗ forecasted information here there is

31:04 ↗ though in a later part of this report

31:07 ↗ some of those projections you see a lot

31:09 ↗ of those are kind of they're just

31:11 ↗ they're just going up because we are in

31:13 ↗ a strong and stable economy and so

31:15 ↗ that's that's why we wanted to share

31:17 ↗ that in another part here because these

31:20 ↗ are budget versus actual and we wanted

31:23 ↗ to give you good clear reports on how we

31:26 ↗ were performing based on the targets

31:29 ↗ that you set for budget

31:31 ↗ okay because if I mean if this includes

31:35 ↗ this includes July then on revenues you

31:41 ↗ know I would if it was evenly spaced and

31:44 ↗ there wasn't a big Christmas bump then

31:46 ↗ I'd expect to be at you know 56.7% not

31:50 ↗ 48 percent and this is as of June I see

31:53 ↗ okay feel better

31:58 ↗ all right so expenditure overview like I

32:01 ↗ indicated there have been no budget

32:05 ↗ amendments that have been considered by

32:07 ↗ the council those are coming for your

32:08 ↗ September 4th meeting the budget

32:11 ↗ amendments that were anticipating are a

32:14 ↗ little over almost 900,000 of some

32:17 ↗ staffing and benefits that the Council

32:19 ↗ of it has addressed and there's agenda

32:20 ↗ bills and in the budget amendment that

32:22 ↗ you'll see we reference the agenda bill

32:25 ↗ where you were already seeing the ask

32:31 ↗ of the administration and then we have

32:34 ↗ some coming up reauthorization requests

32:39 ↗ for the general fund and then we also

32:42 ↗ will be looking at a very very small

32:47 ↗ donation that came in for the Senior

32:49 ↗ Center and then there's a there's a an

32:52 ↗ exact offsetting expenditure to utilize

32:55 ↗ those monies in 2018 so that's what

32:59 ↗ that's what we're anticipating and again

33:02 ↗ will be further conversations about that

33:05 ↗ in September that leads us to again I

33:13 ↗ might sound like a broken record but we

33:15 ↗ have a 2018 identified or a target

33:22 ↗ general fund beginning balance of 18

33:26 ↗ million dollars right now revenues are

33:29 ↗ exceeding expenditures and so when you

33:33 ↗ compare a very very small revenue

33:39 ↗ revenues under expenditures from the

33:41 ↗ budget side on the planning side and

33:43 ↗ where we're at now because we we aren't

33:46 ↗ matched with the revenues at 50 percent

33:48 ↗ and expenditures at 50 percent we're

33:51 ↗ seeing that right now revenues are over

33:54 ↗ expenditures and so we have a fund

33:56 ↗ balance of about 19 million dollars as

33:59 ↗ of June 30th now again checkbook balance

34:02 ↗ changes every time we add money and we

34:04 ↗ pay bills so that that dollar amount has

34:08 ↗ already changed again we do have

34:13 ↗ significant balance though over the

34:16 ↗ council's financial reserve policy of

34:18 ↗ the 15 to 20 percent proportion on 40%

34:24 ↗ at this point right yes we are on page

34:28 ↗ I'm just gonna refer to well we're

34:32 ↗ actually from a from the calculation the

34:37 ↗ percentage of expenditures because we

34:39 ↗ have 19 million dollars and we

34:41 ↗ of only 23 million dollars of

34:44 ↗ expenditures out yes so we are at the

34:47 ↗ 50% target but if you do the math on

34:49 ↗ what we've actually spent - what we you

34:52 ↗ know would have were around the 80 plus

34:55 ↗ percent but yeah yeah these are

34:59 ↗ snapshots these snapshots you wouldn't

35:01 ↗ compare the end of the year to a

35:02 ↗ half-year gives you there - but it's

35:05 ↗ still you know even if we were to take

35:07 ↗ this number and compare it to any sort

35:09 ↗ of projection to the end of here it's

35:11 ↗ gonna be something like forty percent

35:12 ↗ yeah I can't remember right so kind of

35:18 ↗ along those lines it's almost the same

35:19 ↗ question I asked on revenue but

35:21 ↗ unexpensive I mean dude did we see some

35:23 ↗ ik underruns in first few quarters that

35:29 ↗ we would not expect to see the same

35:31 ↗ under-run in the second two quarters

35:33 ↗ that is are they are they are there

35:36 ↗ things that for instance let me just use

35:38 ↗ it for instance if we had some salary

35:41 ↗ savings in the first two quarters and we

35:42 ↗ filled the positions we would not have

35:44 ↗ those salaries savings in the second two

35:45 ↗ course do we have any data that gives us

35:47 ↗ some indication about will this trend

35:50 ↗ continue or will we see ourselves

35:52 ↗ bumping back up to the budgeted level

35:54 ↗ well when I what I'm seeing is that

35:58 ↗ there may have been if there are some

36:00 ↗ delays in some projects or studies to

36:03 ↗ get underway for 2018 that had been

36:06 ↗ identified in any of the departments if

36:09 ↗ those had been delayed for any reason

36:11 ↗ then you would see you would see some

36:14 ↗ that are you know under their budget but

36:17 ↗ then if they've if they've gotten these

36:19 ↗ these these projects on your weight and

36:22 ↗ then we're gonna see that smoothing out

36:24 ↗ and and utilizing their budget now that

36:26 ↗ doesn't mean that they're there could be

36:28 ↗ you know something else that creates a

36:30 ↗ hurdle for departments to spend what

36:33 ↗ they had anticipated but we would want

36:36 ↗ to then capture that in any budget

36:38 ↗ amendment if it was going to be

36:39 ↗ significant so there isn't anything

36:41 ↗ that's that's out there that is cause

36:44 ↗ for concern with regards to you know not

36:48 ↗ getting to our expenditure targets but

36:51 ↗ we'll be knowing that

36:52 ↗ and again because we're going through

36:54 ↗ the projection process through the

36:55 ↗ budget development departments are

36:57 ↗ working with the budget analysts to

36:58 ↗ anticipate what they are they're going

37:01 ↗ to be spending throughout the remainder

37:04 ↗ of the year and so that's an ongoing

37:06 ↗ work that's happening now councilmember

37:12 ↗ winters time thank you yeah and do we

37:15 ↗ keep track of any other non accounting

37:17 ↗ balances such as headcount like budget

37:20 ↗ versus actual like we expected to have

37:22 ↗ so many we got this many your question

37:26 ↗ was on headcount yeah it's like it's a

37:28 ↗ non accounting balance sure

37:31 ↗ I mean we're we you know we had a

37:35 ↗ budgeted number of FTEs so it could it

37:38 ↗ be possible I mean if get this this

37:40 ↗ budget versus actuals you know we you

37:42 ↗ know we have a budget we have an actual

37:44 ↗ variance if that's something that can

37:47 ↗ easily be provided to supplement this

37:50 ↗ information and obviously we don't have

37:51 ↗ it tonight but I think that maybe next

37:53 ↗ time you know we we sit down for a real

37:56 ↗ budget meeting if that's easy to get and

38:00 ↗ I'd like to see that thank you I

38:01 ↗ appreciate that we and we'll put that in

38:03 ↗ the in the in our parking lot and get

38:05 ↗ that information as we have those

38:07 ↗ additional conversations for a budget

38:09 ↗ thank you all right is there any other

38:16 ↗ questions about the 2018 mid-year review

38:21 ↗ it appears not thank you all right so

38:26 ↗ let's move on to a look at our our

38:31 ↗ current debt I do want to point out that

38:34 ↗ council member rate asks some questions

38:37 ↗ thank you very much and there was a

38:40 ↗ revised page that was provided because

38:44 ↗ the charts were flipped and so when

38:48 ↗ you're looking at the second page of the

38:51 ↗ the debt review and I'll grab the page

38:53 ↗ number here 196

38:57 ↗ you'll note that the chart in the in the

39:00 ↗ packet of information that went with the

39:04 ↗ unlimited general obligation debt

39:07 ↗ obligations should have gone below with

39:10 ↗ the limited general obligations but I

39:12 ↗ think we can we can all see and I'll

39:15 ↗ talk quickly about what this information

39:18 ↗ means so the city of Issaquah has a

39:23 ↗ triple-a bond rating and this is through

39:26 ↗ Standard & Poor's this is because we

39:29 ↗ have healthy reserves as well as a

39:33 ↗ significant level of debt capacity so

39:35 ↗ you could issue a lot of debt there's

39:38 ↗ not a lot of cities in Washington to

39:40 ↗ have a triple-a rating and so we

39:43 ↗ maintain that rating as we stay current

39:47 ↗ on our mark and conditions and we

39:50 ↗ contract with a bond advisor to help us

39:53 ↗ with how the marketplace is tolerating

39:57 ↗ the potential for bond issuance I just

40:00 ↗ wanted to provide the council with a

40:03 ↗ note about the low interest rates and

40:08 ↗ what a current trend that's in place is

40:11 ↗ that we instead of going out for these

40:15 ↗ more formal bond issuance it really

40:19 ↗ depends on the bond issue size of it and

40:21 ↗ you know everything that goes into that

40:23 ↗ but the the trend is that we would go

40:26 ↗ out and solicit a bid from privately

40:28 ↗ from banks and we got we're getting very

40:31 ↗ favorable rates so for example when we

40:33 ↗ issued the last portion of the park

40:34 ↗ bonds last year that was that was great

40:39 ↗ rates under 2% so we're still looking at

40:43 ↗ favorable rates not necessarily at 2%

40:45 ↗ but that's just something that we we

40:48 ↗ find out when we go and ask for requests

40:50 ↗ for bids just clarification really quick

40:53 ↗ but you've explained that to us before I

40:56 ↗ want to make sure I understand that

40:57 ↗ instead of go really go into a market

40:59 ↗ place we just found a single private

41:01 ↗ buyer I just I just tried to Reese a

41:04 ↗ what I think I heard you say yes

41:06 ↗ that's correct we we go out and solicit

41:08 ↗ yeah you said a general bond issuance so

41:10 ↗ they're a marketplace someplace where

41:12 ↗ there may where people we don't even

41:14 ↗ know show up and maybe want part that's

41:17 ↗ correct but this is when we're just

41:19 ↗ going to one individual or institution

41:20 ↗ in this case and they're trying to make

41:25 ↗ sure it was clear we we offer it out to

41:27 ↗ any bank who wants to wants to provide a

41:30 ↗ quote mm-hmm so and so it's it's

41:33 ↗ different it's it's less expensive and

41:35 ↗ time-consuming there are still all of

41:37 ↗ the regulations and rules around around

41:40 ↗ issuing debt but what that does is that

41:43 ↗ it allows for banks to see that you know

41:47 ↗ we might be a good fit in their

41:48 ↗ portfolio and that's why we get those

41:50 ↗ favorable rates so the information

41:55 ↗ provided in this in the debt review

41:57 ↗ shows where we at we're at at the end of

42:01 ↗ the year for 2017 where we have assessed

42:04 ↗ valuation of all properties in the city

42:06 ↗ of Issaquah then what it shows there is

42:09 ↗ that we have some certain kind of debt

42:11 ↗ capacity and that's at that

42:12 ↗ two-and-a-half percent of assessed value

42:14 ↗ so we have debt capacity for certain

42:16 ↗ types of levying and certain certain

42:19 ↗ purposes from a capacity standpoint so

42:22 ↗ you can see we have total capacity of

42:24 ↗ that 800 million part of that then comes

42:29 ↗ into play when the council issues konso

42:31 ↗ manic or non voted on debt that means

42:34 ↗ not having to go to the to the voters to

42:36 ↗ ask if you can issue debt so that comes

42:40 ↗ into play where we have to be under a

42:42 ↗ different assessed evaluation limit so

42:46 ↗ you can see that showing there that we

42:48 ↗ have statutory than debt limits are set

42:50 ↗ then we remove the outstanding debt that

42:54 ↗ we have we have 8.1 million in council

42:58 ↗ Manek bonds out there as well as other

43:02 ↗ debt for the that excess levy and parks

43:06 ↗ and open spaces are both voted on levies

43:09 ↗ and so we we total outstanding debt as

43:13 ↗ of the end of 2007

43:15 ↗ is about 25 million dollars we have

43:18 ↗ about eight hundred and seventy eight

43:20 ↗ thousand dollars as of the end of 2017

43:24 ↗ in our debt service funds you would say

43:26 ↗ we don't have enough to cover that

43:27 ↗ that's the amount to pay the annual

43:29 ↗ payment because we receive tax dollars

43:32 ↗ into these funds and then we pay the

43:33 ↗ debt service out for those folded pieces

43:36 ↗ so you can see our debt capacity is

43:39 ↗ quite large in the bottom blue line what

43:43 ↗ I wanted to also provide for the council

43:46 ↗ just so that you could see a perspective

43:49 ↗ of our annual debt service this is this

43:52 ↗ is our current obligations of the

43:55 ↗ council Manek debt at over two million

43:57 ↗ dollars every year and we have then the

44:01 ↗ excess levy the voters approved and our

44:05 ↗ current year debt obligation is a little

44:08 ↗ over 1.7 million dollars I just wanted

44:11 ↗ to put in a perspective that the council

44:14 ↗ Matic bonds or our debt service is about

44:16 ↗ four percent of our general fund current

44:20 ↗ year expenditures so oftentimes that's

44:23 ↗ something that we get asked to say well

44:26 ↗ what's what's the percentage of debt as

44:28 ↗ as compared to our total expenditures so

44:31 ↗ we're at about four percent so I think

44:38 ↗ it'd be useful to understand not today

44:43 ↗ but in future meetings how that compares

44:46 ↗ with comparable cities

44:48 ↗ how does Redmond look how does Kirkland

44:51 ↗ look as we consider options that would

44:54 ↗ take on additional debt for in for

44:57 ↗ infrastructure and transportation it'd

44:59 ↗ be really good to understand like we

45:01 ↗ know we're in a great place with ending

45:02 ↗ fund balance right that 4% Seifer

45:04 ↗ present' I don't have anything to

45:05 ↗ compare that to okay we will do that

45:07 ↗ thank you

45:11 ↗ all right the next page then if you take

45:15 ↗ the amended report you can see visually

45:18 ↗ that our our our unlimited geo bonds or

45:26 ↗ those are the the bonds that had voter

45:28 ↗ approval that those those amortization

45:31 ↗ schedules run out about one

45:34 ↗ one-and-a-half our that's at one point

45:35 ↗ seven out to about two thousand twenty

45:38 ↗ six and then we start to drop down so

45:40 ↗ that's the that's the bond payment

45:42 ↗ starts to go down principal and interest

45:43 ↗ as we then run out in those bonds mature

45:47 ↗ in 2033 then we if we compare then and

45:53 ↗ what kind of we'll be talking about this

45:54 ↗ when we talk about the financial model

45:56 ↗ the the the graph that depicts our

45:59 ↗ limited geo obligations this is the

46:02 ↗ council Manek bonds you can see that

46:04 ↗ we're we have a debt service payment of

46:06 ↗ about two million dollars well very

46:08 ↗ quickly we're gonna start to drop and so

46:11 ↗ in 2019 2020 we're starting to see our

46:16 ↗ obligation annually drop half a million

46:18 ↗ dollars and so eventually we would have

46:21 ↗ we have no debt and so this is something

46:25 ↗ that I wanted to show and depict this

46:27 ↗ way that we would we would start here

46:31 ↗ then and when the council starts to make

46:33 ↗ a decision about debt issuing debt to

46:37 ↗ see how that would change and and there

46:40 ↗ is a picture of that when we are getting

46:42 ↗ into some of our assumptions and in the

46:44 ↗ model the questions on our current debt

46:50 ↗ and again the revised page was sent out

46:54 ↗ to counsel prior to just just right

46:56 ↗ before the meeting so it looked like a

47:00 ↗ quizzical look but no hands if a council

47:03 ↗ member hunt

47:07 ↗ so the debt obligation for the non

47:12 ↗ booted on his flat for a longer than or

47:17 ↗ the voted debt and so I'm just so my

47:21 ↗ question is why why is that difference

47:23 ↗ in the rates so much later for the non

47:27 ↗ voted debt if I'm under said that is

47:31 ↗ it's the annual payment and so our

47:33 ↗ annual payment based on the bond

47:35 ↗ amortization schedule it was just

47:38 ↗ designed in that way so our our payments

47:42 ↗ go down about a half a million dollars

47:46 ↗ over the course of the next three or

47:49 ↗ four years and so we we essentially

47:52 ↗ would not have a debt payment and so

47:54 ↗ that flat line is it's just a depiction

47:58 ↗ of the the payment each year year over

48:00 ↗ year right okay but all that's the

48:03 ↗ question maybe slightly differently have

48:05 ↗ we have we exercised non voted more

48:08 ↗ recently than voted like these are the

48:11 ↗ schedules you know it's just there

48:13 ↗ appears to be more I mean if we look at

48:19 ↗ our debt service is comparable between

48:23 ↗ voted and non voted at the moment but

48:25 ↗ the total outstanding there's much more

48:30 ↗ voted in than there is non voted in

48:33 ↗ and yet the voted in drops faster well

48:39 ↗ the voted in drops faster in I'm just

48:42 ↗ trying to because the we just issued it

48:49 ↗ just issued the last piece of the park

48:52 ↗ bonds and so that is that is also

48:55 ↗ included in our annual payment for the

48:58 ↗ voted in bonds and that's that is the

49:02 ↗ structure of the repayment of the bonds

49:06 ↗ so I'm not sure if I have an answer to

49:09 ↗ say why one is more than the other

49:12 ↗ the council has has not issued any

49:14 ↗ councilmen

49:15 ↗ debt for quite a long time

49:19 ↗ and so that's why you see basically no

49:22 ↗ no debt obligation but the council

49:25 ↗ didn't or the or the community voted to

49:29 ↗ or the excess levy and so therefore that

49:32 ↗ that was a bigger amount of money so

