Quarterly

I'd like to welcome everyone to our May quarterly. Uh we're going to take a few hours today and cover a lot of important topics. And without uh any delay, I'm going to turn it over to our interim town manager to get us started.

Thank you, Mayor and Council. Thanks for being here today. Um, obviously we have a lot to go through on the agenda and we're I'll just run through it very briefly. Don't want to talk u give a couple introductory comments. We're going to start with the bannual survey results, then our employee survey results, get a Q3 financial update, uh, and then go into the manager's uh, rec recommended operating capital budgets, and uh, if we have time, do maybe one miscellaneous item. And I believe we do have a close session, Lisa. Yep.

And before you go any further, I've already messed up. I'm supposed to check make sure Lori can hear us and we can hear her. Lori, can you hear us?

I can. Thank you so much.

Sorry about that.

Okay, Lori.

Back to you.

Yep. Thank you. Thank you. Thanks for doing that. We'll all remind you that Lori's on the

in the ether somewhere. All right. As we go. So, thinking about the budget this year and kind of grounding the budget this year. Um, while I know in my career at Kerry, I've been around um a lot of budget development, but I've never had one that was recommended or had my name attached to it. But it got me thinking that you all as a council haven't either. Um, so while um some on council have been part of budget adoption approvals in the past, um I know two have not and therefore this council has not. So, I want to thank you for all your input uh to this date and um I know we've talked about the budget a lot. So, today is kind of a a passing of the torch bit of an analogy where staff has been working on it and quite frankly is to look around at all the staff we have. Um I couldn't have had a budget to recommend to you without this wonderful

team and then they all have a support team that that delivers it to them. And as Stacy walks through her presentation, she'll just uh uh continue to show you how much work they've done to get get to where we are now. Um speaking of where we are now, you started at your retreat in February and you did a quadratic voting exercise and this is y'all's results where community safety ranked uh number one, but also new capital, high performing staff, uh affordability, and maintaining service levels. So Stacy walks through budget presentation. She's going to show you how how it was built um upon each of those priorities and then we'll also walk through briefly um what boards and commissions and some others in the community gave results on those as well. So the budget is really grounded on not only your priorities uh feedback we've had from the public obviously I'd say survey input. So, it's fitting that we have our bionial survey that shows how citizens are satisfied with the community. And then you have um our employee satisfaction survey or input uh engagement effort that they have. So, we've as I've been talking to employees, you're you're going to see some things that are in there that were a bit of a hedge. Um obviously, you'll see them in in the results, but as I've been talking to employees is things that I feel we need to do. Uh obviously merit positions and other things that help to that. And then uh obviously the manager and council feedback that you have today. Love this chart. You'll probably see it again in in a different slide. But what um you know how you have competing values anytime you develop a budget with anything we do and what people want. Um you've seen this many times now, but you know you cannot if you want stable services and lower taxes, you've got to have more density. If you want stable services but lower density, you've got to have higher taxes. If you want low density but lower taxes, you have to have service cuts. Um what does everyone want? What's in the middle that it's very hard to have? I think this um this vin diagram kind of [snorts] is just

representative of when we're talking to um folks in the community um and having these kind of competing party conversations of what folks want because most of the time and this was true for me at the budget input session. I didn't talk to anyone that came up to me and told me what they wish to have cut. I did talk to numerous folks that came to me and talk told me things that they wish to continue to have in the budget. The backdrop to the budget this year, uh, and this was something actually I think John Collins sent this to a group of people, but it's on everyone's minds earlier in the week, um, is the backdrop of any budget is the economy and kind of the national picture, if you will. And this was, uh, from the, uh, Bureau of Labor Statistics, uh, recently, and it just said that year-over-year, so looking back at the, uh, last year, that the consumer price index, um, and inflation is still at 3.8 eight or very close to that. And you can kind of see where fuel and oil and gasoline, those types of things are um way up and almost everything we do is um really derived on that. We certainly have new vehicles um you know, our health plan, you get physician services and things like that. I doubt we're eating too many cereals and break uh uh bakery goods at the town of Kerry. So that there are probably even upper pressures more than this when we think about delivering projects and uh services that we do. So that's one of the backdrops. The other one that's something that we're seeing um and I know Shelley, Lisa and others are keeping eye on this and I could have I could have given you dozens of articles and just uh chose a few but the pressures from the general assembly. I thought this one was interesting from Axios. Um, I highlighted in the bottom why it matters. Because property taxes help fund many of the critical functions in local government that we perform. Uh, from operating public schools to paying for police officers and firefighters to building sidewalks and maintaining parks. Um, it's interesting that almost everything you see, including this next

one, was a bulletin from the league that they've passed around. Unfortunately, my my highlighting got a little crazy there and you can't see it, but it says the same thing. um what property pack taxes pay for. Um I even thought this was an interesting nugget with regards to um local taxpayers with their voting power can do can can technically remove locally elected officials when they believe local property taxes increases are not justified. Um was just one of the nuggets of kind of how you take away local controls. Um because I think we you've said it, I've heard I've heard you all say it. Um, you know, most often, uh, local decisions should be ma made locally by the folks that are voted in locally that know what their constituents want them to do. And, um, and we trust that you do that from the folks that elected you to office. Um, so to take that out of our hands is going to be a great deal of pressure and we will continue following that because this paints a picture of our revenue options and how limited they are. I've talked about this in the past. Um all uh the bulk of our revenues come from ad voluorum taxes, property taxes and at 61%. It's been that way for quite some time. Sales tax is um somewhat you know large 20%. But we have limitations in anything that we can do in any of those arenas and all of that is set uh by the state government. So if any if they take anything away and don't add a way to produce more revenue sources um our our pressures and our pressures on the budget will just continue to be uh greater. of interesting notes um where kind of you read and who who's this after who might be um getting at. This was a article by the News and Observer um somewhat recently, but they um they and I'll get to it on the next slide, but they referenced another article which cities in North Carolina have the highest property tax burden. Hint, it's not Raleigh or Kerry. Um it's largely in the rural areas. And I looked up where I'm from in Eastern North Carolina. Um,

and I I'll just leave it at who I won't say who it is, but um, their tax rate is 84 cents on the 100. Um, and their average home price is $250,000. Um, ours is $650,000, but our tax rate is considerably lower. And you can do the math and the tax they pay is almost the same. And I just thought that was kind of interesting when it comes to um you know what what and and I can speak to the services they provide and probably the quality of life is a lot less than it is in Kerry, North Carolina. The article went on to say because it was referencing something from Smart Assets that looked at property tax burdens by cities around America. and um and it got to this list uh that says property taxes as a percent of income and Patterson, New Jersey was almost 10% of your property tax to income. And you can go through the list and you have to go all the way down uh to get to number 254 on the list with Kerry, North Carolina and almost uh every um large municipality or urban municipality in North Carolina. We're at a tax burden of 2 uh 4. And I believe the one of the lowest in North Carolina was actually at 2.3 and that was uh Charlotte's Concord and Winston Salem were um cited as being some of the lowest in North Carolina at a tax burden of 2.3. So, I think it's just very very interesting um as uh you know, every uh resident and folks around around North Carolina and certainly in Kerry read more about this and just get educated about what's going on at the state local level so you can be informed as to if this has become to become a constitutional amendment in the fall because what does it mean to us and I think this is our charge keeping Carrie Carry. Um, this is what I believe has been my entire career here and uh as what most most folks will put kind of into the high quality of life that you have in Carrie. So I just listed the superlatives that we have in 2026 and

certainly you can think about it in a term of if we're not able to fund things um that make our uh make Kerry the wonderful place that it is um this list will start going down and I think you'll feel the quality of life to go down. Um, so with that, this year we're introducing this concept of smoothing. Uh, y'all have heard about this in kind of the utility fund or [snorts] uh with our our rates for utilities, but introducing a concept of smoothing with the operating budget, especially on the general fund so that um you can implement adjustments over time so they're more predictable. Something that we've talked to some of y'all in small groups. And this is the first of a three-year plan to address staffing, address staffing needs, especially in public safety. You're going to hear from both chiefs today talk about um their impacts on this and thoughts on this. And then um property tax increase is recommended in this year's budget and there will likely be tax increases needed in the se uh next several years of budgets to make sure that we can deliver the services that folks in this community um expect to have delivered. And I think that's kind of a good segue to what you'll hear very shortly from Susan and Dr. Baker about the um bianual survey. And I'll just want to say as we get into this is the budget team this year uh was a little bit of a cobbled together staff. Um and I did want to say thank you to that staff. I think uh Margaret is here today in the back and I believe this is actually maybe her second to last day with us and she is going to a public policy job at the state um starting in a few weeks. So we thank her uh for her service and especially dedication during this time. But Julie Collins from the parks department, John Holloway from utilities, we've had Will Hagar uh from 311, Robbie Liippard from public works, Elizabeth McCay who's uh our our lone remaining budget and management analyst. Uh Margaret will be moving on to bigger and better things. And then thank you Stacy Titi who's assistant town manager

now going back to her roots in budgeting that she started some 20 odd years ago from now. And uh I know she's greatly looking to if budget is passed and we fund positions uh for a budget director that next year you'll have a new budget director that I hope to find one that has done something in rate smoothing and many cities do where they look at budgets not as a just a one-year uh thing but a multi-year um kind of operating cost to bring you that. So with that, unless there's any questions from my intro, I'd love to turn it over to Susan and Dr. Baker and come and give us the banial survey results uh from this year. Thank you.

Thank you, Ross. Hi, council.

Hello.

Oh, good. You're still awake. We're doing [laughter] we're doing well so far. I am so um pleased to be here to help kick off this quarterly meeting with the results of the 2026 bianial survey. Now, you're going to see throughout this uh report or presentation, you're going to see the word citizens. Sometimes we're still transitioning over to resident, which we know you prefer. We'll get there. Thanks for a little bit of grace on that. Today, I want to recognize Carrie Parville, who uh without whom over the last nine months uh we would not have this survey. Carrie handles the nuts and bolts, including working with Dr. Baker. Kevin Baker uh has uh is the scientist behind the science that is this survey and he has been working on this survey as our partner every two years since the year 2000. We're just going to do a couple of touch points before we get to the actual results. There'll be uh Kevin will go over the results of every question. He will answer questions that you have until we run out of our time. Uh and uh Kevin's available to us anytime for further questions, anytime you want to talk to him. Uh a little bit about the history of the survey. It's important to

understand where we've been and that goes back to 1998 when none of you were council members. Uh but some of us were staff members. And the council in 1998 said uh they wanted to do three things, at least three things. One of the things that the council said was that they wanted to go on television and they challenged staff to build, operate and maintain a government access cable television channel which is still operational today even if I'm the only person in the room with cable television. We are also like we also live stream and it's happening right now since 1998. we have not missed one council meeting uh on uh in that service. A second thing that the council then said that they wanted to do was to create a citizen advisory board that would help them and the staff think through communications issues, technology issues. And so the council created what mayor?

ISAB, information services advisor board.

And you know that because why?

I was the first chair

as a citizen. The mayor [clears throat] was a citizen agitator and advocate back in 1998. He [laughter] drove us crazy with his little website and questions and things and then he got elected. He was the first year of the ISAB and and uh why that matters is the ISAB um has has since the beginning uh been involved in this survey uh this formerly known as or I guess still today citizen um satisfaction survey. The survey itself also initiated by the council in 1998. The council wanted a way to um confidently [clears throat] measure the impacts that the town was making in transparency. It's a hard word for me to

say. The staff knows transparency, sunshine, uh information. How do we know we are making a difference? And uh the survey that we do today is done the same way that we did it in 1998. It is a telephone survey. We randomly select about 400 adults to represent um the adult population of Carrie and um we use scientific methodology so that the margin of error is less than 5%. And we ask um three kinds of questions, three buckets. One bucket is core questions that we've repeated every year or every two years. The survey is done every two years. Uh that would be things like how safe do you feel or what are the big biggest issues facing Carrie or how great is the staff at customer service? Another bucket of questions is those that we kind of flex in and out. Um, we used to ask, "How many of you have access to high-speed internet versus dialup internet?" Uh, and we don't ask that question anymore. At one point, there was a lot of conversation about whether pets should be allowed at emergency shelters. Mike Cooper will remember that. And so, we had a survey coming through about that time. And so, we asked the question of Kerry residents in order to help our friends in emergency management at Wake County come to some decision about whether pets would be allowed at some shelters. How many households do you think had pets?

70%.

70%. It was 50%. And I was very surprised at that time, but it was 50%. Of course, all of us asked involved with the survey had pets, but 50%. This year we asked a new question and

that was to get at artificial intelligence. Um many of you use AI in your correspondence. Um and there is a feeling that the town could gain great efficiencies using AI and communications. So we ask our residents how they would feel if we used that. Kevin will talk about those results. Third bucket of questions, demographics. age, race, education, years living in carry, all of that. So that's kind of what the survey looks like. One more thing to know about the survey, we are not part of some national survey group. We are not comparing ourselves against Marsville or Raleigh or Los Angeles or Milwaukee. Our survey has always uh been our own survey and we compare ourselves against ourselves every two years. So, we're not trying to see how if if Mars if our citizens like us better than Marsville uh citizens like them. That's just not what it's about. We get that feedback other ways like through those rankings that Russ was sharing with you um and how we compare with others. The last thing I want to say before I uh turn it over to Kevin uh is about Russ. We um used to always do this presentation and uh it was a big part of our uh letting citizens residents know that we had heard from them and we always did it in front of the council. But you wouldn't remember that. The only person here that would remember that's the mayor. That went away uh several years ago and it was important to Russ to bring it back as part of his effort at improving um our connection to our citizens. So, with that, if you don't have any questions for me, I'm going to turn it over to Kevin, Dr. Baker, so that he can um get to the survey results.

Thank you, Susan.

You're welcome, Kevin.

Um, Mr. Mayor, Councilman, good to see

you. Thanks for asking me here. I'm just give you a quick overview of what we did with the survey. And, uh, let's start out. There's a timeline. Okay, let's start with the actual results. Okay, we did 60 basically means that were compared to last year, 48 of them went up. That's 80% increase. 23 of those means, and this is what's impressive, were the highest the town has ever earned in any survey. And then if you go look at the grades, 27 grades improved, 25 were unchanged. Only four declined. I'll show you those in a minute. And then the overall average of our 33 service dimensions. That's the questions the core questions only given to like the fire department, police department, parks and wreck across um was 8.41. By the way, an 8.42 is an A. That's how close it is. And there's your grades. A+ 4 A 12 15 uh A's. Notice the lowest grade was just a B. Uh streets tend to get that one consistently. So we surveyed 400 people. Um that was give us a plus or minus 4.89%. uh we contact them randomly with with random assignment. The survey was 20 to 25 minutes long if you wanted to know and um overall we had a response rate of about 50 between 53 and 54% which is really good and to if you look at statistics or other nationwide surveys or even local surveys somewhere in the range of 30 to 40% is considered excellent response rate. So we did really well on that. the residents came through and answered. Wireless callers, again, there's not much in terms of landline, so 97.8% were wireless. There's an overall grade again. Now, let's go and see how we got there. Uh let's start out, well, let's first start with demographics. Age distribution, mostly between the 26 and 36 and 55. Uh there's your uh years in carry. Notice a pretty blend there, but notice the 20 plus the 218% were 20 plus year residents. And there's

your educational level level. You put those together about 73 a little over 73% have a college degree in this area. And then race, uh, 64% were Caucasian, Asian was 14.1, and both African-American and Hispanic were 81. uh income level uh high income level over 100,000 23.1 and 17.5 or better. And then for gender identity uh woman was 56.1 and man was 43.4 common in surveys as u more likely to get uh females answer the phone than males would be. And then the general uh town government staff let's start with that. Now, before I start out, you see where I didn't want you guys to have to look and find uh if it went up or not. So, I just put an arrow in for you. And then, if you see the orange there, that represents the highest score the town has ever earned. So, these would be uh means. So, starting out with grades, notice that six of these grades improved. And also, six of these were the highest ratings ever for the town uh government staff. They did a great job with it. The lowest overall grade was A minus. Notice the quality of customer service is the only one that really didn't get the highest mark, but it went from a B to an A minus. So, uh, very good. And then we also asked, this time, this is the first time we asked this question. Do you trust the government to do the right things for Kerry residents? And we asked for the town government, the county government, the state government, and the federal government. And we note that town of Kerry ended the highest at 6.46 46 was 69.3% above five. Five, by the way, would be the midpoint. And you come down, you got the county, the North Carolina, and the federal government finished uh lowest on that chart. And then let's talk about the cleanliness and appearance of uh parks, greenways, streets, median, roadsides, and bus shelters. Again, great job this time. Um four of the grades actually went up, and the three of them were the highest the

town has ever earned. uh the one that if you look at streets there it didn't go up but it the mean did go up and made it uh the highest that's ever earned on that and let's talk this is the one remember I said the lowest grade us tends to be streets for the maintenance of public areas the streets did earned the lowest but that's been going up as you can see from going from 2016 and on u and it this time earned the highest uh mean that's ever earned in the past and if you see that three of the grades went up and actually five of Those were the highest grades ever earned for maintenance of public areas. So very good traffic sign stayed an A minus and and signals also a B+. Okay. And then the police department um very good marks. Notice that uh four of the actual grades went up this time and none of them were the highest today. But when you're they're they're at a high level now already. It's sort of hard to get higher than those. Same thing with the fire department. And then you notice you see uh all most all A's and a few A minuses. So a great job. The competence went up from a B+ to an A minus this time. And then the fire department of course uh usually gets all A+es and u and they almost did. The courteous drop down from an A+ to an A and it's right on the borderline of being an A+. So [laughter] I wanted to say that it's a barely a move down. So uh they really should get another a A+. All marked in red right there. You'll see the ones that went down. This the second one that went down and the first one that went down. Parks and recreation. Uh, good job here. Parks and Rec already had high scores anyway in 24. And look what they've done this time. They've they've gone up and and welcoming is new. We didn't have that last year. We took inclusiveness out, put welcoming in. So, there's no comparison base for that one. And so, if you look down, you see two of the scores are the highest to date. That turns facility quality instructor coach. and the that's the only one that actually went up in grade was the instructor and coach, but they already had high score. There's no score below

an A on that chart. So, very good for parks and wreck. And let's take a look at solid waste. They also had really good scores this time. That has really improved. Notice that the uh five of those grades went up. And then of those, five also are the highest that's ever earned for solid waste. The lowest rated was this loose leaf collection. Notice it went up and it went from a B+ to an A minus. And an A minus is the lowest grade they earn. So, uh, that's excellent. And then, how about carries a place to live? No change there. Uh, 8.24 last year, 8.24 this year. A minus. And this one's a little needed little explanation of it. Notice that the mean went down, which you would assume meant that things are getting worse here. That's not true. Look at the worst percentages. They're exactly the same, 11.6. What happened was more people answered the same that used to answer better. So that's all that happened. So it's not showing it's worse. But we did ask the people that gave a lower score what their reasons were. And there they were pretty much in order. Traffic, overcrowded, cost of living, growth development, high taxes, and unaffordable housing. Okay. And then recommend carries place to live. These numbers all went up. Uh the yes percentage went up. the no percentage actually dropped from I think it was 51 to two and the may and that did go up by two uh 2% was 10.3 so really good there and let's take a look at overall quality of services about the same um it went from 766 to 768 it remains a B so about the same as what it once was uh the value for the services provided town government for the taxes paid that went down and went from a 7.03 03 to a 6.54 and that dropped the grade from a C++ to a C minus. That's your second one that went down. Okay. And then what's the biggest issue facing Carrie? That's almost unchanged. Just a couple little

minor changes. Growth, traffic, affordable housing, all up there in the top three. But if we look down, you'll see cost of living went from 26 comments up to 47 and moved up a spot. So the cost of living did jump up in the top five there a little bit. And the only really other change is the the town manager scandal which finished 10th this year. And then how safe do residents feel? Um pretty really good score here. This is the highest you've ever earned up to an 8.39 with 98.8% above five. So the feelings of safety here have really improved. I think it's going to show in the neighborhood stuff in a minute too. And then information sources. Word of mouth has continued to be the top information source overall and hasn't really changed at all. And if you look down the social medias, the the Facebook social media, blogs, email, they're some even less than half the impact. But you'll see they're the next line that you would communicate with them. uh traditional media, local television finished down a little ways and local magazines at the bottom, but your brochure and bud still had some impact and satisfaction with making information available to the residents. Really good job here. That went that mean went from 6.69 to 7.38 and was 78.6% uh uh above the midpoint. Five. Same thing occurred here for satisfaction and opportunities participate in the decision-making process went from 6.25 25 to 707 even bigger jump and 72 72.3% were above five. So both of those areas improved and let's talk about AI um using generative AI for communication with residents. The mean was 4.81. So a mixed bag here. The uncomfortable side was 37.4. The comfortable side with it was 31.4 and then another 31.2 or neutral with it. So it's sort of a mixed bag with how they feel about using that. We did get some comments that if a an

actual person was if they use this have an actual person you could contact in some of the uh open-ended questions. Now focus areas we call these focus areas areas that the town works on every year. One of the first one then is the job you're doing with recreational facilities mean went up 7.74 to 7.92 and so did the grade from a B to a B+ and then we asked them like the ones that any ways to improve it. just ask for everybody in that. One of the biggest things was add more sports and the major reason was uh most of the sports are full and they just can't get into a sport. And then they said expand the greenways and improve the parking. So let's look next at the job you're doing with environmental protection. That also went up from 7.03 to 7.31 and the grade jump from a C plus to a B minus. And then how about how effective is town council working to keep carry the best place to live, work, and enjoy? Slight increase in the mean from 6.99 to 707. No change in the grade. State a C plus. And the last one is the job the town's doing on planning and development. Pretty good jump there. Uh 6.52 to 6.79 and it went from a C minus to a C. So a little bit of improvement on that side. And then neighborhood characteristics and they were asking the people about their home neighborhood in terms of safety, desiraability, strength and their community connection. And all of them earned solid marks. Uh safety did move up to be the top from a grade didn't change and went from top of the list. Desiraability fell down, but the grade still the same. Strength still a B+ still place third. But community connection actually the grade went up from a B minus to a B. and that was the only one that actually went up. And then this area, uh, ratings, available housing choices, um, some changes, but the grades aren't particularly um, average to below average. If you look

at, uh, houses without children went from second to first, but the grade didn't change. Their households with children went from first in 2004 to second, and that grade went down from a C to a C minus. So did young professionals, which stayed third. It went from C minus to a D+. That's your other two. Remember we said four grades declined. That's the last two. Multigener uh multigenerational moved up and but the grade stayed a D+ and seniors also moved up. Grade remained a D+. Local workforce households that did drop though the grade still a D+. It dropped down um a couple notches. And then the first time this has been asked was how about households for low income? that earned an F. And then there's the overall results again. And at this point, we'll answer any questions you may have. They'll keep it under half an hour.

