Planning Commission Work Session   11/22/2022

and responding to what?

I also heard a request from Ms.

Well, you saw this new request list, right, of $80 million that was in your packet?

Was that one in your packet?

Okay, well, we can talk about that.

So are we, I mean, last year we had more than, we proved more than we had.

Yeah, so we're going to visit where we are right now.

Magician, okay.

Do I sound like anything?

Just speaking to myself now.

Sounds okay?

Fantastic.

Mr. Stolzenberg, welcome.

I see Mr. Stolzenberg, so that means we are ready to begin.

Where do you begin?

I'd like to talk about capital improvement planning.

I'll start with just a logistics note.

Thank you for everyone coming this evening.

We are not going to have a verbal comment this evening.

If anyone is interested in providing comment, you are welcome to provide written comment.

That can be emailed to me at creasym, C-R-E-A-S-Y-M, at charlottesville.gov.

and we'll attach that to the minutes of this evening.

Please note that the CIP item will be on the December 13th Planning Commission agenda for public hearing and there'll be an opportunity for verbal comment at that time.

But for this meeting, we're definitely accepting the written comment and we will share that with the Planning Commission.

and all other parties.

If you choose to do that, again, if you have written comment this evening, you can email that to me at creasym, C-R-E-A-S-Y-M, at charlottesville.gov.

Thanks.

Good evening how are you all nice to be with you in person so tonight we're gonna have a work session a little bit on the CIP as a precursor to the public hearing that you all be holding on that on the 13th and so with that could you please bring up our PowerPoint

So here we are November 22nd.

And again, we're going to be talking about the capital improvement planning.

So next slide, please.

So just a few things we're going to talk about just a sort of a review and a recap of what is a capital project?

What is a capital improvement program?

What is the budget?

Why do we do that for five years?

And how does the process work?

So next slide, please.

So what is a capital project?

Essentially, it is a project that will serve a public purpose.

It typically has a long, useful life.

Oh, she's here.

Pardon?

Okay.

So it is a project that has a long, useful life.

We finance a lot of the CIP with bonds.

Those bonds typically have a 20-year lifespan, so we're looking for projects that

at least are equal to or exceed the life of the bond.

One exception to that are large purchases for things like fire trucks.

We do use bonds to purchase those, and they typically have a lifespan of about 15 years, and we adjust the bonds accordingly.

We also, a capital project is something that is usually non-recurring and non-operational and typically has a cost of more than $50,000.

So next slide, please.

so some examples that were in the plan last year and will be coming forward in this plan as well the bypass fire station replacement Buford school reconfiguration the Friendship Court redevelopment and the Belmont Bridge that's currently underway as well are some examples of large projects that are in the CIP so next slide please

So what is the CIP?

It's a capital improvement program, and it's intended to be a multi-year plan to forecast spending for anticipated capital projects.

It's also supposed to build on the comprehensive plan that you all have worked on, and it addresses repair and maintenance of existing infrastructure and development of new city facilities as well.

So next slide.

So what is a budget?

Again, the capital budget is part of a five-year plan.

Every year when council adopts the budget, they adopt the first year of that plan officially, and the years two through five are a plan for moving forward, but they are not actually adopted until we get to that fiscal year.

so many times what you see one year will change or vary a little bit in years two through five once you get to the next year's CIP plan so here typically our plan our budget is broken out into some large priority categories then the individual projects are listed and the funding plan over those five years is broken out as part of the budget so next slide please

again this is just the idea that for every expenses in the CIP there has to be an offsetting revenue so at the end of the day revenues minus expenditures should always be zero in every single year we do have multiple revenue sources primarily as I mentioned we primarily fund the CIP using bonds we also have a city policy that requires us to fund that with cash

at 3% of the general fund is allocated for PAYGO we frequently do more than that but at a minimum we council has committed to pay at least 3% cash and then in addition if they are shared projects with the county or other schools they also contribute in some way

and additionally we occasionally have grants and as you know we also do a lot of projects with VDOT for which we get state and federal money also so next slide please

So why do it for five years?

Again, the five year is a plan and it provides a framework to help involve citizens to define the future of the community.

It reflects priorities of council and the city.

it determines the long-term cost of what that growth would be and it also helps encourage and track regional cooperation on projects such as the general district court and other things that we've worked on with both the county UVA and schools so next slide please

So a well-planned CIP, in theory, is the means that ensures that major expenditures are in line with community expectations, our anticipated growth, and our financial capabilities.

So it aligns with what we can afford.

So next slide.

So over the coming well actually since September we have begun this process this is kind of a timeline of what happens with the CIP in particular going from left to right in October the department submitted their project request to the budget office

throughout the fall the budget team which consists of the city manager the deputy city managers myself the finance director and budget office staff we evaluate all those submissions and we work to come up with a draft plan

which in now November and through this meeting and the public hearing in December we then present to you all for your feedback and your input taking that then moving on to March we will put all that together into a final proposed budget that the city manager will present to council and then council will spend the month month of March working on that and will finally adopt it as its budget on in April

So next slide, please.