49:35 ↗ it's just the chart that's backwards it

49:38 ↗ wasn't corrected here okay

49:40 ↗ it was I thought it was corrected in

49:42 ↗ this version okay not corrected in the

49:44 ↗ book version okay I totally get it okay

49:47 ↗ I thought this was the correct oh my

49:49 ↗ apologies okay now that was played why I

49:51 ↗ was utterly can was that why you were

49:53 ↗ confused several people that was why

49:55 ↗ they're confused so the correction it

50:01 ↗ that was in the original printed fiscal

50:03 ↗ forecasting book if you take the the two

50:06 ↗ charts they were flipped so it was a

50:08 ↗ copy-paste this is good so the the

50:11 ↗ charts are they're correct they were

50:13 ↗ just under the wrong categories so this

50:16 ↗ is the corrected one no this is not the

50:21 ↗ corrected one there was an amendment

50:28 ↗ after what added so thank you there in

50:31 ↗ the ninety cents yeah

50:36 ↗ can you could you go back there to make

50:40 ↗ it larger

50:41 ↗ not larger make it smaller to do show

50:43 ↗ the comparison there we go yes this is

50:49 ↗ the correct one that's remember winters

50:53 ↗ time don't leave Tina second to be a

50:56 ↗ master the document you go back to page

51:00 ↗ 103 of the today's packet

51:07 ↗ and it's it's it was just a thing

51:10 ↗ there's just a page before where we were

51:12 ↗ and it's the debt review current-gen

51:17 ↗ it's the the outstanding line less debt

51:23 ↗ outstanding geo bonds there is no longer

51:31 ↗ okay this is not which page number its

51:39 ↗ page 95 of the original packet you going

51:44 ↗ up right there

51:48 ↗ so the yeah so midway through that table

51:53 ↗ less debt outstanding you see about 8.1

51:58 ↗ and counsel Matic 7 7 and XS parks and

52:02 ↗ open space 9 what those are as of when

52:06 ↗ those are as of 12:30 1 2017 okay okay

52:13 ↗ all right okay I see that date there

52:14 ↗ okay that was oh I see that date jumps

52:17 ↗ out at me because I was looking I was

52:19 ↗ comparing those two hour those are the

52:21 ↗ exact same amounts they were at the end

52:22 ↗ of September 2017 as well I was just

52:26 ↗ because I was looking I know I had that

52:28 ↗ in front was looking at to see what we

52:29 ↗ actually had counsel Matic bonds and for

52:31 ↗ I'm not sure where I can't recall if top

52:33 ↗ my head what we're using the council

52:35 ↗ Matic bond for so I looked at the old

52:37 ↗ budget that I noticed these numbers are

52:38 ↗ exactly the same because we we know

52:40 ↗ because we have the we have the

52:42 ↗ amortization and so we know what the

52:45 ↗ outstanding debt is at the end of every

52:49 ↗ year so it's something that we could see

52:51 ↗ that we would have the same amount for

52:55 ↗ you if the report said June 2017 we know

52:59 ↗ what our ending debt would be at the end

53:01 ↗ of the year and so I think we can do it

53:03 ↗ better we can clarify that better that

53:05 ↗ that this is this is based on the

53:07 ↗ amortization schedule so it wouldn't

53:10 ↗ change it just so happens that those

53:11 ↗ amounts exactly match as of September

53:14 ↗ 30th to 7 2017 as well we knew what

53:18 ↗ those we knew what those balances were

53:20 ↗ so we should we should have noted that

53:22 ↗ they that they were the balances

53:23 ↗ identified for 2000 at the end of 2017

53:27 ↗ the report was just dated September and

53:31 ↗ it wasn't the outstanding bonds as of

53:33 ↗ September it was as of the end of the

53:35 ↗ year 2017 ok maybe actually said yeah it

53:38 ↗ says September 30th okay thank you

53:49 ↗ any more questions on the depth review

53:55 ↗ actually I did sorry it was what do we

53:58 ↗ what's that's inside that on council

54:01 ↗ have we issued a council Matic bond so

54:03 ↗ the current bonds for council annek

54:05 ↗ bonds are paying for what well the cons

54:09 ↗ of matic bonds off the top my head they

54:14 ↗ were for there's a variety of reasons

54:21 ↗ for there was some police and we're

54:24 ↗ pulling that up now what will that we

54:26 ↗ might want to get that back to the

54:27 ↗ council so we can get you that accurate

54:29 ↗ information there's a number of debt

54:32 ↗ issuance you know what during the 2018

54:33 ↗ budget I found it here Highlands Park I

54:36 ↗ can answer my own question here there is

54:39 ↗ 2006 2007 2009 and 2014

54:42 ↗ oh there's some 2014 Highland Park

54:46 ↗ facilities all right so it was under our

54:48 ↗ watch hmm hey thank you some of us over

54:53 ↗ you are off the hook

54:55 ↗ shall we proceed any other questions

54:57 ↗ nope nope all right all right okay so

55:01 ↗ let's talk up a little bit about

55:02 ↗ long-term financial model this is on

55:07 ↗ page 97 of the original packet so as we

55:14 ↗ as we talk about incorporating long term

55:18 ↗ council long term goals and financial

55:21 ↗ strategies we wanted to provide a way to

55:24 ↗ look at not only where we've been

55:27 ↗ historically and and if some of you

55:30 ↗ remember because the financial models

55:32 ↗ and a little bit different format

55:33 ↗ because it was it was it was big sheets

55:37 ↗ big spreadsheets and a lot of

55:39 ↗ information and so we wanted to

55:40 ↗ synthesize this down into a way that we

55:44 ↗ could quickly have a conversation about

55:46 ↗ where's our baseline where's our

55:48 ↗ starting point and if we do a B C or D

55:51 ↗ how does it look

55:53 ↗ and so we've integrated some potential

55:58 ↗ general fund debt service obligations

56:00 ↗ for projects that are

56:02 ↗ and in the CIP this is something that

56:04 ↗ the ad-hoc committee has been working on

56:07 ↗ to help the administration present this

56:10 ↗ information in a way that would be

56:12 ↗ useful for decision-making and so this

56:15 ↗ is a financial model is a living

56:18 ↗ document so when a decision is made

56:20 ↗ we're gonna update the model and we're

56:22 ↗ going to then you know continue to

56:25 ↗ provide this as a decision-making tool

56:27 ↗ because it identifies the revenues that

56:31 ↗ we anticipate expenditures that that we

56:35 ↗ expect and then that impact on an ending

56:37 ↗ fund balance and so we we look to do a

56:40 ↗ conservatively objective measure of our

56:45 ↗ our forecasts because we just didn't

56:47 ↗ want to be too optimistic so the model

56:51 ↗ provides a baseline scenario and I'll

56:54 ↗ walk through those assumptions here in a

56:55 ↗ little bit it was based on an analysis

56:59 ↗ of our historical and current financial

57:02 ↗ environment revenues operating and

57:05 ↗ capital expenditure forecast our current

57:08 ↗ debt and potential debt and then we look

57:11 ↗ to do some affordability analysis and

57:13 ↗ that's and I'll talk about that in the

57:15 ↗ financial indicator section but again

57:18 ↗ this model is updated routinely and the

57:22 ↗ ad hoc committee had some dis of great

57:25 ↗ work and had some good discussions about

57:29 ↗ putting together scenarios for how we

57:33 ↗ start to tackle primarily our

57:34 ↗ transportation issues so the next page I

57:38 ↗ want to just briefly cover the

57:42 ↗ assumptions that were used in our

57:44 ↗ financial model what you'll see this is

57:47 ↗ on page 97 I want to make sure I'm given

57:51 ↗ the right page number 98 excuse me

57:57 ↗ so our assumptions are where we start

58:00 ↗ with at the baseline we used an

58:03 ↗ assumption for general economic growth

58:05 ↗ for revenue unless otherwise noted and

58:08 ↗ so we use 3% for most of the scenarios

58:11 ↗ with the exception of scenario D we also

58:15 ↗ then going down the rows use specific

58:17 ↗ revenue assumptions for economic growth

58:19 ↗ and you might see that some might be the

58:22 ↗ same and you might say why be a no tax

58:25 ↗ we see as increasing 3% it's based on

58:28 ↗ the three-year average we wanted to

58:30 ↗ segregate that out because it's a major

58:32 ↗ source of revenue

58:33 ↗ just like we segregated out sales tax

58:35 ↗ and property tax and so you might say

58:36 ↗ that's just kind of irrelevant but we if

58:39 ↗ we wanted to look at a scenario where it

58:42 ↗ just had a deep decline it was available

58:44 ↗ to do that in a scenario sales tax

58:48 ↗ increasing again on a three-year average

58:50 ↗ is at a four percent so that's obviously

58:54 ↗ more and then you see property tax

58:56 ↗ because they're subject to the state law

58:58 ↗ and limitations of one percent plus any

59:01 ↗ new construction growth and you'll see

59:03 ↗ ncg that is what that means new

59:05 ↗ construction growth so that's added on

59:08 ↗ top of the one percent

59:10 ↗ and then we wanted to add in a

59:12 ↗ possibility of a new revenue source and

59:15 ↗ we put in new revenue because we don't

59:18 ↗ know what that is that that is something

59:19 ↗ for these future discussions of the

59:22 ↗ council on the expenditure side then we

59:24 ↗ used a general economic growth for

59:27 ↗ expenditures unless otherwise noted we

59:30 ↗ talked we we talked about do we just

59:33 ↗ have one for both general for revenues

59:36 ↗ and expenditures and so we wanted to

59:38 ↗ separate it out in case we wanted to

59:40 ↗ have a scenario that said revenues we

59:43 ↗ don't see any good outlook and

59:46 ↗ expenditures are just going to keep

59:48 ↗ rising so then we have a specific

59:50 ↗ expenditure assumptions and what we did

59:52 ↗ in the baseline is what we wanted to

59:53 ↗ make an assumption that we had annual

59:56 ↗ new staffing for enhanced levels of

59:58 ↗ service so we didn't define what that

59:59 ↗ level of service was but an enhanced

1:00:02 ↗ level of service so new staffing we

1:00:04 ↗ wanted to show about three and a half

1:00:07 ↗ percent

1:00:08 ↗ each year so that we that we were always

1:00:15 ↗ assuming that there would be some growth

1:00:17 ↗ in FTE they also wanted to put into play

1:00:22 ↗ and this is primarily where that some of

1:00:23 ↗ the biggest changes come because for

1:00:26 ↗ tackling some of the transportation

1:00:28 ↗ issues it means issuing debt and paying

1:00:31 ↗ a debt service payment and paying a

1:00:33 ↗ principal and interest payment and

1:00:35 ↗ that's what we were just talking about

1:00:36 ↗ what we have in the our current debt we

1:00:41 ↗ also included the obligation for the

1:00:43 ↗ transit-oriented development and that is

1:00:46 ↗ included in the baseline it's also

1:00:49 ↗ included in any scenario change that you

1:00:52 ↗ see in the line above but we did include

1:00:54 ↗ that because that has also been an

1:00:56 ↗ obligation that has been already

1:00:58 ↗ obligated in some cases in the the 2000

1:01:04 ↗ in the baseline the 2018 budget adopted

1:01:08 ↗ this does include the those budget

1:01:11 ↗ amendments that I talked about earlier

1:01:12 ↗ and that is those staffing changes and

1:01:15 ↗ the reauthorizations for a couple of

1:01:18 ↗ projects one comment I think of probably

1:01:24 ↗ many in the annual debt service

1:01:26 ↗ obligation as a percentage of the

1:01:27 ↗ expenditures in the baseline 4% I think

1:01:30 ↗ that should just be clear that this is

1:01:32 ↗ we're just talking about council Matic

1:01:34 ↗ bonds and this has nothing to do with

1:01:35 ↗ any voted in debt this is us just using

1:01:38 ↗ existing cash flows and here that's what

1:01:44 ↗ has its own restricted funds thank you

1:01:48 ↗ for bringing that up because if one

1:01:50 ↗ looks at those if you look at the any of

1:01:52 ↗ the reports a year on report or the 2018

1:01:54 ↗ mid-year report because it has all of

1:01:56 ↗ those funds if you were to look at the

1:01:59 ↗ the fund for voted in debt those tax

1:02:03 ↗ dollars go directly into that fund and

1:02:05 ↗ the debt service is paid out it so it

1:02:07 ↗ does not touch the general fund

1:02:08 ↗ it's the council Manek bonds where the

1:02:11 ↗ where the general fund has to transfer

1:02:13 ↗ some dollars to that fund so you see a

1:02:15 ↗ transfer in and then you see the debt

1:02:17 ↗ service going out so thank you for

1:02:18 ↗ bringing that up

1:02:20 ↗ deputy council president Matisse so

1:02:24 ↗ thank Thank You Jen I just had a couple

1:02:27 ↗ questions so I can better understand the

1:02:29 ↗ assumptions so with the annual new

1:02:32 ↗ staffing resources in scenario B which

1:02:37 ↗ which would be the economic downturn you

1:02:42 ↗ you were still having 3.5% for new

1:02:47 ↗ staffing okay and then likewise on

1:02:50 ↗ scenario B where there's an additional

1:02:54 ↗ source you still have that at 3.5% so

1:02:57 ↗ across the board really seeing that in

1:03:00 ↗ the assumptions anyway yes we left that

1:03:02 ↗ flat because then that would kind of

1:03:04 ↗ align with a a more conservative of

1:03:07 ↗ objective approach is that we may have

1:03:11 ↗ added staff and continued have to add

1:03:12 ↗ staff for delivering levels of service

1:03:15 ↗ and certainly that that's something in

1:03:17 ↗ an economic downturn is that it is it a

1:03:21 ↗ short chill is it a long a long term

1:03:24 ↗ recession and so there still may be a

1:03:26 ↗ plan going forward to continue to add

1:03:29 ↗ staff maybe not at that level but it was

1:03:32 ↗ it was just a way to show that we

1:03:34 ↗ routinely

1:03:35 ↗ are continuing to add staff to ensure

1:03:38 ↗ that we provide quality levels of

1:03:40 ↗ service okay and then the general

1:03:43 ↗ economic growth for expenditures is also

1:03:45 ↗ at 3% for the economic downturn so just

1:03:49 ↗ again flat across with your assumptions

1:03:52 ↗ okay I was trying to better understand

1:03:55 ↗ that Thanks tell us member winter Stein

1:03:56 ↗ I want to pick up on something where I

1:04:00 ↗ just said so I'm missing the point about

1:04:02 ↗ an economic downturn scenario B as an

1:04:05 ↗ economic downturn

1:04:06 ↗ adhi well I thought you said B so my

1:04:09 ↗ mistake that's how I'm looking at this

1:04:10 ↗ and

1:04:16 ↗ up above it says scenario B you're right

1:04:18 ↗ scenario D we've got to be in a D sorry

1:04:21 ↗ okay that it was D that I was talking

1:04:24 ↗ about okay thank you so I'm kind of

1:04:31 ↗ curious and and maybe this is something

1:04:33 ↗ for to bring back but I I think deputy

1:04:37 ↗ president batiste is brings up a really

1:04:40 ↗ good point which is if we're having an

1:04:42 ↗ economic downturn we're probably not

1:04:43 ↗ adding 3.5% in staffing and I'm curious

1:04:49 ↗ to see what would happen to that that

1:04:51 ↗ chart if we flattened out both the

1:04:54 ↗ revenues and the expenses Oh City

1:05:01 ↗ Administrator thank you

1:05:03 ↗ we can certainly run that scenario the

1:05:06 ↗ purpose of putting together these

1:05:08 ↗ scenarios was to just create some

1:05:11 ↗ bookends so that you can see under one

1:05:15 ↗ changing condition what sort of effect

1:05:18 ↗ does that have on the whole so that is

1:05:22 ↗ why you see staffing assumption

1:05:26 ↗ remaining constant across the scenarios

1:05:28 ↗ we just want to adjust one variable so

1:05:30 ↗ in this case we were adjusting the

1:05:32 ↗ revenue side of the equation and

1:05:34 ↗ scenario D so that you can just see that

1:05:37 ↗ impact but council members are are

1:05:40 ↗ correct under real-life conditions we

1:05:44 ↗ would make other adjustments to make

1:05:47 ↗ sure that we balanced out this is just

1:05:49 ↗ for painting a picture of what happens

1:05:51 ↗ if you have less revenue but you keep

1:05:55 ↗ other things constant

1:06:02 ↗ deputy council president patís Thank You

1:06:06 ↗ Emily so that was really the purpose of

1:06:10 ↗ my questions so with assumption modeling

1:06:12 ↗ that way you're as you're trying to look

1:06:15 ↗ across you're able to compare apples to

1:06:17 ↗ apples Thanks it comes from Winchester

1:06:23 ↗ thank you I think before we move off

1:06:27 ↗ this page those that didn't have the

1:06:29 ↗ opportunity that the rest of us did in

1:06:32 ↗ committee to review this this is really

1:06:35 ↗ the time to challenge some of the

1:06:37 ↗ assumptions that we have or at least

1:06:38 ↗ understand them I'd say maybe not at

1:06:40 ↗ this point let's really make sure we

1:06:42 ↗ understand each one of these before we

1:06:44 ↗ move on and I know that some of the

1:06:48 ↗ things that we wrestled with in

1:06:49 ↗ committee where you can like the head

1:06:52 ↗ count for example I think the original

1:06:54 ↗ proposal was just a fixed number and we

1:06:56 ↗ said no let's do it as a percent we

1:06:59 ↗ thought that that would would be a

1:07:00 ↗ better model and then and then this idea

1:07:05 ↗ scenario a was was everything in the

1:07:11 ↗ transportation TI p but we funded

1:07:13 ↗ ourselves we don't go ask for any

1:07:15 ↗ dollars all the unfunded portion of the

1:07:17 ↗ transportation TI p we just we its

1:07:20 ↗ existing revenues we find our savings

1:07:23 ↗ somewhere else we know we're going to

1:07:24 ↗ get some back because our debt

1:07:25 ↗ obligation is going to go down but this

1:07:27 ↗ was a scenario we just pay for it no no

1:07:30 ↗ ask of the people of for anything and

1:07:32 ↗ then B was no I'll just take half of it

1:07:36 ↗ thinking was what let's let's use our

1:07:42 ↗ existing revenue to fund half of the

1:07:47 ↗ unfunded transportation projects because

1:07:50 ↗ some of the transportation has funding