So far so good.

Okay.

Any questions?

How about Lori? You got to have questions, Lori.

I do. I I was wondering um if there were any trend lines over the 20 years. I I know you showed the last 10 years of data which was amazing. Thank you for adding that this year. I think that's really helpful. I'm curious if there were any trend lines that you saw were remarkable enough to to share with us anything in any besides this the ones that were the highest like safety anything that you noticed that was remarkable if you went out 20 years. Well, going out 20, I think the biggest thing if you go back and look at all of them is from 2016 looking every one of the areas how the grades at least for all the core areas have gone up. I think that's the biggest one in the trend line. And then just from this year, last year I mean two years ago to this year is how many of these grades were the highest ever earned. That's that's

unheard of in surveys I've done.

And Lori, you're asking for 20 years. We we haven't run any trends for that, but we can take a look at it and see if there's anything that jumps out.

Sure, we certainly will.

Thank you.

Other questions?

Do you have any data on the the respondents uh whether they were homeowners versus renters?

Uh yeah, that's in the actual survey. We just didn't put it in here.

We have that in the demographics.

Look in the dem Yeah, demographics on the Well, actually the first couple pages it will tell you those.

Can you tell me ballpark if it was had to look at significantly skewed one way or the other.

Yeah,

we have to look at it.

Yeah, we have to look at it.

So, you marked uh the highest grades ever. Did we have any lowest grades ever?

I don't think Well,

except for the ones at the end. Remember that last one, the housing choices? Those

will be your only issues.

But even the ones that declined, they didn't decline that much till you get to the the last one, housing choices. That seems to be a sticking point. I have one more question. Um, I always love the cross tabs, so thank you always for providing those. Was there any group or demographic that had any surprise associated with any of the questions? So, for instance, are seniors, I'm making this up, are seniors more likely to feel less safe or are families with children more likely to be disappointed with our parks? Was there anything in the cross tabs that was out of the ordinary?

We'd have to pull those out and look at them. I couldn't remember those offh hand cuz there's six or 700 cross tabs.

700 cross tabs. [laughter]

But one of the things to keep in mind, I'm so glad that Lori brought up the cross tabs because I love a cross tab. Um, while we talked about the margin of error being less than 5% for the survey, we don't over sample. So, anything that we glean from the cross tabs, while helpful, is anecdotal.

That's right.

We can't we can't make inferences from it. But we can we'll take a look and see if anything jumps out.

I Lori, I'm looking at I'm looking up at the ceiling like, "Oh, you're on the moon." [laughter]

But but but uh Allison Hutchkins reminds me that even the astronauts had the internet, so you may be on the moon. I'm not sure. [laughter]

I appreciate that. I I truly value the cross tabs. Although as um Susan you share the cross tabs are anecdotal. Sometimes we might get a glimmer that a particular community

Sure.

is really struggling.

Yep. For sure.

Other questions before we run away?

Yeah. Could you provide maybe a a little insight or impressions um or maybe help me uh confirm whether I'm understanding it correctly? It looked like when we got past the individual sections and we had a couple of aggregate questions about services generally and value generally,

those scores seemed significantly lower than what was almost universally high marks for the individual sections. And it seemed like maybe a bit of a disconnect where when scored individually they were scored very high but then when asked about it in the aggregate scored lower. Did I did I understand that correctly?

For some it could be which is not unusual in in surveys. Uh remember when we go through the uh surveys in terms of like the different areas that you know police all so people had contact. So the others are more

some

everyone got to answer those questions

and that can have an impact.

Yeah. The other thing too is when we when we're looking at like police and fire or particular service, we're just asking people if they like it or how much they like it. When we ask the value question, it's how much do you like it based on what you had to pay for it.

Um we didn't always ask that question. We added that a couple of years ago. And that is that's the nuance, right? What are you willing to pay for? How do you feel about about that? Other question?

I have two questions. Um, so you I and I'm confirming my understanding with the first one. Um, you mentioned that 50% people responded. Is that correct?

53

53%

we've reached.

So we reached around 450 residents and about 50%

took our call and were um happily provided the answers. No, she's that's not what she's she's getting at. She What she What I think she's saying is you said you called 400, but you only got 53% of those called more than that.

Right. Right. You right. You called more to get to the 400.

That's correct. We only count those that actually

we reached on the phone and and we actually do multiple call backs. So, we make sure we get a number if we can. And then of those we did reach and then they could say, "I don't want to do the survey." They could hang up halfway through. And that's what that's the 40 some percent that did not. And in telephone surveys today, anything over the 40% barrier is excellent.

Okay. And my second question is that the um how were how did we identify these residents? Were these people like the ones who called um Kerry at some point for some service or there was just anyone that lives in Kerry regardless of their background, their um citizen um record? I mean they they were like they could fall into like a non resident

could could have been one of the persons providing the survey or is is it like how how does the

the numbers that we purchase are just for the car.

So let's start start right there.

Okay.

We go out and we buy telephone numbers. That's correct. So we go to a company that says these are all the telephone numbers for all the people who say they live in Kerry North Carolina. And so we pay for that and then we randomly select

and remember the phone numbers they could have an LA area code

but we know we've caught them. We know

they live now in Gary and then after that they're randomized when we get them and then we further randomize them before we call them. So that's how we then we ask them are you a resident and over the age of uh uh 18 or above. So pretty sure they live there.

Yeah. So, we're not pulling from an existing database like 911 or 311 or 911 calls or anything like that.

That's not right.

I was just wondering about the criteria.

Yeah.

But I think you kind of answered that. Thanks.

And go ahead.

And it's completely randomized. You're not trying to get a certain number of people in this age group or a certain number of people in this demographic. You It's completely randomized and that's how it's distributed.

It's randomized. But within when we're looking to do a certain age groups, they have randomized age groups listed for us and then we random randomly select from those. So we get a certain number of those and that's not very much at all. If we've done it right, which we tend to, we and our surveyors are really good. Some of the surveyors have been working on this survey for actually for 20 years. They're really good at what they do, keeping people on the phone. And then we actually usually end up a pretty good demographic period for the age. And we don't ask what part of Kerry they live in that's not by district.

We used to ask zip code at one point but that didn't seem to offer us very much. We thought about asking them what district they live in but I'm not going to know that.

Right.

Right. Or what's the nearest cross street? There are things we can do uh to kind of get at that with this survey. One of the things that we're mindful of is as ke as Kevin said um they're already on the phone for 20 or 25 minutes and which is a very long survey. So, uh, what we say in the fall or what Carrie says in the fall of odd years, yes, the fall of odd years to get ready for the survey that's always done in an even year,

um, is [clears throat] staff, do you have any new questions? What questions do you have? And when they come up with new questions, then she says, and which ones do you want to

get rid of? Because now the survey is so long, we can't add questions. So, that's one of the things that we're weighing when we think about how much we put into demographics or new questions or for. Yeah, we get a lot more hang-ups the longer the survey gets [snorts]

and that means we have to go find another respondent.

Did we um do we have a question related to 311? I didn't I don't know if I like you know

in the information sources

do people know uh what 311 service is like if we don't have that can we include that?

Yes we um have a list of information sources that we ask and 311 is I believe on it was on the list. It was I think it still is on the list.

We'll double check it.

Yeah, we'll look and see. And there's a little descriptor out from them when we're not sure if people will know what it is that the surveyor will answer as.

Okay.

Can you tell me what the specific AI question was?

It basically said, how comfortable are you or comfortable you with the city of town of Kerry using uh generative AI? I think it's to give information

in communications

in communication with residents. using Genervea for communication. So essentially

it was specific to communication. That's it.

Okay.

Yeah.

Not not in general but specific chatbot type.

Yes. Or or in in what whatever we're writing to them.

Yes.

We made it specific to communication.

That's that's why I asked that because I wanted to put the answer into context specifically with the question with the broad use of AI.

Okay. That's helpful. Thank you. And [clears throat] I just want to confirm Chattam County residents were included.

If it was just anybody who lives in Kerry, it's both Wake and Cadam County residents.

If they have to say they lived in

Kerry,

town of Kerry,

they had to say they lived in Kerry.

Yes. When when we you're asking when we buy the telephone numbers.

Yes.

Thank you.

Okay. Other questions? We will look forward to receiving them another time.

and thank you very much for giving us this opportunity to start off this quarterly meeting. [applause]

All right, we're going to bring up um Allison to introduce the employee engagement survey results.

Okay. Well, thank you, Russ, and good afternoon, Mayor, Council. Keeping with the theme of surveys, I'm here to um I'm here with Kelly Hamrich to close the loop on the employee engagement survey that um just finished earlier this spring. And so, a couple takeaways. As you know, this was our first survey that we've done in over a decade. And we partnered with an external firm CRA that has expertise in this area. and we had strong participation from our employees and it resulted in lots of um actionable areas for improvement. A little bit of context as you know council um Russ brought forward a staff report in February where you appropriated in money to um allow us to do the employee engagement survey. The work started in February. CRA was on site leading different focus groups of randomly selected employees. The survey was open for a two-eek period of time, the middle of March, and we are here today to present the findings. And so I will invite up Kelly Hamch. She's with CRA and she led the research in this area.

And Kelly was here yesterday to uh give the findings to uh staff in our all hands meeting

and then the full results were shared with them after that meeting and then you all had a chance potentially to dive very deeply into them. So, um, we'll talk through the findings today and then if you have any questions, feel free to just inter

just [laughter]

I was really hoping that would happen. [laughter]

Thanks. That's great. I needed a joke. She wouldn't give me a walk up song, so I needed a joke instead. So that's great that the mic wasn't working out. Okay. So before we get through the findings, what I want to do is kind of level set with you all to just kind of remind you. I know Allison already covered part of it, but what I wanted to focus on was first of all the number of people that we had participate in the focus groups. So we conducted 10 focus groups back in February. We invited 120 people. We had 80 people attend. So the way that we designed the survey then was using all of the really rich feedback that we had gathered through that qualitative effort and really involving employees across um the organization. And so what we heard from that was a whole lot of positive stuff. People are super proud to work for the town. They love the people. They love the service aspect of of the work that they do. So we heard a lot of positives, but what Russ and the leadership team in particular really wanted the survey to focus on was where can we improve? We know that there's areas where we can focus. So, we do want to celebrate our strengths, but what we really want to make sure that we can do is say, what is it that we should be doing differently or better? And so, as you look at the survey, mostly the open-ended items were really intended to say, where can we improve? What's the thing that will make the the greatest impact if we were to change it? And then, um, we surveyed all full-time and part-time, um, employees. We heard back from a,02 employees for a response rate of 57% and the statistical error for that is plus or minus 2%. So very statistically representative findings. When we look at the graphs that will follow um that I'll go through, they're all going to look like this. So every single rating scale item was rated on a five-point scale where one was the least favorable rating, five was the most favorable rating. What we're looking for here as we move through time because again we're we you know invite you all to of course continue to do this measurement so that you can treat this

as a true baseline. It's been over a decade since you gathered the feedback in the past. We would encourage you to continue measuring either annually or do the same cadence as the bienial survey but continue to measure and say here's our baseline. Here's the biggest gaps that we have. Let's continue measuring as we move forward and see where we can close some of these gaps. So what we're aiming for over time is to get the biggest amount of purple on each one of these slides as we look through. Those are the ratings of four and five. And the favorability scores that I'll refer to will be the com combination of a rating of four plus five. So the first section was around the overall engagement and as you see here confirming what we had heard in the focus groups more than 75% of respondents agreed that they can see themselves working here two years from now and over 80% believe that their work gives them a sense of purpose and meaning. So really great findings here from an overall engagement standpoint. The next section was around perceptions of leadership of which we included director direct supervisors and then leadership of the town manager's office. So for direct supervisors here there's particularly strong results as we look at this these ratings with agreement that my direct supervisor treats me with respect receiving the highest scores and the lowest score of this set is still um at a 75% favorability score. So really good to see these results here for direct supervisors. For the next slide, for the perceptions of the of uh leaders for the town manager's office, we see some opportunities for improvement with favorability scores topping out at 37% and larger than desirable percentages of strong disagreement for um trusting the manager's office leadership. Um taking employee input into account when making decisions. And then the final one is um listening to and acting on employee feedback. The one thing I'll comment on here that we often will um speak to clients about when we do work like this is to really focus here on the people

who are in that center bucket of neither agree nor disagree. So they have some level of uncertainty for some reason or they're particularly neutral around this. Those folks are the easiest to then move to agreement. Right? So because you have that that really represents a a really great opportunity to to see improvement in the next year's findings.

Can I ask you said to interrupt please?

So I apologies.

I also need water. So that was perfect timing.

Perfect. Do you find that this um this neutral neither agree nor disagree um being such a large to me that looks like a large proportion [laughter] of employees. Do you find that to be unusual? um not necessarily and that's again where when we do see that we just say okay this is great actually because this is an opportunity because those are the folks that you can sway with even the smallest of changes. So, anything that's going to even just be a tweak in how we're doing things, showing that we're more transparent, you know, making sure that we're um responding and taking input into account, like even just the act of doing the survey itself and saying, "Hey, we heard what you said and here's what we're doing to change it would be the perfect opportunity there to say, okay, we're going to move those people from neutral into agreement."

That's sort of what my what I was thinking. If a third of employees were willing to take this survey and then a third of those individuals were neutral.

Mhm.

Are is that are wait and see employees? Are they okay? We're watching. I'm not sure yet.

Right. Does that make sense?

Different question related.

So I'm a neutral because I see pros, I see cons or

you know I'm not really engaged with manager's office. I don't know. I don't care.

There could be a lot of factors. Yep. I'm focused on my work. I'm not entirely sure. I don't have a lot a line of sight to that. I don't know whether or not they're listening to or acting on feedback. So, I'm going to just pick that neutral. Or it could be I'm in wait and see mode. So, there's a lot of

reasons why people would select the neither agree nor disagree. But again, those are the folks that it's going to be easiest to sort of focus on their perceptions to be able to move them towards the agreement bucket. So this member like is um because the manager's office is the top level of the organization. Yeah. So mostly the middle level or lower level staff might not daily react to the town manager's office.

Well, and everyone who completed the survey had the opportunity to answer these questions. So regardless of level within the organization. So even if people in the town manager's office and even leaders of town manager's office could have seen these these items.

Yeah. So uh uh my uh what I were thinking is like like in a private company if it's the CEO normally I'm just a engineer I couldn't talk to the CEO that often. So I don't have the feeling of

that kind of

which is another reason. Yep. which is another reason why some of those might be a little bit more in that center bucket of unsure because they're like, "Well, I don't I don't I'm thinking of this as just Russ and I don't interact with him one-on-one a lot."

And so, what we will see a lot of times when we do surveys like this, particularly when it comes to communication, and we'll get to that section here shortly, is when you've moved further away from the employee, the scores tend to decrease anyways because I just don't have the level of interaction. So in the previous slide when we're looking at the direct manager findings, it's these are the people I talk to all the time. So it's really easy for me to say, "Yeah, of course they treat me with respect. I trust them. They're listening to my feedback." Whereas here, if they're seeing them as one or two people removed from them, it's going to be a little bit harder sometimes for them to even like weigh in on it or to really give a very strong disagreement or very strong agreement for those.

So that's why the score is not that high. um what I thought thinking is uh

might not potentially

because some of this is just in the fact that you're f so far removed you're never going to see scores like I don't want you guys to be like ugh what's the point if we're never going to see his scores as high as direct supervisors but honestly you you may not ever because of that dynamic that you're never going to have the level of interaction and engagement with the senior levels of the organization as you would with your direct supervisor

so if perception is a part of this

and the environment we've been in the last several months.

Yep.

Do you think that had a lot or I know it's a it's a called as a called you can't

if I had to guess I would say it probably had something to do with it for sure.

Yeah. Because I have a similar question Allison. I don't know if maybe you'll help us with the interpretation as well. just the timing of the survey considering all of the turmoil we've had in the manager's office.

Uh, and maybe I'm asking you to read minds here or if there was any guidance given to the survey takers if they were thinking historically how it's been for the past number of years. Are they thinking today? Are they thinking in if this was March and the three months since Russ has taken office? you know, helping us understand what is what what sentiment this is reflecting.

I can tell you we did not give guidance to

Are you Am I on? We did not give guidance and so um I think it is a possibility as Kelly alluded to. I mean there's been a lot in the news that was happening at this time in March when the survey was taking place. So that was one of the questions that we got after delivering the results yesterday and answered in that m it was it was you say however you feel.

We didn't ask

you can't imagine it wouldn't have swayed it.

Yes.

At all.

Um and I I know anecdotally I had folks come to me after they took it that said they kind of didn't know

how to answer it. It's like you just

have to go how you feel.

Yeah.

So you did mention that this was from the focus group. That means like um

the focus groups helped us design the survey itself.

Got it. So they helped design but this survey was sent in an email.

Mhm. It was

to the um staff.

Yep.

And they had their own sweet time

or at [clears throat] least whatever the timeline was probably. I'm thinking like it cannot be overnight but

yeah it was like they were given two weeks.

So they were able to fill this out after starting the survey. Did they have to complete everything in one go or was they could take a break?

No, they could take a break and go back

and this was fully anonymous. So everything would say, "Okay, give us the names of those 18 people."

I absolutely could not. And we designed it purposefully that way.

Um so we did distribute the survey so that we could um on the back end have the demographics because it was this is already a lengthy survey in terms of the number of questions. So, we were tracking department information, tenure, um, full-time, part-time, and then, uh, supervisor and exempt status. Um, and so, we had that information, but the way that we gathered the data was to completely anonymize it. So, even when the data came in, we had no idea who the individual people were. We were only left with those identifiers. And the reason why I'm asking this question, I know this is anonymous, but there was a concern um shared with us um during the sur when the survey was going on that there was a sentiment that there could be a potential leak of the name. But that's what I'm impossible.

It's impossible.

It was absolutely impossible. And in fact, before we even sent the survey out with those identifiers of department, we painstakingly went through every single group and made sure there was no scenario where the combination of your department, your tenure range and say your exempt status was going to identify you personally. So we stripped out all of that so that truly I could not tell

you who an individual person was

and it was communicated as such.

And it was communicated as such as well. And the numbers here in the survey 18 17 28 20 17 these are all percentages.

Those are the percentages. Yep. So those should all add up to 100% and those represent the strongly disagree to strongly agree on the fivepoint scale. And from this page I see uh the fourth question and the fifth is about the trust of the manager's office. It's kind of the lower percentage I think might impact before uh because of the current situation,

right?

Yeah.

Yeah. One of the things um that we could consider and we should discuss maybe is that um rather than wait a full year even is that maybe we do like a pulse check

once you know there's more time for the the new leadership team and potentially have a smaller streamlined version of the survey. So, it's not going to be as long as this, but we can then get at some of these and then that will help us further be able to tell was it really just because of the timing of the survey and still some of the stuff that was potentially even just in the news and otherwise that was tainting people's perceptions here. Okay. When I looked at it last night, I was think very late, so maybe I just misremembering, but I was thinking there was maybe one question that indicated like like a recent improvement, like things are getting better.

Yeah.

And that looked positive.

There's no way to indicate like this is how I felt from, you know, January prior or whatever.

So, that seemed positive.

Um,

and I think some of that came through in open-ended feedback.

Okay. improvement in the recent leadership changes

but um looking at the one that um the slide before this I think

the direct supervisors yeah

so that 4% looks small

but yeah

if my 1 a.m. math is correct. That's like 40 people

ish.

And I know we have, you know, well over

a thousand employees and not that many took the survey.

But um I don't know, you probably couldn't tease out which departments because that would identify people inadvertently depending on how big the department was.

But um

and we do have the interesting

the tabular summary by all of the demographics. So we have that level of detail. So you'd at least see the percent favorability

and I'm pretty sure the average rating as well by every department.

Okay.

And by the tenure brackets and everything.

Yeah.

Some of the department

and the departments were consolidated because [clears throat] again when we were doing that process I mean you wouldn't want to end like this department,

right? We ended up with

people would be afraid to answer.

Yeah. We ended up with 12 departments consolidating them because again we didn't want any one department to be too small because again if we could identify any one personity

across those four we weren't going to be able to guarantee the anonymity and that certainly wasn't anything that I was going to be on board with or anyone else would either.

Can I ask a quick question about participation?

Yeah.