So what are the things we look at when we're considering a capital project and what's in and what's out?

First, we look at legal mandates.

So is there something about the project that we are required to do either by law or regulation or a court mandate?

Is there a public health and safety issue?

And do we need to do something to eliminate those risks?

how does the project line up with the city council and manage manager strategic work plan and also how does it align with the comprehensive plan next slide please

What are the environmental sustainability issues with the project?

Does it support those?

Is it an infrastructure infrastructure investment or protection issue?

Does the project need to be done in order to preserve some city infrastructure?

And then finally, what is the impact on the city operational finances and revenue?

Will the project have a positive or neutral or negative impact on the city's operation finances?

next slide please so some special areas of consideration that we also look at is if a particular project request ties into something that's already existing or in the proposed CIP if there's been a demonstrated public support for the project

If the particular project gives us the ability to leverage other outside funding, i.e., county, UVA, grants, those kind of things, will the project be done in partnership with someone else?

And then also, does it increase the service level that the city is able to provide because of this project?

So next slide, please.

So where are we?

That is correct.

So that is what's in FY24 there at the $69 million.

You mentioned Buford.

So in the current version of the CIP, that is the Beaufort was 66.8 million.

We had a little bit of that in 22.

I think it was 2.5 that we approved in 22.

And then we added the 66 and change to 24 to get it up to a total of the the I'm sorry.

Did I do that?

Yeah, we added the 66 and change to get it up to the, I did that math wrong, but anyway, the total was 66.8.

As of right now that is the only thing so what's in that line are some recurring accounts that happen in the CIP every year for schools we have typically put in about two and a half million for school priority projects which is a is an account that there is a CIP committee that involves the school board and city staff

they go through set their priorities and they create projects to use that they consider priorities with that there's also a little over two million dollars a year that goes into their large cap which is a lump sum and again gets prioritized based on

the needs of the schools and then there are a few other things in there there were some dollars in here which we'll look at I'll show you the detail in a few coming slides but the CHS roof replacement was in there and some other things but in terms of a large-scale reconfiguration like Buford there currently is not anything in the budget for that the roof at KTEC is just kind of built in across the roof at KTEC I think was in 23

22 or 23 because I think that project is coming to an end.

Any other questions there?

No, no, you're good.

This is what it's for.

So as you look at this, over the five years, we had a CIP budget of about $162 million, of which we were funding about $117 million in bonds, and the rest was cash or general fund dollars.

So next slide, please.

So now to kind of dig into those details a little bit of each of those categories in our current plan where we adopted 7.1 million for FY23, which is made up of these projects.

And I see I have an extra line here.

The top line, I'm sorry, but the

the CHS roof is in there for 1.2 million the school reconfiguration was in there for the two and a half there's my numbers two and a half and the 66.3 and then the the lump sum accounts that I mentioned before so that's what makes up those totals next slide please

So moving on to the next categories facilities capital projects again this is very similar the lump sum for facilities capital projects those are projects that our facilities development team prioritizes based on assessments and things that they use

HVAC replacement is very similar we have been allocating for quite some time some money for the solar PV program and then the HVAC contingency funds were new in 23 and the the idea behind those is that we do have some aging HVAC systems with things that have happened with filtering the things with COVID as well

we can't replace it all but we do know that at the pace that we're able to at some point there might be some type of an emergency and so this contingency fund is here to sort of build up some risk mitigation should we have a failure somewhere

next slide please public safety and justice again as I mentioned we do because of the price of fire trucks they are included in the CIP whereas most of our other vehicle or rolling stock is budgeted for in the operating budget fire trucks are generally on a 15-year replacement cycle and so we

put those in here as well as ambulances we've been adding those those are on a seven-year replacement cycle there's not any in this version of the CIP but you will see those from time to time

At this point, we are doing purchase.

We have looked at leases in the past, and it's expensive.

And so we've ebbed and flowed, but we have discussed that, and we have looked at it, and every single time so far, we've landed on purchase as the best way to go.

The bypass fire station, this project was budgeted, and I'm going to get the numbers wrong, but I want to say it was in the $5 or $6 million range.

When they went back, when they actually went out for bid, there were some things that came in, some costs, there were some other utility issues that came up, and so we did go back to council and ask for an additional $1.2 million last year, which is included here.

The other things are basically these are accounts in which for the mobile data terminals and the portable radios for both police, fire and sheriff as well especially police and fire when we have to replace those there are a lot of them and so we have tried instead of doing that sort of one lump sum dump into the budget when it comes due and I think there are like every seven eight years

we have tried to level this out so that we're funding that as they come due and we just did we had to do a full-scale replacement I think it was in the 21 budget because locally the 911 800 megahertz radio system was upgraded and all the current radios that we had were non-compliant and so it was several hundred thousand dollars and we were able to do that with some year-end surplus money but this is a way to sort of offset because

We on a lot of these things, we try to rotate the replacement so that we're not doing everybody all at once.