1:07:51 ↗ associated or we and we're forecasting

1:07:53 ↗ getting grant money and other sources of

1:07:55 ↗ money but there is an unfunded component

1:07:57 ↗ and I would just recommend I always keep

1:07:59 ↗ an electronic copy of the the CIP budget

1:08:01 ↗ at hand so I can always look at those

1:08:03 ↗ real quickly so I think that's very

1:08:05 ↗ handy to do so be said let's just do

1:08:08 ↗ half let's just fund half of that

1:08:10 ↗ outstanding balance and maybe just maybe

1:08:12 ↗ we'll get some projects under our

1:08:14 ↗ and and demonstrate to ourselves that we

1:08:17 ↗ can do this and we can do it well and

1:08:19 ↗ then maybe maybe that would be a time

1:08:22 ↗ where we go back out and ask the voters

1:08:25 ↗ to fund the balance of the unfunded half

1:08:29 ↗ and that's what C represents so funny is

1:08:35 ↗ fun at all don't ask for any new B is

1:08:39 ↗ without any new revenue fun half of the

1:08:42 ↗ unfunded balance and and C goes out and

1:08:45 ↗ asks the people for the revenue for the

1:08:49 ↗ other half of the unfunded balance does

1:08:51 ↗ that make sense those are the scenarios

1:08:57 ↗ thanks Paul that's helpful

1:08:59 ↗ cops remember Ramos just for me the

1:09:02 ↗ scenario D and I know what you're trying

1:09:04 ↗ to say

1:09:04 ↗ I mean trend only change one thing but

1:09:07 ↗ as you said the realistic part of it is

1:09:10 ↗ hard to look at it because if you just

1:09:12 ↗ assume everything may the expense side

1:09:14 ↗ just keeps growing but you just cut your

1:09:16 ↗ revenue you know that just wouldn't be

1:09:18 ↗ realistic so I find a hard time now you

1:09:21 ↗ say it's comparing apples that was to me

1:09:23 ↗ it changed at Apple to an orange so then

1:09:25 ↗ looking at that with the other without

1:09:27 ↗ making adjustments there which you we

1:09:30 ↗ would have to do it it doesn't give me a

1:09:32 ↗ good comparison that way so I guess the

1:09:35 ↗ challenge on the two columns there of

1:09:37 ↗ growth of expenditures 3% and the three

1:09:40 ↗ and a half percent growth of staffing it

1:09:44 ↗ makes it look like a lot worse than it

1:09:48 ↗ probably would councilmember hunt

1:09:53 ↗ thank you so I have a question about the

1:09:57 ↗ new construction growth and assessed

1:09:59 ↗ valuation that is held constant across

1:10:03 ↗ the model right

1:10:06 ↗ and then how how is that factored in

1:10:09 ↗ with the model so it's 1% plus new

1:10:13 ↗ construction growth in assessed

1:10:16 ↗ in the financial model what we identify

1:10:20 ↗ is a 1% growth in the property of

1:10:24 ↗ property tax that is not the same actual

1:10:28 ↗ growth in assessed valuation and so the

1:10:32 ↗ the 1% is what we calculate as being our

1:10:36 ↗ our limit based on those forecasts for

1:10:39 ↗ assessed valuations based on our growth

1:10:42 ↗ our growth projections and so then the

1:10:45 ↗ new construction value is is not a

1:10:48 ↗ static number that's also going up based

1:10:52 ↗ on our historical growth in new

1:10:54 ↗ construction I think some of the the

1:10:57 ↗ numbers are around 280 some thousand in

1:11:02 ↗ new construction growth and so that

1:11:05 ↗ we've we've taken and we just we

1:11:08 ↗ increase that based on our our new

1:11:11 ↗ construction growth of about three to

1:11:13 ↗ four percent every year but it's there's

1:11:16 ↗ there's a lot of detail in into that

1:11:18 ↗ line item because it because one it's

1:11:20 ↗ not static and the 1% is just based off

1:11:24 ↗ of the calculation of our assessed

1:11:28 ↗ valuations and you can see and that was

1:11:31 ↗ in one of the reports and we've got some

1:11:32 ↗ information in our our growth in our

1:11:35 ↗ assessed valuations later on in the

1:11:37 ↗ report and then I can show you how we

1:11:40 ↗ calculate that because we are assuming

1:11:43 ↗ that our property valuation this us

1:11:45 ↗ about that's just a depiction of that 1%

1:11:50 ↗ of that that dollar amounts so I can

1:11:54 ↗ answer that question maybe a little bit

1:11:55 ↗ later have some of your race so I have a

1:12:00 ↗ question and a concern my question is

1:12:02 ↗ what we're really trying to do here is

1:12:04 ↗ to establish what our realistic new debt

1:12:08 ↗ capacity is for capital improvements

1:12:13 ↗ using council Matic bonds is that the

1:12:16 ↗ intent of what we're driving at here yes

1:12:18 ↗ so my concern is we keep talking about

1:12:21 ↗ transportation and I don't think we've

1:12:23 ↗ ever had a discussion

1:12:23 ↗ as counsel about that so I I think that

1:12:27 ↗ it's fine as an ie

1:12:28 ↗ you know such as investing in the you

1:12:30 ↗ know more transportation initiatives but

1:12:32 ↗ I don't ever recall us having a

1:12:34 ↗ discussion about we're gonna look to

1:12:35 ↗ invest much more in transportation than

1:12:38 ↗ we are right now so this could be other

1:12:40 ↗ capital investments as well as

1:12:42 ↗ transportation less your mark fair okay

1:12:49 ↗ so noted I'm something of a wintry Stein

1:12:54 ↗ I'm gonna go back to what Vicki asked a

1:12:58 ↗ second ago I'm gonna stick bet with the

1:13:00 ↗ new construction growth I want to make

1:13:05 ↗ sure I have this correct so there's new

1:13:07 ↗ construction in 2018 and we're going to

1:13:10 ↗ there's going to be some assessment of

1:13:12 ↗ that value they're gonna be charged a

1:13:15 ↗ property tax and we're gonna we're gonna

1:13:18 ↗ get that in 2018 now that property in

1:13:22 ↗ its assessed value in 2019 will go into

1:13:27 ↗ the pool that has a limited growth of 1%

1:13:30 ↗ so so this so where it says and say if

1:13:35 ↗ so one percent plus ncg that ncg at one

1:13:39 ↗ year is into the 1% pool maximum growth

1:13:42 ↗ the next year so every subsequent year

1:13:46 ↗ the new construction growth goes goes

1:13:48 ↗ into the pool where it's limited there's

1:13:49 ↗ no limit to the new construction growth

1:13:51 ↗ because we don't we they've never been

1:13:52 ↗ taxed before there's no this is the

1:13:54 ↗ first assessment on some improvement on

1:13:56 ↗ the property the first year's assessment

1:13:59 ↗ it's got a value okay now that becomes

1:14:01 ↗ part of the assessment pool that we have

1:14:03 ↗ limited growth in in subsequent years so

1:14:06 ↗ it's you're nodding your head I think

1:14:07 ↗ that's that's important thank I mean

1:14:11 ↗ thank you for acknowledging my statement

1:14:14 ↗ of understanding deputy council

1:14:16 ↗ president impetus I just in in regard to

1:14:21 ↗ feedback on the assumptions one thing

1:14:25 ↗ that I was pleased to see is that when

1:14:26 ↗ we're we're talking about

1:14:29 ↗ the staffing resources that were also

1:14:32 ↗ listing enhanced levels of service that

1:14:34 ↗ to give us an opportunity that if we're

1:14:37 ↗ talking about that that we're talking

1:14:40 ↗ about what level of service we want to

1:14:43 ↗ have and something that we I I think you

1:14:46 ↗ know that we talked about during the

1:14:47 ↗ last budgeting session in terms of what

1:14:51 ↗ are the levels of service that we're

1:14:52 ↗ focusing on

1:15:01 ↗ any other questions or comments at the

1:15:03 ↗ moment alright let's proceed okay thank

1:15:07 ↗ you next page is really a key age in

1:15:17 ↗ most of this report because it's a chart

1:15:20 ↗ and it has the what for this discussion

1:15:26 ↗ purposes was to show all of the baseline

1:15:30 ↗ ending fund balance and this is general

1:15:33 ↗ fund how the ending fund balance is for

1:15:37 ↗ is forecasted so the baseline scenario a

1:15:41 ↗ scenario B scenario D so what happens

1:15:43 ↗ then to the ending fund balance forecast

1:15:47 ↗ when we lay it all over into one chart

1:15:51 ↗ and so what I wanted to point out is is

1:15:54 ↗ just some of the colors to show that

1:15:58 ↗ with the baseline you can see that the

1:16:02 ↗ purple ending fund balance starts at

1:16:07 ↗ they're all starting at the same point

1:16:09 ↗ starts at the just below 20 million

1:16:12 ↗ dollars and pretty much skyrockets

1:16:15 ↗ because one of the main reasons is there

1:16:20 ↗ would be no more debt that would be

1:16:22 ↗ issued because you can see in the

1:16:23 ↗ assumptions we're assuming additional

1:16:26 ↗ staffing we're assuming expenditure

1:16:28 ↗ growth at 3 percent we're assuming

1:16:30 ↗ revenue growth at 3 percent some a

1:16:32 ↗ little bit higher sales tax and so you

1:16:36 ↗ can see that this is a the purple line

1:16:39 ↗ is a very positive picture doing only

1:16:43 ↗ those things that are in the baseline

1:16:44 ↗ now that doesn't mean that we've

1:16:46 ↗ identified specifically but we've we've

1:16:48 ↗ identified a level of assumptions that

1:16:50 ↗ we would move forward with I want to

1:16:53 ↗ jump over and then talk about the

1:16:57 ↗ scenario a which is the orange line and

1:17:05 ↗ this is the exact opposite because this

1:17:07 ↗ is what I think was referred to and we

1:17:09 ↗ were talking about in our ad-hoc

1:17:11 ↗ committee as the apocalypse and so you

1:17:13 ↗ can see that ending fund balance

1:17:15 ↗ starting at just under twenty million

1:17:16 ↗ dollars goes severely downward into the

1:17:21 ↗ negative realm and so I just wanted to

1:17:24 ↗ give you both ends where we've got

1:17:27 ↗ baseline and we've got scenario a I just

1:17:31 ↗ wanted to then point out the green lines

1:17:33 ↗ in between are the council's reserve

1:17:36 ↗ policy so you see the dark green is

1:17:39 ↗ where the ceiling for your reserves are

1:17:44 ↗ identified in policy and then the light

1:17:46 ↗ green is the floor so that's the 15% of

1:17:50 ↗ those expenditures so you can see that's

1:17:51 ↗ that's kind of our target so we've got

1:17:56 ↗ the as a scenario that identified if we

1:17:59 ↗ tackled every piece of the unfunded

1:18:04 ↗ transportation projects in the CIP that

1:18:09 ↗ we would not have enough not enough

1:18:12 ↗ money in our ending fund balance in

1:18:14 ↗ order to accommodate so that that is

1:18:16 ↗ just not a sustainable scenario then we

1:18:19 ↗ go into scenario B and that is the blue

1:18:23 ↗ line and you can see that the blue line

1:18:26 ↗ does dip down in a few years primarily

1:18:30 ↗ because we have existing council Matic

1:18:33 ↗ debt we still have a payment but as you

1:18:35 ↗ can see in that in the amended graphed

1:18:38 ↗ for the debt that that was provided you

1:18:42 ↗ can see that that debt those debt

1:18:44 ↗ obligations were going down and so what

1:18:47 ↗ the blue line depicts is that we

1:18:49 ↗ continue to pay that debt if the council

1:18:51 ↗ chooses to issue debt for tackling some

1:18:55 ↗ projects we would dip down into our

1:18:58 ↗ reserves to do that all things being the

1:19:02 ↗ same in the assumptions but then we

1:19:04 ↗ would start to come back up because

1:19:05 ↗ again existing debt obligations drop off

1:19:08 ↗ but what this shows is that this it's

1:19:10 ↗ about a two point one two point five

1:19:14 ↗ million

1:19:14 ↗ our annual debt service and so basically

1:19:16 ↗ what this scenario shows is that we're

1:19:18 ↗ going to continually have about that

1:19:21 ↗ level of debt service about that four

1:19:24 ↗ percent five percent of expenditures

1:19:26 ↗ towards debt obligations console Matic

1:19:29 ↗ bonds so that's the blue line that

1:19:33 ↗ scenario see then was a scenario that

1:19:36 ↗ added in a source of revenue to help

1:19:38 ↗ either offset and remove some of the

1:19:43 ↗ obligation of the general fund but you

1:19:45 ↗ can see the yellow line is pretty close

1:19:49 ↗ to the baseline because the assumptions

1:19:51 ↗ showed about 1 million in the first year

1:19:56 ↗ and then kind of ramping up to about a

1:19:58 ↗ two million dollar revenue source that

1:20:01 ↗ would help to offset the general fund

1:20:03 ↗ paying the debt obligation so that again

1:20:06 ↗ is a is an upward movement and does not

1:20:09 ↗ impact or or dip into our reserve

1:20:14 ↗ targets and then we have the scenario D

1:20:18 ↗ which was to show that revenues would be

1:20:21 ↗ declining but our expenditures would

1:20:24 ↗ remain the same also shows that we would

1:20:27 ↗ go into an unsustainable mode and that

1:20:31 ↗ certainly as administrator moon

1:20:34 ↗ indicated is that yes the reality would

1:20:36 ↗ be that the council would be reacting to

1:20:39 ↗ offset and reduce expenditures should

1:20:42 ↗ the revenues decline but this was a way

1:20:45 ↗ to depict the scenarios to give try to

1:20:49 ↗ give a good clear understanding about if

1:20:51 ↗ if there was one scenario versus another

1:20:54 ↗ and so I would like to hear feedback and

1:20:58 ↗ certainly questions of the council

1:20:59 ↗ councilmember we're just not thank you

1:21:01 ↗ two questions

1:21:02 ↗ do you recall why did we start scenario

1:21:07 ↗ C when we did it looks from this it's

1:21:13 ↗ almost like next year but I mean that

1:21:18 ↗ wouldn't be we wouldn't do that right it

1:21:20 ↗ would be a couple years down the road

1:21:23 ↗ rather than so immediate

1:21:26 ↗ assumptions showed in the assumption

1:21:28 ↗ that serves 1 million two million so it

1:21:30 ↗ showed an example of and to look at the

1:21:34 ↗ start of the year that we wouldn't have

1:21:37 ↗ we wouldn't just you know it wouldn't be

1:21:39 ↗ a start at the beginning of the year

1:21:40 ↗ calendar year and all of a sudden we we

1:21:42 ↗ knew we were gonna have two million

1:21:44 ↗ dollars that's why I have the million

1:21:45 ↗ two to show that we would not have a you

1:21:48 ↗ know that full source of revenue well

1:21:50 ↗ I'm just saying from this these numbers

1:21:52 ↗ right here see tracks with the baseline

1:21:55 ↗ immediately and it seems to me the new

1:21:58 ↗ revenues would more likely kick in see

1:22:01 ↗ should track with B for a number of

1:22:04 ↗ years before the new revenue kicks in so

1:22:08 ↗ so I basically it looks like we're

1:22:10 ↗ taking some new revenue almost

1:22:12 ↗ immediately with C I'm just thinking it

1:22:14 ↗ was should kick in a little bit later

1:22:16 ↗ does that make sense yes

1:22:18 ↗ so that was my first question but you

1:22:20 ↗ have a response I mean do we provide the

1:22:23 ↗ year as to when it actually was when the

1:22:26 ↗ scenario C revenues were we're kicking

1:22:29 ↗ in it started around if you look about

1:22:31 ↗ 2022 okay so I would expect that C curve

1:22:38 ↗ to take off we should track with the B

1:22:41 ↗ curve all the way to 2022 and then start

1:22:44 ↗ sloping up rather than starting right in

1:22:48 ↗ 2018 so that's that I think it would

1:22:49 ↗ look a little bit different okay but

1:22:53 ↗ think about that I know I fully

1:22:55 ↗ understand okay all right all right then

1:22:58 ↗ the other question is about that

1:23:00 ↗ scenario D it doesn't mcgann it it says

1:23:06 ↗ in the assumptions I guess this is this

1:23:09 ↗ is supposed to be like a 1-year in 2021

1:23:11 ↗ or is this like we go zero looks like we

1:23:14 ↗ go zero in 2018 and just stay zero

1:23:17 ↗ forever in terms of the general economic

1:23:19 ↗ growth and and I wonder see that we

1:23:27 ↗ so this this downturn in 2021 doesn't

1:23:31 ↗ look like it looks like it's a downturn

1:23:32 ↗ starting in 2018 per these numbers that

1:23:35 ↗ are in this chart in front of us now so

1:23:37 ↗ I'm actually looking at the previous

1:23:38 ↗ page and seeing the numbers but looking

1:23:41 ↗ at this chart up here so that down and

1:23:45 ↗ so and so that is a scenario where we

1:23:47 ↗ just have this zero growth forevermore

1:23:51 ↗ okay so that's pretty extreme and I'm

1:23:56 ↗ not sure this model run even reflects

1:23:59 ↗ that oh it does okay it's tracking with

1:24:02 ↗ the until 2021 okay and then then it's

1:24:07 ↗ just assuming from 2021 onwards we're at

1:24:10 ↗ zero okay that one makes it okay now I

1:24:13 ↗ get that one because that one's tracking

1:24:15 ↗ would be as it should until there's a

1:24:16 ↗ turn a downturn okay don't remember hunt

1:24:25 ↗ green lines which are the 15% reserves

1:24:28 ↗ are in the 20% reserve target those are

1:24:31 ↗ the same for all scenarios but in

1:24:34 ↗ reality when they also change because

1:24:38 ↗ the reserve would change with the

1:24:39 ↗ different scenarios well well the reason

1:24:42 ↗ that they're that they're going up it is

1:24:43 ↗ because it's it's based on the

1:24:45 ↗ calculation of the expenditure in that

1:24:47 ↗ year and so the data behind this is is

1:24:50 ↗ calculating 15% of those expenditures

1:24:53 ↗ and those expenditures generally are

1:24:55 ↗ going up three percent so the reserve

1:24:58 ↗ requirement is going up just as it is

1:25:03 ↗ based on on the baseline because they're

1:25:05 ↗ all at three percent right so there's no

1:25:07 ↗ variability and that one and they're all

1:25:10 ↗ at they're all at 15 percent and 20

1:25:13 ↗ percent so so one things that's

1:25:18 ↗ interesting about this is you know I

1:25:20 ↗ feel like this is you know we Jam the

1:25:23 ↗ knobs one way and the JEM knobs the

1:25:25 ↗ other way and see what it sweeps through

1:25:26 ↗ and it's you know it's also thinking

1:25:29 ↗ like okay if I add lots of salt no salt

1:25:32 ↗ lots of pepper no pepper and in the end

1:25:34 ↗ there's give me some combination of salt

1:25:36 ↗ and pepper

1:25:37 ↗ to make a zesty meal and it seems like