Right.

Um I

sorry I did I did what Susan did too. I thought you were coming from the heavens. [laughter] exciting.

Yes.

When um looking at the numbers and I um and I appreciate Russ's email about it being for full-time and part-time folks, do you have a percentage participation rate associated with both full-time separate from part-time? So, for instance, do we have a a lot more full-time people percentage-wise than we participate than part-time?

I don't have the percent response rate. Um, but we had obviously more full-time employees were sent the survey than part-time just because of the how it worked out. I'm guessing that the response rates may be similar, but we'll have to follow up with that because I don't have those exact numbers off the top of my head.

How many full

Okay. I and I would wonder if the that would skew it because I I noticed in the very back the part-time responses were

much higher percentage- wise. people were much part-time employees were much happier. Maybe it's because they are part-time, but they they tended to to lean towards more positive responses than the full-time.

And that would be in the appendix. And then Chris was asking so what rough 13 sent to 1300 um full-time employees and four something.

It was about 500 part-time employees that we sent to, but at any given time that changes with vacancies or you know retirements and so um the The grand total at this point in time when we distributed it was 1749 with like roughly a just about 1300 I think were fulltime but again we'll look that up and we'll get you those response rate percentages.

Thank you. I appreciate that.

Okay.

Okay. The next section on the survey and we can come back to any of that if we need to. um was built around how supervisors feel um in their role as supervisors across the organization. So how well supported do they feel by the organization? Um and when we ask them about the experience, we see high levels of confidence in the ability to address performance issues when they arise, which is the highest rated here. And then less confidence in terms of um having effective ways to share employee feedback and concerns with the manager's office leadership um within the employee communication section. So um at my firm we we do a lot of communication specific surveys. So communication and leadership and so we are able then to derive because we have similar items across a bunch of other surveys that we've done for the 40 years that we've been in existence. So we have a best practice target associated with these that we didn't apply to the rest of the survey just because we don't have as large of a database for all of those. Um and there's also more variability in the things that are important across um the engagement survey. So what you'll see on the next two graphs is a vertical

line across the graph that shows that 80% favorability target and again we treat that as a target and again I reiterate that this is a baseline. So what we would want to see over time is improvement such that the purple bars will meet and then exceed that um vertical line. So for overall communication so please rate the overall effectiveness of internal communication. Um the score that we have here shows that more than half agree or rate it the highest for somewhat plus very effective. Um even though uh we haven't yet reached that 80% favorability target, more than half of respondents are um giving those highest scores. Um, in terms of aspects of communication, 67% of respondents agreed that they received the information they need to do their jobs, while cross departmental communication and decision-making transparency revealed the larger gaps. Here within the employee working experience section, we have several tables of uh feedback to go through. We had a section on culture, recognition and belonging, one on capacity, tools and compensation, growth and development. And then the final section of the survey was around the future alignment of the organization within culture recognition and belonging. More than 60% of respondents believe that their professional judgment and expertise are respected and that they belong at the town of Kerry. While accountability and value alignment represent the key opportunities here with the um larger percentages of strong disagreement there for those final items. And I see you looking closely, mayor. Do you need more time?

I'm sorry. I was traveling last night so I haven't seen this yet.

Okay. And this is also the largest graph manager's office at the bottom here. That's what I was focusing in on.

Okay. Um, in terms of capacity, tools, and compensation, we see that more than 80% of respondents agree that the benefits

package meets their needs, and more than 70% agree that they have the tools and resources they need to do their jobs. Um, but on the other hand, respondents were uh less likely to um agree that there were adequately staffed to meet the demands based on their department. growth and development respondents feel they have the opportunity to grow in their roles, that they that new employees receive the support that they need, and that people leverage unique skills that employees bring to the organization, but they're less clear on career advancement pathways um and less likely to believe that promotions are based on merit and qualifications. half of respondents feel optimistic about the future of the organization while roughly a third trust leadership and believe the organization has a clear plan for its direction. And so again here I' I'd focus in on those um again that middle bucket of neither agree nor disagree because again this could be kind of a wait and see kind of a situation similar to what we were seeing on that previous graph that we discussed um for the open-ended feedback. So there's an item by item summary of all the themes that we did for every single open-ended within the full report. So for today's purposes, we just wanted to give you a quick summary starting with what's working well. So the question was what's working well at the organization that we should make sure to keep um with 686 total people from the 1002 who responded offering a comment. And the primary themes here are employee benefits package, quality colleagues and team culture, commitment to service, excellence and community, and then recent changes in communication and leadership, which was what you were noting in terms of suggestions for improvement. So again, we really wanted the survey to focus on well, what should we be doing differently? So we had three separate questions along these lines. Um the first was around the employee experience. So in response to what would be the one thing that would improve your experience working for the town that

would make the most impact 731 people responded there and the primary theme is restore accountability and trustworthy communication from leadership. The employee communication follow-up. So what's the one thing we could do to improve communication? 622 responses. The primary theme there was being more transparent, authentic, and honest. And then what would be the um one thing that leadership at any level could do to better support you and your teams with the primary theme there being trust, listen to and empower employees at 34% for that theme. In terms of suggestions for next steps, so our team obviously analyzed all of the feedback uh read through everything um and then we provided suggestions for next steps which obviously it is you know up to you all to then act on them. Some will be things that require more resource and time and other things might be, you know, low-hanging fruit that can be acted upon relatively quickly. So, just a quick summary of our suggestions, but just to reiterate that the survey findings really do suggest that and again reiterates what we heard in the focus groups that employee engagement is strong with employees appreciating their co-workers, their direct supervisor, and the sense of purpose and meaning they get from their work. So, if I remind you of that first slide that we saw, the percentage of people who said that they expect to still be here at the town of Kerry in the next two years as an employee was very high. So, it's, you know, there may be some things that we need to focus on, and there obviously are, but people aren't saying, "I got to get out of here. I don't like it." They love it. They feel pride. They love the work that they do. They love how they're um supporting the community. There are just some things as all organizations have where we can improve. And our suggestions would be to first and foremost restore trust by building on recent leadership visibility and openness. Strengthen internal communication structure and ownership. Assess possible solutions to address staffing, pay equity, and career pathways. Strengthen consistency and accountability across the organization. And then specific to the the supervisor feedback that we got, we would recommend

just enhancing supervisor resources that empower them to lead and communicate effectively.

What does that last one mean? enhance supervisor resources.

Uh basically equip supervisors with the tools and resources that they need. So maybe tools is I don't really understand how I'm supposed to communicate an important message and so I have talking points that I'm given after a big announcement or it could even just be resources in terms of I don't really know how I'm supposed to because the lowest rated item in that section was delivering feedback to upper management. So the question would be well I don't as a supervisor I'm not sure what mechanism I would use for that. So ensuring that there's clarity around where do I go with the information I'm gathering from my teams because again as the closest to the frontline employees they're the primary person they're going to go to. They're the person they're seeing the most. They're the one that they're going to trust the most. So we just need to make it really clear and easy for them to say here's how you roll up the information that you're getting and any of the feedback that you're receiving to the senior leadership in the organization so that then we can actually fix any of the issues that

might sense. Thank you. So for the middle level uh management team which I feel maybe need more training opportunities to help them because they are contacting the staff more than the upper level management and even with uh the manager office I think all of them need some training about communication

to improve the efficiency and like all of these um

lower percentage of the uh survey. I think that'll be help

and we see that across nearly every organization I've worked with over 20ome years is there's people are promoted to supervisory roles because they're operationally efficient and not because they understand how they're supposed to be communicating or leading teams.

And so we need to equip them to play that very important role because you're promoting someone because they're really good at their job and not because

they're equipped to be a leader. And so we need to give them the tools that they need to be able to do that. I also saw something on one of the slides about the salary and the y

you know the differences and the like the the I I think the I don't remember the exact verbiage but it said like

I think I can get back to it.

Uh

it was probably the compensation in line with benefits.

No. Um,

or I mean comments.

I think it was the

the open-ended.

It was like five slides down. Maybe if you if you move forward.

Oh, forward from here.

Yeah, not backwards. Yeah, forward more.

Oh, was it an open-ended?

Yeah.

Okay.

Um, maybe the next one. Yeah, here it says um Oh, no. Did I lose it?

Address compensation and pay equity.

Yes. Yes.

Yes.

So, what's the one thing that we could do to improve the your experience working for the town that would make the most impact?

And so, a primary theme was the second most prominent. 26% of people said something about addressing compensation and pay equity.

And this was like a blank and they put in their own thing and you categorized.

It was in there. Correct. Yeah. So, we did a qualitative content analysis of all of the 731 responses and bucketed them into primary themes. And within the overall report, we have some representative comments for each one of those themes just for the purposes of of brevity for the presentation, it doesn't have that level of detail, but certainly if you if you look at the full report, if you have any questions about anything, you can always follow up. We'll make sure that you all have my email address if you have any direct questions that you need answered. And if I remember correctly, I think in the the previous the slide that she was going to, it it more indicates that people overall are happy

with the pay. Yes.

But when you ask people, what is your big issue? The people who have a

concern, it's a big concern,

right?

Because that's what they think about.

Yeah. And again, I'll reiterate that the purpose of these open-ended items were to say, tell us what we should do differently. They were written in a way where we wanted things to be constructive feedback but feedback that was what should we do differently. this wasn't the opportunity to say what are we doing well and so that's how it feels like this leans a little bit more towards the negative is because the survey is designed in a way to say you know in the absence of everything being perfect like what would be ideal what would be the one thing we could change that would make the biggest impact and that's where we identified these themes

I think this is something that I personally feared always the um the equity issue

um we are not looking at the very low level but we're like the council is only kind of looking at the manager

or [clears throat] manager's office level like you know the percentages that we're giving

but I always feel and this is just talking based on my own experience that when we talk about uh percentage um let's say somebody's making 100k versus 50k the percentage is not very equitable when we say let's give 3% to everybody

it should be 2% on the top and then four or 5% on the bottom so that it's equitable. Like I'm just

We might need a focus group to that. I don't know [clears throat] that that's exactly what it asked.

Yeah.

But and it was an open-ended comment. Um so you probably need um a focus group or something to get to

if that's it. It wouldn't be surprising that those people those 23% of the end were lower income that were focused on that. Just to clarify, we do not do flat percentage raises like what Serica just described. Correct. We don't do cola. We do merit-based

pay for performance.

Pay for performance. Okay. I just wanted to make sure that that was

and that's why our recommendation

we do 3%.

No, it's a potential That's right.

bucket. We do not give flat raises.

You could get 10 or you could get zero.

Yeah, it's it's based on your performance.

It's based on performance, but it's up to 3%. Does that work? No,

that's the bucket that when we budget,

you budget an average.

We budget a percentage of the total compensation that we pay every year to be available. So, some people will get a larger percentage and some will get be a lower. That's just what we're budgeting is a line item for an increase. Last year's amount we had bucketed for employee and I see some nodding. Make sure I'm getting this right. Last year's amount we had bucketed and now this year's is going to be 5% higher, for example, is what we did year-over-year before. But how that additional 5% is distributed is

is distributed per a policy and that policy is currently under review and it'll come back to you because it's a um town

policing this point.

Um I think we should um consider it differently.

Yeah. I think when our recommendation was really just to further explore some possible solutions and so to Russ's point it may mean pulling together a group of employees and learning more because in these particular cases I don't know that we have the exact here's exactly what the problem was or here's what the solution should be at this point it likely requires a little bit further exploration and talking to employees more to really uncover what the issue is that they were getting at because again we're just you know doing a thematic analysis of that particular [laughter] open-ended. And so I think there's a lot more probably to glean of what really is going to be the best solution to that particular issue,

which is also why um a pay studies included in the recommended budget as well.

Yeah.

And so to your point uh council member Baronsel, [clears throat] I do agree with exactly where you're going though. I feel, and I've been in this position before, when you have employees that feel like their compensation is too low currently,

a merit-based raise isn't going to be enough to make them feel satisfied with their compensation. I know when my company uh we got I joke we got new corporate overlords but we we got a new we we were bought by another company who had a very very similar merit-based program but quite a few people felt as though their base pay wasn't where it needed to be and they right sized the pay and obviously morale went up very significantly after that but I do think there's probably some pay bands where We need to have a critical look at where they are now. And I think you're hearing a lot of the same things I'm hearing where, you know, a a larger percent raise is great, but it's still I think for a lot of our employees doesn't get them to where they they think they should be.

Yeah.

Especially when they've got some longevity folks that stick around. What we don't I'll just speak for myself. What we don't want to create is a situation like a lot of corporate jobs where in order to get a real bump in pay when you get experience that you've got to leave the organization and go work somewhere else.

And you I'll give you the experience I had. I was in a group of five. We use the same system.

Yeah.

Two of them were international. They couldn't afford to lose them. So that means three of us were fighting them less

than the average. And so we always got less and they go, "You guys are rock stars, but

we're going to pay you.

We need more of the bucket over here." Yeah.

And then as I showed you in my intro slides, when the consumer price index is at, you know, inflation's at 3.8, if you're averaging five, you don't get that as a percent inflation. Um, but the one reason that the uh pay study is in because it's going around and to not wait for survey results was something at least myself and other managers and supervisors were hearing uh since December as we've gone around and talked to people.

Yep.

I think it's important also to mention on the pay study because a a few of you

know or a lot of people in this room we used to do pay studies. uh we would do my memory 25% of of all the positions every year. So in four years you would know the fifth year you'd come your position would automatically come up. You didn't have to ask for it and that went away. Um what what we're talking about for this budget that's been proposed is to go ahead just like with this survey and do a baseline and evaluate all the positions. That doesn't mean all the employees, but all of the positions to see if they're in the right pay band and where things need to be adjusted.

Then you've got the

then you right then by this time next year, you've got your foundation and you know what what to do in terms of if you if you want to change how we're doing compensation,

then you could decide is it annually? Is it a third of the organization every three years, four years, whatever you wish to do it at, but yes to do the sum of the whole at once.

So

So that's being addressed. So,

if the budget's approved.

Yes, mayor.

We'll see us. Sorry.

No, that's okay.

Go ahead. Go ahead.

I was just gonna change and ask a different type question. And I apologize again. I was spent a lot of time traveling in the last two days, so I'm way behind.

Oh, no worries. We didn't give you

the open-end questions.

Yeah.

You would get the answers. You go, uh, we're going to categorize that over here. There's not an indices with all these comments. No, it's it's a thematic analysis.

You could probably identify based on how somebody wrote a comment or said something.

Um I I wouldn't have been able to of a thousand comments to be able to say somebody might have been able to, but that was also why we were the ones, you know, analyzing the feedback and only giving representative comments within that report. So that then if there was anything that seemed like it was identifiable of a person, it then didn't appear in the report. And then we've already since taken all of the raw data and deleted it. just

the only curious thing is I would wonder if some employees had some serious concern about council members. You know,

we we did review all of the feedback

because we made a promise that if we saw anything that was, you know, oh, this should be addressed, this is an HR concern or whatever, that we did make a promise to the organization that we would highlight anything, but nothing rose, okay,

to the extent to which it needed to be shared with anyone. But that's a great question because we did look at the feedback just to make sure because of course anytime we do these surveys if someone says something inflammatory or like says something that someone's doing wrong, we don't want to just ignore that and try to sweep it under the rug. So we certainly would have brought that forth, but there wasn't anything that rose to that level.

That's a relief.

There was one question that maybe touched on council that you had it it had that middle ground. Yes.

As y'all were saying it about some of the other questions, I was thinking about it because a lot of folks don't interact with council. So, it would seem fair that they don't know.

Yeah. It was it was Exactly.

Exactly. [laughter]

It was around council decisions, a wide middle,

being consistent with the values. So, we had a town manager's office leadership and council. So, they were mirroring each each other. Well, that and that's something I did to get out of the survey is do you know would it be beneficial to spend more time in town hall and just be standing in the break room at you know having a cup of coffee yeah more often not that I have a whole bunch of free time to do that but it's it would be you know probably the effort [clears throat]

or do do I just make people nervous

and our assumption was that people that your average frontline employee just doesn't have the level of interaction with you all to be able to weigh in on that and so that was why we limited it to the one to the one question is because

Sure.

Yeah.

And it's just I wanted to share

Can I make a quick comment?

Go ahead. Go ahead, Lori.

Well, uh, first before we I guess get into comments, I have a couple more questions. Um, one is I really enjoyed CRA's um list of opportunities for um addressing this. I'm wondering um or I

guess another way to say it. would love if council could get a publicf facing action framework so that would have the list of the things that you all feel we should be doing within the next 60 to 120 days and then a commitment to regular updates because I love CRA's recommendation for that detailed action framework and the on and the pulse we we do that at Cisco system where we get pulse surveys, which I really think are are valuable to let you know if you're going in the right direction.

Um, one thing I'd also like to mention before a number before I forget actually is I do want to thank the 1,2 I think it was employees

who took the time to respond and and part and all the ones who participated in the focus groups. I mean, a 57 response rate really tells me that people care deeply and those folks felt um comfortable enough to not only care deeply about it, but also want to see it improve because you don't participate in a survey, right? Unless you really hope that there's going to be a change. And since we hadn't done it in more than a decade,

I really want staff to know that I hear you. It's hard to look at hard feedback about yourself. Um, I see it on Facebook all the time. [laughter] Um, but being able to treat this as a baseline and a commitment, not a one-off exercise is really important. Um, and although it's a lower response rate than the one we did 10 years ago, I think we had something like 83 participation, it came at a time that was really hard and and I really do appreciate all the people who, you know, were um gave us their honest and open feedback. Yep. And I think part of the process is even just with the all hands yesterday just in a setting to say, "Hey, this is what we heard and we're sharing it back with you." And we always recommend that

organizations do that and it's we won't do a survey just to do a survey and nothing happens with it because that's the worst thing that you can do is ask people for their opinion on what needs to change and then just ignore it. So great steps already even just in the fact that we're sharing back what we heard with the organization. But Russ, did you want to address the

question? So, with the 20 um I guess called ideas for consideration, y'all [clears throat] didn't rank them or anything like that, you're kind of handing them to us. What I committed to the staff to do is give us 60 days to figure out how we even wish to prioritize them. Whether that's more focus groups, something to potentially lean on, these are just um you know, thinking right now, not total commitments is uh you got very positive results with regards to how people feel about their supervisors. maybe lean into some supervisors and you could do a little bottom up if you wished

um to kind of prioritize these because there are 20 and you can't do 20 things at once very well. So, we need to prioritize these, get back to staff and get y'all's input as well and decide what we're going to do. Um and then also um a lot of these are being addressed by several things in the budget. So, you know, we I also shared that. Um, but so I think we just need 60 days to digest them and get back to you all, get back to staff and say how we're going to do them.

Yeah. And I mean, the the team has only had

days, maybe a week, not even

to sit with the data themselves. And again, and that's our typical process is to say, "Hey, here's all [clears throat] the recommendations we would make, but you know, we're happy to help you prioritize them, but really, you know, you need to think about what's feasible, what's feasible in the short term, what's feasible long term, what's going to require a lot more resource budget potentially." And so, but that's the typical process to go through is to say, now that we have the data, we can sit with the data. Let's really take a look and prioritize these things. And obviously, it'll require some, you know, additional conversation

and ongoing surveys. Don't should not wait 10 years, 11 years to do the next one.

Right.

Thank you. I I appreciate that. But I I truly support making sure that you all have the time that you need to, you know, within 60 days or whatever, you come back with a clear action framework, you know, and also I think that gives all the people who responded to the survey, you know, understanding that yeah, their time answering the survey would actually lead to concrete steps.

Absolutely.

Great. Well, thank you so much for the time. appreciate you having me here in the beautiful town of Kerry. I've enjoyed it and your weather's pretty great, too. But [laughter] I I know you can't control that, but everything else you do control.

There's actually there's a bubble. There's a bubble here, actually. [laughter]

That must explain it. We don't have that up in Philly. So,

um thank you so much.

Appreciate it.

Thank you, Kelly. [applause]

So, we're slightly behind, but um we're due for a break. Why don't we just shorten the break, take five or 10 minutes, and

come back and keep going.

Give us a time. We're coming back.

Um, we're 240. 240 concept.

We're going to resume our quarterly and I'm going to turn it over to Russ who's going to introduce the next item.

Yep. Uh Kimberly Branch is here, our finance director to go through the uh quarterly Q3 financial update.

Yes. Good afternoon, Mayor and Council. So you all know I hope you understand by now that I appreciate being able to give you all an update during your quarterly meetings. Before we get um into the business, I wanted to introduce some things that you have at your desk. We are putting a final bow on this 2025 fiscal year for the comprehensive annual financial report. So here you will have the actual ACTER which is the over 300page document. But most importantly, I love to introduce this popular annual financial report that you have as well. This is a summary citizen friendly um document that we put together as well to um summarize that information also with with um enclosed within there as well is the document that give you gives you page references. We talked a little bit about that in some of your orientation so that you can easily um read through the um acter at your leisure.

So the popular annual financial report is basically a summary of the act.

That is exactly right. If anyone has questions, you can give them a quick reference.

It's very popular as well.

It's very popular. Um and lastly, you all should have received at your um area your quarterly report. I am as part of my presentation today. I'm going to cover two things. One, I am going to do a summary of this report. Um I have page references throughout the presentation. So if you want to follow along with me, feel free to do so. Um and secondly, I am going to give you an update on our external auditor selection that you all have asked about um in the past.

Excellent.