1:25:40 ↗ something that sort of qualitatively

1:25:43 ↗ looks something like the scenario B

1:25:46 ↗ outcome right where you get down towards

1:25:48 ↗ some number that is somewhere close to

1:25:51 ↗ where our reserve goals are and that's

1:25:55 ↗ through some combination of what we take

1:25:58 ↗ on council Matic and what we fund with

1:26:01 ↗ alternative revenue sources but you know

1:26:04 ↗ I'm just sort of doing a spoiler alert

1:26:06 ↗ from where I hope we get to down the

1:26:08 ↗ road which is something that looks

1:26:09 ↗ vaguely like this maybe not

1:26:11 ↗ you know quite so beautifully right just

1:26:13 ↗ skimming the 15% line but something that

1:26:17 ↗ looks kind of like this that brings us

1:26:19 ↗ down towards our where we want to get to

1:26:23 ↗ with our ending fund balance and that in

1:26:25 ↗ terms of it

1:26:25 ↗ hockey sticking back up to use a good

1:26:28 ↗ Minnesota term later you know we can

1:26:31 ↗ figure out how to how to deal with that

1:26:33 ↗ as we when when we get to that good one

1:26:36 ↗ of the one of those are the good

1:26:37 ↗ problems to have thank you that I mean

1:26:42 ↗ the the purpose of of the different

1:26:46 ↗ scenarios was to do just that is that

1:26:49 ↗ was there a pathway forward that was

1:26:51 ↗ planned

1:26:52 ↗ and then according to financial policy

1:26:55 ↗ that the council would be adhering to

1:26:57 ↗ that is that you have a planned use of

1:27:00 ↗ your resources your reserves and that

1:27:05 ↗ you have a plan because when we look at

1:27:07 ↗ some of the indicators you would say

1:27:09 ↗ well operating deficits are not a good

1:27:11 ↗ thing however if there is a plan to go

1:27:17 ↗ into the green in this case with the

1:27:19 ↗ colors chosen on the graph is that

1:27:21 ↗ you're you're doing something and you're

1:27:25 ↗ working on issues and this is a

1:27:28 ↗ financial depiction of what happens if

1:27:32 ↗ you issue new debt and that was

1:27:35 ↗ primarily the purpose for coming up with

1:27:38 ↗ these the financial model is to try to

1:27:42 ↗ tackle

1:27:44 ↗ those issues regarding transportation

1:27:46 ↗ sure because because I'll just add at

1:27:49 ↗ some point having a really high ending

1:27:52 ↗ fund balance there's there's a level

1:27:55 ↗ beyond which it's it's it's just bad you

1:27:59 ↗ know bad public policy right because a

1:28:02 ↗ citizen in the city or a business owner

1:28:04 ↗ in the city could come to us and say you

1:28:06 ↗ know if we were at 60% right or some

1:28:10 ↗ some super high number and they're like

1:28:11 ↗ why are you raising so much money and

1:28:14 ↗ not spending it right like you haven't

1:28:17 ↗ all you have options you can take you

1:28:19 ↗ know you've got all this extra money you

1:28:20 ↗ can spend it or you can just not tax us

1:28:22 ↗ and you know collect a little less money

1:28:24 ↗ or slow down your rate of growth of

1:28:26 ↗ taxing and and do that as well so you

1:28:29 ↗ know I do think I have been happy that

1:28:32 ↗ I'm happy that we're above the Green

1:28:34 ↗ Line but you know I I would love us to

1:28:37 ↗ come up with a solution that gets us

1:28:39 ↗ back towards our stated goal I feel like

1:28:41 ↗ every year we talked about this we

1:28:43 ↗ talked about how lucky we are they were

1:28:44 ↗ above the line but you know at some

1:28:46 ↗ point it would be good to do that like I

1:28:49 ↗ said just because residents might feel

1:28:51 ↗ like hey you know what one solution is

1:28:53 ↗ just not taxes so much and of course

1:28:54 ↗ because we have such narrow taxation

1:28:57 ↗ mechanisms in this state and it's so

1:28:59 ↗ draconian to get money back once you

1:29:01 ↗ stop you know once you reduce a revenue

1:29:04 ↗ stream we're always careful not to not

1:29:06 ↗ to do that but it's but having having

1:29:09 ↗ policies that result in a net closer to

1:29:11 ↗ our goal I think is is is the is the

1:29:14 ↗ responsible thing to do with voters

1:29:16 ↗ money other questions oh come of

1:29:21 ↗ interest I well just in general I would

1:29:24 ↗ say that see you see is the scenario

1:29:28 ↗ again if you detach it from 2018 basis

1:29:32 ↗ there and reattach it to be around 2022

1:29:35 ↗ 2023 then that starts to make the most

1:29:38 ↗ sense to me and it in it but it banks

1:29:40 ↗ upon us us kind of basically earning

1:29:45 ↗ some capital in terms of public trust

1:29:47 ↗ and what we can do with transportation

1:29:48 ↗ we're saying without any additional ask

1:29:50 ↗ we're you know we're gonna we're gonna

1:29:52 ↗ take the assets we've already collected

1:29:53 ↗ and

1:29:55 ↗ gonna do some important projects and and

1:29:58 ↗ and it's a little bit of a bat that says

1:30:01 ↗ and and if we do a good job and we think

1:30:05 ↗ we will do a good job then you know

1:30:07 ↗ there will be a better climate for us to

1:30:09 ↗ go ask for some new funding for the

1:30:11 ↗ balance of the unfunded transportation

1:30:14 ↗ projects in our CIP that's what that's

1:30:17 ↗ what scenario C says and I'm interested

1:30:20 ↗ in that scenario at the same time I do

1:30:24 ↗ want to take up the conversation that

1:30:26 ↗ Chris brought up about other portions we

1:30:29 ↗ have other asset classes in our CIP way

1:30:31 ↗ of facilities parks trails and

1:30:32 ↗ transportation and and I don't know if

1:30:36 ↗ we're prepared to have a conversation

1:30:37 ↗ about that tonight but there might be

1:30:38 ↗ good some get someone out onto the table

1:30:41 ↗ to discuss and I'm looking I'm looking

1:30:44 ↗ at the the CIP document right now of the

1:30:48 ↗ and it goes out for you know into the

1:30:50 ↗ future years there's a total of 238

1:30:52 ↗ million of unfunded capital

1:30:55 ↗ transportation is 161 of that 238 and

1:30:59 ↗ parks and trails are a total of 28 out

1:31:02 ↗ of that 238 perhaps we've been making an

1:31:06 ↗ assumption in this that because we've

1:31:09 ↗ been the public has a time and again

1:31:12 ↗ shown a willingness to tax themselves

1:31:16 ↗ for parks and open space acquisition and

1:31:18 ↗ trail related stuff that that as a

1:31:21 ↗ policy would be something that we would

1:31:23 ↗ expect to do in future years as well

1:31:26 ↗ perhaps to cover that on funded portion

1:31:28 ↗ of the capital plan which which I don't

1:31:32 ↗ know so I'm just putting I don't - I'm

1:31:35 ↗ just saying something I want to put any

1:31:36 ↗ words anybody's mouth and then and then

1:31:38 ↗ the facilities part is all in the future

1:31:41 ↗ years which means is out beyond 2022 and

1:31:44 ↗ it is it's unfunded Kippur Shin is 48

1:31:47 ↗ million so that's significantly that's

1:31:49 ↗ twice what the parks and trails is

1:31:51 ↗ almost and I'm not as familiar with that

1:31:54 ↗ because that's actually roll and roll up

1:31:56 ↗ of quite a few of the categories that's

1:31:58 ↗ only for asset classes but we have many

1:32:00 ↗ more categories than that in our CIP

1:32:03 ↗ and I'm not sure we're prepared at all

1:32:05 ↗ to have a more in-depth conversation

1:32:06 ↗ about that tonight but I think it would

1:32:09 ↗ be good to hear if from the

1:32:10 ↗ administration on what the thinking

1:32:13 ↗ might be about that part of the CIP

1:32:15 ↗ because it was it was when we got

1:32:18 ↗ together as the Finance Committee ad-hoc

1:32:21 ↗ committee it was definitely very strong

1:32:24 ↗ direction like let's focus on

1:32:26 ↗ transportation it's the biggest part and

1:32:28 ↗ it's the one that we don't have a track

1:32:32 ↗ record in terms of you know going to ask

1:32:36 ↗ for money for being successful we went

1:32:38 ↗ for the bond and still got 54% but that

1:32:41 ↗ still wasn't successful so and in

1:32:44 ↗ feeling also it reflected what we

1:32:46 ↗ thought was the most urgent need within

1:32:48 ↗ the community and we have a list of

1:32:51 ↗ projects that we think would make a

1:32:52 ↗ difference so let's put the focus of our

1:32:55 ↗ capital and in this whole model on

1:32:57 ↗ transportation but I've said what I

1:33:00 ↗ think maybe about parks and trails and

1:33:02 ↗ what the strategy might be for him

1:33:03 ↗ handling the unfunded portion there I'd

1:33:05 ↗ like to know what others think about

1:33:07 ↗ that and I and I like to hear we'd want

1:33:09 ↗ to get some more back on the facilities

1:33:11 ↗ part and I think we need to get that

1:33:12 ↗ from the administration because I don't

1:33:13 ↗ think we've ever talked about that so so

1:33:15 ↗ I want to be clear on one thing the a be

1:33:17 ↗ that impaneled the ad hoc Finance

1:33:19 ↗ Committee acts actually asked us to look

1:33:21 ↗ specifically at transportation and

1:33:23 ↗ that's why we focused on transportation

1:33:24 ↗ having said that here we are today

1:33:27 ↗ talking about citywide the bigger issues

1:33:29 ↗ and so you know that that's why I had

1:33:32 ↗ Hawk focuses with you thank you yeah you

1:33:35 ↗ know it's this whole conversation is

1:33:37 ↗ gonna be really interesting Paul because

1:33:39 ↗ I understand this idea of maybe starting

1:33:42 ↗ with council Matic and and you know

1:33:44 ↗ building some inertia I also think

1:33:46 ↗ there's a there's an alternate and

1:33:48 ↗ certainly not gonna solve it here

1:33:50 ↗ tonight but there's an alternate thing

1:33:51 ↗ that says if you know what you need to

1:33:52 ↗ do to start transport to get to address

1:33:54 ↗ transportation get cracking right and

1:33:56 ↗ use all the tools that are arsenal to

1:33:59 ↗ address it right I'm not sure that's the

1:34:01 ↗ right way to do it but you know I could

1:34:03 ↗ see somebody saying that somebody's

1:34:04 ↗ saying look you know we've said

1:34:06 ↗ transportations the thing just get going

1:34:08 ↗ do everything you can find every nickel

1:34:10 ↗ in every cushion in every couch

1:34:13 ↗ everywhere and and go do it so it'll be

1:34:16 ↗ interesting to figure out how how we

1:34:17 ↗ want to how we want to pursue that

1:34:19 ↗ Christian did you have something resin

1:34:21 ↗ no sorry okay other questions comments

1:34:25 ↗ and we're looking for other thoughts all

1:34:33 ↗ right

1:34:38 ↗ alright I'm just gonna quickly go

1:34:41 ↗ through because like I said that this

1:34:43 ↗ this page was was probably a page that

1:34:46 ↗ we could have just had maybe a smaller

1:34:48 ↗ packet and we could have talked

1:34:51 ↗ specifically about the model but the

1:34:53 ↗ again the this information is intended

1:34:55 ↗ to provide you with with a lot of detail

1:34:59 ↗ as we go into the the budget discussion

1:35:03 ↗ so thank you

1:35:03 ↗ council president marks for talking

1:35:05 ↗ about will continue the discussions on

1:35:11 ↗ revenue sources and capital expenditures

1:35:14 ↗ that might be made I want to then jump

1:35:18 ↗ to financial indicators because this is

1:35:21 ↗ this is where we are getting into kind

1:35:24 ↗ of testing how we're doing and so one of

1:35:28 ↗ the things that I wanted to point out is

1:35:30 ↗ that financial can our financial

1:35:34 ↗ condition is obviously something that we

1:35:39 ↗ want to make sure that we have the

1:35:41 ↗ ability to maintain existing levels of

1:35:44 ↗ service and that there are there are

1:35:47 ↗ things that impact there are local and

1:35:49 ↗ regional economic disruptions that often

1:35:53 ↗ get in the way of what we need to do to

1:35:57 ↗ meet demands and so what we wanted to

1:36:00 ↗ put together and this is the same as

1:36:02 ↗ last year but if you remember that these

1:36:04 ↗ were the large pages again which we

1:36:06 ↗ shrunk these down and pointed out some

1:36:11 ↗ retrospective and historical information

1:36:13 ↗ about where we've been and I'm going to

1:36:15 ↗ talk about each of the the indicators

1:36:18 ↗ that we have developed information for I

1:36:21 ↗ also just wanted to point out that there

1:36:24 ↗ are a number more indicators that are in

1:36:30 ↗ that would impact our environmental and

1:36:32 ↗ organizational factors that contribute

1:36:34 ↗ to our financial condition so that would

1:36:36 ↗ answer perhaps comes whenever

1:36:40 ↗ winter stands comment about

1:36:43 ↗ non-financial and so I just wanted to

1:36:46 ↗ make that point that those are in the

1:36:50 ↗ overall kind of matrix and I'll walk

1:36:53 ↗ through that we're in the process of

1:36:54 ↗ compiling this information and just kind

1:36:58 ↗ of wanted to let you know that how you

1:36:59 ↗ would read the the first page is that

1:37:02 ↗ we've done some work on the indicators

1:37:04 ↗ one two three six and partial of seven

1:37:07 ↗ we continue to add data to our our

1:37:13 ↗ master data and will continue to then go

1:37:17 ↗ out and look for comparative information

1:37:20 ↗ from other communities as well so

1:37:23 ↗ nonetheless I wanted to just briefly go

1:37:26 ↗ over that our indicators are based on

1:37:29 ↗ our baseline right now and certainly as

1:37:34 ↗ the council makes decisions then what we

1:37:35 ↗ do is we go back and we put that that

1:37:38 ↗ forecast or that those those assumptions

1:37:40 ↗ of the council or those decisions of the

1:37:42 ↗ council in and it serves as a test on

1:37:44 ↗ whether or not we're going to be

1:37:46 ↗ performing better or worse and helps us

1:37:51 ↗ take a a longer look at our financial

1:37:54 ↗ condition so what I wanted to point out

1:37:57 ↗ on page let's say I'm just trying to get

1:38:00 ↗ page numbers here on page 107 of the

1:38:05 ↗ packet that just kind of shows that flow

1:38:07 ↗ of some of those environmental factors

1:38:11 ↗ that impact our financial condition

1:38:16 ↗ there's organizational factors and then

1:38:18 ↗ there's certainly the financial factors

1:38:19 ↗ and we we the easy ones are the

1:38:21 ↗ financial factors because we we do

1:38:23 ↗ collect data and and we do want to

1:38:25 ↗ present it in a way that is helpful for

1:38:27 ↗ the council and then you see way up

1:38:30 ↗ above you can see those early warning

1:38:32 ↗ trends and you can see some of those

1:38:35 ↗ early warning trends are and I'll go

1:38:37 ↗ through those in the indicators that we

1:38:38 ↗ have prepared and and what you would

1:38:42 ↗ look for but it's intended to help the

1:38:44 ↗ council with decision making

1:38:48 ↗ and I have a description of each of the

1:38:50 ↗ indicators so if there isn't any

1:38:53 ↗ questions about the the overall plan for

1:38:56 ↗ putting a tool in place and continuing

1:38:58 ↗ to use it I'll go on with the indicators

1:39:02 ↗ the first one is revenue per capita and

1:39:05 ↗ so examining our revenue per capita and

1:39:09 ↗ this is the this is in comparison so per

1:39:11 ↗ capita is relative to the change in

1:39:13 ↗ population and the rate of inflation and

1:39:17 ↗ you can see historically that we have

1:39:20 ↗ had increasing net operating revenues

1:39:23 ↗ per capita and so you can see at the top

1:39:25 ↗ the warning trend would be is that if

1:39:26 ↗ they were decreasing because that would

1:39:29 ↗ mean is if our revenues were going down

1:39:31 ↗ per capita that means that we're not

1:39:33 ↗ able to maintain those existing levels

1:39:35 ↗ of service we would need to find new

1:39:37 ↗ sources of revenue or or certainly ways

1:39:41 ↗ to save money on the expenditure side

1:39:43 ↗ but it assumes that that the cost of

1:39:47 ↗ service is directly related to

1:39:48 ↗ population size and so we've put

1:39:51 ↗ together the data in the historical

1:39:54 ↗ information you can see how the numbers

1:39:56 ↗ play out these are actual numbers from

1:39:57 ↗ our audited financial statements the the

1:40:01 ↗ CPI and then we just we just do the math

1:40:04 ↗ and the population then creates that per

1:40:07 ↗ capita revenue and you so you can see

1:40:10 ↗ that is increasing historically Hausner

1:40:14 ↗ would just I'm Thank You Jen what type

1:40:19 ↗ of revenue are we talking about this is

1:40:22 ↗ just general fund so this is just

1:40:24 ↗ general this is just okay we can do we

1:40:27 ↗ could do any indicators on the different

1:40:30 ↗ types of revenues so if we were going to

1:40:31 ↗ look at this from a utility perspective

1:40:33 ↗ then you know those would be those rates

1:40:35 ↗ and the capital contributions I just

1:40:37 ↗ didn't see I thought that maybe it was

1:40:39 ↗ but I didn't see any where I know that's

1:40:41 ↗ primarily been our context tonight has

1:40:43 ↗ been general fund but I didn't I didn't

1:40:46 ↗ see that on there say specifically

1:40:48 ↗ general fund so thank you for that

1:40:50 ↗ tell me about transfers but when we're

1:40:55 ↗ talking about the general fund and

1:40:56 ↗ transfers what do you what would we be

1:40:59 ↗ referring to

1:41:00 ↗ what we referred to there is because in

1:41:03 ↗ fund accounting one fund transfers money

1:41:06 ↗ to another so we also include those

1:41:09 ↗ transfer dollars now some you might

1:41:12 ↗ think maybe a special revenue fund was

1:41:15 ↗ entrace fer some dollars into the

1:41:17 ↗ general fund because of some some

1:41:19 ↗ condition but we we want to be made

1:41:22 ↗ known that we are including transfers in

1:41:24 ↗ the the net operating revenues could you

1:41:29 ↗ give me an example of this example a

1:41:33 ↗ transfer into the general fund yeah