Okay. So, with that, we have some key takeaways for you today. The general fund revenues and the utility fund revenues are outperforming their expenditures as of this this third

period, which ends March 31st of our fiscal year, which strengthens our year-end projections. Sales tax collections continue to show positive growth. While property tax revenues are projected to moderate primarily due to a variety of factors which Stacy when she comes forth and discuss the budget, she's going to talk a little bit more about that in detail. And lastly, you all will leave knowing that the external auditor review process has resulted in two finalists. Okay, so let's get started um and looking at our financial um snapshot as of the end of the quarter. On page five, you will um see where I received the um where I documented the numbers for this slide. This is a five-year history showing you how revenues compared to expenditures as of the end of the third quarter. As you can see with the last two bars, our revenues were over expenditures by about $39 million at the end of the um third quarter. And again you can see um the history that we have here and be reminded you can see in 23 and 24 at this point in time our expenditures were outpacing our revenues. So this is all the work that we've been doing over the past year and into this year um is turning some things around for this um as at the point um where we are March 31st. Okay. As we go to the next slide, this is our um projections. We promised you, I believe it was during the retreat, that um after December of each year, we would be providing you with a projection. You can see this referenced on page 10 through 12 of your quarterly report. If you want to do a deep dive in any of the explanations that I talk about today, it's in that report. So, we encourage you um to read it. But in looking at this current year projection, um I just want to walk through the quarterlys um real quickly. Quarter one, you can see here that the green chart, which rep the green bar line which represents revenue is under expenditures. That's un that's to be

understood because historically the first quarter of the year our revenues are just not there because our property tax which is our main um tax provider I mean which is our main revenue provider is always collected during the second quarter of the year and it you know kind of um finishes off during the first about the first week of January which is why you will see in quarter two and quarter three that green line is outpacing um the uh expenses is what I will say with the quart the third quarter plots that goes back to the bar chart that I just spoke about we had revenues over expenses of about $39 U million however as you can see in the dotted lines that's showing how we are projecting for the remainder of the year projections are based on historical patterns some things we may know that's in the pipeline that will happen but as you can see those um lines are coming closer together so the margins always and you can always look for this in the future will um narrow out really during the latter part of the year because our revenue is frontloaded in that first half of the year beginning of January. So, we are projecting as of right now um for June 30th to be about $19 million to the good of revenues over expenses, which if you remember when I did the year- end audit presentation, we were about $106 million in fund balance. If we add $19 million to it, we're about at $125 that we are projecting for the end of the fiscal year. I believe our policy um for this year has us at about $96 million. So, as you can imagine, if you compare the 125 that we're projecting to the 96, that's the policy calculation per the policy, we will meet policy. We are estimating to meet policy at the end of the year

or listed on PA on page 10 specifically if you want to get in fund balance balance policy.

Yep.

Okay. So these are just a couple of dashboards that I'm throwing up here and that is just to summarize um what we have. First I would like to say there was nothing significant or unusual that happened through um the first three quarters of the fiscal year. Revenue we received 83% of budget at this time. Um total revenue growth 5%. Property tax revenue again is our largest at 59%. Of budget is up 6%. And we have collected as of the end of March about 97% has been collected. On the sales tax side 21% of our budget um sales tax is showing year to date up 5%. Which was a nice surprise for us because if you remember last year we were talking about those nominal increases of about 1% we're looking at like 5%. But again, with sales tax, we never know. So, we're just hopeful that we continue with that trend. Okay. On the expenditure side, um expenditures for the general fund, we Oh, and again, I'm not referencing the pages, but you can see here that I have the pages, so I apologize for that. Um page nine, which is where I get the information. Um we have received about we have spent about 69% of our budget. If you look at last year's quarter at the same time, we're spot on. We've been um we've spent about 69% last year as well. Um at this time total expenditure growth we are down 2%. The reason um that we're attributing to this um to this decline is that we had a change in practice this year of um for our capital projects. So our capital project spending is down. So the money that we usually send from the general fund to the capital project funds has decreased over the year. And you'll notice the same when we switch over to the utility fund. Okay, utility fund. As you can see, this is a similar five-year history. I will, of course, point out our quarter three of this fiscal year. You see, we are um recognizing the 77 revenue compared to the 47 in expenditures. There are a

couple of of things going on in the revenue this year. What is typical is we normally have a um a rate increase and we did have another rate increase this year for the utility of about 4%. We also recognized some revenue from PAS settlement. So that's another thing that has um um increased our revenue for this period on the expenditure side and you can see comparing quarter 3 2025 to quarter 3 of 2026 there was a pretty much um significant decrease um in the expenditure spending. It is exactly what I mentioned on the um from the general fund side. this reason being the timing and when we are doing capital projects and we've we're down about 18 million um in that transfer to capital projects for this year compared to where we were um last year at this time.

Kim, was the PAS settlement money um I don't recall us taking that into consideration when we were budgeting last year. Was it a we didn't know when it was coming? I remember you discussing it with with us right

frequently. Lisa, I'm not implying that you didn't come and communicate with us about that. Was it um

It hasn't been clear until recently when it was coming and even how much it would [snorts] be.

Okay. And how much was it?

We said 5 million.

We re we received 5 million through March of uh 31.

So of that 77 million, 5 million of it was the PAS settlement. Correct. Is there more PAS money?

Jamie, do you know how much we're looking for than um total PAS? Well, like you mentioned, nothing is a guarantee, but I think we're expecting about another million million and a half over the next year or so.

And we just there's no way to know when or right. Okay. Right.

And is that money um utility fund

specific?

So where there What can we spend that potentially $6.5 million on?

I'll let Jamie speak to that.

Utility fund. Um

cleaning Pass out of the water.

Well, um yeah, that kind of thing. But we um utility applications like if we need a facility improvement, if we have a water line replacement, if we have water main breaks, all those kinds of things.

Thank you. That's helpful. It it's helpful to understand that we have that

not unexpected bucket of money, but this that additional influx of money that we can tap into for for utility infrastructure or any utility need then.

Yep.

Excellent. Excellent. Thank you.

A quick question. Does that mean we can also use it for watershed protection and maybe purchasing homes that are flooded or areas where we need to do maybe better storm water? Would that also fit into that bucket of money?

The storm water applications would not be utility fund and um so watershed protection could be because that is funded in part by utility fund. Um and so it it is within that basket of things we could spend the money on. Great. Thank you.

Very good. Thank you, Jamie. All right. So, as we look at the dashboard that we have here for the utility fund, a lot of what I've already mentioned, 77% um of the revenue was re of to of budget was received as as of March 30 um 1st. Revenue up 17% for those reasons that we discussed. expenditures are down um 29% and that goes back to um the decision and timing of capital projects that have decreased over for this fiscal year.

All right. So before I go into

before we go on

yes

this was a snapshot taken at the end of March

that's the quarter and a lot has happened globally since the end of March. I want you to look into the crystal ball and say, do you have see an impact uh locally?

Um I have not. However, what I will tell you is we are working on our projections because if you remember after December, we're going to be working projections

every month to see if we're seeing any of those influences. We're working to do another projection next week. If something significant needs to be highlighted, we will certainly let you all know,

especially with uh maybe fuel cost. Y

I don't know if Jimmy wants to add anything to that right now. I know there hasn't been a problem, but it's probably something that historically has been as prices can fluctuate wildly.

Yeah, it's not a problem right now because it is fairly recent.

Um but it if it continues in this matter, it will be an increasing thing that for us to look at

which then increases uh cost asphalt cost u bid projects project cost you just something to be aware of.

Yep. Um, one thing I would like to point out is your next quarter you will see the impacts of um, getting us back to the 5% um, merit in pool as well because we started making those payments at the end of the third quarter. So, we start seeing that um, that pick up as well in the third in the fourth quarter.

Say that another way.

Go ahead. Well, I was going to say because you added 2% y

to the merit pot uh midyear,

you're you're paying retroactively.

Okay.

Um in this quarter

to what would have historically been spread across the quarters that folks would have gotten their those

we would have captured mostly in that

still within the budgeted amount ultimately. So it'll spend down that 77% a little bit.

The 70 it'll our in our percentages of budget will increase.

Okay. Yeah.

For this quarter. But the projections are accounting

the projections. That's where some of that narrowing out will come. Yeah.

Thank you.

Yep. Okay. So there's just a couple more pages I want to refer to you. I did not put them in um chart form, but if you want to turn with me on page 15, this is a um table you all familiar with. I believe you receive it at your work sessions just so you can see how your million dollars is being allocated. Um when you turn shift with me to page

16, this is a good chart um that we like for you to know about because we are responsible for letting you know about all of our budget amendments if things come up during the year that we um we do. We present them in the quarterly report for you so for your awareness. Um, and then lastly on page 17, of course, you have your um, citizen public input, which I believe you all are also receiving that um, periodically as well.

I have a question. Can we spend just a minute on this um, interfunctional budget adjustments? What are these? Okay. So, most of the time we have a and Stacy, you might want to um I'll let you go ahead and go go for it before I uh say my from a finance person. I'd rather the budget person

borrow your book.

Yes.

So, I can be looking at the same thing.

Thank you. [clears throat] All right. So, we're the interfunctional transfer section.

Okay. I've got I just needed to see the data. So anytime there are um groups of expense of expenses that are um accounted for in what we'll call a function and so public safety, police and fire are in the public safety function, but say information technology is in the general government function. And if we are going to do a budget adjustment that transfers money from one function to the other, we need to let you all know. And what our ordinance says is that we will let you know at a council meeting or through this documentation after the transaction has occurred. So that's what this table is doing. And if we look specifically, I'll give you a very clear answer. We have a function called non-EP departmental. That's the first row with quarter 1 noted where 2 get my eyeballs. $2.6 million almost was um a budget adjustment was done transferring from non-EP departmental to the one, two, three functions on the right, which are public works, general government, and public safety to address mid-year needs in those groups. Mayor, I can show you mine, too. That helps you

step outside my box.

And I'll just um say one thing to Stacy's explanation

going to these functions in that amount.

Okay.

And another transfer done here

from police to it in that amount.

And these um us letting you all know about these is required by um state statute because our

why this is being

Oh, I took mayor's book.

That's okay. [laughter] This has been in the quarterly for some time. I think what's catching everybody's attention is

we're working it out.

You were like jagged [laughter] or something. Are we have having book problems?

Yeah. Sorry. Yeah, we have a big kid problem here. [laughter]

No, no, no. This chart has been in the quarterly um since the document was created.

I think maybe the difference that we're all experiencing right now is we are all communicating about it

in this quarterly.

But I don't know what what this money is used for like how would we know that? I'll uh here I can I can contribute to this conversation. Uh so last year uh the budget was developed and in the weeks before the former town manager gave his um recommended budget to you, like literally weeks before um he did percentage cuts from various departments and um in an effort to reduce the amount of tax increase that was going to be associated with last year. When we then looked at the detail of what that meant, in particular, you'll notice I think a pretty big chunk of it went to public works. Um, looking at the detail, we recognized that that really was not a feasible move. Um, meaning there were going to be um very visible cuts to services, public works being the example. So when he um so in at the very last minute there was not time to then automatically put it in the budget in public works. So there is about a half

of a cent so 2.6 million that was then put into non-departmental and already identified for where it was going to be going because it had been cut from those exact places in the final weeks. Got it.

Thanks.

Okay. Okay. Any other questions before we go into more fun of our auditor selection update? Okay. All right. So, I wanted to start off by telling you what the job of our auditors are. Um, before we go into a new agreement, I will say first off this an audit is required annually by our local government commission that you all are familiar with. Auditors express an opinion that the statements are free from material misstatements and they're in compliance with general um accepted accounting principles which is GAAP. Um they are not here to discover fraud. They are here to make sure our statements are free from material misstatement. It's not an opinion on the strength of our financial position. It is an opinion only that covers our financial statements,

which also gets into if there are any other things that you all want to go into that contract and Kim will get into that a little bit at the end and things to consider as we sign a contract with a new auditor.

That's right. Um, so I just wanted to put this little question up here. The auditors, who do the auditors work for? Um, they don't work for me. They don't work for the finance department. They work for our um, town manager.

I thought it was council. Yeah, his town manager.

Um, but the council must appoint the auditors, right? Um, which is why we're bringing it starting today um before you. Our contract is up with our current auditors, Sherry Beckard. Um, so it's the time to just get, you know, um, to review to see what options we have out there if someone else is to um, take on the job of doing our annual audit. Okay. So, with that, as a result of it being time, we issued an RFP. We received four proposals. We do have two finalists and this week we um conducted

interviews of those two finalists. I would like to introduce and thank the panel that um did the review along with me. It was myself along with one of our assistant finance directors. Um her name is Dara Schoffner. We have Kelly Blazy who helped with um all of the fund and Carrie Harville helped us do that review as well. All right. So, this is just a quick timeline. We posted the RFP March the 26th. We had a pre-proposal conference uh March 31st. That's just that that's just where they ca people who were interested came to ask questions. Um the proposal submission deadline was April the 28th. We conducted interviews like I said this week. Um council feedback from what you learned today. Um we would love for you to take it back with you. ask whatever questions you um may need to ask um so that you can help in um making this final decision. The dates here, May 14th, which is today through May 28th, is just to allow you all time um to to to think, ponder up until your next 3 by um four meetings, which I believe are the week of the

um May 28th. And then lastly, council approval and contract. that we will go to council on June 11th um to execute that contract, get approval of that contract. Okay, here are our two finalists. Our finalists are Cherry Beckard um who we have a history with. They've been with us for about 25 years. And then we have another contender, Malden and Jenkins. Malden and Jenkins is a smaller firm than Cherry Becker. They're trying to build their presence in North Carolina. I do want to point out both firms shared multiple other financial services outside of the audit um that they can provide. All of which is at an additional fee. These are some of the criteria that we go through when we receive their initial proposals that we read, you know, when we read through them and we um we graded them. I won't read through all of these, but we can take a minute for you to glimpse through and see what you see or

ask any questions you may have. When you're ready, I can switch.

Would they have the same would a different auditor from Cherry Beckard have the same process likely that Cherry Becker did, like interviewing the mayor?

Yep. For for the most part, when you think about audit process, they're they're the same across the board. And we did notice that during the interviews as well. Same across the board. All right. These are some additional decision points that we've talked through and some of this discussion came out in interviews. Just the North Carolina presence, um Car's experience directly with the firms, Car's service, staff concerns addressed during the interviews. A big thing that came up in Cherry Beckard's interview was just the concept of independence. um you all um Leanne who presented the audit um at the end of the fiscal year, she spoke a little bit to that in that they have policies and procedures to make sure that they are complying with the independence rules. Um Leanne, this was her first year this past year, 25 in the audit. So they their goal is to make sure in the audit that they have fresh set of the eyes, someone who's coming in new, but also some institutional knowledge, the people that can continue the um continuity of the audit. On the Malden and Jenkins side, um some of the questions came around their North Carolina presence. Um the biggest city municipal um city that they had was Greensboro, but they also um audit Rocky Mount. And that for us was um an area that we felt like we needed to discuss. [laughter] Um they have currently about three um other jurisdictions that they have that are being audited by the OS by the Office of State Auditor. And um I asked Cherry back at the same thing. Um right now I believe we're the only ones that they have, but they're getting around. But I said all that to say that those were some things that we had to talk do deeper dive conversations about

through our convers through our um review.

And can you share any of that because what happened with Rocky Mountain? [laughter]

I mean that's that's a story in itself.

Uh it is a story within itself but the um similar to um Cherry Beckard who has the you know we talked about the policy um with them. They went back in their explanation of our job is not is to make sure your financial statements are free from material misstatement. And a lot of times some of these findings don't meet that materiality threshold. And so if it doesn't meet the um peri um the um materiality threshold and it's not unless it's fraud, you know, knowing fraud, it's not going to be um additional work behind So they were, and I don't want to dig too far deep in this, but I thought Rocky Mountain was taking money out of reserves and putting paying for operations.

They were losing money out of their reserves, but they were accounting for it properly in the financial statements, if that makes sense.

They were spending down without the analysis to be able to properly spend down.

So if we did that, that wouldn't be flagged.

You're asking me my opinion now.

Yeah. Okay. Sorry. [laughter]

And then I'll bring I used to be an auditor, so there's a lot of things I can say about that. um because some of that I would think would come up in some of the um analytical reviews that they do but if it's not material they're not going to do a um deep dive

because their job again remember is not to discover

and then it's good questions which get into um we may want to consider an alternative approach on on this slide because

so yes [laughter]

as you guys make your help us um make the decision um there's two options that I would propose one is we go with what the RFP um says, which is usually a three-year agreement with the with the option to extend, or we can um get in a contract, of course, of less than the three years, issue another RFP a year or so out and do this review all over

again. The reason why I put preferred um in the first column though, I will share with you there's not many people in the business of local government um auditing. So our numbers for people who are responding to the RFP, they're small and a lot of times it's the same people. So we could be reviewing the same people all over again to have the same, you know, findings. So these are what you're presented with as the options. Again, we would love for you to ask whatever questions you want over the next couple of weeks. Um if you don't ask me my recommendation, I'll save it for later. [laughter] Um because I'll give you all a chance to help us with that. Um but those are the options we have. They're not looking for any decisions today. Just feedback and obviously then feedback over the next couple of weeks.

That's right.

And again, since we didn't get too many proposals to this is why kind of an alternative approach could be considered.

Yeah.

Can I ask did we not get um did you get as many uh RFP responses as you expected or are we currently because of our experience with the state auditor an unattractive client to to take on at this time? So, I think it could be I think it could be some of both, right? Um because the the people who did respond, they said they don't care, you know, that we're um being under review. I don't know the people who did not respond. I don't know what their reasonings are, but I still go back to the number of audit firms that are in government um auditing is getting smaller.

And so that's part of it because I think we had five or six and 21. Now we had four. So, I would be interested in in making my decision knowing and I'll just call it craziness. If we're doing something crazy like spinning reserves on operations,

how much more will we have to pay to make sure that that's flagged?

Mayor, I had the same question. So, if I could piggy back real quick, is uh a cost comparison between the two options. And this might get into the proposed

budget that we're going to talk about if there's any budget considerations for those additional fees if we do want to pay for that optional scrutiny.

So we would have to understand what what jobs we are wanting outside so we can get the full spec for the fees. What I will say is the fees as presented to do a baseline audit. they are running uh um Cherry Becker is a little bit lower than um Malden but you know marginally they're they're close [snorts] um I will say even with the policy discussion that we had um for Carrie with under Cherry Beckard we had a fresh set of eyes which was Leanne she ran the calculation so you know so we did benefit from that first set of eyes the way they choose to um equip their teams so we would have to know the Um, sorry, who was that?

Kimberly, I have a I have a question. Um,

and this might not be the most popular question, but I'm going to ask a question that we all were scratching our heads and maybe it's irrelevant now, but our mayor prom questioned this multiple times and um I don't know if Lori, you're still on the line.

I'm here and I I think I know where you're going. So, go [laughter] ahead. Um so um Lori brought this up multiple times when we were going through the low phase and we still probably have not we're not out of that low phase that why did we not change our auditor even after 3 years and with the current [snorts] finding that we have um with the fund balance how did they not cover that in their finding. So, are we also going to consider those things when we're looking at the um to renew the contract or perhaps find a new one?

Yes, we do. Um what I will say is it all comes back to what an audit is really intended for. And so even when you look at the spending of those those back years,

they the spending was not significant enough and it was planned. there was pl there was some planning from the um council adopting certain things in the budget that allowed us that helped facilitate some of that um variance but again when they're looking when they're looking at analytics and stuff they're looking for things to jump out as significant and in those years even that didn't happen

and it's to say it differently that that would be an additional service

that would be an additional service

what would that cost for us

well how much is the could you give a range of what the prices you mean oh So, the base prices for the audit, um, Cherry Beckard submitted about 92.97. Y'all keep me honest.

Cherry Cherry Beckard's at 92,500 and Molden and Jenkins is right at 100,000.

Yeah. So, that's what I was saying. They're fairly close for the baseline audit. The additional fees, which both firms offer, we'd have to figure out what we're looking for um in order to

Yeah. And but I think I'm hearing there's [snorts] an appetite for us to consider adding on some additional scrutiny.

Yeah.

From this external auditor, especially for the immediate future.

Y

but did I say that right?

Yeah. What I would what I what I would love to know is maybe being specific and saying our last experience included us being under our fund balance target without council clearly understanding it. So, I'd love to know how we ensure that they surface and communicate situations where we're materially off from our own financial policies like fund balance or debt coverage even if there is no generally account accounting practice misstatement. Right? So what that I guess what that that might mean as a adding it onto a service but clearly if a if they looked up our policy 175 and saw that it was 33

and a3% yet they calculated that we were below that I would think aligning the data to the policy is a value added service even though um e even though we might not have asked them to do that in the previous contract which is what you had told us. So I think alignment with our policies if that's an additional service would be an um an important addition to the contract.

Sounds good. We can go ahead.

Yeah, I want to add a couple of things because this is such a good conversation. Um the the I think um that we can all agree that the primary issue was not actually the dropping below the fund balance. It was the lack of transparency about dropping below the fund balance. And so there's many ways to solve that. Um in fact um Council Member Bush pointed out one. I think it was in Raleigh's book. Um, so we actually prepare the information

and then the auditor reviews what we prepare

and so um, so there was some things added in the most recent ACTER. We're going to it was kind of last minute so it was hard to it was hard to elaborate in detail but we can add more into the acter from the what we prepare and what we provide as information and then have them review the more that we add in and this of course the specific more that you are interested in is greater um greater information specifically on fund balance and how it meets policy. So, can I rephrase what I think I just heard you say? We put in what we give to whoever our auditor is. Here's the fund balance policy. Here's where we are. And they take that and they make their report.