1:41:36 ↗ transfer into the general fund could be

1:41:39 ↗ from let's just and this is hard because

1:41:44 ↗ when we when we did our fund accounting

1:41:46 ↗ cleanup we shifted and we created

1:41:48 ↗ special revenue funds specifically for

1:41:52 ↗ like REIT so for example if you would

1:41:54 ↗ have the project that the general fund

1:41:58 ↗ was the project was left out of the

1:42:00 ↗ general fund so all the transactions

1:42:02 ↗ were being you know tracked in the

1:42:06 ↗ general fund but there was a source of

1:42:08 ↗ revenue that that was going to come from

1:42:10 ↗ readers were going to come from another

1:42:12 ↗ special revenue fund that we would

1:42:13 ↗ transfer in that revenue to tackle that

1:42:15 ↗ that one-time capital project so there's

1:42:20 ↗ not a lot of transfers that come into

1:42:21 ↗ the general fund right we're often

1:42:24 ↗ feeding other funds with general funds

1:42:26 ↗ so transfers as a percent I mean how

1:42:30 ↗ what percent is this above the total

1:42:34 ↗ revenue I'm gonna have to get you that

1:42:36 ↗ just get apart I don't want to guess

1:42:38 ↗ less than five I'm not a guess there one

1:42:40 ↗ could we provide that back okay sorry

1:42:43 ↗ they just said something which I was

1:42:45 ↗ wondering if this was true you said this

1:42:47 ↗ it's not common to transfer from other

1:42:50 ↗ funds in the general and yet you have a

1:42:51 ↗ title to your net operating revenues and

1:42:53 ↗ transfers like transfers had some

1:42:56 ↗ significance I just wasn't aware of what

1:42:58 ↗ that was so there was significance in in

1:43:01 ↗ 2007

1:43:02 ↗ tene because there was a million dollar

1:43:04 ↗ transfer from the because of the Malheur

1:43:08 ↗ bait property and so there there was a

1:43:11 ↗ transfer into the general fund so yeah

1:43:13 ↗ transaction that confuses us constantly

1:43:16 ↗ it never stops confusing us okay

1:43:18 ↗ it is a very complicated project the

1:43:21 ↗ purchase okay so so I'm can I'm confused

1:43:28 ↗ by this first that first off are these

1:43:31 ↗ in real dollars are actual dollars

1:43:34 ↗ revenue no I know they're actual dollars

1:43:37 ↗ are they in real dollars in other words

1:43:38 ↗ have you corrected are these in 2017

1:43:41 ↗ dollars all back NPV to current they are

1:43:47 ↗ they are real so in what year are they

1:43:51 ↗ then are they they're in 2017 dollars

1:43:53 ↗ they're in 2013 dollars what are they in

1:43:54 ↗ they are the actual for that year these

1:43:57 ↗ are the audited financial statement

1:43:59 ↗ that's not what I mean by real dollars I

1:44:00 ↗ mean for is it corrected for a certain

1:44:03 ↗ year's currency because they were

1:44:05 ↗ because they were in the past on the big

1:44:07 ↗ spreadsheet they were corrected for

1:44:10 ↗ inflation basically because otherwise

1:44:12 ↗ what I have to do here is I have to take

1:44:14 ↗ these numbers then I have to compare it

1:44:15 ↗ to the CPI and eyeball it myself right

1:44:17 ↗ what you want to do is you want to

1:44:19 ↗ divide these numbers out by the CPI to

1:44:21 ↗ get real dollars right I think so take

1:44:26 ↗ that as an for an offline I believe on

1:44:29 ↗ the bricks down the big spreadsheet we

1:44:31 ↗ corrected for two things we corrected

1:44:32 ↗ for population and then we corrected for

1:44:34 ↗ inflation right which should have given

1:44:36 ↗ us per capita in real dollars right not

1:44:40 ↗ just per capita because the thing that

1:44:42 ↗ the thing that I'm confused about and

1:44:44 ↗ I'm not ready to be I'm not ready to say

1:44:46 ↗ I'm alarmed yet but I thought that at

1:44:49 ↗ least before last year the big chart

1:44:51 ↗ showed is essentially flat in revenues

1:44:53 ↗ more or less in revenues per capita in

1:44:55 ↗ real dollars over time and this the the

1:44:59 ↗ first three years of this chart is

1:45:01 ↗ anything but right the the actual

1:45:04 ↗ operating revenue goes up 19.4% the

1:45:07 ↗ operating revenues transfer per capita

1:45:09 ↗ goes up by 17 percent meanwhile the CPI

1:45:11 ↗ only goes up by three point eight

1:45:13 ↗ percent I don't think that's what

1:45:15 ↗ previous years what we call the big

1:45:17 ↗ chart showed I think it showed over a

1:45:19 ↗ reasonable length timeline that those

1:45:22 ↗ numbers were flat because if those

1:45:23 ↗ numbers aren't flat then it means that

1:45:26 ↗ the cost of governance in the city is

1:45:27 ↗ going up even even taking into account

1:45:30 ↗ the fact that we get economies of scale

1:45:33 ↗ and some of our operations right some of

1:45:35 ↗ the things we do we can do with a larger

1:45:37 ↗ population that's harder to do with a

1:45:38 ↗ smaller population so you should at

1:45:40 ↗ least be staying flat in that kind of a

1:45:43 ↗ measure and it was in the big in the big

1:45:45 ↗ chart that we did in previous years but

1:45:47 ↗ it's not here so again I don't want to

1:45:50 ↗ say I'm alarmed yet but I want to say I

1:45:52 ↗ absolutely need to understand better

1:45:54 ↗ corrected for real dollars corrected for

1:45:56 ↗ inflation so so again divided by

1:45:58 ↗ population divided by inflation so that

1:46:01 ↗ we see what the real cost of governance

1:46:03 ↗ is over time so these are these are

1:46:06 ↗ revenues just revenues mm-hmm so I think

1:46:10 ↗ we can take a deeper dive than in on

1:46:12 ↗ your your view of last year as compared

1:46:18 ↗ to this year well the big chart that we

1:46:20 ↗ did did it for like 10 years right we

1:46:22 ↗ looked you have to be careful just

1:46:24 ↗ looking for three or four years right

1:46:25 ↗ you have to you have to take sort of

1:46:27 ↗ when we did it before we looked at a

1:46:29 ↗ longer timeline so you smoothed out sort

1:46:31 ↗ of local variations because you can get

1:46:33 ↗ little local blips that'll make things

1:46:35 ↗ look weird but both revenues and

1:46:38 ↗ expenditures in per capita real dollars

1:46:42 ↗ were essentially flat and that's what

1:46:44 ↗ made me comfortable with a lot of the

1:46:46 ↗ things we were doing this was two years

1:46:48 ↗ ago the conversation because it made me

1:46:51 ↗ say I could go to a resident in the city

1:46:53 ↗ and say the cost of government for you

1:46:55 ↗ isn't any worse you know the cost of

1:46:57 ↗ government for your yeah we're in any

1:47:00 ↗ worse for you than it was 10 years ago

1:47:01 ↗ right if I can't say that then I have to

1:47:05 ↗ ask myself a whole bunch of questions

1:47:09 ↗ that I want to have to ask myself about

1:47:11 ↗ the way that we're choosing to generate

1:47:14 ↗ and spend money and that was the whole

1:47:17 ↗ purpose of that of that big spreadsheet

1:47:20 ↗ and and so that's what that's why I need

1:47:23 ↗ to know a lot better about this per

1:47:26 ↗ capita in real dollars over a longer

1:47:28 ↗ time lines and

1:47:29 ↗ make sure that we don't have a problem

1:47:30 ↗ because this if I just looked at this

1:47:32 ↗ the fact that I mean he got allocate

1:47:35 ↗ expenditures also but in you want all

1:47:38 ↗ that stuff to track you want to say

1:47:40 ↗ we're asking of the people comparable

1:47:42 ↗ that we asked to the people ten years

1:47:43 ↗ ago we're spending comparable for people

1:47:46 ↗ that we were spending ten years ago and

1:47:47 ↗ you correct that for a population and

1:47:49 ↗ inflation will bring back the big all of

1:47:52 ↗ the data and so you can look at it in

1:47:54 ↗ that framework because we're looking at

1:47:57 ↗ the historical here and then we're

1:47:58 ↗ looking at the next page we're looking

1:48:00 ↗ at the forecast so we will certainly

1:48:03 ↗ include that when we have budget

1:48:06 ↗ discussions great okay that would help

1:48:08 ↗ me and and and I believe it'll show

1:48:11 ↗ things better than I'm envisioning them

1:48:12 ↗ in my head just looking at this one page

1:48:14 ↗ okay thanks oh then I'm just gonna move

1:48:23 ↗ on through then the revenues per capita

1:48:25 ↗ this is the projected this is this is

1:48:27 ↗ coming then from that moving forward

1:48:30 ↗ with the same information and and then

1:48:34 ↗ based on the baseline assumptions

1:48:42 ↗ the indicator to which is expenditures

1:48:45 ↗ per capita I do want to point out that

1:48:47 ↗ the warning trend would be this was a

1:48:49 ↗ correction and it is in the page 111

1:48:53 ↗ replacement that was supplemental

1:48:55 ↗ materials this was a typing error and it

1:49:01 ↗ should say increasing that operating

1:49:03 ↗ revenue expenditures per capita

1:49:06 ↗ obviously with changing expenditures if

1:49:10 ↗ expenditures are going up relative to

1:49:12 ↗ population changes that that would mean

1:49:15 ↗ that the cost of providing services is

1:49:18 ↗ outstripping the ability the community's

1:49:20 ↗ ability to pay it also indicates - if

1:49:24 ↗ there is an increase in spending that

1:49:27 ↗ can be greater than accounted for then

1:49:30 ↗ the inflation or the addition of new

1:49:33 ↗ services and here's the replacement page

1:49:37 ↗ to show the warning trend would be

1:49:39 ↗ increasing net operating expenditures

1:49:44 ↗ per capita again we showed the same

1:49:47 ↗ information from a historical

1:49:49 ↗ perspective from 2013 as council

1:49:54 ↗ president Mart's indicated last year's

1:49:57 ↗ sheets had information that had a

1:50:02 ↗ significantly more historical data in

1:50:05 ↗ there and so our shift to move some

1:50:09 ↗ things around we will again do that

1:50:12 ↗ deeper dive but you can see in the

1:50:14 ↗ expenditures again when we try to depict

1:50:17 ↗ that in charts we show per household and

1:50:21 ↗ per capita pretty much the same in in

1:50:25 ↗ changing from expended one year to the

1:50:29 ↗ next there was a question by a

1:50:31 ↗ councilmember ray with regards to what

1:50:34 ↗ happened in 2021 I provided an

1:50:38 ↗ explanation on that this was some of the

1:50:41 ↗ impact of our debt obligation our annual

1:50:44 ↗ debt obligation dropping off and

1:50:49 ↗ the then the the general economic change

1:50:52 ↗ in expenditures is 3% so we don't have a

1:50:55 ↗ full three percent year-over-year so in

1:50:59 ↗ a couple of years we have about two

1:51:02 ↗ percent and so we have population

1:51:04 ↗ changes increasing at the two percent

1:51:06 ↗ level and so all of a sudden we have

1:51:08 ↗ this blip in that third year because our

1:51:11 ↗ debt service has dropped down in the and

1:51:14 ↗ the change year over over a year is not

1:51:16 ↗ apples to apples again like I indicated

1:51:19 ↗ in my response and if this had been

1:51:22 ↗ extended out into 2023 we would see

1:51:26 ↗ another funky change in expenditures for

1:51:32 ↗ per capita expenditures and per

1:51:34 ↗ household expenditures to go upward

1:51:37 ↗ similar to 2021 so so we are seeing so

1:51:43 ↗ the sign that says warning trend would

1:51:45 ↗ be increasing that operating expenses

1:51:47 ↗ per capita and that's exactly what we're

1:51:48 ↗ seeing so we've got the warnings that we

1:51:51 ↗ have warning sign mm-hmm okay yes and

1:51:55 ↗ and so per capita expenditures over four

1:51:59 ↗ years have gone up 26% but CPI is only

1:52:02 ↗ gone up ten point three percent so we're

1:52:04 ↗ outpacing inflation so that's

1:52:08 ↗ hypothetically a problem again it looks

1:52:14 ↗ different than when we talked about this

1:52:16 ↗ either a year two ago but this concerns

1:52:19 ↗ me it's noted and we'll go back and make

1:52:23 ↗ sure that the information provided and

1:52:25 ↗ what changed in these in this depiction

1:52:35 ↗ other questions all right indicator 3 is

1:52:41 ↗ operating deficits the warning trend is

1:52:43 ↗ increasing general fund operating

1:52:44 ↗ deficits I talked a little bit about

1:52:46 ↗ this when we were looking at the

1:52:49 ↗ financial model when we were looking at

1:52:52 ↗ scenario B that it would look like it

1:52:58 ↗ was an operating deficit again this

1:53:03 ↗ occurs when expenditures are exceeding

1:53:06 ↗ revenues it doesn't mean that the budget

1:53:08 ↗ is out of balance because reserves are

1:53:10 ↗ used because reserves are a source to be

1:53:14 ↗ used to fund services and so it does

1:53:19 ↗ mean that in a current year it doesn't

1:53:22 ↗ mean that the government is spending

1:53:24 ↗ more than its receiving there could be

1:53:27 ↗ things like an emergency in one year and

1:53:30 ↗ then not the next but for the most part

1:53:34 ↗ is that an operating deficit in one year

1:53:37 ↗ is not a cause for concern it's when it

1:53:40 ↗ happens over multiple years and there's

1:53:42 ↗ not a plan in place and the council does

1:53:45 ↗ again as I stated have financial policy

1:53:49 ↗ that identifies how you handle operating

1:53:52 ↗ deficits over time how you handle

1:53:56 ↗ spending reserves or bringing reserves

1:53:59 ↗ back up into your into your policy

1:54:02 ↗ targets and so this is something that I

1:54:06 ↗ wanted to point out too with regards to

1:54:08 ↗ credit raging firms when they look at

1:54:12 ↗ operating deficit it's certainly a minor

1:54:15 ↗ warning signal but then they would at be

1:54:18 ↗ asking for a plan and so certainly any

1:54:22 ↗ large deficit more than more than 10%

1:54:25 ↗ would also be something that the credit

1:54:28 ↗ raiders would ask for more information

1:54:32 ↗ about so I'm sorry what assumptions are

1:54:39 ↗ we using why why are we seeing a change

1:54:45 ↗ out at 20 20 20

1:54:47 ↗ 20:22 because if you if you if you

1:54:50 ↗ append the projected on to the

1:54:52 ↗ historical for most of this you get sort

1:54:54 ↗ of a little back and forth oscillation

1:54:57 ↗ of some kind but then you get this you

1:54:59 ↗ get this step out around 2020 and all of

1:55:01 ↗ a sudden you're above zero and you stay

1:55:03 ↗ above zero what's that about

1:55:05 ↗ well one of the one of the things that

1:55:08 ↗ we talked about was the where our debt

1:55:11 ↗ service starts starts to be reduced and

1:55:13 ↗ so this does not include the any new

1:55:18 ↗ debt right now this is just a look at

1:55:21 ↗ where we pelvis right that should make

1:55:23 ↗ it better and that's why you see the

1:55:25 ↗ operating deficits on the projected side

1:55:27 ↗ going out going above the negative sorry

1:55:32 ↗ an operating deficit is a good thing

1:55:34 ↗ the well I'm not saying the operating

1:55:37 ↗ deficit is a good thing this is just how

1:55:39 ↗ we're looking at this indicator based on

1:55:42 ↗ the operating deficit revenues over

1:55:44 ↗ expenditures and every year so as we go

1:55:47 ↗ into the outer years in the baseline

1:55:50 ↗ that that the the color I'm going to go

1:55:55 ↗ back to the color of the line there was

1:55:58 ↗ no operating deficit in some of those

1:56:00 ↗ years in the outer ears now I'm super

1:56:02 ↗ confused deficit so a positive number

1:56:04 ↗ means a deficit or does it positive

1:56:07 ↗ number mean a surplus the positive

1:56:09 ↗ number means a surplus thank you okay

1:56:12 ↗ now I get it

1:56:13 ↗ so rising surpluses would be a warning

1:56:16 ↗ sign no it would not be a warning sign

1:56:20 ↗ it would be the the warning would be

1:56:23 ↗ that if we continued to be in the

1:56:25 ↗ negative then that would be problematic

1:56:27 ↗ but in this case our current our current

1:56:31 ↗ revenues over expenditures forecast

1:56:34 ↗ shows that we would not have we would

1:56:37 ↗ not have operating deficits so therefore

1:56:40 ↗ there would be no warning right okay

1:56:43 ↗ nothing to warn us I would heartily

1:56:44 ↗ encourage either calling this operating

1:56:46 ↗ surpluses or inverting the graph right

1:56:49 ↗ because the title on the thing is the

1:56:51 ↗ positive value of the thing right and

1:56:53 ↗ this is not a measure of operating

1:56:56 ↗ deficits as a measure of operating

1:56:58 ↗ surpluses right

1:56:59 ↗ this is a measure of operating deficits

1:57:03 ↗ because that is that is the warning but

1:57:06 ↗ in this case in this in these scenarios

1:57:08 ↗ in these forecasts we do not have one so

1:57:11 ↗ certainly I think this is the how the

1:57:15 ↗ indicator Jennifer let me tell you as a

1:57:18 ↗ math person the warning says increasing

1:57:21 ↗ increasing in this chart is not a bad

1:57:23 ↗ thing decreasing is a bad thing

1:57:25 ↗ so something some combination of the

1:57:27 ↗ warning sign and the title of the chart

1:57:29 ↗ and what whether you choose to invert

1:57:32 ↗ the chart or not but anybody that is not

1:57:34 ↗ a map person or not a finance person is

1:57:36 ↗ going to be very confused by this okay

1:57:37 ↗ I'm quite confident that that's the case

1:57:39 ↗ because you see the increasing write on

1:57:42 ↗ the warning as this number is increasing

1:57:44 ↗ and that's actually a good thing right

1:57:46 ↗ but it took some time for me to work

1:57:48 ↗ through what that was so I just ask that

1:57:49 ↗ you consider whether there's some

1:57:51 ↗ combination of how we word this and how

1:57:53 ↗ we show this that makes it more clear

1:57:55 ↗ for anybody who's going to take a look

1:57:57 ↗ at this because I'm sure if I'm confused

1:57:59 ↗ there will be other people working we

1:58:00 ↗ will work on depicting it in a better

1:58:02 ↗ manner and a better framework for the so

1:58:04 ↗ that the community can understand it

1:58:05 ↗ Thanks before we move on

1:58:07 ↗ Toula could you explain it to me so I

1:58:09 ↗ can understand yeah I really understand

1:58:13 ↗ I'm not tracking you sure so above the

1:58:16 ↗ nice and calm

1:58:17 ↗ above the line is a surplus at which

1:58:19 ↗ chart page which are you looking at I'm

1:58:20 ↗ gonna make sure I'm in the right age 114

1:58:23 ↗ right operating deficits historical is

1:58:26 ↗ the top charge so above the line is the

1:58:28 ↗ surplus which chart are you on the top

1:58:29 ↗ one the top one either they're both the

1:58:32 ↗ same for both of them above zero is a

1:58:34 ↗ surplus below zero is a deficit so when

1:58:39 ↗ you go back one page to increasing

1:58:41 ↗ general fund deficits as a percentage of

1:58:44 ↗ net operating revenues that would be a

1:58:45 ↗ warning trend right what that means okay

1:58:48 ↗ wait hold on okay moving on warning

1:58:50 ↗ trend would be increasing general fund

1:58:52 ↗ operating deficits so the deficit is

1:58:54 ↗ increasing if the deficit is increasing

1:58:57 ↗ that's a warning sign so I so okay it's

1:58:59 ↗ a-okay it's right that's right

1:59:04 ↗ what's that that's a deficit that's

1:59:06 ↗ growing right value is getting large yes

1:59:10 ↗ so so it means a chart that is it has an

1:59:12 ↗ increasingly negative value that's what

1:59:14 ↗ means going further into deficit that's

1:59:17 ↗ right right okay all right okay so and

1:59:21 ↗ so what is your concern my concern is

1:59:24 ↗ that first of all if I see something

1:59:27 ↗ that's titled deficits I'm used to the

1:59:31 ↗ the title of a chart being a the

1:59:34 ↗ positive value of something and secondly

1:59:36 ↗ is it if I see increasing I think well

1:59:41 ↗ it's increasing so so we've got a

1:59:43 ↗ problem

1:59:43 ↗ you lost me right there where are you

1:59:44 ↗ seeing the word increasing what are you

1:59:46 ↗ talking about under the warning trend

1:59:47 ↗ would be says increasing general fund

1:59:49 ↗ operating deficits yep you're free to

1:59:53 ↗ disagree with my date with my understand

1:59:56 ↗ what it was so what's the problem with

1:59:57 ↗ that phrase increasing deficits because

1:59:59 ↗ I look at that chart and that charts

2:00:01 ↗ increasing so we've got a problem no no

2:00:04 ↗ it doesn't it's not increasing it did

2:00:06 ↗ from 13 to 14 the deficit increased and

2:00:09 ↗ it took a little dip in 15 to 16 but

2:00:12 ↗ it's but the value of the chart is

2:00:16 ↗ increasing over time moving up into the

2:00:18 ↗ right yeah growing I know that okay okay

2:00:25 ↗ again you're free disagree with my

2:00:27 ↗ concern well I hear what you're saying

2:00:30 ↗ now yeah I don't this you don't yeah I

2:00:36 ↗ see that this I know that a growing

2:00:38 ↗ negative number would be a bad thing

2:00:40 ↗ we're not seeing a growing negative

2:00:41 ↗ number gotcha

2:00:42 ↗ so that's good right council member ray

2:00:47 ↗ Jen thank you very much for your earlier

2:00:49 ↗ responses to my questions that we're

2:00:51 ↗ real helpful the one that I do want to

2:00:52 ↗ kind of dive a little bit into is is

2:00:55 ↗ here because in our projections for 18

2:00:58 ↗ we're showing a deficit of nine hundred

2:01:01 ↗ twenty three thousand dollars and right

2:01:03 ↗ now where we have a surplus of 1.2

2:01:05 ↗ million dollars and so I understand that

2:01:08 ↗ there's some guidance that's driving

2:01:09 ↗ that number I just like to understand

2:01:11 ↗ the guidance of why we why we're going

2:01:14 ↗ to have why we have the discrepancy

2:01:15 ↗ between what we're seeing you know what

2:01:16 ↗ we're

2:01:17 ↗ um the we could have we could have

2:01:22 ↗ multiple charts than to show the the

2:01:24 ↗ operating deficits or surpluses or or

2:01:28 ↗ how it's depicted up into the right yes

2:01:31 ↗ based on the budget based on the

2:01:33 ↗ council's expectation that there would

2:01:35 ↗ be an operating deficit in 2018 we could

2:01:40 ↗ also show then and I think it's

2:01:43 ↗ something that will be an important

2:01:46 ↗ piece as we get better depiction of this

2:01:48 ↗ is that when we start to forecast the

2:01:51 ↗ year on 2018 we can show the same chart

2:01:56 ↗ inverted to show how what were what

2:02:00 ↗ we're forecasting for the operating

2:02:01 ↗ deficits so I think will will properly

2:02:05 ↗ identify what is what is the budget

2:02:09 ↗ versus forecast then as we bring back

2:02:12 ↗ more information other questions

2:02:21 ↗ okay thank you indicator six this is

2:02:26 ↗ capital outlay this is one that commonly

2:02:33 ↗ and and again this is this is general

2:02:36 ↗ fund capital outlay but this is just

2:02:40 ↗ another indicator that in the warning

2:02:43 ↗ trend would be that three or more year

2:02:46 ↗ decline in capital outlay might mean

2:02:49 ↗ that there are some challenges with

2:02:52 ↗ keeping up with vehicle and equipment

2:02:56 ↗ and the maintenance of that referred to

2:02:58 ↗ as maybe capital outlay so we've

2:03:03 ↗ replacing items in the general fund or

2:03:07 ↗ capital outlay items that do not make

2:03:09 ↗ the CIP that is something that we wanted

2:03:12 ↗ to show historically on the the second

2:03:15 ↗ chart is where we wanted to depict CIP

2:03:18 ↗ and so this is one that is to show that

2:03:24 ↗ we're we're working towards putting

2:03:26 ↗ together these tools and to let the

2:03:31 ↗ council see the see the portion that has

2:03:35 ↗ been identified for total capital outlay

2:03:38 ↗ it is rather all over the place but

2:03:42 ↗ nonetheless it's something that can help

2:03:46 ↗ to test how we're doing in our financial

2:03:50 ↗ condition because our smaller assets are

2:03:53 ↗ important as well as the bigger objects

2:03:57 ↗ that are in CIP and then the final

2:04:02 ↗ indicator so you can ask a question so

2:04:05 ↗ this is another one that if you tie

2:04:06 ↗ together the historical would be

2:04:08 ↗ projected like if I just look at the

2:04:10 ↗ historical I go oh I think we may have

2:04:12 ↗ that warning trend right but if you tie

2:04:15 ↗ it together with the projected what you

2:04:17 ↗ get is sort of a back and forth squiggle

2:04:19 ↗ a little bit right and so it's not

2:04:21 ↗ necessarily I guess it's still is it

2:04:29 ↗ still generally coming down there's high

2:04:31 ↗ there's highs and lows but we go from

2:04:33 ↗ orig

2:04:34 ↗ that's generally in the 1 and a half to

2:04:37 ↗ three percent range to a regime that is

2:04:40 ↗ generally sub 1% right so would you say

2:04:44 ↗ that that warning trend is is is

2:04:49 ↗ activated on this on this indicator

2:04:53 ↗ administrator moon not yeah not yet I

2:04:56 ↗ think this is a great tool for us to

2:04:58 ↗ just watch over time and make sure we

2:05:01 ↗ are thinking about our replacement of

2:05:03 ↗ smaller capital assets if we go back in

2:05:07 ↗ time beyond 2013 we may see a different

2:05:10 ↗ pattern from year to year you have

2:05:13 ↗ different pieces of equipment that come

2:05:15 ↗ due some might be really big and create

2:05:18 ↗ a little spike on the next year you may

2:05:20 ↗ not have that so there's a good deal of

2:05:23 ↗ variability from year to year I would

2:05:25 ↗ also say in the projection we have some

2:05:28 ↗ work to do

2:05:29 ↗ to make sure that we're forecasting

2:05:30 ↗ accurately into the future for those

2:05:32 ↗ smaller capital needs so as we think

2:05:36 ↗ about our fleet replacement you know how

2:05:39 ↗ we certainly have a schedule but we can

2:05:42 ↗ analyze you know how to spread things

2:05:44 ↗ out in a better way and so I would I

2:05:46 ↗ would expect that we don't fall as lows

2:05:51 ↗ as shown in the projection and that we

2:05:54 ↗ stay somewhere around whatever that

2:05:56 ↗ trend line has been historically but I

2:05:59 ↗ think the purpose of the chart is just

2:06:01 ↗ to be mindful that we we should assume

2:06:04 ↗ that we have an annual obligation to

2:06:06 ↗ keep up with those replacements and then

2:06:08 ↗ if we underfund we're putting service

2:06:12 ↗ delivery at risk

2:06:14 ↗ do we have an idea of what that number

2:06:18 ↗ should be that's an excellent question I

2:06:22 ↗ don't off the top of my head I think we

2:06:24 ↗ do on our on our fleet side and that

2:06:27 ↗ tends to capture

2:06:30 ↗ larger more expensive pieces of

2:06:32 ↗ equipment I don't have that off the top

2:06:34 ↗ of my head and then there's other pieces

2:06:37 ↗ that are part of capital outlay that

2:06:40 ↗ we're developing asset management plans

2:06:42 ↗ for yep other questions

2:06:45 ↗ that's member hunt what are the

2:06:48 ↗ asterisks indicate what are they

2:06:51 ↗ indicate on the years for that one I

2:06:53 ↗ don't see them on the other one excuse

2:06:59 ↗ me this may have been a change in the in

2:07:01 ↗ the formatting and so I'll need to get

2:07:04 ↗ what that note is because that didn't

2:07:07 ↗ get transferred

2:07:16 ↗ their questions right I'm just gonna

2:07:21 ↗ move quickly through the the indicator

2:07:24 ↗ number seven this is property values

2:07:26 ↗ both historical and projected again it's

2:07:30 ↗ based on the assessed valuation these

2:07:35 ↗ are the King County assessed valuations

2:07:39 ↗ from a historical perspective and then

2:07:42 ↗ these are the growth so I'm going to

2:07:43 ↗ shift to page 118 and just point out in

2:07:49 ↗ the the assessed valuation numbers are

2:07:53 ↗ based on what we we are seeing

2:07:59 ↗ historically and what we have that are

2:08:01 ↗ coming from the projects in the pipeline

2:08:03 ↗ and so this is the number where we get

2:08:06 ↗ that that 1% the limitations for in

2:08:10 ↗ order for us to forecast property taxes

2:08:13 ↗ and you can see that the assessed

2:08:14 ↗ valuation in this particular projected

2:08:18 ↗ information is going up and so I just

2:08:22 ↗ wanted to circle back and let you know

2:08:24 ↗ this is the dollar amount where we get

2:08:26 ↗ our property tax estimates going forward

2:08:31 ↗ so I struggle a little bit with this one

2:08:34 ↗ because you could by just putting more

2:08:38 ↗ stuff by having more development swamp

2:08:41 ↗ what's actually going on like I it with

2:08:44 ↗ a measure like this you could have the

2:08:46 ↗ average home sale price be dropping

2:08:49 ↗ right but as long as as long as you are

2:08:52 ↗ growing faster than housing prices are

2:08:55 ↗ dropping you would see a positive number

2:08:56 ↗ so my question is is there any way the

2:08:59 ↗ same way we talked about revenues and

2:09:01 ↗ expenses as per capita in real dollars

2:09:04 ↗ is there some divisor that we can put

2:09:07 ↗ the this is the numerators the divisor

2:09:09 ↗ we can put this over such that we can

2:09:12 ↗ measure how this is for a business that

2:09:16 ↗ has a certain number of square feet or a

2:09:17 ↗ homeowner for a certain risk square feet

2:09:19 ↗ I mean what you what what I'd one in a

2:09:22 ↗ perfect world if I could wave a magic

2:09:23 ↗ wand would be like the value of

2:09:26 ↗ commercial real estate over the

2:09:27 ↗ commercial square feet the value of

2:09:29 ↗ residential

2:09:30 ↗ over the residential square feet right

2:09:32 ↗ and then you would get commercial per

2:09:34 ↗ square foot you'd get residential per

2:09:36 ↗ square foot and then you would really

2:09:38 ↗ experience what I mean we could sort of

2:09:40 ↗ talk about what the average homeowner or

2:09:42 ↗ business owner is experiencing and I

2:09:45 ↗ have no idea if any of that information

2:09:46 ↗ is available or how easy it would be to

2:09:48 ↗ get I don't know just that that that

2:09:51 ↗ would be super we're taking down this

2:09:54 ↗ and again these are indicators that

2:09:56 ↗ we're starting to pull together so that

2:09:59 ↗ we can start having these conversations

2:10:00 ↗ so appreciate that and let's remember

2:10:06 ↗ winter stuff yes so historical that's

2:10:09 ↗ easy to get you just go look it up

2:10:13 ↗ pretty daring to project rising property

2:10:17 ↗ values in the future well this this is

2:10:19 ↗ something that the the crystal ball it's

2:10:22 ↗ it's a hard one to I mean it's it's hard

2:10:24 ↗ to predict these things and so we we

2:10:26 ↗ have to put something out there as a

2:10:27 ↗ starting point as a talking point and

2:10:29 ↗ then we're not afraid to have holes

2:10:32 ↗ punched in our our assumptions over our

2:10:35 ↗ information so yeah it is a risky so why

2:10:40 ↗ why even why look forward at this one I

2:10:43 ↗ mean we know we just we know what's

2:10:45 ↗ happening mm-hmm right because we don't

2:10:50 ↗ there's there's there's so many factors

2:10:53 ↗ in the environment that that drive

2:10:56 ↗ assessed valuations most and I don't

2:11:00 ↗ know how we would manage to a forecast

2:11:03 ↗ of property valuation changes so I think

2:11:10 ↗ tracking it I get tracking it that's

2:11:12 ↗ absolutely fine as a look this is what

2:11:14 ↗ it's okay we've got next year's numbers

2:11:17 ↗ in this is what it is I just don't know

2:11:20 ↗ the value of projecting anything into

2:11:21 ↗ the future in this way because it's a

2:11:23 ↗ major source of revenue and we do want

2:11:27 ↗ to

2:11:27 ↗ something in the financial model that it

2:11:30 ↗ identifies property tax as add is a

2:11:35 ↗ source and the only way that we get

2:11:37 ↗ there is is the you know the formula to

2:11:40 ↗ identify what our annual levy is gonna

2:11:43 ↗ be okay so then I would want to track

2:11:45 ↗ how it's happening care compared to our

2:11:48 ↗ our baseline or our basis that's what I

2:11:52 ↗ want to track hey so you're providing

2:11:55 ↗ the actual but what I want to know is

2:11:57 ↗ what it is to our base sofiane are so

2:11:58 ↗ okay so that makes sense so so so we

2:12:01 ↗ actually if I we this is and this is

2:12:03 ↗ this is not total this is total

2:12:06 ↗ valuation or just like average increase

2:12:09 ↗ this is this is total valuation this is

2:12:12 ↗ okay which it would be averages okay

2:12:17 ↗ yeah so I would think is a key indicator

2:12:19 ↗ I just want to know what is it doing

2:12:22 ↗ compared to what we are in using in our

2:12:24 ↗ forecast if we're using an 8% I already

2:12:27 ↗ ate no 2018 so for we don't know 2019

2:12:31 ↗ yet that's correct right

2:12:33 ↗ okay so let's track how it does compared

2:12:35 ↗ to what's what we forecasted okay other

2:12:41 ↗ questions comes from array um this is

2:12:43 ↗ this is great I just want to start by

2:12:45 ↗ saying this is great stuff since we're

2:12:48 ↗ gonna get back and the routine of doing

2:12:50 ↗ quarterly updates it would be I think

2:12:51 ↗ really useful to see these numbers on a

2:12:55 ↗ quarterly basis instead the anyone

2:12:57 ↗ particularly relates to property because

2:12:59 ↗ it can be an early warning indicator of

2:13:01 ↗ an impending doom if we start to see

2:13:04 ↗ property values tank and we've seen that

2:13:07 ↗ happen before so if we can have a little

2:13:09 ↗ higher level of granularity than just

2:13:11 ↗ the annual numbers I think that would

2:13:12 ↗ provide us all kind of some some good

2:13:15 ↗ early warnings to take some corrective

2:13:17 ↗ action with so but I love this stuff

2:13:24 ↗ other questions

2:13:29 ↗ all right so then let's let's move on

2:13:31 ↗ this is intended of the next session the

2:13:35 ↗ lat the last section is about revenue

2:13:37 ↗ sources and this talks about current

2:13:41 ↗ revenue sources but I also wanted to

2:13:43 ↗ just briefly touch base on some

2:13:46 ↗ information for information purposes

2:13:47 ↗ only was alternative revenue so what I

2:13:51 ↗ wanted to provide for the council here

2:13:53 ↗ is just a look at our current revenue

2:13:56 ↗ sources this is information all city

2:14:00 ↗ funds so this is not only the general

2:14:03 ↗ fund but it also includes all of those

2:14:05 ↗ revenue sources and you can see that

2:14:07 ↗ there's a large portion for charges for

2:14:09 ↗ goods and services because it includes

2:14:10 ↗ the utility funds and that's those

2:14:12 ↗ utility rates that we charge just to go

2:14:15 ↗ back we're on page 119 of the packet of

2:14:17 ↗ information the information in here is

2:14:23 ↗ intended to give you historical actual

2:14:26 ↗ levies that we have received in and then

2:14:31 ↗ we have then the forecasts for the

2:14:35 ↗ different types of revenues that that we

2:14:37 ↗ have put out you can see a number of

2:14:41 ↗ different ways that we've provided this

2:14:44 ↗ information so on the next page 120 you

2:14:47 ↗ can see the authorized levy amounts also

2:14:50 ↗ wanted to provide the council with that

2:14:52 ↗ property tax distribution so when a

2:14:54 ↗ property owner receives their their tax

2:14:57 ↗ bill not all of those monies go to the

2:14:59 ↗ city of Issaquah there is about 10% of

2:15:02 ↗ the property tax that would go to the

2:15:05 ↗ city of Vista that's the blue pie piece

2:15:07 ↗ that's coming out and so we wanted to

2:15:11 ↗ make sure that this information was

2:15:14 ↗ available next page this is the levy

2:15:17 ↗ rates one of the things that I think we

2:15:21 ↗ talked about here but I wanted to kind

2:15:23 ↗ of circle back to was about that when we

2:15:27 ↗ when we predict assessed value and we

2:15:30 ↗ predict what the property tax levy would