That is exactly right. We can ask them to do the additional service of

validating the information that we provide in the book. I I could be wrong. I could be wrong, Kim, but I do not believe the 2024 had specific fund balance references to the policy within the document.

What it has is a surface explanation of definitions, but not like calculations.

Yes.

And that's what Dana is speaking about. We need to include the not in within our notes that we provide to the auditors an actual calculation of policy.

Okay. So, Kimberly, that was the first part of the question, right? The second part is um are we okay to bring the same person where we had this maybe not a slip up but you know at least from our perspective we felt what how did we pass this order right like is this just bringing the council up to speed on this is the scope going to be this is how it's going to run and are we okay with um Sher's uh service

so I think the our um team would agree that we are we feel like we we get good service um from our existing auditors. Um sometimes people look at the number of years that we've had um with Cherry Bagger, but if you did a local review around municipalities, municipalities don't change auditors um very frequently. Um I know Raleigh has had cherry beggar as well for about 20 years.

Um so, you know, I think that's important. I do think it's important going back to Dana's comment, the notes are ours. We put in the notes what we feel like need to go in the notes and they review the notes. Um, if it's something that stands outside of a typical audit,

um, and so they did what we asked them to do. That's

they did what we asked them

and you didn't have that as an extra sur that's that's exactly where I think I've landed. I hear you loud and clear and I did previously when it was presented at council. this is the job of the auditor. Here is what you know is there a myster

a material misrepresentation of x y and z. I think what especially those of us that have been around for you know a minute what we're looking for is higher oversight in general outside of what is typically

outside of what's typical

in these in these auditors and how do we put that in place? We do trust you and we also want to show you we trust you by verifying your good work.

That's right. Right.

I'm Yes.

And so this auditor, for example, from my conversation with with the the state auditor's office, our auditor, when they're reviewing

what we give them,

they're not looking to see, hey, should they not be

paying for things they're procuring on a on a PE card? That's right. And incurring fees, right? where how do we get a third party to look and make sure that we're doing the smart things that we're doing the best practice things because I think there's been some of the stuff

like the checks the large checks things like that that would have gotten caught

as not the best practice if we if we were plus with us having his in the in the most recent history underfunded and underst staffed

yes

so I just want to make sure to acknowledge that we also don't have the people necessary. You'd all have to have x-ray vision superpowers and work 20 hours a day to also do that kind of extreme overviewing. So So can we use one of these these firms to do that additional oversight?

Yes.

Right. and and if so, I'd really like to know how much that costs so that we can then have a a a firm conversation where we're talking this is what we're going to get for this dollar amount and here's exactly what they can do for these this additional oversight and if they can't do those additional things, how do we

get those

additional things? Did I sum that up kind of well? That's that's where I've I've landed. And you have you you have all had the patience of saints explaining this whole here's what the auditor does do and here's what they don't. So I I just I get it. I finally get it.

And I I wanted to add just a couple of things um relative SA to your comment. Um, I don't know if it would if it makes a difference or not, but I had two what I will call extraordinarily difficult conversations. Um, where Kim had to bring me into them in December and January. Uh, and um, and Cherry Becker was an extraordinarily difficult conversation. And I mentioned that because um because they were taking serious what they were hearing um from the mayor directly and what they were hearing in the media and so um

difficult as what sense?

Pardon?

Difficult as in what sense? Like they were asking difficult questions.

Very difficult question to get down to the bottom

getting to the bottom of what was going on with the transition of the town manager.

Okay.

Yep. Um and then the second thing that um uh related to what you were mentioning Carissa, the proposed budget, there used to be an internal audit function quite a long time ago in Carrie. That internal audit function has gone went away.

It was unfunded.

Unfunded at some point. There you go.

Yes. Okay. So So it was unfunded at some point over the last 10 years. It is part of um Russ's recommended budget to restore that position.

I've been waiting to say that.

Yeah. Yes. [laughter] Sorry. Sorry I took that from you.

Yeah. So

when you get a Stacy, you'll see more about it.

Say it's your turn. [laughter]

So that doesn't that doesn't get us someone in place on July 1st. You know, it takes us a little bit of time, but an

internal audit position is scanning things year round to see if there's any anomalies in PECARD purchases, etc.

But does will that in in if it's an internal role much like can we police ourselves? And if the answer is yes,

we're going to talk about that, right? Well, you should talk about it with regards to whatever the outcome investigations are and what you want uh PECARD policy

or other policy updates to be, especially in reporting to council. If you want a third party to then verify that, independently verify that, that's fine, too.

But we probably will get the investigations done,

then start working on policy changes. Actually, I know finance is actually already working on them.

I'll tell you a little bit of what will happen even with the internal auditor. We'll do the work. The internal auditor will do the work of what an internal auditor does. External if we decide that an external firm comes in to do a review, they use the work of the internal auditor to do their work. You know what I mean? So you got you can look at it from I just want an opinion from an independent auditor or are we doing the actual work?

Okay.

You know, that satisfies what you all um would like to see.

Thank you.

Yep. Have you

I'd like to thank the um Carissa for her comment or council member Con Johnson for her comment. I think what the one thing that was surprising to me as well was the reporting structure. Um, as Russ said that I really thought that I didn't realize that the auditor worked directly for the manager, but the auditor works with management day-to-day, but they're appointed by council yet serve the town and our residents. But I I've always felt that and expect them to speak pretty candidly to us about what they see. Not just whether the books follow the generally accounting principles, but whether there there are, as Council Member Con Johnson

said, emerging risks with fund balance or budget to actuals and our own financial policies. So, I appreciate when they come to us and they present findings after the fact and in as much as they can in plain language, but in public. Um, but being able to flag any concerns a as I'm guessing Russ is getting to with an internal auditor is important. And and also if I also hope that if the mayor or any other individual council member reaches out to them, I still expect the auditor to respond but be consistent with their standards and then share that response with the full council so there's no private channel that undermines their independence. But I think that should also be raised as a flag that I I truly expected them to respond to the mayor when he reached out to them and that was a bit concerning as well. So I just wanted to make sure we're all on the same page.

Yep. And council member Bush nailed that. That's the we what I don't want to do is undermine the independents

but also really looking to staff to tell us you know what is the best practice here. We're under a lot of pressure to hand residents and citizens and taxpayers a very clean this is the full pro proof plan we have right to make sure that nothing that nothing in the future is going to get the answer I didn't know. Yeah.

Right. So there's only there's only so many reports you can give us. This is a lot of reading, right? We all have all this bedtime reading. Um it's scintillating.

But even if you produce everything, like if you write everything down and we've got a thousand reports, we can't ingest all of it. Not we're

part-time

leaders here. It's not realistic

and not experts. and and yeah and and as much as you're trying to make us experts, you're absolutely right, we're not experts. So that's where um an an individual on staff dedicated to oversight as well as something external. I don't see a path to avoid that combination being the only answer that we can sort of land on. That's just my opinion. And I see a couple of head thoughts, but I just that's I I believe, you know, from hearing from residents, hearing from taxpayers, I believe that's what they're asking us to do.

Sure.

More oversight.

Makes sense,

Ross. We're at 3:30.

We sure are. But y'all had a lot of questions,

so I think it's you you should make sure

it's time for Kim to go. [laughter]

I have to leave at 6. So, I'm leaving at 6. I'm out.

Thank you. Thank you.

Well, then assuming you're done. Yep. Thank you. [applause]

Assuming you're done, we're going to

May I borrow a corner here?

Tea up the next presentation, which

I will read it.

Um Stacy's going to review our budget with us. And the only thing that I want to say going into this is just remember that um you are not making budget decisions today. um we would love to hear your budget feedback and obviously we'll take any of that and we'll roll into um the May 28th work session and talk more about the budget. So today I think the important thing is to give us any feedback, questions or comments that you have as we move through the process with you and probably likely have two more work sessions on the budget knowing that you have to adopt a budget at the end of June,

right? June 30th is the deadline because July 1, a whole new year and we get to do it all again, y'all.

[laughter]

Yay. See, we're two and a half hours in. I'm psucking myself up.

All right. So, let's talk about the fiscal year 2027 recommended budget

and the fact that you have a copy of it on your

Oh, you do. That is true. Let's not dismiss the fact that you do have copies

with tabs.

Hole punched ready to go in your binders.

Whole punch ready for the binders.

And they're still hot from the printer last night.

They're pretty warm from the printer

You Stacy was and her team were here till 11:00 last night getting those things printed.

It's Margaret and Elizabeth that I very much appreciate. Oh, it's online.

And it is online as well for those that are watching us online. Um, and when we get to the end of today, uh, at one of the end slides that you'll see, uh, we'll walk through some documents much like Kim did. I will just verbally show you the page numbers and then you will get these presentations at the end of today. You can go back on your own time when you're thinking about leisurely reading and check those out. Sound good? Okay. So today's agenda from a budget perspective. We are going to talk a lot about the budget development and priority setting processes of which you all have been a really important part of. Um we're also going to share an overview of the document that you have in your hands and what's online right now. Um we're going to review reductions that were made to balance the recommended general fund budget. And so we're going to talk quite a bit from an operations standpoint about the general fund budget because that is where the majority of our departments are budgeted and it is where property tax is our single largest revenue. So we will spend a good amount of time on that. The utility fund and our capital project funds. Um but we won't forget that there are other funds that are outlined and balanced in your budget book as well like the fleet fund. We'll give that a little love. Um we're going to talk about property tax rate. We're going to just give you a little preview of some thoughts about additional revenue and cost recovery options that you all could choose to consider and we'll bring those back to you one of the future work sessions likely May 28th, but we'll just kind of tee that up for thinking today. Um, we're going to talk some about the council identified budget items that we have all received through uh you all over the past few months. We've got those listed and and we'll talk about those and then we'll have next steps regarding the May 28th budget work session. So, sound good? Okay, three key points for today. There are many, so it's hard to bring it down to three, but we landed on the first is that this recommended budget is rooted

in council and the public's priority input. We're going to talk a lot about that. We did a lot of quadratic voting, y'all. Um, you're probably tired of talking about it, but we did a lot and we got some great results from it, and you see those results in this recommended budget, and so we want to make sure we draw all of those threads together for you. Um, secondly, this budget represents the single largest investment in public safety in K's history. And so we will talk a lot about that and that is a theme that came directly from all the priority setting information that we received. And third, this recommended budget is the first step in instituting a predictable, transparent approach to funding carry services. So Russ got started with this earlier setting the tone about this concept of smoothing. Smoothing isn't just about tax rates, utility rates. It's also about how we bring on services or manage expenditures, capital or operating in a measured manner. So, we're going to talk about that, too. Quick reminder, I know rest of you this as well, but we've got these points that consistently conflict, right? So, just kind of keep this vin diagram in our minds as we walk through priority setting decision- making about service density taxes and the fact that everybody wants the middle and really the middle is unachievable. Maybe we flip the vin diagram and you want unstable services, high density, and higher taxes and then see if more people talk about it.

Maybe so. Maybe so. Um, it's nice to see this chart. I'm particularly excited to see that of a two-page schedule, we are on the last button of the first page, y'all. [laughter]

You've done you've done a lot of work.

You have, and we should not minimize that. I mean, this started with you all consistently back in January, and we have now made it to the far right on May 14th. We've gone through the public input and we still are taking more and looking forward to receiving it, but it really has been a great and collaborative process. We're going to talk more about that shortly. Um, these are the remaining dates after today. So, we have two work sessions, two budget public hearings, and we're set for you all to adopt a budget on June 25th, last

meeting in June. Oh, why are we not moving forward? All right. So, we're going to talk a little bit. We're going to get started with process and priority setting. This is a chart that I've shared with you previously. It really is just a reminder that the budget is a year- round process. You'll see at the top we start like July to October. We're already pre-planning and here we are down here in May. We finally made it to the recommended budget and then we'll review and discuss with you all and then we'll adopt and then we'll start again. Right? So, this is a process that happens year round. It's not really just going on in May and June. But what makes this particular process unique is we restored some fundamentals, some best practices, things that we used to do and had kind of fallen away. We've brought them back and we wanted to make sure we made everyone aware of that and kind of provided a little reminder. Um the first is that directors collaboratively developed a recommended budget, both operating and capital, and delivered those to the interim town manager, Russ. And in my 26 years with the town of Kerry and many of those in budgeting, this was if not the most one of the most collaborative efforts I personally have been involved with. So this really is something that started within the organization and is coming upward to you all. Um the interim town manager has held budget preview meetings with council. That is a restored process that we did for many many years so that we could share information with each of you along the way about what might be going on with tax rate, what might be going on with expenditure needs. Instead of holding that information and bringing it to you in May, we've tried to sprinkle that through over the last few months. Um we uh had directors share early budget insights and facilitate priority discussions with boards and commissions. Um we started that a little earlier this year. Last year I think it was more in the May June time frame. We started back in March. Um last year we worked with the boards and commissions to do the budget modeling exercise that you all participated in. This year we

used it for quadratic voting and more priority information from the community and we'll share some of those high level results with you today. Um we have been providing public input reports to you at every meeting. you got your pulse reports today and we started by holding capital project work sessions in March which is something we did many years ago um and had kind of stopped so we've tried very much to look back at the past uh best practices and bring them forward so hopefully you have found those helpful in addition to that we've implemented some new things um kind of like right now all work sessions and meetings are live streamed and recorded right everybody can hear and everybody uh can always go back can see what was said and what we talked about. Um, we introduced the concept of quadratic voting which is a government finance officers association best practice. For those who are watching, there is a link in the online budget document that will explain more to you about that process and tool. Um, but it is a uh a voting process that allows you to really tease out priority without one single voter being able to allocate all their priority feelings to one thing. Right? Right? So we get a little bit of a better view of how does someone feel about an item on a continuum. Um so we have done this exercise with a number of folks and we started with council at the staff retreat and the results of your work that you all did together that day absolutely fed what you're going to see in this recommended budget. You will very see very clearly see those themes. Um we also held a budget public o a budget open house in April which is the first time we've done anything like that. it was livereamed, recorded. Uh there was a survey similar to quadratic voting, not quite the same, but a survey, and we've incorporated those results in what you're going to see today in public input. So, they're just a few of the new things we've done. One that didn't make the list, but I want to point out is we've revived the concept of a manager's transmitt letter in the budget, which is a two-page letter directly from the manager to the public about the recommended budget.

You've seen this earlier today, but this is a reminder of what your council quadratic voting uh results were. Um, and I'd like to remind folks that just because there's no bar on operational efficiency does not mean it did not get votes. It got 10 votes. It's just weird that the tool doesn't populate the bar for that. Um, but your top three as a council, community safety, new capital investment, and high performing staff.

Stacy, can I um interject here? I've gotten two different emails. one I believe Michelle was copied on from from residents who were quite angry to see that fiscal responsibility wasn't higher on this list and I recall distinctly when we were discussing this that I believe the majority of council felt it was a pillar. I believe the other or I'm sorry it was a foundational item that regardless of what all the other ones you were doing I believe the other one was

maybe operation

transparency

transparency thank you and I I feel like we agreed um maybe it wasn't a majority but I feel like we agreed that that was um built in

built in and didn't need to be a singular pillar because it really was a foundational piece to each one of these other pillars And this is the second time I've seen this graph now and it gets stuck in my cross. So I wanted to mention that perhaps we can update this slide to represent those two foundational items that we discussed.

Yep. I appreciate that feedback and

we talked about it this morning.

We did.

Um and and thought y'all might talk about it. Yes.

So um if y'all are in agreement, we can certainly

council member Con Johnson. Uh when I did this exercise as the liaison with planning and zoning, we had a conversation akin to what we had as a council. My humble recommendation would be that the data and the priority that we labeled fiscal responsibility was trying to um represent maybe just needs to be rebranded that because I think the

well there's the discrepancy between the popular notion of what we mean by fiscal responsibility versus the policy uh you know the the budgeting priority that that was meant to captured.

Good point.

Because, you know, a lot of that was about fund balance, about fiscal policy, you know, so there there was a a correlation to actual budget priorities, you know, where you invest dollars that the word responsibility

I think obscured some of the uh the intent of that of that piece.

That is an astute in in this context. Does that mean fiscal conservatism for example? Um because if we went back to that slide, you know, for each of these, we had those slides that that had a full definition and showed you what the budget ramifications could be. And so for for anybody who's watching this, if you were to see the slide that corresponded to fiscal responsibility, you'd have a better understanding of what that means. That probably doesn't mean what you think it means. When you just hear the words fiscal responsibility,

oh, it's down the list. Who cares? to build on that and answer your question. Hopefully, you'll be pleased about this, but if you turn to the appendix of your budget document,

you will see the um I don't have the page number off the top of my head 27,

but you will see the definitions that were presented as draft

and then we have your updated as a council draft definition.

Thank you.

We're trying. So, um I will I do want to reiterate just to be clear though that when we did this same exercise with the boards and commissions and the resident groups, community groups we're going to talk about, we used the original wording and original definition just for consistency with what you all first reacted to. So, your point is very well taken. Um, but want to point out that definitions page and you said 24

327

327 sorry in the appendix we tried to get at that and and we also provided so as we walk through these this is something else we talked about this morning as we walk through these highle aggregated results that I'm going to show you in a minute you have also in

there the independent quadratic voting tables that look just like this for every board and commission and I think the other groups as well I can't remember but you you will see as we walk through you can see every group that partic participated in their results. So hopefully that also um helps you. This information again I want to repeat for those watching is available online right now on Car's website. So folks can look at it with you.

Okay.

Thank you.

So with that, now that you all are finding the appendix, which I don't know that anybody's ever looked at the appendix that much in my history, right? [laughter] Um it's just great. I love it when people want to read the budget book. Um what I want to do is take you through just some aggregate results. And I don't want you to be overwhelmed by the bar charts because what I do is I follow it up with a quick chart that shows you each group's top three, right? So you can see councils and then the group that we're talking about in comparison. So this particular slide is comparing council's um voting results, quadratic voting results in gray with those of the average uh rank of the boards and commissions. We had to average the boards and commissions results just because there were so many of them and we wanted to present it on one slide against you all. But you can choose to go through and look at every board and commission and see their independent results. So, uh, the priorities are labeled at the bottom, community safety first on the left, kind of everywhere a little bit. Some some things coming together, but what I wanted to consolidate for you are the top threes. And so, that's what we have here. Council's top three on the left. And in this case, boards and commissions, you are aligned at community safety in this vision. Uh then we've got a little differential on number two with new capital investment with council and maintaining uh facilities with boards and commissions and then high performing staff on the left and service levels maintaining service levels on the right. So this is boards and commissions and council. All right. So then we uh brought together what we are calling community sessions. And so the community sessions include Kyrie 101's results um the survey results from the budget openhouse. And we had one local Rotary

group reach out to Russ and ask him to do a budget presentation and they asked if they could quadratic vote. So we wanted to include their votes as well. So they are included in the grouping on here that you see in green for resident sessions. So you all are gray, resident sessions are or community sessions are green and then blue is boards and commissions. [cough and clears throat] So I'll give you a minute to look at the bars and then I'll bring it back to each group with their top three. So explain the resident sessions again. Like

it was anyone else that number like just a few

Carrie 101 I forget how many.

Okay. Always on the bottom 101

was an open house. You can show yourself

67 people. And then um the Rotary Club we think had about 50 people. I don't have the numbers

in the that's probably about

in my head solidly but

I was looking at the picture and not the words.

Okay. So top three by group. Everybody's aligned at number one, community safety, right?

Number two, we start to see some differences among all three. Nobody's got the same one.

Um, and then number three, we see that boards and commissions and what we're calling the community sessions are aligned at service levels,

maintaining service,

capital was the one that maybe

if you go back one

go back

to the chart, just the most difference of opinions, if you will,

right here. So, so is the um the the residents ranking physical responsibility is very high compared to other uh council.

Yes, that would be the green. Yes.

So, same question. Do we are we on the same page of the definition of physical responsibility? And it shows the new capital investment kind of related to physical responsibility because that is super high and new investment means you need to spend more

but I I was thinking it are we on the same page of

it very well could be that on that fiscal responsibility area that that shared definition isn't there. So that one, you know, I I align with you all in the sense that that is an inherent part

of who we are.

Um, and I think that if we continue this quadratic voting exercise in the future, that's one that we definitely refine so that we tease that out to your point. Um, so I don't

I don't know how much specificity we can take from that particular one. I' I'd add that um I think we could add even in this document uh I thought I heard a fair amount of consensus that this was foundational much like transparency and therefore not to be voted on. Yeah.

Um, so I essentially it's an expectation and so we can we can um on that page 327 uh as opposed to there being an alternate um definition, it's that it's adjusted to say that council agreed this is a found foundational item um much like transparency and um and then we can put an asterisk in the tables as well.

Thank you.

All right, additional questions on that. Um, oh, sorry, I can back up.

I would just point out that the definition of maintaining service levels includes police and fire. So, I almost look at that as

about the overlaps.

Yeah. To it's it's it's a a clear set of marching orders for us, I'd say, from

Yeah. I see overlap too in uh high performing staff and maintaining service levels.

Absolutely. Um have the staff to do it.

Yeah. Ex and at the retreat we had so much conversation too about efficiencies and how we we've probably uh maximized that and so if you want to maintain those service levels it means we need the the staff to execute the vision.

Yeah. And we tried to we didn't try we did put notes in the documentation that talk about that this is not a scientific study right this is not statistical analysis but it is definitely sentiment right and there's a lot that we can learn from the sentiment.

This is the first time we've done it with y'all.

Absolutely. So we we'll learn from it and um you get better as we go. If you wish to build budgets around this type of um voting exercise and

we'll refine it.

Y

All right. So last one that

shows this information in a

Lori have a question.

I don't know.

Oh

I'm just checking if Lori

Yeah. Um well I agree with the idea of it the fiscal responsibility being similar to transparency. I think we came up with that. Um, I I definitely remember us coming up with that. I would also like to say that when when I voted, I put most of my voting in fiscal responsibility. So, in some respects, if we were to run it again, um [clears throat] I would imagine it would have potentially a a different skew um for the council just taking that one out and allow and allowing everyone to you know figure out what their priorities are associated. The other comment I would make is I did would like to understand from a participatory budget perspective the alignment or the misalignment of council's um request or or leaning towards capital investments where the public was definitely not on the same page that I think that bears some additional um guiding into to understand why

we can certainly they do that

as opposed to maintenance possibly,

right? Maintaining what we have, not building more of

that's the way I took it when I was doing the exercise

and I think and you will see as we follow through this conversation with what's in the recommended budget. A blend of all these things is considered and included. So don't get too my advice would be not to get too wrapped around the axle on this particular part until we are able to lay the whole plan out and then react to that. Well, and I might add some commentary to new capital because you also didn't give the context of what capital might be. It was the concept of capital, not specificity of

projects which may have gotten people to lean certain ways, but it was very broad and opened.

But from the BU survey, we see people want more sports.

That's could be new capital.

Uh if you built parks and then programs, I can see how you could get there. Yes. Okay, last slide on this and then we'll move along to the next segment. So the last part of community input uh shows us this is just comparing the community participants. So carry 101, the Rotary we discussed in the budget openhouse. This is not putting council in here, not putting boards and commissions in here. Just how did those community input opportunities? Michelle, just to your question about numbers of people, they didn't get to vote, but if you go online, you can see there's been over 3,000 views of the budget openhouse um video.

And this is the top three for each of those groups. Um Carrie 101 on the left, Rotary in the middle, budget openhouse attendees, and the green on the right. And so here, um you know, you see a little alignment. Well, you see alignment around community safety because it's one or two in all three, right? um you see affordable popping in and then now we have maintaining coming in as well

and those those groups I think skew a little bit older too so I'm not surprised to see some alignment there from what I heard with the senior advisory board as well

again not scientific

really about sentiment and super excited that we did this for the first time

but those are are extremely engaged

residents

so we took all of this as we take all public input that we have received and we'll continue to receive, but in particular, how did we use this information to form the recommended budget that's before you? Well, you're going to see a lot of themes coming back to community safety, capital investment, staff, maintenance. Maintenance is absolutely in there. Um, and what I'd ask of you all is that in time that you really focus on reading the interim manager's message, Russ's message, and the budget overview because those really

break down what is in this budget. and we'll talk more about specific things to read, but that's just my my early level pitch for those two documents are great.

Thank you.

All right, so without further ado,

20 pages or less.

Where's your letter?

Uh the very first

it's there's a tab. It has its own tab, manager message.

Manager's message. Okay,

and the overview follows directly behind.

All right, I know we're all excited to talk numbers, so let's talk numbers. So the fiscical year 2027 recommended budget totals $573.5 million that's the total budget all funds $445.9 million of that is related to operating budget and 127.6 6 million is capital budget. And so for a little frame of reference, the total budget is up about 12% which is about 62.5ish million. The operating budget is up about 6% about $25.5 million. And the capital budget is up about 40% or 36 million. I want to talk a little bit about the capital part because that one varies a lot year to year because it truly depends on what projects are in the pipeline, how much they are because we're talking big facilities, big roads, that kind of thing. and where something is in development. So, it is not uncommon for the capital budget to see a big swing from year to year. So,

and knowing the work you did last year on reassessment, assessing the capital budget to not have much of a capital budget.

Yeah. Okay. So, thought we'd give you a quick snapshot of things that interest people the most. Um, so wanted to talk about the property tax rate. This budget recommends a property tax rate of 37.75, which is a 3.75 cent increase. And to put that into perspective, for the median value assessed value home in carry of $650,000, that's about $20 a month for the 3.75.

The solid waste and recycling fee is uh recommended to be $28 per month. That would be a $2 per month increase from

the current rate. And the utility rate is a 4% recommended to be a 4% overall increase of the rate applied to the base rate. And so for the typical family, that would be about $38 a month.

And both the solid waste and recycling fee, just like the utility rates, can only be recovery, right? We can't over% of expenses. Okay?

You cannot over recover. And right now this puts us depending on whether or not we include vehicles um meaning the cost of sanitation trucks that we routinely replace whether or not we include those in our cost recovery um calculation that puts us in the range of on the low end of about 86% cost recovery to 93% just kind of depending. Okay. So what I'd like to do next is walk you through some of the major funds and just give you expenditure and um revenue information. And then from there, we're going to go into the themes of the budget that we talked about earlier, and some of my friends are going to come up and help talk about those as well. So,

and we'll take a break before

Yes, you don't just have to listen to me ramble on. Um, so talking about the general fund budget, the general funds expenditure budget is $329.7 million. And we've broken it down in the same type of uh bar graph that we used in the budget openhouse materials. And so I won't read them all to you, but you will see that the bulk of our expenditures are related to public safety on the operating side. And to be clear, public safety is referring to police, emergency communications, and fire. Um, you'll see general government. I want to make sure folks understand that that's really talking about a lot of the folks within the organization that uh support the rest of the organization like budget and finance and purchasing and that kind of thing, HR. How are we funding that $329.7 million? Um, and it's important that I wrote the words revenues and funding sources on here because a chart that uh Russ showed earlier indicated that property taxes were 61% of the overall funding sources and they are when you're talking only about revenue. But in this case, I

wanted to make sure that you see that this is a balanced fund and we are using a little bit of fund balance, a small amount to support capital projects. And so by weaving that little extra funding source in there to create a balanced budget, that drops the property tax percentage to 60%. But I want to make sure you understood the difference there. If you're wondering where sales taxes are, they appear here in this other taxes and license category and they make up the bulk of that revenue.

I did not understand that.

Same.

I will back up.

Thank you.

So I think you wanted to know I think your question is on the property tax. Yeah, the the

so this is funding revenues and funding sources. Fund balance is not a revenue but it's a way that we can fund work and so in order to balance over here because we are transferring money from here to capital.

Yep.

We need an offset over here to be balanced.

And where did that 2% in fund balance? Where did that money come from?

It is an a true it's I don't have the numbers in my head. is about $5 million of fund balance to be directed to capital projects and we're going to talk about those capital projects.

Okay.

That would be above and beyond what your uh policy is.

Correct.

Well,

for reserves

for your general fund fund balance. Yes.

It's coming from fund balance. Yes. Yes. Yes. Above the 33%. Yes. I was like waiting. [laughter]

Yes.

I I think I'm hearing this correctly. Stacy knows that we have such a keen eye that we previously saw a pie chart

with property taxes listed at 61%. And we were going to say to her, but wait a minute, it's 61% and she's noting that when you add in that that pie chart was revenue, that fund balance is not. So when you add that in to funding sources, it's at 60%. So when we when we are doing our bedtime reading tonight and we're like wait a minute's pie chart and Stacy's bar chart are not matching.

Britney Britney we we do have a we will

have an opening for a budget director [laughter]

for a budget analyst. Britney

my my pie chart sounds like you do math the budget document and was just specific to revenues and specific to what the state allows us to collect.

Thank you. I'm glad I asked because I did not. They were just saving themselves from your midnight email when you said, "What about this 1%?"

Well, we welcome the I welcome the questions and I would happily answer, but I'm like, I'm going to head this one off. Maybe that was not my better choice was to try to head it off. All right. Were there any other questions on the general fund before I move to the utility fund because I can go back. I don't want to rush anyone. Okay. Utility fund. The utility fund has an expenditure budget of $126.7 million. And a piece good piece of this you see down here at non-dep departmental and transfers in this case that is money that is being transferred from the utility fund to the general fund in support of all the things that our public works folks do on behalf of the utility fund. So that's what's creating a large amount of that expense. You'll also note debt here. How are we paying for that? We are paying for that through service charges. You'll see water and sewer service charges charges there. We're appropriating some fund balance to go to capital specifically for about and then uh we've got some other smaller revenue sources but that's how that fund is then balanced.

So just just to be clear for those that might not know utility fund can only be used for utility stuff.

That is correct.

So you were talking about uh people that do work for utilities. That's why th those funds could be used.

Yep. Exactly. I know public works does stuff for the utilities and

which we didn't know until recently. So, thank you for that.

That is true.

Thank you for listening.

I know y'all are doing great.

Okay. General

charts are in the pages referenced for reading.

Yeah, they're in the budget

over 11 through 20

and they're explained in the budget overview. So, um, general capital, the budget includes $83.78 million, and you

can see how that is spread between our various capital categories with transportation being the largest, then general government, parks, fire, and transit. We'll talk some more about these shortly. Um, how are we funding that? Uh, we are funding it, a good amount of it, 61% of it with debt, followed closely by general fund transfer dollars. And then there's some Wake County transit tax funding going in there for the multimodal. And then there's some smaller revenue sources associated only with capital that can only be used for those things.

Are you going to talk about debt service level anytime soon?

Uh I don't know that we'll talk I didn't have debt service but to talk give you an update on the shaping carries tomorrow bonds and debt in general. Yes, we are.

I just want people to know like oh man they're going crazy. They're throwing all this debt in there. No, we're actually lower.

We have a very Yes, we have a wide margin of debt capacity. We have a very low percentage of debt overall. Yes, you're exactly right. So, this does not put us in jeopardy of meeting our cap of which I believe is 15%. Um, when we developed this $83 million budget, this starts to set the stage to help you understand the work that the directors have done collectively and then working with Russ, the requests that came in this year for general capital totaled $137.1 million. And so the work that we've done over the last few months is to reduce those by 53.3 to bring you a balanced capital general capital budget today of 83.8. And so does that mean that there are a good number of projects that are not being funded on the general capital side streets, fire parks, general government, downtown, right? Yes, that means that. Does it mean that they won't ever be funded? It means they could absolutely be considered in a future year. And just a reminder because some of us have gotten communications from residents that said staff just gives you recommendations and you just say yes that the directors reduced and then the this recommended today was not the same number we saw back months

ago. So we have all as council been a part of the process with resident feedback and helping

meet this this number for today. also

which I think speaks to fiscal responsibility because you could fund all that. It would just take uh more revenue to do so. Possibly tax increases or debt.

Takes us back to the vin diagram. Okay. So again, how are we primarily funding this? We are using $16.3 million from the general fund. We are using $51.1 million of debt. So here you can see the types of debt. Some of that will be installment purchase. That's primarily for fire station design and vehicle purchases. Not primarily, that is what it is. Um, and then 28.6 million for a number of projects that we're going to walk through in a minute, but from the shaping carries tomorrow bond, the 2019 bonds, which were voter approved

and vehicle purchases meaning firet trucks.

Um, there are two new fire apparatus in here. We're going to talk about that, but also vehicle replacements, whether it's heavy duty things like Bobcats or it's passenger vehicles or light duty or police cars.

Thank you. Okay. And so geo bond interest rate is much lower than an installment.

They can be similarly anywhere between 3.75. The last numbers I got last week were like 375 to 475. So

that's could be millions of dollars when you're talking about capital project.

Just giving a plug for future bonds. Just saying if you want to fund something that's the best way to do it. Well, Mayor, it is important to remember though that uh if you need a fire station, you may not want to leave that up to chance.

That's true.

That's why we make different decisions. But yes, the interest rate is one important variable when we're thinking about how we match up debt or cash.

Y

because if we spend cash, then we're also losing that interest rate as well.

All right. So, we thought we'd give you an update on um the 2019 general obligation bonds that were voter approved. Just as a reminder on the transportation side, $112 million was approved. We have budgeted a little over 90 million of that to date, meaning

budgeted it within projects that are active. That leaves us about 21.9 million left to budget within projects. And this recommendation budgets just shy of that, 21871. Uh on the parks side, the voters approved $13 million of that debt. We've budgeted 93 million of that, 93 and a half. Um there's 195 remaining to be budgeted and this budget recommends utilizing six seven of that. And why is it utilizing less? It has to do with mainly with project alignment, right? Like what projects were coming up through uh recommendations from the directors and how did they or did they not align with debt? Um there are just some things that that don't align well with debt when you've got to pay your debt back over 20 years. You need to make sure that what you're using it on is something that has a life span equivalent to what your debt repayment is. And and for those watching, this is over years. This is not last year, this year.

No, over years, but to this point. And to refresh everyone's memory, mayor, thank you on what projects currently are budgeted with these funds. Uh you saw this chart probably back in February or March, I can't recall for sure. Um but this lists all of the currently funded transportation and parks projects. It notes where they are in progress right now. And those that are orange, the playground updates, carpenter fire station road, and open space land acquisition, all are included with recommended funding in 2027. All funded with 2019 bonds. Okay, before we close out capital, I want to talk about the utility capital. It's water and sewer. A lot more simple, two types of projects. Um, and the funding sources are also more simple. Um I alluded earlier to the fact that there was a significant utility fund transfer this year uh to support those projects. We're going to talk in a minute, but that's planned um and forecasted. Uh there are restricted revenues which are development fees, water and sewer development fees. We get some reimbursement from Apex for their participation in some of our facilities

and then there's a little interest income being used. Okay. So what happened with the budget balancing on the utility front? that system is a little more predictable than the general capital front and we were able to fund it as requested. Um, and that means a$26.3 million utility fund transfer, but that is an intentional use and I want to be very clear about this, an intentional use uh that is in alignment with our rate modeling and our forecasting that we do. Um, and there is no debt budgeted in 2027 to support utility capital projects. So, we're going to shift a little bit um and now start to align the recommended budget with the priorities that we've just all discussed. So, there's the concept of smoothing, community safety, new capital investment, high performing staff, and maintaining infrastructure. Russ shared this uh slide with you earlier, but just as a reminder, the concept of smoothing is all about implementing adjustments over time in a predictable and transparent manner to avoid concentrated impacts. And that smoothing doesn't just have to mean rate smoothing or tax rate smoothing. It can also mean the smoothing of when do we bring on staff? When do we layer in capital projects? Does our organization have the capacity to complete the work to complete the infrastructure management associated with what is coming forward. So that smoothing is is two-part. Um this budget is the first of a three-year approach to address staffing and infrastructure needs with keeping an eye on the impact to taxpayers and our own organization. And Russ me mentioned this earlier. Following the recommended tax increase this year, there likely would be similar tax increases in the future. Is that set in stone? No. But is that something we have our eye on? Absolutely. Okay. The theme of community safety. The 2027 recommended budget includes $12.4 million in public safety investment.

That is a 44% increase over the prior year. it is 938 million more uh or 93.8 million of that is focused on operating not capital but operating and that's a 20% [cough and clears throat] increase over the current or prior year 26 which is our current year um capital is $18.6 million and that is up from zero. There was nothing funded in last year's this year 26 capital budget for public safety. So this truly is a historic investment. When we talk about the operating side of that investment, it supports 33 positions and you can see those in the table to the right. Design of two new fire stations. Chris, to your point, two new uh fire apparatus for those stations. 911 space upfits, continued investments in our new records management system, and renovation of a police record space.

And at this point,

we're going to take a break. We can take a break. Yes. I was like, do I call it my friends or are we taking a break? 10 Yeah,

We'll reconvene the quarterly at this time and I'm going to turn it back over to Russ.

Yes. Thank you, mayor. Um, you cannot talk about a budget that includes public safety as its top priority without hearing from your two chiefs. Um, so they are here to give you a little more uh detail on what some of the things that are in the budget and probably around the concept of smoothing. So, I'll turn it over to them now. And guys, thank you for being here.

Well, thank you mayor and council for the opportunity to speak to you and I want to thank y'all very much for putting public safety as the top priority for the councils at the end for the budget. Um what we're going to provide is a very high level overview of our needs uh for this coming fiscal year and how we smooth the budget and our total needs over the next few years. Of course, they're ever evolving, so there'll be opportunities for you view those as we go forward through the next couple of years. from a police staffing perspective. Um there are a couple of key takeaways that want to talk about. The short version of this whole thing is that this fiscal year we need 21 police officers and we need six 911 center dispatchers or telecommunicators. smoothing the budget. The total [snorts] number that we're going to need is considerably more than that, but we're looking at an additional 20 year or 20 officers over the next two budget cycles. That's 20 each year. And then the same for the 911 dispatchers. And then ongoing, we would like to uh look at phased hiring towards a 1.5 per 1,000 population and trying to achieve that goal over the next 5 to 10 years as we go forward. But it is an easy number for council to keep track of as you go forward. All you have to do is look at the population and look at 1.5 per thousand and you should know where we are. And then the only other factor you need is how many officers do we

currently have? Nitro says, "Please help us here." [laughter]

Our critical needs right now in the police department are sworn officers, emergency communications personnel. And then to a lesser to well to an equal degree is is space for the police department, training, evidence, backup 911 center, and special vehicle storage. All of these are critical and you'll see pieces of that in the budget and it's already been presented before. The reason that we need this is that if you look at our staffing over the last decade, we have not increased patrol staffing. And what I'm talking about today is patrol numbers. I'm focused on patrol numbers. Doesn't include kines, doesn't include detectives and all of that other stuff. But it's real simple. When you look at the orange dots there, everything in our category, we have remained flat for a decade on personnel with the exception of what we increased to staff or to protect the downtown as the downtown has grown. And those officers do not impact our cost for service and our response times. Chica, I just have to interrupt you to say that was the most alarming thing I saw and found out and should be underlined and bolded to the world that for 10 years we didn't add new officers.

Yes, sir.

We just fill positions. And that's incredible that you guys keep the same level of service with that

fact. And we've implemented strategies over the past couple years. We've focused on uh efficiencies and we focused on technology working smarter and and new strategies. And I you know I'm happy to brag on the folks. They've reduced crime in 2024 by 20% this past year by 23% and we're still going but it's killing us.

U and you know I don't need to go through these particular numbers here. You can see them. The big highlights are, you know, special events is

increased by 167. We're constantly wanting to add more because that's what our citizens would like to see and we just want to make sure we can keep them safe. We have new challenges with protests and that sort of thing that we have to keep our finger on the pulse. We want to be able to take care of the kids that are on these and the neighbors uh that are concerned about these electric motorcycles that are going to run around and drive them crazy. Our response times uh need to improve greatly. Uh if on our true emergency calls for service, our emergency priority, it takes us from the time you dial 911 and it starts ringing, it takes 13 and a half minutes for us to have an officer on the scene. And that's the 90th percentile, 90% of the time. So, we really have to focus on that. And that's why the staffing at both 911 and uh in the police patrol areas is critically important. We are the way we assign officers is we have two districts, a north and a south district. And we have an officer in each beat, which each district has six beats. And then we have one float officer, one officer that works across all the beats to help back up officers that respond. So a total of seven officers work each district uh 24/7 at this moment. Now the problem with that is that is an absolute minimum staffing. The problem with minimum staffing is there often times we don't have any officers to respond to emergency calls or they're coming from all the way the other side of town uh from either the west to the east or east to the west because they're tied up on traffic accidents. They're tied up on domestics. two of the council members here, I think Bell and Sera were getting a a view of the real time center and we had live incidents going on a domestic and a couple other things and could point out to them right then we had nothing left

on the west side. They were all tied up. Uh and so that's why this is critically important. The next thing to understand too, why do we need so many people? The reason we need so many people to add one officer to each to a district takes six officers because you have to make sure they're there three uh you know 7 days a week, 24 hours a day, 365 days a year. And you have officers that have to have days off. They have to go to court. They have vacation. They have leave my way. They have medical issues, military leave. And so it takes, you know, the relief factors 5.8 8 officers 5.9 officers just to keep one position filled. There are a number of ways to manage or to look at uh how we calculate uh the correct number of officers. The most accurate is number two here is the managing patrol performance because it includes population, it includes travel time, it includes a lot of different things. the easiest to understand and what I use as a barometer uh is the per capita analysis because anyone can look at that and it won't give you the actual numbers that we need. But with Carrie being so safe and that's what we want to keep it but with us being so safe, this is a pretty good example of where we need to be. The state national average is about 2.4 per thousand. If you look at our peer agencies, similar situated uh here and across the country, it's about 1.7 and what we're we're at about 1.1 now or a little below. What we're recommending is that we need to be looking at 1.5, which means we're at 198 officers right now. We really need to be at 287. Uh, which means about 89 officers, but we don't have to do all those at once. Frankly, we couldn't hire them all at

the same time if we wanted to. And so, that's why I'm looking at the three-year smoothing. And then we look at how many we actually need to do each year and the realities of the budget. We have to do that. We need to be realistic. And so, communications pretty much the same way. We in 2019 we began uh dispatching with uh Morrisville and AP and uh Apex and we were supposed to add or budget uh about six people to do that. That was never done. Uh we have been filling some positions through overhire positions but we have never budgeted for those. And so the national recommendation model would be 38 positions. We currently have 27. So over that same smoothing period, we need to add 11 telecommunicators and at least one supervisor.

Are UCOs a shared expense?

Uh there is a formula and we're recalculating that. There's actually an agreement to where Yeah. And short answer is yes.

They reimburse us. I think

they reimburse us and but we're removing that as well to try to figure out a a better cost model. Do we need to get any kind of approval or input prior to making these staffing decisions from those that

No, we share this recovery.

No, because the formulas are based on cost for service. Uh it's a workload balance associated with

did share the request especially on the ECOs with both managers, Apex and Morrisville.

Okay. Thank you.

So Chief, I'm sorry I I processed things a little delayed.