2:15:33 ↗ be as the assessed value goes up the the

2:15:37 ↗ the property because we're limited with

2:15:39 ↗ that 1% the actual rate goes down and in

2:15:43 ↗ the chart at the top of the page it

2:15:45 ↗ identifies the the total the dollar for

2:15:50 ↗ in 2018 per thousand and assessed

2:15:53 ↗ valuation I also wanted to shift out

2:15:56 ↗ that there is the general levy or the

2:15:59 ↗ regular tax rate of about 87 cents and

2:16:01 ↗ then you have that access tax rate and

2:16:04 ↗ that's the the voter approved levy that

2:16:06 ↗ does not hit the general fund but it but

2:16:09 ↗ it show you that that when our

2:16:11 ↗ valuations go up and our ability to set

2:16:15 ↗ the property tax rate it is just an

2:16:17 ↗ automatic going downward then I just

2:16:23 ↗ wanted to show you those assessed

2:16:24 ↗ evaluations this is a lot of small

2:16:26 ↗ numbers in a space to show you what

2:16:30 ↗ those actual assessed valuations were as

2:16:32 ↗ well as there's that new construction

2:16:34 ↗ value of about the two hundred and I I

2:16:41 ↗ knew I remembered a number about two

2:16:42 ↗ hundred eighty but that was 2017 in 2018

2:16:47 ↗ we actually had information from King

2:16:51 ↗ County that it did go down some so it is

2:16:54 ↗ one that's hard to predict other

2:16:56 ↗ information then for the council

2:16:59 ↗ historical residential home values and

2:17:02 ↗ at the bottom of the page you can see

2:17:04 ↗ some average valued home and the changes

2:17:08 ↗ year-over-year that's a question about

2:17:10 ↗ that so you've got that that value was

2:17:14 ↗ obtained from Zillow mmm-hmm do we have

2:17:17 ↗ a more rigorous way to get that number

2:17:21 ↗ other than Zillow because I seem to

2:17:23 ↗ recall not necessarily in City Council

2:17:28 ↗ but some question about how Zillow's

2:17:31 ↗ mechanism and whether it's accurate and

2:17:33 ↗ all that kind of stuff and we're working

2:17:35 ↗ on making sure that we have that we have

2:17:38 ↗ the right source so certainly

2:17:41 ↗ something as we continue to build on our

2:17:43 ↗ tools for understanding where we are

2:17:46 ↗ we've been and where we want to go we'll

2:17:48 ↗ continue to have better sources and the

2:17:52 ↗ Multiple Listing Service doesn't make

2:17:54 ↗ that kind of information available well

2:17:56 ↗ they do that make that kind of available

2:17:57 ↗ at the time of this report this is my

2:18:00 ↗ understanding it was what had been used

2:18:01 ↗ in the past and again and we're working

2:18:03 ↗ to strengthen our tools and the

2:18:05 ↗ information that we produce okay I don't

2:18:07 ↗ have anything against Zillow just if

2:18:09 ↗ there's a if there's a more accurate

2:18:10 ↗ mechanism I've just seen Zillow stuff in

2:18:12 ↗ the past that I was sort of a

2:18:13 ↗ head-scratcher it was like I would

2:18:15 ↗ didn't have a lot of confidence and

2:18:16 ↗ there are numbers and then when we go to

2:18:20 ↗ page 122 this is information and does

2:18:24 ↗ some comparisons to other cities what we

2:18:28 ↗ wanted to do is show the the only the

2:18:31 ↗ city portion by community and the change

2:18:35 ↗ in the the rates just a quick snapshot

2:18:40 ↗ of you you can see the city portion and

2:18:44 ↗ the total rate and then the percentage

2:18:46 ↗ of the total and so from 2016 to this

2:18:51 ↗ current year that's at ten percent of

2:18:53 ↗ the total tax bill the city of Issaquah

2:18:56 ↗ collects or that just over a dollar for

2:18:59 ↗ per thousand of assessed valuation you

2:19:02 ↗ can see how we compare two cities from

2:19:04 ↗ Bellevue to Kirkland Redmond Sammamish

2:19:08 ↗ and in smaller communities counts

2:19:12 ↗ remember ray why is our number so low

2:19:14 ↗ because we have our assessed evaluation

2:19:18 ↗ is it is what it is and the property tax

2:19:24 ↗ limitation of 1% and that is I mean that

2:19:31 ↗ that's the math okay I mean I just

2:19:34 ↗ always you know a little bit of

2:19:35 ↗ competition with Sammamish right and and

2:19:37 ↗ they're killing us here and a dollar

2:19:39 ↗ seven now

2:19:40 ↗ it's all in perspective we are not

2:19:44 ↗ aligned no this is so so I was gonna

2:19:48 ↗ come out of this my comments are not

2:19:50 ↗ reflected they're not aimed at what you

2:19:52 ↗ just said but I think this is super

2:19:54 ↗ super important and I'm just gonna get

2:19:56 ↗ on a on a high hog here just for 60

2:19:59 ↗ seconds this is the flipside of all the

2:20:04 ↗ traffic and concerns that our community

2:20:07 ↗ has had around growth over the last

2:20:10 ↗ thirty years this is when you talk about

2:20:13 ↗ old Issaquah and where did old Issaquah

2:20:15 ↗ go we made a decision thirty years ago

2:20:18 ↗ and have continued to execute public

2:20:20 ↗ policy around having a well rounded city

2:20:23 ↗ that has commercial and retail and

2:20:26 ↗ residential and so when you see we are

2:20:30 ↗ able to function with a relatively lower

2:20:35 ↗ cost to our residents to our homeowners

2:20:39 ↗ than many of our comparable cities on

2:20:41 ↗ the east side this is the upside part of

2:20:44 ↗ the upside and there's there's a number

2:20:47 ↗ of having of being a real city and not

2:20:50 ↗ just being a bedroom community and so I

2:20:52 ↗ think this is SuperDuper important and I

2:20:54 ↗ I struggle because I don't want to throw

2:20:55 ↗ any of our neighboring cities under the

2:20:57 ↗ bus but this is really the repercussions

2:21:00 ↗ of being well rounded and so I'm very

2:21:03 ↗ proud of these numbers and I will tell

2:21:05 ↗ you that these numbers are lower than

2:21:07 ↗ unincorporated King County I looked at

2:21:09 ↗ unincorporated King County last summer

2:21:11 ↗ and so when people think that by not

2:21:14 ↗ incorporating they're gonna get

2:21:16 ↗ themselves a better tax bill

2:21:18 ↗ unfortunately that's not how it works

2:21:20 ↗ so and our residents and this numbers

2:21:23 ↗ prove that thanks sounds remember

2:21:27 ↗ winters time property taxes are roughly

2:21:30 ↗ 13% of revenue and the general fund that

2:21:34 ↗ true roughly in were you looking at a

2:21:37 ↗ specific year just India recently it's I

2:21:43 ↗ mean

2:21:53 ↗ I mean how you you don't have to do I

2:21:55 ↗ thought maybe you'd know if top your

2:21:57 ↗ head this isn't I just just to put this

2:21:59 ↗ in another I think in an important

2:22:01 ↗ perspective as well as what this rate

2:22:03 ↗ you know that this rate is what it is

2:22:05 ↗ but it's also only about 13 percent of

2:22:09 ↗ our revenue mm-hmm and in in I was just

2:22:12 ↗ looking back into them in the mid-year

2:22:14 ↗ report yeah you have it in the narrative

2:22:17 ↗ well we've we've collected what I've got

2:22:20 ↗ in the narrative here is not the

2:22:23 ↗ percentage of our total our overall

2:22:26 ↗ revenue so that's something that we can

2:22:31 ↗ add the the chart and you know it's more

2:22:34 ↗ just yeah the you have this in here you

2:22:39 ↗ compares with the other cities and

2:22:41 ↗ that's interesting and and we have a

2:22:45 ↗ significant amount of retail sales tax

2:22:48 ↗ for example not everybody has the same

2:22:50 ↗ mix so that that's that's it's

2:22:55 ↗ interesting to compare but we're not

2:22:57 ↗ really but II you know we have to do it

2:23:00 ↗ I think it only makes sense if you know

2:23:04 ↗ the entire makeup what's the president

2:23:07 ↗ yes I wanted to add to this too because

2:23:10 ↗ the one we're looking at this

2:23:12 ↗ information is that the city portion

2:23:14 ↗ includes the excess debt levy and so one

2:23:18 ↗ thing to note is that another community

2:23:20 ↗ may have have had voter approved excess

2:23:25 ↗ levies go forward they may have opted to

2:23:28 ↗ do a lid levy lift they may have opted

2:23:32 ↗ to do utilize all of their bank capacity

2:23:35 ↗ so so this this tells a story of

2:23:39 ↗ everything that that a community has has

2:23:42 ↗ determined to do and when we compare

2:23:44 ↗ those communities and so I just wanted

2:23:46 ↗ to point that out is that this is the

2:23:47 ↗ the total city portion of all the

2:23:50 ↗ different levies that and the the

2:23:55 ↗ impacts to their levy that those

2:23:57 ↗ communities have chosen do it thank you

2:24:03 ↗ for that clarification

2:24:05 ↗ so then we move on to page 123 I just

2:24:09 ↗ wanted to give a council the council a

2:24:11 ↗ breakdown of our sales tax it goes to a

2:24:15 ↗ variety of different places you can see

2:24:17 ↗ that the city of Issaquah does not

2:24:19 ↗ collect the the the total 10% general

2:24:23 ↗ sales tax so we collect a small portion

2:24:26 ↗ just like the property tax it goes to

2:24:29 ↗ other entities then we put in some

2:24:32 ↗ information - about our our total sales

2:24:35 ↗ tax as well as a history of sales tax by

2:24:38 ↗ some of those major categories there's a

2:24:42 ↗ quite a number of different categories

2:24:45 ↗ of sales tax that we monitor and receive

2:24:49 ↗ and it's all over the board but the

2:24:53 ↗ major portion is the retail sales tax

2:24:55 ↗ portion then we move on to information

2:24:59 ↗ background information about our

2:25:01 ↗ business and occupation tax you can see

2:25:03 ↗ there all of the different tax rates

2:25:05 ↗ again the tax rate was was changed in

2:25:09 ↗ 2015 so you can see how we look at and

2:25:14 ↗ how we audit those bno tax returns and

2:25:18 ↗ those thresholds for whether or not

2:25:20 ↗ someone has to file a tax return

2:25:23 ↗ quarterly filing is at 25000 an annual

2:25:28 ↗ filing is at a hundred thousand and then

2:25:31 ↗ providing some historical information

2:25:33 ↗ and forecast

2:25:40 ↗ keep going moving on to page 125 at the

2:25:44 ↗ bottom is information utility taxes and

2:25:46 ↗ those are the taxes that we charge on

2:25:48 ↗ electricity natural gas so again that

2:25:51 ↗ forecast of all of the different

2:25:53 ↗ categories of utility tax and then on

2:25:55 ↗ the next page 126 shows a historical

2:25:59 ↗ comparison by the type of utility tax

2:26:03 ↗ that the city collects we also have

2:26:06 ↗ included information about building

2:26:08 ↗ permits engineering and plan check fees

2:26:10 ↗ at the bottom of page 126 and just want

2:26:13 ↗ to know this was a question last year

2:26:16 ↗ but we're certainly keeping it in

2:26:17 ↗ because there was a question about plan

2:26:20 ↗ check fees dipping and an engineering

2:26:22 ↗ fees increasing and this was primarily

2:26:26 ↗ due to some in 2014 and 16 some of large

2:26:30 ↗ multifamily projects in Highlands and

2:26:34 ↗ well in the valley floor to show you

2:26:37 ↗ that again like I stated this is a hard

2:26:40 ↗ one to predict and we do our best to

2:26:43 ↗ monitor what's in the pipeline and put

2:26:45 ↗ that into our forecast and budgets

2:26:51 ↗ shared revenues then is on page 127

2:26:55 ↗ shared revenues include our liquor

2:26:57 ↗ license our liquor profits and and

2:26:59 ↗ marijuana profits and just to show you

2:27:02 ↗ where where we have been and how we the

2:27:06 ↗ dollar amounts that we have been

2:27:08 ↗ collecting tell us remember hunt I

2:27:13 ↗ actually have a question about the

2:27:15 ↗ previous page the figure four with the

2:27:18 ↗ building permits engineering and plan

2:27:20 ↗ check you mentioned that it's hard to

2:27:23 ↗ predict these I also is it safe to say

2:27:27 ↗ that they're not tracking with each

2:27:28 ↗ other you you don't see the same trends

2:27:31 ↗ with you can't really predict what's

2:27:34 ↗ gonna happen with the plan check or with

2:27:37 ↗ building permits and they're just sort

2:27:39 ↗ of independently changing it looks like

2:27:47 ↗ yeah listen I just want a question is

2:27:50 ↗ there there they don't they're not

2:27:51 ↗ really they're not following a trend

2:27:54 ↗ with each other they just follow

2:27:55 ↗ different trends for each of those these

2:28:06 ↗ that's not I guess it's not really

2:28:08 ↗ question it's just I I would have

2:28:09 ↗ thought that they would have a

2:28:11 ↗ relationship with each other where

2:28:12 ↗ they're correlated or something but they

2:28:14 ↗ seem to not be they do it's a little

2:28:18 ↗ funky on this page I think you're seeing

2:28:21 ↗ the impact of the moratorium here so

2:28:23 ↗ they do sort of track until we hit that

2:28:26 ↗ that moment in time to some degree

2:28:29 ↗ there's also lag

2:28:30 ↗ so you'll typically you get the plan

2:28:35 ↗ check and then the building permit so

2:28:41 ↗ they do they they typically follow kind

2:28:44 ↗ of similar pattern but I think we've had

2:28:46 ↗ some weirdness with our moratorium

2:28:50 ↗ impact and and that's why 2017 was so

2:28:56 ↗ difficult for us we tried to be very

2:28:59 ↗ conservative in our estimate and

2:29:00 ↗ actually had more in the pipeline that

2:29:03 ↗ proceeded faster than we had expected so

2:29:08 ↗ that's really the strangeness I think

2:29:11 ↗ you begin to see play out in 2016 and

2:29:14 ↗ 2017 I just like that there was a year

2:29:19 ↗ that we run in $50 in engineering of

2:29:22 ↗ inspections it just makes you wonder

2:29:27 ↗ what was that $50 any other questions

2:29:34 ↗ the homestretch

2:29:38 ↗ I think your mic is your mic not about

2:29:44 ↗ that on page 128 there's a this is the

2:29:48 ↗ some similar information the council

2:29:50 ↗ might have seen for information purposes

2:29:52 ↗ only

2:29:53 ↗ these are alternative revenue options

2:29:56 ↗ that may be considered we talked about

2:29:59 ↗ that earlier about a new source of

2:30:01 ↗ revenue was in one of the scenarios in

2:30:04 ↗ the financial model but it is hoped to

2:30:07 ↗ give the council a very brief background

2:30:09 ↗ about some of these alternative revenue

2:30:13 ↗ options there is certainly more

2:30:15 ↗ information certainly about any of these

2:30:17 ↗ revenue options and as we go forward

2:30:21 ↗ through the budget discussions certainly

2:30:23 ↗ would would bring forth more

2:30:26 ↗ comprehensive review of a source should

2:30:28 ↗ the council direct the administration to

2:30:30 ↗ do so all right questions all right

2:30:39 ↗ does administration have any closing

2:30:42 ↗ comments for us this evening does anyone

2:30:46 ↗ in council have any comments I'm

2:30:48 ↗ something of a winter's day

2:30:49 ↗ thank you toilet I think I'm gonna ask a

2:30:55 ↗ question of the administration that I'm

2:30:56 ↗ gonna ask a question of you the the

2:30:59 ↗ fiscal model summary the baseline sarios

2:31:02 ↗ a b c and d you've indicated tonight

2:31:07 ↗ that you will be using this information

2:31:13 ↗ some i mean and maybe going forward did

2:31:17 ↗ you just explain what what you were

2:31:19 ↗ talking about there I'd like to hear

2:31:21 ↗ that and then actually so I'm gonna let

2:31:23 ↗ Tola know what I'm gonna ask him as well

2:31:25 ↗ so Tola

2:31:26 ↗ it seems to me that that model and what

2:31:29 ↗ we've assumed in there are all big is is

2:31:33 ↗ there's a pretty big deal it's hold

2:31:36 ↗ documents a big deal Jen but that part's

2:31:38 ↗ a really big deal and and if some of us

2:31:43 ↗ I know you know Ryan

2:31:44 ↗ bill Vikki haven't seen it before at all

2:31:48 ↗ but it would be good not to go away

2:31:51 ↗ tonight without getting at least some

2:31:53 ↗ type of reaction to what was proposed

2:31:58 ↗ here or or or what it's not really a

2:32:00 ↗ proposal but what's in this model and

2:32:02 ↗ what it might be from everybody I'd like

2:32:03 ↗ to get because we spent a lot of time on

2:32:05 ↗ this and the ad hoc committee I just

2:32:07 ↗ seeing it for the first time I'm just

2:32:09 ↗ kind of wondering if they have any

2:32:11 ↗ reaction or care the concerns or

2:32:13 ↗ comments and and and I thought before we

2:32:16 ↗ left tonight to get that would be good

2:32:18 ↗ but I'd also like to hear a little bit

2:32:19 ↗ more how the administration was it wants

2:32:21 ↗ to use this information so there you go

2:32:29 ↗ okay so one of the things that so what I

2:32:35 ↗ what I would like to do to honor that is

2:32:39 ↗ I would like to offer council members an

2:32:43 ↗ opportunity to summarize how this

2:32:46 ↗ information they think will what

2:32:51 ↗ questions it may address that we want to

2:32:54 ↗ bring up in the budget process but I

2:32:56 ↗ also want to make a mechanism where

2:32:59 ↗ people can alternately if they have

2:33:03 ↗ feedback that they want to provide in

2:33:05 ↗ writing this week to the administration

2:33:07 ↗ they could do that and the

2:33:08 ↗ administration could come back to us

2:33:10 ↗ because I know some of us are more

2:33:11 ↗ comfortable speaking extemporaneously

2:33:13 ↗ and some people are not so I want to I

2:33:16 ↗ want to provide both of those mechanisms

2:33:17 ↗ and make sure people don't feel like

2:33:19 ↗ they would have to do it tonight they

2:33:21 ↗ could also do it in if they wanted to

2:33:23 ↗ after after sleeping on it and thinking

2:33:26 ↗ about it a little further I like the

2:33:30 ↗ idea of us having an opportunity to

2:33:33 ↗ provide that feedback and I've sort of

2:33:34 ↗ already done that myself personally

2:33:43 ↗ so I think from administration's

2:33:45 ↗ standpoint we were just eager to share

2:33:48 ↗ this information so you have a better

2:33:50 ↗ sense of the overall financial health of