That's okay. This previous slide said 89 you is what you need but you're budgeting 20 2020 20. Tell me about the last 29. How does that happen?

Yeah, that happens over looking at that. That would be each year we will do a staffing analysis and we'll see where our critical needs are and we would start modifying you use the the per capita as a barometer but you start doing the managing patrol performance to

look at the actual numbers that we may need and then you have to balance that against the budget and the other other priorities of the of the town at that point. But you know uh and I don't want to go down a rabbit hole here but I was the in Georgia when I was there there was this thing about creating new cities and I was the subject matter expert appointed by the governor for the town of Brook Haven and so part of this is an art part of it is statistics and uh I recommended 57 officers to start that new town they ended up after analysis through the equivalent of the uh uh intergovern governmental groups uh at 57.

So, I've had some experience at this.

Well, what you'd like to see too, Chief, I can interject back to the slide where you had all that orange because you'll start to see how that orange changes over time as you add officers.

Yeah. And you know, and it depends on our crime trends. You may need more than that if the numbers go way up. If we're able to move in the direction we're moving now with the strategies we have now, that's why we're focusing on our foundations, then we may not need as many. But 20, 20, and 20, 21, 20, and 20 will put us in a position and give us some breathing room to where we can we can decide and give council more options going forward.

And chief, um, I'll just ask a quick question before we move on to the next slide. Um recently we reviewed the consumption of police like you know the police force for festivals and that [snorts] seems to be a very intensive ask and you know very um I would probably very heavy-handed. Is that something you feel like we need to re-evaluate and kind of reassess where do we stand to kind of take some workload off? Yeah, we we staffed the extra duty. And I'm going to back up a couple of slides here. If you look at the the workload slide,

the bottom lefthand corner, that graph, that's the extra duty assignments. That's the special events. It's increased tremendously during that period of time. That is mandated overtime that we require officers to work. They can either volunteer for it. If we don't get enough volunteers, then we order them to do it. And so that impacts their wellness, their quality of life, and that type of thing. Uh these additional positions will alleviate a lot of that uh mandated stuff. A lot of officers like to work that because it's extra money and things along those lines, but I don't want to be in a position, nor should we be in a position to force them to do it. These extra positions will impact that greatly. So I think Russ that would be probably an ideal uh thing to or the right thing to do is also kind of reassess some of this workload and kind of come up with a new policy. Mayor, this is what we discussed based on the festival's discussion we had to to kind of shrink that bucket because now we're growing and I feel like we're putting so much pressure on this area. We that that's really not needed from our side. Well, I I will say this. If council chooses to fund this strategy over the smoothing period,

you are addressing both of those problems uh at the same time and it would in increase our capacity to handle a lot of things. That's good.

You know, we have the university gains, world games coming in. Uh we don't have the capacity to really handle that right now. we have time to kind of get that in place and be prepared for that as a part of this strategy.

Agreed. But we also have pressures on uh public works and other parts.

Excellent. Excellent point as well.

We can't do anything without our partners in public works and their other departments. An example is you want me to have you want our officers to have uh

cars on the road that they can respond to the cars. We can't do it without Jimmy. M

you want our our radio towers and our radio communications to be staffed. He handles security and he handles facilities around those towers and everything. So we can't do it without Brandon, Jimmy, and all of their staff. And I know the fire department is the same way. The chief is going to speak here in a minute.

Our facilities and our apparatus are maintained by public works and we need their support.

Right. But to to council member Bonsal's point, if we don't have a commensurate investment in public works, I think we're not going to be doing enough to

No, I'm not saying that we don't make an investment. I'm just saying that you know like what we discussed we had a 3x4 meeting and we discussed the support that the staff is providing to each festival and there is a very very long list right now and not every event is really town uh town's event. There are several other events. So we discussed that as a council we need to discuss a policy that could perhaps help us shrink the town's responsibility in terms of resources and the funding that would help the staff alleviate the pressure and I think that's where I'm coming from.

Yeah, agree.

I understand what you're both saying and Chrissa, you had said prior too about understanding service levels of everything that we do as well. One way to manage the sea special events from that standpoint is to have officially town sponsored events where we force people to work and we pay overtime and all of that and then have those that want to put on a special event but we require them to pay the bill and that helps our budget but it also helps to curtail it's a self-management tool. either you can afford it, you're well organized, or if it's just a fly by night or a lastm minute request to throw this festival, you're not putting town resources in it. They have to get those volunteers from the officers before it can actually be

held.

Chief, so I really appreciate that last comment. I was actually going to interrupt and ask if there were mechanisms by which and by way that we could for some of the higherend higher economic um drivers especially when they're private events um run by other other organizations. Do we have a mechanism by which to um have some offset of cost and have we done that in the past or have other municipalities done that? Yeah, I think that's a great discussion for council and maybe a workshop in the future to discuss that. U anecdotally, Lori, I don't we we have not um and that's something we've recently been discussing that may maybe we should. What's the cost of putting on a bus rule in kind services or cash or whatever it may be that doesn't have to be part of a budget to get to a budget decision, but maybe that's something we start in July.

It keeps coming up. So maybe we have a work session where we discuss the resources, the costs, you know, what goes into these festivals cuz I feel like that's something

and and I've been asking what's the other big buckets that that are going to surprise me. I suspect festivals and events is a bucket that

if I if we just zeroed on that might be surprising. I

I agree. So what I hear my colleagues saying is and rest correct me if I'm wrong. I think uh how we've been operating is we've let the the calendar limitations dictate uh what what we're able to host and offer with and we've just said we'll provide the resources that make that possible and we should maybe be doing almost the opposite which is looking at what level of resources do we want to invest

establishing KPIs return on investment

let that dictate the schedule. Yeah. Very

organization sometimes you need to look at what you need to stop doing as opposed to what you need to start doing.

Yeah. And and also we see the two pages

of long list of festivals

and we know that our um demographic growing and um inclusivity is also very important. If we could manage the a specific number of festivals but include more communities to join us and that means we spend less but the outcome is more.

So we have to evaluate all the festivals to see how we can be more inclusive.

Yeah. I I think it's a really simplistic framework, but we've had conversations even uh going back to the retreat about framing things as nice to haves versus have to haves and just where we've evolved to as a town. And so it was very nice to have a very generous offering of festivals at the town's expense. Uh but maybe we look at making those investments a little more strategic.

And also I'd add where to have

Yes. Well, if you don't get anything from this whole presentation, I think this has been great discussion. The three key takeaways and uh thank you all for your attention and transition over to the fire chief.

Thank you. Thank you.

Thank you, Chief Sult. I appreciate working with him on public safety needs. I would like to reiterate what he said. I want to thank council for your commitment to um public safety. It's really important. I'd also like to thank Russ for his commitment in this budget to public safety and thank the department directors for sub uh supporting our request. And so again, as Chief Salt said, mine will be a uh overview, very high level overview. We can get into more detail in work sessions or either in 3x4 about what our exact performance is, but the bottom line is we're making requests that is uh consistent with the priority of keeping the community safe and also uh the rate smoothing that we're going to be utilizing over the next three to to six years. So really I'm going to talk about the immediate need of two

stations, station 10 and 11 out west and then we'll talk about station 12 in the souththeast. this came up and this is really a continuation of the individual meeting I believe I had with council member Richards and um council member Hung and also um from last uh retreat that I talked about our service levels and one of the things I mentioned is there's a direct correlation between um population and incident rate and here you see a graph indicating that as the population increases um so does our incident rate and that's important because I mentioned last year that it was at 60% this year's increased to 62% and we anticipate that going up as the population increases but also because of the changes in EMS uh that we have all talked about here recently very important to keep that in mind

can you briefly summarize that for the people that are paying attention for the first time.

Yes, ma'am. I can. So, EMS is very busy just like all of us.

Wake be EMS, not Yes.

Wake County.

And EMS is ambulance service.

Yes.

Transport.

Thank you for all your assistance. So, yes, Wake County EMS emergency [laughter] medical services is responsible for the transport of patients within Wake County. They have the franchise agreement. in Chattam.

We are first responders and first health covers Chattam County and we are first responders to both those agencies. We get there provide immediate life safety efforts efforts. They come in and then they transport the patient. Um because of their incident rate increasing just like ours, they've had to make system changes which means that they're changing u the time frame at which they're going to respond to lower acuity calls. So

ambulances will be available for higher acuity calls, which means that our units are going to respond to more incidents than they have in the past, and we will most likely remain on the scene longer, waiting for EMS to ensure that patients that need EMS the most will be able to receive that care.

Thank you. And since our fire department is staffed with um individuals with EMT training, there's going to be a larger tax on our fire department in general to respond to what are essentially often life and death calls.

Absolutely. And we're already starting to see that call volume increase.

Thank you.

Yes, ma'am. Next, um at Mr. Overton's request. Um I would and I'm going to turn my back to you if that's okay because I'm going to point and look at the map. Is that okay?

Um you'll notice that this uh includes fire stations in Kerry. The fire stations in red are existing fire stations. The fire stations in blue are future plan fire stations within Kerry. That's in our strategic plan. And then the purple and green are departments uh surrounding Kerry that we utilize for automatic mutual aid as well as our CAM partners.

So what this slide or what this map should indicate is we're utilizing every available resource surrounding Kerry to assist us in providing service and we reciprocate that to them. I'm going to mention the previous slide. that call volume that we're experiencing. Guess what they're experiencing? They're experiencing the same call volume, which means those units may or may not be available, just like our units may or not may or may not be available for an incident whenever it comes in. What this also should indicate to you is that our residents, and I got it, not citizens. Our residents are receiving the quickest, most appropriate response from surrounding jurisdictions as well as Carrie to ensure they get the most capable resource and the quickest

resource available. But it also should indicate some gaps. So, I'm going to concentrate on station 10 and station 11. If you'll look, there are really no resources in those two areas that we can depend upon to provide mutual aid to us. So that means the only option we have to increase or improve our performance in that area is adding a resource in carry. Station 12 is the other area I'm going to talk about. As you can see, there aren't any resources closer to or um nearer to that incident or to that location other than station six. So, I'm going to be talking about their performance in both station 10, station 11, station 12. Before I get there though, population in our districts, as you know, the population out west is increasing. If you look at station 7 and station 8, they now serve almost a third of the city's population. And that is only going to increase. And it's consistent with what the Kerry community plan has stated would happen. You look at our square miles uh per district, you can see where our larger districts, that's where we have our longer response times because uh travel distance equals time. And the longer we have to travel, the longer it takes us to get there. And then very telling, probably the one slide that's most dramatic, if you compare us to our peers and mutual aid partners, we are covering more geographical area than any of our partners. If we built those two stations today and opened them today and didn't annex another another piece of property, we would still only improve by two and be ahead of Winston and Durham.

So station 10 and station 11, station 10, we purchased that property

on Okelly Chapel Road in 2015. We originally uh requested design and construction in 2018 and have requested every year since. Um our actual travel time is 7 minutes to that area, but please remember that our travel time is only the time that it takes from the time we leave the station to the time we arrive. Our total response times include call processing from the emergency communications center as well as the turnout time. So our total response time is just short of 10 minutes in that area. And then we are exceeding our five minute goal at the 90th percentile 24% of the time. This station will require a new engine that's in the budget, the design for the station, the engine that's in the budget, and 15 personnel. Station 11. If you're familiar with the White Oak Church Road area, it's right at the circle where the new school is at, the roundabout. Um, we purchased that track, Wake County actually purchased Rafferty track back in 2002. It was a partnership with Kerry at the time. Um, recent growth in both station 11 and station 10 warrant stations. One thing I failed to mention on 10 is we're getting ready to go vertical in the built environment in station 10 with the Austin Yard development and we're also going vertical in station 11's area with Duke Hospital which will dramatically increase the risk in that area. Our actual travel time at the 90th percentile at station 11 is 9 minutes. So again, if you add approximately 2 and a half to two minutes and 50 seconds additional time for call processing and turnout time, we're just short of 12 minutes total response time. And right now, and that remember that's utilizing

Apex, that's utilizing North Cadam, that's utilizing every available resource we have that surrounds us to to to be at 908. Again, this station will require design funding in this year's budget, a new engine, as well as 15 personnel. Station 12 with the rate smoothing in the next three to three to six years. That is in uh down at Middle Creek. Are you familiar with

West Lake and Optimus Farm? That property was purchased by Parks and Wreck in 1999. Uh we have a designated area for fire station on Optimus Farm Road. The actual travel time in that area, the 90th percentile is 8 minutes and 35 seconds. And we're only meeting that 35% of the time because there are no other resources down there. That station uh will require two resources uh according to our strategic plan. It will require an engine company with 15 personnel as well as a ladder company with 12 personnel for a total of 27 in the next 3 to six years. and also the traffic that area I I I feel the uh infrastructure also needs to improve

improve in that area. Yes, ma'am. And then as you know there there's going to be quite a bit of regional development

in that area

that we're also taking in consideration uh that will uh increase our call volume.

Yeah.

Can I ask that that station um will be servicing a lot of area for residents that are not paying carry taxes? It could. Yes, ma'am. Absolutely.

And I I am a big fan of the interdep departmental and inter regional,

you know, agreements and such, but is there not a way to get the surrounding individuals, whatever entity, um, they're paying into to share the cost of that fire station?

Yes, ma'am. We can talk about that

offline. We had a we had a brief conversation this afternoon that this will challenge the CAM model.

Yeah. and we'll have to re-evaluate what does that service look like.

I asked the question simply because I was absolutely certain you were already asking those questions and having those discussions.

You absolutely read our mind

knowing I was not putting you on the spot just for the record but I'd be really interested to understand that. Um just you know to be fair to everybody in that area I completely understand they need

Yes ma'am.

the the fire station is clearly necessary. it it's just a matter of of folks, you know, sharing the burden of the cost fairly.

Yes, ma'am.

Thank you.

So, hopefully I've covered the three takeaways of keeping Carrie, keeping our residents safe is our number one priority and then also uh doing that in a in a manner that we smooth that rate of spreading that cost over multiple physical years. And I would like to thank you very much for your time.

Thank you.

I'd like to thank Yeah, [applause]

both of you because this is a discussion we should have had five years ago

and now we're backlogged heavily and we got to fix it and it's not going to be easy and [snorts] thank you for telling us the hard truth because we didn't know.

Yeah. And

I I want to thank both of our chiefs as well because this is not the first time council's hearing this information. and you've been diligently sharing this with us for months and uh I I think it's important for residents to hear cuz I will confess a misunderstanding I had as a resident which is you are almost victims of your own success that you keep Carrie so remarkably safe and residents feel safe that it's a very natural question to ask well why do we need to invest more in an area where we're already excelling and so thank you for so clearly really demonstrating that we have been able to excel for as long as we've had because of how hard your

departments work, but that we cannot continue to operate that way indefinitely and continue to be as safe as we have. And so we are at this critical juncture where we have to make these investments in order to stay as safe as we have been. So, thank you so much.

Thanks, Chiefs. Can Can I ask one quick question?

Thank you.

You hear was that Lori? I think that was

Oh, yes. Sorry, Lori.

One one quick question. Um, and I so appreciate Chief Salt uh sharing the amount the the large amount of overtime um and the expected mandatory overtime that our police officers have been stepping up to do. We we also appreciate them. Um, from that perspective, does that mean if we fill some of these roles, will the overtime numbers reduce? And should this actually be even though we're adding more officers, um, better work life balance for them, reduced costs in the overtime bucket, or or are those still considered overtime? for instance, is it is it going to normalize our expenses?

Uh the answer to that is yes and no. Um the uh overtime, it should impact our overtime for officers that are working on duty. In other words, the ones that are answering calls for service that have to work over and we have to call them back in to work to fill those minimum minimum staffing levels. As far as the uh special events, no it would not uh because we still require uh that to be covered by what we call extra duty. That's beyond their normal assignments. Uh now the discussion we had earlier in regards to if council chooses to decide which uh are town

sponsored events versus those that should be uh promoter sponsored uh that would impact our overtime in a positive fashion.

Your point is uh you do not take away from patrol to staff special events.

Correct.

Okay.

Thank you.

Great. Thank you for that.

We'll bring Stacy up to go through a few more slides and we'll probably start talking about what we'll um bring to you towards the uh the next work session that we may not have gotten to today.

Yes, I'm thinking there are maybe four to five slides that we can get through fairly quickly that might lead us to a good stopping point if that works for today and then we can regroup and

pick back up in the next work session. Sound good?

Yep.

Okay. So, we're continuing along in our theme of what's in this budget, new capital investment. We've talked some about uh the fire station and all of that good stuff. Also want to point out uh Carpenter Fire Station road widening. This is a $42 million project in total, but I want to help everybody understand where we are with that. Um this project widens Carpenter Fire Station Road between Cameron Pond Drive and NC55. Would include sidewalks, streetside trail gaps along the length of that corridor. uh two traffic signals at Cameron Pond and I'm looking at Cassie in Highraftoft Drive.

Good, good deal. Um so, so that everyone understands to date, meaning through today, $17.4 million has already been budgeted in this project, right? We've been doing some work. Then it went on reassess and now the request has come back. Um the request for 2027 is for $9 million. 100% of that would be funded with the uh voter approved 2019 bonds and it would be for design and initial construction money. So if we're doing our math and we're adding along, we've got 17.4, we're asking for nine more and in the concept of smoothing, we're letting you know that there is very likely at this point the estimate is 16 million. We've talked about inflation and the things um but another 16 million that would be identified next year in

2028 in order to complete construction. Now, Cassie and her team are applying for grants, uh, Lap grants, locally administered project program grants. Uh, right now, we think we could potentially get about $6.3 million, which would absolutely help. Um, so we'll keep you updated on that, but this project is included in the recommended budget. Also want to talk about the fact that this recommended budget brings sidewalk funding back. We took a hiatus on sidewalk funding in 2026, and that is back with what you see here. Uh these were all sidewalks that were placed on the reassess list. Um so you may be familiar with all or some of these. Uh but the recommendation includes $3.7 million for sidewalks. This is primarily funded again with shaping carries tomorrow bonds the geo approved debt. And again these were all on the reassess list. I believe Stacy I I want and Cassie can confirm this, but um staff thought it important to bring back sidewalks uh but may have cut into the resurfacing budget to do so.

That was a that was a discussion.

That is correct. We did do we did choose to do that.

So I I just want to point out of you know how kind of

different values serve different things. Sidewalks

make me happy.

Sidewalks are very important but this means we may be getting further behind on resurfacing. Um, and these are all part of things we need to continue to be discussing how we continue to discuss uh fund maintenance needs into the future.

Talk about resurfacing and maintenance in just a minute. So, I'll put a pin there for a second. Um, one more new capital investment we want to make sure that's discussed that's included in the 27 recommended budget. Uh, relates to the GOAR downtown multimmoal transit center. As a reminder, this is a planned central hub uh to integrate local regional buses, uh bus rapid transit, also known as BRT, commuter rail, and Amtrak. Uh this is primarily funded with Wake uh count wake uh transit plan dollars. So, I want to make that really clear. Um there has been $42 million appropriated to date. Almost all of that

is Wake Transit Plan dollars for landsite acquisition, design, and initial construction. The $5 million request in 27 is 100% Wake Transit plan funded and would be I believe for some more design construction work and then again in this three-year plan concept coming next year another 55 million for construction all funded by Wake Transit but it is a significant project in the budget and wanted to make sure everybody understood the ins and outs behind that.

Okay.

Where does Wake Transit plan dollars come from?

Sales tax. They have a dedicated sales tax

which was voter approved.

Yes. Okay. Yes,

if only we could all get that.

If you heard the 26. [laughter]

Okay. And rounding out our new capital investment, again, these are highlights. You'll see other things in the document, but wanted to hit the highlights. Um, $6.3 million for flood plane open space acquisition, focusing specifically on storm water management. Again, 100% funded with the 2019 general obligation bond dollars that were voter approved.

I have a question for this. Yes. If we uh decided to um purchase some properties, uh will you bring it to the council for approval or just

I will direct that to Russ. But

yes, well, one thing you'll remember with regards to delegation of authority, we're talking about adding what we bring for pro property acquisition back to you.

And if it's part of an active capital project, you would know that you were doing it as part of a capital project. uh but you should expect to see policy updates I think in June uh would be the [clears throat] plan to bring something back to you so you seek delegation of authority but great question especially for the record

and I I would add this has been part of a larger strategy for Walnut Creek watershed there's at least two grants maybe a third one um associated with stabilizing the creek there's some areas that are you know like 20 ft of erosion that have happened and so um So this is uh primarily focused on that and we can provide um a full session on what that

looks like.

All right. Um I promised you some conversation about maintaining infrastructure. This slide gets us there. Um 54% of the recommended general and utility capital budgets. 544% of them combined supports maintaining infrastructure. Um and this is just a list. It's not everything, but this hits at a lot of the big ones. Um, mayor, I believe it's 9 and a.5 million for street maintenance included.

14.

Understood. But I wanted to give you a number.

Next year we'll need 19 just if everything were equal, which they won't be, which will be more than that.

Understood. Understood.

So, we're losing ground quickly.

Understood.

Um, but here you can see the list of of generally what those look like. And I think if we can

round out as a reminder,

but we're spending an a lot on road widening. And that's I'm not saying we shouldn't run that. Don't don't look at me like that. [laughter] Not saying we should not do that project. It just feels like a pretty big imbalance to invest in widening in a widening a road at that level

before we invest in maintaining the existing [snorts] roads. There's your values and priorities decisions.