2:33:52 ↗ the organization and you asked you know

2:33:56 ↗ how might we use this information going

2:33:59 ↗ forward and I think we have a we have a

2:34:02 ↗ couple places at least coming up soon

2:34:05 ↗ we're having this background will help

2:34:08 ↗ us in facing some decisions so one is

2:34:12 ↗ with the budget amendment that is coming

2:34:14 ↗ up majority of the budget amendments are

2:34:20 ↗ items that have already been approved by

2:34:23 ↗ council and you've directed us to

2:34:25 ↗ incorporate those but when we bring it

2:34:28 ↗ back to you as a package it looks like a

2:34:30 ↗ big number so this will help you put it

2:34:33 ↗ into context to some degree and we are

2:34:37 ↗ in the midst of developing the 19 budget

2:34:41 ↗ I think having this background

2:34:43 ↗ information will allow you to maybe get

2:34:47 ↗ a visual on how what we will propose for

2:34:53 ↗ 2019 compares to what's in the forecast

2:34:55 ↗ let's take an example of that might be

2:34:58 ↗ the debt service level we might propose

2:35:03 ↗ having greater debt expenditure or we

2:35:06 ↗ might propose adding more staffing

2:35:09 ↗ resources than what was depicted here

2:35:12 ↗ and you might be able to kind of scale

2:35:14 ↗ up and understand what the longer-term

2:35:18 ↗ impact of that is I think on the

2:35:23 ↗ scenarios that we gave you we are hoping

2:35:27 ↗ to get some reaction whether it's

2:35:30 ↗ tonight or some point in the near future

2:35:32 ↗ so that we can bring forward a tangible

2:35:36 ↗ proposal a direct proposal for you on

2:35:38 ↗ how to meet some of the community needs

2:35:41 ↗ that you've expressed whether that's

2:35:44 ↗ transportation or something else as

2:35:47 ↗ council president Mart's stated there is

2:35:52 ↗ an

2:35:53 ↗ standing directive to the ad hoc Finance

2:35:56 ↗ Committee to come back to the whole

2:35:58 ↗ council with the recommendation on how

2:36:01 ↗ to fund the unfunded transportation

2:36:05 ↗ projects and so we're trying to be

2:36:08 ↗ responsive to that as well deputy

2:36:15 ↗ council president impetus first of all

2:36:19 ↗ Jan and everyone who worked on this

2:36:23 ↗ thank you for for all the hard work and

2:36:27 ↗ everything that has gone into this I

2:36:29 ↗ would say I just wanted to give a little

2:36:32 ↗ bit of initial feedback and then if I

2:36:34 ↗ have some other thoughts all follow up

2:36:36 ↗ via email but having the the modeling

2:36:40 ↗ and the ending fund balance baseline

2:36:43 ↗ with the different scenarios especially

2:36:45 ↗ as we're talking about transportation is

2:36:48 ↗ really helpful to me being able to look

2:36:51 ↗ at that and think about the different

2:36:52 ↗ scenarios and and try to I think it just

2:36:56 ↗ helps my brain anyway to think about

2:36:58 ↗ those different scenarios especially

2:37:00 ↗ before something comes forward I did

2:37:03 ↗ have the question about that that we

2:37:06 ↗ went straight to recall it traffic

2:37:08 ↗ instead of transportation here but that

2:37:10 ↗ we went straight to that so better

2:37:12 ↗ understanding that was good we asked a

2:37:16 ↗ few questions around those assumptions I

2:37:19 ↗ always feel like when you're working

2:37:21 ↗ with models and assumptions it's really

2:37:24 ↗ good to get a lot of pushback on the

2:37:27 ↗ assumptions I think it gives you a

2:37:29 ↗ better product in the end so I was glad

2:37:31 ↗ that we had a conversation around that

2:37:33 ↗ so I just wanted to say overall having

2:37:36 ↗ having it modeled this way and and being

2:37:40 ↗ able to look at that is helpful for me

2:37:45 ↗ other comments

2:37:51 ↗ council member hunt thank you also for

2:37:56 ↗ all of the work that went went into this

2:37:58 ↗ so this is the first time that I've been

2:38:01 ↗ looking at the budget and we're looking

2:38:04 ↗ at the finances in such detail and I

2:38:06 ↗ think for me the the thing that I want

2:38:09 ↗ to look at in parallel with the model is

2:38:12 ↗ what's in our CIP because I think that

2:38:14 ↗ that is the other piece to this and look

2:38:18 ↗ at here it is trying to tackle traffic

2:38:22 ↗ or transportation but as has been

2:38:25 ↗ mentioned by my fellow councilmembers

2:38:27 ↗ there are other things in the CIP too

2:38:29 ↗ and I think that that really affects how

2:38:33 ↗ I would think of the scenarios and then

2:38:36 ↗ I think that having the having the

2:38:39 ↗ scenarios where you just change one

2:38:41 ↗ variable it makes a lot of sense for

2:38:43 ↗ looking at how in the big picture how

2:38:47 ↗ changing one variable does change the

2:38:49 ↗ trend over time it might be as we have

2:38:54 ↗ more conversations it might be helpful

2:38:56 ↗ to have some more realistic detailed

2:39:00 ↗ versions of scenarios where if we if we

2:39:03 ↗ come sort of start narrowing down our

2:39:06 ↗ options and then think well if we did

2:39:08 ↗ this then we would probably start tuning

2:39:10 ↗ down this other lever at this point that

2:39:14 ↗ would also be helpful so I will be

2:39:17 ↗ looking at looking in more detail to try

2:39:20 ↗ to match up my understanding of this

2:39:23 ↗ model with the CIP councilmember Ramos

2:39:30 ↗ yeah this is great to start looking at

2:39:34 ↗ the budget in this way because one of

2:39:35 ↗ the concerns I've had as we've done

2:39:37 ↗ things in the past is we look at the big

2:39:39 ↗ budget and then we keep making these

2:39:41 ↗ amendments through the year which keep

2:39:42 ↗ adding a piece of the time of pieces

2:39:45 ↗ time as you just mentioned all of a

2:39:46 ↗ sudden we're gonna get an amendment

2:39:47 ↗ that's gonna come here and look like how

2:39:48 ↗ the heck we did we just approve all that

2:39:50 ↗ because it totals up quickly and it's

2:39:53 ↗ not and when we do that we're never

2:39:54 ↗ looking at the big piece we just keep

2:39:56 ↗ looking at these individual pieces which

2:39:58 ↗ which puts our perspective nothing in a

2:40:01 ↗ good way so this is a start

2:40:04 ↗ trying to look at that hole that big

2:40:06 ↗ picture and say compare back to the CIP

2:40:09 ↗ that's all great too but we have not

2:40:11 ↗ prioritized that list in in the totally

2:40:16 ↗ you know so as we look at that it's like

2:40:18 ↗ what would we do in in what order and

2:40:20 ↗ that would also make a difference to to

2:40:22 ↗ how we fund things in the long run as

2:40:24 ↗ well so the priorities do make a

2:40:26 ↗ difference to to that list as well and

2:40:29 ↗ and another thing that I guess because

2:40:30 ↗ I've heard it previously as we need you

2:40:33 ↗ know a transportation benefit district

2:40:35 ↗ to fund these things and this is shown

2:40:37 ↗ that there are some ways without adding

2:40:39 ↗ more money because I think one of our

2:40:40 ↗ most important duties is to take the

2:40:43 ↗ money we have now and spend it very

2:40:45 ↗ wisely and in places where we prioritize

2:40:47 ↗ it I think it's most important and

2:40:49 ↗ before we ask for additional funding so

2:40:52 ↗ that's that's showing that that gives us

2:40:54 ↗ more option than what I've heard

2:40:55 ↗ previously from s administrations so

2:40:59 ↗ that's a real good way to start looking

2:41:01 ↗ at those those things so to me

2:41:02 ↗ prioritizing what can you get done with

2:41:05 ↗ the resources you have protecting them

2:41:07 ↗ out over time before you start looking

2:41:09 ↗ at more and really the way we just do

2:41:15 ↗ our budgeting in a way that when we keep

2:41:17 ↗ adding pieces we have to somehow keep

2:41:19 ↗ keep the whole picture in mind versus a

2:41:21 ↗ little piece of the time a little piece

2:41:22 ↗ of the time and all of a sudden you

2:41:24 ↗ spent a few extra million dollars that

2:41:26 ↗ you weren't expecting this bin and that

2:41:27 ↗ that lets our budget way out of whack

2:41:30 ↗ when we when we're looking at the big

2:41:31 ↗ picture we're arguing sometimes down to

2:41:33 ↗ ten thousand dollars or something like

2:41:34 ↗ that and Ellison's something much bigger

2:41:36 ↗ comes buying it slides right in so those

2:41:39 ↗ are things I hope that we continue to

2:41:40 ↗ improve how we look at this budget

2:41:42 ↗ overall and then fiscal practices will

2:41:45 ↗ just keep getting better thank you

2:41:49 ↗ so so I'll circle back this is this is

2:41:54 ↗ incredibly valuable information and

2:41:55 ↗ thank you very much it's super important

2:41:58 ↗ that that people understand this

2:41:59 ↗ information and that's why you know I

2:42:02 ↗ apologize if I if I pick some

2:42:04 ↗ engineering nits and some individual

2:42:05 ↗ slides I just want to make sure the

2:42:07 ↗ public understand it's because because I

2:42:08 ↗ think generally it tells a really good

2:42:10 ↗ story about our fiscal stewardship it

2:42:15 ↗ does this issue of

2:42:17 ↗ we track compared to inflation is a

2:42:19 ↗ thing I'm gonna really want to

2:42:21 ↗ understand going forward I have some

2:42:23 ↗ concerns I'm again I'm hoping that when

2:42:26 ↗ we look at it on a long timeline and

2:42:29 ↗ gonna put it in present dollars and all

2:42:31 ↗ that kind of stuff

2:42:31 ↗ that my concerns will will not you know

2:42:35 ↗ will go away you know I want to

2:42:38 ↗ reiterate I think the challenge coming

2:42:40 ↗ out of tonight is to talk about this

2:42:44 ↗ you know there's transportation and then

2:42:46 ↗ there's the other right and the a you

2:42:48 ↗ know I wrote down some stuff open space

2:42:50 ↗ we've had conversations recently about

2:42:52 ↗ spending money on open space we've got

2:42:55 ↗ you know recreational facilities every

2:42:58 ↗ so often we get letters from people that

2:42:59 ↗ want us to build a new pool and we're

2:43:01 ↗ not gonna do that any time soon but

2:43:03 ↗ that's in the mix out there city

2:43:06 ↗ facilities and where the city what the

2:43:08 ↗ city looks like 20 years from now for

2:43:10 ↗ infrastructure human services things

2:43:13 ↗ that we want to do services to provide

2:43:15 ↗ for the community workforce housing is

2:43:17 ↗ something that at times cost money

2:43:19 ↗ you know Senior Center do we want to

2:43:21 ↗ invest money and in running a Senior

2:43:23 ↗ Center ourselves that's a that's a

2:43:25 ↗ smaller one but a one that's coming up

2:43:27 ↗ in the near term and we have to factor

2:43:29 ↗ all these things in when we look at that

2:43:32 ↗ coming up with a curve that's that's

2:43:34 ↗ beautiful and just touches a limit that

2:43:37 ↗ we set for ourselves we want to make

2:43:38 ↗ sure that those other factors although

2:43:41 ↗ no one of them probably you know raises

2:43:44 ↗ people's blood pressure as much in the

2:43:46 ↗ community as traffic put together

2:43:47 ↗ they're also additional important

2:43:50 ↗ factors for making our city run well so

2:43:52 ↗ I'm not sure exactly how we broaden the

2:43:54 ↗ conversation to include those topics but

2:43:57 ↗ we'll figure it out and we'll do it

2:44:00 ↗ any other comments and I do want it I

2:44:03 ↗ don't know if we have anybody from the

2:44:04 ↗ public here tonight but if we do we

2:44:05 ↗ could do we have anybody yeah all right

2:44:08 ↗ we don't have to worry about public

2:44:09 ↗ comment all did you yeah thank you

2:44:14 ↗ regarding the the scenarios I'm gonna

2:44:18 ↗ repeat myself somewhat but it is so I've

2:44:21 ↗ had the opportunity to sleep on it for

2:44:23 ↗ many moons I'm not just hearing it for

2:44:25 ↗ the first time we heard it in the

2:44:26 ↗ ad hoc committee and seeing it again

2:44:29 ↗ tonight there I think Vicki touched upon

2:44:34 ↗ something I think I saw some non income

2:44:36 ↗ heads we see we think we think we think

2:44:39 ↗ this strategy we pick a strategy to go

2:44:42 ↗ forward with we will perhaps refine some

2:44:45 ↗ of the estimates that makes sense to me

2:44:48 ↗ but at at this level I think I think

2:44:51 ↗ what we're looking for some type of

2:44:52 ↗ policy direction with this granularity

2:44:54 ↗ in this type and level of data that we

2:44:57 ↗ have right now so so that I think that's

2:45:00 ↗ that will happen well we'll get more

2:45:03 ↗ rule refined things once we focus in on

2:45:07 ↗ a scenario that we want to try to

2:45:08 ↗ execute on I'm still in favor of I do

2:45:12 ↗ like the idea of using that capacity

2:45:16 ↗ that we have and saying we're going to

2:45:19 ↗ fund this out of our existing revenues

2:45:21 ↗ and we're gonna we're going to figure

2:45:22 ↗ out how to make this work and so that

2:45:24 ↗ and that so that so that cenario see

2:45:28 ↗ that we've already discussed I just want

2:45:31 ↗ to reiterate I think that that is I'd

2:45:33 ↗ like to see us go on a path and try to

2:45:36 ↗ do that and and I think what I heard

2:45:39 ↗ that does say there's got to be some

2:45:43 ↗ revenue we have to somehow fund a

2:45:47 ↗ greater debt obligation and the TBD

2:45:49 ↗ still maybe one of the tools for doing

2:45:51 ↗ that but not anytime soon

2:45:53 ↗ if we follow scenario C any other

2:46:00 ↗ comments o deputy council president

2:46:04 ↗ batiste

2:46:05 ↗ so that this comment may be a little bit

2:46:08 ↗ down in the weeds but I'll just go ahead

2:46:10 ↗ and talk about it the as we talk about

2:46:15 ↗ whether this is for transportation or or

2:46:18 ↗ it's going to include other things as

2:46:20 ↗ has been talked a little bit about when

2:46:23 ↗ we when we look at scenario B and within

2:46:28 ↗ the modeling we bring it all the way

2:46:30 ↗ down to the 15% reserve line that what

2:46:36 ↗ what sticks out to me is

2:46:38 ↗ if we're if we're wrapping everything

2:46:40 ↗ around transportation and we go all the

2:46:42 ↗ way down to that reserve line and then

2:46:45 ↗ what about other things that might come

2:46:47 ↗ up so just within the modeling it might

2:46:50 ↗ there might be the ability to play with

2:46:52 ↗ the numbers a little bit so it's not to

2:46:54 ↗ being all the way down and scenario B to

2:46:56 ↗ the 15 percent reserve line so just a

2:46:59 ↗ thought so all for myself a third

2:47:08 ↗ comment I think that I want to come back

2:47:16 ↗ to this idea that if we know what we

2:47:19 ↗ need to do I think that one of the

2:47:22 ↗ things we should consider as a council

2:47:24 ↗ is whether we go to the public sooner

2:47:28 ↗ rather than later I think that on the

2:47:31 ↗ last bond I don't think the public

2:47:35 ↗ necessarily saw the direct coupling of

2:47:39 ↗ what we wanted to do to improve to

2:47:42 ↗ improving transportation in and through

2:47:44 ↗ the city and I think that if we came up

2:47:47 ↗ with a killer package of things that

2:47:51 ↗ everybody looked at and said oh yeah

2:47:54 ↗ that's gonna make traffic better

2:47:55 ↗ tomorrow right

2:47:56 ↗ like the roundabout in front of in front

2:48:00 ↗ of target makes better banks traffic

2:48:02 ↗ better right now right it's better safer

2:48:05 ↗ through that area now than it was before

2:48:08 ↗ that roundabout was there there's

2:48:10 ↗ there's projects like that so I I just

2:48:13 ↗ want to I don't want to leave it unsaid

2:48:16 ↗ that there's an option going forward

2:48:17 ↗ that would be putting together like I

2:48:19 ↗ said this killer package of

2:48:20 ↗ transportation benefits and putting in

2:48:22 ↗ front of the public that I think we you

2:48:27 ↗ know we did well on a package that I as

2:48:30 ↗ I said had some confusion had an active

2:48:32 ↗ no campaign if we had something that the

2:48:34 ↗ public thought Janet that's perfect

2:48:36 ↗ that's what we need

2:48:38 ↗ I think we'd find the other 5% so I

2:48:40 ↗ think it needs to stay in the mix in

2:48:42 ↗ consideration I also think that before

2:48:44 ↗ we did the parks bond and this was what

2:48:48 ↗ five years ago something like that we

2:48:51 ↗ did some polling to find out priorities

2:48:53 ↗ around bonding specifically right and so

2:48:56 ↗ when we did the bond and we said five

2:48:59 ↗ million of it was going to be for

2:49:00 ↗ renovating the pool and five million of

2:49:03 ↗ it was going to be for confluence we had

2:49:05 ↗ some confidence that there was support

2:49:07 ↗ for that in the community and it's one

2:49:08 ↗ of the reasons why we just went to the

2:49:09 ↗ city we didn't try to create a benefit

2:49:11 ↗ district that would include the larger

2:49:14 ↗ area because those voters told us to go

2:49:16 ↗ pound sand and so I wonder if there's an

2:49:19 ↗ opportunity as we move forward to get a

2:49:22 ↗ better feel as to the community's

2:49:24 ↗ appetite for what they would want to see

2:49:26 ↗ potentially bonded out to the public

2:49:29 ↗ before deciding what would go into that

2:49:32 ↗ quote-unquote killer package so again

2:49:38 ↗ other additional comments thoughts going

2:49:43 ↗ once

2:49:43 ↗ I think twice I guess we don't have to

2:49:46 ↗ do it like public comment we don't have

2:49:47 ↗ to ask three times with that we are

2:49:49 ↗ adjourned thank you very much everyone

2:50:02 ↗ you

Approved minutes

Extracted from the next meeting's packet, where this meeting's minutes were approved as a consent-calendar attachment.

Open PDF

Attendance

Council / Members (7)

Mariah Bettise

Stacy Goodman (Arrived at 6:25 PM)

Victoria Hunt

Tola Marts (Mayor Pro Tem)

Bill Ramos

Chris Reh

Paul Winterstein