So, I'm not suggesting anything before anybody comes for me. I'm just saying that if we were to prioritize road funding instead of the 19 million next year and the 24 million the year after for road surfacing to play catch-up, have we? I don't recall ever having a conversation as a body about investing in the roads and resurfacing first, then going and doing the road improvement projects because that's really what that ultimately is, right? It's a significant road improvement project and I'm assuming it's not a safety concern.

So I would tell you um again

wasn't the Carpenter Fire Station road widening on the bond.

Yes,

it was. Yes.

So I think

so it's already been voter approved.

Mhm. I think one thing um to notice here and maybe that's the information that um this council probably doesn't have and maybe some of you may have the the work already started on that road and Shel actually worked very hard on getting the property rights from various different homeowners and property owners there. They have already moved the utility lines. The work is already it was paused shed right and it was um last year when the the project was paused I know Shelley was one of the first ones to say we should this is one project that cannot be paused. We can we can think about how do we spread the work more out so that the cost gets spread out.

But then again the conversation will be maybe next year the cost will double up. Then do we stop the project or plus like what Lori said this is um this was a voter approved on 2019 bond so we're using the debt funds um and that's where pro that will be my I'm not coming after you but I'm just giving you some facts. Yeah, it's not there's not enough left from the bonds to fully fund that project, right?

Or even there is actually

or you're using what would have funded other projects

other projects that were also paused. Correct.

Okay. Right. Correct. And I'll just I'll rem I'll I'll revisit for all of us that when we had some of our capital prioritization conversation, I have a district A project that's close to my heart that shall not be named again today, but [laughter] uh when we were when we were talking uh with staff when you originally presented the uh capital recommendations to us, to Russ's point,

there's a lot of subjectivity and and uh some, you know, implicit values there and staff had made it clear to us that the criteria they were using were projects that were already underway that we already had investments in that seemed feasible. Um because you're right we didn't have a full deliberation as a body where we threw these all into the same category with equal weight and then said what do we invest in? We relied on staff to come to us and say these are the projects that make the most sense because of all of these criteria.

Yeah.

So I I feel a little bit of the pain [laughter]

that that it doesn't always align with what priorities maybe a bus line to district

and and all of those projects are on a slide that we will not now get to but we will get to a work session

and we will bring to the work session on the

I appreciate that. What I didn't want was to let that project slide by. Um where we've had such a significant amount of investment in district D. It's I feel like it's starting to become unbalanced with district B and D getting a lot more investment than A and C. I'll say it.

Thank you.

We won't argue

right. But [laughter] it waxes and waines and it goes back and forth. But also immediately then saying we're investing such a significant amount and it's an ongoing investment in a road widening project and and then in the same breath after seeing the results again saying our roads don't get such a great grade to then not say hey can we stop for one second and me be a pain in the butt and say maybe we should

and having just seen the bianual survey scores of what people think your road

that's what I just said we did the grade what was it a C minus It was.

So, we're going to discuss this later.

Yes, we there will be more discussion

cuz I have a lot to say.

We're just getting everybody up to speed on what's in the document.

I'm just getting you wound up ahead of time. [laughter]

I know what I'm doing over here.

Well, I'll say this and maybe Stacy finishes with this slide and I think y'all are already doing it, but you should go around the room and we can give you a tenor of what's coming up at the next work session. um as we'll need to continue this discussion and we can also do it in our um meetings before the ne before that time as we bring it back to the work session as well.

Yep. This rounds out our discussion on capital. We've talked about the new things, we've talked about the maintenance of things at least at a highest level to get you all thinking. Um we've reminded you that there was a good amount of cutting to do because there was a budget to balance and this was staff's recommendation and Russ's recommendation on that and then we'll continue to work with you all after that. This is a great pause point or stop uh point, Russ, if you're ready to shift to another topic.

Yep. Um no, thank you, Stacy, because the things that we didn't get to today that we have slides for and we'll be prepared for the next work session and we'll and we'll uh hand you in advance, but are the uh projects that were all uh that I that I've been given feedback along the way to show you both in capital and in operating. And then we're asked for some uh potential cuts. They're not recommended cuts because this is the recommended budget, but as you need to see, things that you could possibly consider to cut, whether you wanted to do different things or adjust um the tax rate and whatsoever. And we will have at least two more work sessions to talk about that. Um that said, you're already doing it. I think you should go around the table and probably get I'll turn it over to you, mayor, to do that to get final thoughts on at least what you've heard today or anything you'd like for us to comments to bring back as we go into work sessions before we close out the day. Lauri, you want to start?

Oh. Um, okay.

Before I forget. I'm afraid I'd forget. [laughter]

No, I I appreciate it. And, uh, I I also I want to appreciate everyone on the staff who support me from attend to attend this and the previous meetings

remotely. It's my first vacation of of this long a time. And when you book a vacation a year and a half in advance, you never really know what meetings you may what important meetings you might miss. So I I appreciate both the technical staff, the IT staff, the town clerk staff, and the manager's office staff for making it um easy for me to call in. Um and of course the council members for um if by chance I talked over you, I deeply apologize. It's a little hard with the satellite delay. Um so that the first thing I would say is I'm very impressed with the way staff um positioned us for this meeting. Um I very much appreciate the back to basics way that you all have taken us through the budget in this long um maybe drawn out for some mechanism. I also wanted to appreciate the way you have aligned our requests and staff's requests to our priorities. It's very important for us to see how each and every decision we make is aligned to either the priorities and values of council members along with staff and most importantly with our citizens. I know we have or our residents. I know we haven't gotten through everything yet, but um the kickoff to this was really great and I appreciate the long long time to discuss to see discuss and then provide feedback. So, thank you very much.

Billy, you want to go next? Oh um I I think this is the second quarterly meeting I've attended and this is super helpful from the annual survey and our employee survey and the most important thing I feel whatever we have experienced is um is the past but I feel

our staff are great. What do we need to do is to change the policy and just make some changes and get better communication and even I feel there is a district representatives is really helpful because we are trying to support our [laughter] constituents in our district and also we understand as car as a whole we have to balance like district has so many new developments and fire stations uh public safety is so important and know we all agree we need to invest in Western Kerry and Chadam uh Chadam County. Uh but in the future I see our staff has tried so much to cut and I would love to see more the behindthe-scene work they have done and to share it not only with our staff but with our residents because they won't see how much and how hard the work is but even if we explain as you have worked so hard but still we need to let them to see it more transparency and to show that we be responsible on our tax um property tax money especially invest in the future because the need for our all our residents and I look forward for the next the rest of this discussion because this seems to we are just half of half of the way [laughter] a lot of work thank you thank you guys so much

yep thank you all for actually I would say this um so much work that goes into the background and you guys just make it feel like there's nothing and you're just coming and presenting, but we know how much work um that or how much time do you spend on building this up. So, I'm genuinely appreciative and um I want to thank you for all all that you do. Um

I know that we we are at that point where we understand what the problems are and we have to start coming up with solutions together. Um, and it's not going to be an easy discussion, but we have to all put our heads together to to think through everything more carefully because I always say that next 10 years from a planning perspective is going to be very important given the costs uh are going up. Um, it's getting more expensive for residents to live here. So, we just have to be a little bit more careful on how we plan this um next 10 years. Um districts are important and I will be a little selfish here. I'll talk about my district. District priorities are extremely important especially my district because it's growing like what you said and you know we are hitting that place where if we do not start investing now um in next few years it's going to get more challenging and since it's that side of the world it's I feel like sometimes we we feel like we're on an island. We're lost but we I know we are not lost. Um I've been asking for a bus service um in that on that side of the world and we really really need it because I think now we um there was a transit study that was done which reemphasized the need of a service in that area. And I believe there was one more line, right Kelly?

South Kerry,

right? We had done a microtransit study um that provided some options for both western and southern carry.

Yeah.

So I think both both um western and southern requires bus service and I would really you know at some point like to pick up those kind of conversations like we had about the downtown Kerry bus loop which was $2 million that we are spending and that was a temporary line that was started. So how do we kind of start thinking on those lines? How do we

reallocate funds and um you know start working on um distributing some of the love I feel so

be in the slides on the 28th.

Okay. But then um I mean those kind of discussions would be good and um healthy. I know there there are bigger discussions about the carpenter fire station road. You know I mean there are different road surfacing priorities. There's so many different things and we just have to kind of figure out together on what the next steps are going to be and those are I don't think they're going to be easy conversations but those are much needed for next 2.0 work session 2.0

2.0

Chris

Sure. Um I want to thank staff for their endless patience with me. Um, I know it seems probably like I'm I'm throwing a monkey wrench into well-laid plans, right? And but what really what I've learned over the last six months, I've learned a lot over the last six months, I know as many of my colleagues, the the the thing that's always now bubbling up to the very top of my mind is question everything and everything can be reconsidered. And so that's how I'm trying to approach all of this very honestly and just um yeah, that was our plan 6 months ago, but should it be our plan now? Or am I have I asked the right questions? I I I'm constantly trying to do a better job by everybody in this room to make sure that I'm asking for the information I need to make an informed decision. and stop treating staff like mind readers. Um, so that's that's my goal and I just want to thank my colleagues and staff for being patient uh, you know, with my it may seem a little like whiplash my behavior

lately, but it it really is um I'm doing it mindfully. Uh, but it I know it's a lot sometimes a lot of extra work. I know I've asked for a lot of information, a lot of data. Um, and it's a this budget we're being pre presented. I feel as though it reflects the shared values we've discussed as a council in a way that's really quite impressive, right? It's all it's all in there. And of course, you know, just like a district representative, us at large representatives have our pet projects and there are some some things in there. I what I've you know been vocally advocating for re-examining especially some of the middle pay bands in public safety in particular but in staff by and large um and reconsidering some of the ways that we approach um we approach judging whether we are paying a livable wage here in Kerry. And that's just something I want to bring up at this time since, you know, we're all kind of rehab recapping this um simply because I do believe that there we do need to invest more heavily in our our pay scale and to do that without ballooning the property tax rate, we're going to need to make some some difficult decisions. I agree often when the mayor brings up a roads, I think that's a place where um the the time to act is going to be in the very immediate future, not not something we can kick down the road. Um, so that's that's the other place where, you know, if I had to pick two concerns, those pay bands, um, making sure that our employees, what I want to make absolutely sure is regardless, you know, where you are when you're working for the town of Kerry, you don't have to leave the town to get [snorts] paid for your experience. Um, and so that's the way I'm approaching, you know, how we're paying and how we're rewarding um, tenure and experience here with the town. So, but really and truly, thank

you for reflecting what we've been discussing for months now in this budget. I think it's I'm really excited about the 28th. I can't wait to see the rest.

I love your questions, so don't hold back.

I know, but I make I make the meeting take too long and then we can't cover everything [clears throat] every time. I know it's me doing it,

but we need to

Well, and Lori, but she's not here, so she couldn't do it to the extent that we usually do it together. But yeah,

I'll start by piggybacking on some of the things that you said about starting with like asking all the questions. Some of the importance of the questions that you ask and others of us are that in our things have become much more efficient in my opinion with the 3x4 meetings because in years past I'm sitting there oneon-one for a lot of reasons but I don't know the questions to ask and there's nobody to help spark anything for me. So that's helped with the discussion, but also some questions have already been answered in those 3x4s, but I wasn't in your 3x4 necessarily, and the information is relayed back, but sometimes what stands out in your mind may not be what's in the notes specifically. And it's also really important that we ask the questions into the microphone

so that the residents hear it also and so that they get a better understanding of you know we we only had 5 hours today but five times a whole lot more. We've already had the beginnings of these discussions. So it's I think it's really important that we're slowing it down and if we need to figure out how to squeeze one more meeting in then I think we need to do that. Um, also I echo your sentiments about the living wage and I think the survey that well not I think I know that the staff survey that we just saw echoes. We have no proof of who said they had the serious concerns about that, but I wouldn't be surprised if it was some of our people who are not making a living

wage. That would just

make sense. And for the slide that's up here currently, just a reminder that we can fund the total requested

and that the total requested still does not cover all of the priorities. It's still not going to cover those 60 plus capital projects that we put on pause in that reassess category. So maintaining the roads like resurfacing, widening, transit, these are I mean those are all priorities that I ran on that but you know I said are important to me. So, I think I think it's safe to say that we all agree that we should do all of the things, but fiscal responsibility, you know, depending on how you define it, as we're weaving it through everything, I I think it's safe to say we agree like 12 plus cent increase is is not going to not going to feel good to anybody, nor am I going to be able to sleep at Right. So, it's we also we're prioritizing well the recommendation is to prioritize sidewalks this year, but I think it's because we paused them

last year. So, we're trying to, you know, some of the things we funded maybe a little bit last year. Well, actually, we didn't fund much of anything last year, maybe the year before. So, it's it makes sense, but also just a reminder that it's not because we don't need to resurface. It's just because we need sidewalks, too. And definitely wanted to thank staff for all the hard work they've put in and for residents who attended today and that are watching online. And we do want to continue to get that feedback because the the budget doesn't end in June. We're just setting that tax rate. And then we

in our discussions in our 3x4s, we don't int I mean I intend to take a break in July for at least a short time.

[laughter]

But we don't intend to let it sit and wait until January of next year. We have already talked a lot about we want to start immediately really, you know, looking more specifically at things that we didn't have time to look as specifically at this year. And um so there's definitely a lot more work to do. And um you know, I'm super excited that the council, the resident groups, and um the boards and commissions all agreed that public safety was the right thing to invest in. And I think that makes sense with our surveys as well. So, I think we're headed down the right path. We know we're not going to make everybody happy, but I think we've really worked hard and we'll continue because we still have I mean not enough time, but we [laughter] still have much more um we have weeks to go, but I think we're headed down the right path to make the best informed decisions, the right things for Carrie. Well, Council Member Craig, you took the words out of my mouth. So, I will add my gratitude to staff, but what I'm really grateful for is exactly what this slide represents, which I feel like staff did a really good job of letting us see under the hood this year, both council and residents, because I I I think there is the notion sometimes that staff ask for the moon and council rubber stamps it. And to see the iterative process here of going from what it would look like to fund many projects to see the whittling down pro uh process of trying to balance all of those competing priorities and concerns. Uh because I

said I wouldn't mention it, but apparently I will. Uh the district a project is the Louisis Steven sidewalk project. That is the equivalent of three pennies of sales tax. And we could we could do the Louiswis Stevens sidewalk project if we had a recommended uh rate of 6.75 cents. We don't because we're trying to meet multiple objectives and thinking about all of those priorities, affordability and capital investment and maintaining services. And I think staff has done an excellent job of making that work visible um and these conversations really transparent. And I especially value the smoothing idea uh both in terms of our revenue but also our expenditures. I think it's just a really smart way to think about how we make these decisions because making them in a vacuum for a single year doesn't make nearly as much sense as looking at a longer time horizon. So I think these have been really productive conversations

and hopefully more transparent.

Yes.

Yeah. I also echo uh all staff's work. I mean, it really shows. I've been like my 23rd year on a budget.

Um, so I've seen a lot and this is probably the best presentation by far and the most information by far. uh which we need especially now as we move forward out of the muck of the previous town manager and out of the lack of information from the previous town manager. So having more information is great. I can tell this doesn't even represent what's going through my head right now of trying to figure all this out. Uh but information is great and uh I think that this council will come up with a lot of good solutions. not only in this fiscal year but in coming fiscal years especially if we keep getting

accurate and complete information. So I want to thank staff for that. That's very very important uh for all of us decision makers. Um and again this was probably the best one I've seen for a recommended budget. Usually you get the flyer or whatever the the brochure and few comments. We spend a couple hours and we move on and we make slight adjustments, but this is pretty much in depth and I appreciate it. And and like somebody said, we're not done.

Not done

because I can't wait to talk about reservicing more. [laughter]

You moved on from tennis. [laughter]

We get to that after this.

Um but [laughter] uh thanks to everyone. Russ, I don't know if you

Let me do Let me do a couple thank yous if you're done.

Yep. And then we'll go into close session.

Obviously, the first one is to each of you and obviously for um uh being involved in the process as much as you have and I know we've got a lot of work to do and you're [snorts] right, there's um probably more needs than there are resources to fund and we've got to be cognizant of that with regards to fiscal responsibility. So, thank you all. Uh thanks for the everyone that came. I think there's still a guest over there and uh anyone watching online and thank you to the consultants Kelly from CRA and Kevin um who gave the survey results today obviously thanks from all the managers but Dana and Scott and Shelly this is Shel's last quarterly by the way

um yep boo uh certainly Stacy and the budget team and Susan um and and uh Britney and Carrie Allison everyone else that helped from the manager's office uh Renee did not get to I do her living wage uh presentation today. [snorts] So, she'll be back on the 28th. I know she's looking forward to that. This is Renee, also Rene's last quarterly meeting, by the way.

Yes. And since it's last, I guess she's still here back there. Margaret's last, so I may as well get get all the last

out of the way. I'm sorry. [snorts] Uh but um a lot of people went into preparing this. So, um thanks everyone and thanks to the technical team over there. We've got Kaylin and Jeremy and Brandon and Ryan and Jack and you see what goes on behind the scenes to make all of this happen. Jenny, uh Sarah, your entire staff, public works and Jimmy's team that also helps set up and uh [clears throat] certainly Lisa, we don't want to forget the other arm of all of this. But um just thanks to for the community center staff for also host hosting us and I believe um as he's here all the time and probably not in the room. I think Sergeant Paige is out there um keeping everybody safe. So say say um something to him as you walk out and uh we'll be back on the 28th and look forward to a lot more discussion including everything that you all gave on your list to me um as well as some cuts and living wage and other considerations as you get to the uh end of the month, end of June where you have to make a budget decision. So thanks a lot and I'll throw it back to you, Mayor.

Okay. Uh, since Lori's not here, I need somebody to read a motion for us to go into close session.

I can read it. Pursuant to GS 143 318 111A13 and 6, I move that we hold a close session to consult with attorneys employed or by and or retained by the town in order to preserve the attorney client privilege between the attorneys and the town. prevent the disclosure of information that is made privileged or confidential pursuant to the laws of the state or not considered a public record within the meaning of chapter 132 of the general general statues. Consider the qualifications, competence, performance, character, fitness, conditions of appointment or conditions of initial employment of one or more individual public officers or employees.

Is there a second?

I'll second it.

Discussion. All in favor, please say I. I

oppose. Motion carries and we are going into close session.

This is one of the things I wanted.

Okay.

We'll reconvene our quarterly meeting. Uh we have one order of business to complete and that is a discussion between council members about a potential work session that's not on the calendar. adding adding two dates

for two more dates.

Yes.

And so would we want to look at the beginning first week of June?

Won't be here.

Okay.

I'm proposing May 21st. Is that too soon? A week from tonight.

Week from tonight.

Well, I mean, um,

we have carryover from tonight, but I'm sure there's something from the 28th that's not

Oh, week. Okay. So you're not here. Okay.

What about the week of Memorial Day? So you have a meeting on Thursday the 28th of the work session?

We already have that. Yeah.

What about the 26? I'm looking at Russ. I'm not sure when you come back, Russ.

Yeah, that's I'm back after Memorial Day. Yes.

So we have an agenda meeting. That's all that's on my calendar.

26 works for me.

Yeah.

Afternoon.

Um Okay.

It'd be at 5:30.

Or you can move the agenda meeting up sooner. Okay. Uh, well, we'll keep it at 5:30 for work schedule.

5:15's okay.

26th.

Yes.

And so, I would need a motion to adopt it tonight. And we can do two dates together. Okay.

Um, so I've got the 26th at 5:15.

Okay. What else?

And then if you want to look the week after,

I'll be gone.

Be gone. So then the

Can we do 5:30, please?

Okay. because um it takes 30 minutes for me to

Oh, so 5:30 on the 26th. And what else are we looking at?

So it would be week of Monday. I mean the week of June 8th would be the next

I have a meeting on the 8th.

I'm having surgery on the 9th.

Would you want to do the 8th?

I have a meeting anyway.

Okay.

From 6:00 to 9. six.

So, the ninth

and if it were just me, it'd be okay. But there's like six of us and they are all over the place.

Oh, yeah. Wednesday the 10th.

Okay. As long as I don't have to be on camera.

Do what? I have historic preservation on the 10th. I suppose I could be excused for a work session.

Why have I got the tenth blocked?

But the 10th does not work for me.

Yeah, I don't know why it's blocked. on my job.

Are you meeting with your Australian team too?

We already have a work session on 11th,

right?

We have a work session and regular meeting on the 11th. So that would be your next one.

The next week,

so the week of the 15th,

I have the 16th wide open. Shocking.

Same. I have Panther Creek High School graduation.

Oh, on 16th

until 5:30. Yeah. And then Bella has Athens Drive graduation. I have the 18th open. That's a Thursday.

18th is good for me.

18th is good for me. Yes.

So June 18th.

Okay.

This is way less painful than I thought it was going to be.

Well, Lory's not here, though.

That' be 5:30.

Hopefully she'll be.

Hopefully she can hit one of these two.

Well, Thursdays should be okay for her. She probably doesn't have a class on th Well, she's not a class right now.

So, are we going to make a motion to do both or these are two potential dates? We could hold we could hold both. We need you to make a motion to add it to your um to your schedule and then it's easier to cancel than to add. So

So we're going to say two work sessions then we can cancel. All right.

All right. I'm I'll make the motion then. How about that since it was my bright idea

and and the motion is for May

May 26 at 5:30 and then June 18th at 5:30.

Yeah.

Okay. Is there a second?

Second.

Second discussion. All in favor please

say I.

I. I any

oppose? Motion carries.

Bless you.

Any other business for this evening? Seeing none, this quarterly is a journey. Thank you.

Yay. I can go watch my movie now. [laughter]