But because we had to do that, then we know we're going to be we're going to have a big bill coming up.

So that's the point of these here.

So next slide, please.

Transportation and access so this is always a long big category for us this is where we have sidewalks we have a lot of the ADA things we have bus replacements bike infrastructure right away we spend a lot of time here a lot of these are big dollar projects and many times as you'll see these numbers are very similar

from year to year because we're in most cases trying to build up a balance and this chart makes it obvious that I forgot a point early on if you recall when we first started the budget process last year we were talking about the school project and the impact of adding such a large project to our CIP we also were unsure of what the revenues were at that time because of COVID and other things and so

we basically at the beginning of the CIP process we're talking about that the CIP plan was putting our debt capacity at at our upper limits and so for that we basically did not budget any bondable projects for 27 last year so that's why you see those zeros here because these are all bondable type projects so next slide please

affordable housing this has been a big input to the CIP I think we put some of the first dollars in in the 20 budget our meaningful dollars in the 20 budget and that began with the public housing redevelopment project

also the friendship court project and we added the CAF the CAF has been in for quite some time actually and then the supplemental rental assistance program was also one I think that we came in in FY20

So we have continued to maintain, as this plan shows, we have continued to level fund those and the Friendship Court numbers are phased in by phases and so that's why those are laid out here separately Next slide, please

Economic Strategic Initiatives Account This has been an account that is in the CIP and it is essentially the spirit of this account is to accumulate some funds so that we're able to take advantage or leverage

Any type of economic development opportunities One of the major things that we have done with this account some time ago is we were able to contribute some dollars to help when Whole Foods came with the development of the Hillsdale Drive, a piece of that

So the technology infrastructure here, again, the $40,000 is offset by what we call PEG fees, which is like a cable franchise fee that are dedicated for the use of, to public TV, and so we use that for infrastructure for our Channel 10

Is it useful having the PEG fee funded items on the CIP?

It isn't.

So in the revenues, you'll see the PEG fees and you'll see the expense here.

One of the main reasons why it's in the CIP is it's for capital.

I think it's largely allocated for capital expenses only.

And this also allows those funds to accumulate.

Next slide, please.

So revenues.

How do we pay for all this?

As I mentioned to you, largely we are funding our CIP with general obligation bonds and cash.

The peg fee, which I noticed, which we just talked about, is the $40,000 that gets posted here.

we do get money from the schools every year for their small cap program we shared the cost of any projects at KTEC with the county at 50 percent and so depending on what was in for that particular project I don't recall actually I'm sorry

We were expecting $62,500, so that amount will vary from year to year And then the mall vendor fees, that was a decision made by council in that the cafe permit fees that are paid for on the mall are dedicated to mall infrastructure repairs

which that's in the transportation and access section of the CIP as well and it's it's just an offset just like the peg fees so it's a $78,000 budget with a $78,000 revenue essentially notice that the paycheck revenues from the county were only $62,000 in 2023 what happens in 2024, 25, 26

That's basically just dependent on any projects that we know are on the bulk.

So, for example, the roof, that revenue, I think, was put in an earlier year.

So we had an expenditure of half a million.

I can't remember.

Either it was a million and they paid us a half a million or it was half a million and we got 250.

But the way that works is anytime there's a project, we bill the county for 50 percent.

They reimburse us.

It goes back into the CIP.

because we do have to put the full expenditure on the books on the expenditure side.

Yeah.

Am I correct that mall vendor fees are not adequate to meet mall maintenance costs?

That is correct.

And so if I'm recalling correctly, council has been waiving those for a last year or two over COVID, right?

Um no so um it's a good question um I guess it is being backfilled by the general fund we could actually reduce that budget if we wanted to but it doesn't behoove us because we got a lot of work to do so good question yeah um

The other thing I would add here is that the breakout of revenues that you see varies a lot amongst different localities.

It's not untypical to have largely a bond-funded CIP, although there are localities at all ends of the spectrum.

There are some who fund everything by cash and no debt, and there are some who fund all by debt.

So, you know, it's all about preference, and it usually follows or is, you know, is adhering to financial policies that have previously been adopted from council or the elected bodies.

So next slide, please.

So as we enter into CIP season this year, what we know is that there are always challenges.

We had challenges last year.

We have challenges every year.

That's where every budget starts from, right?

There's always more needs than available revenue.

and as you I think in your packet we provided you with a comparison of did we provide you with the comparison of the FY23 request to 24 okay so you know what what this does is it basically takes everything that was laid out in the five-year plan last year and

and compares it to when it went to the departments.

We asked them to review all of those projects and to indicate if there were inflationary increases or anything that changes the dollar amount of that project.

and so what you see in green is basically the amounts or increase in the requested amounts for these particular projects so these are projects that council has already approved as part of this plan you you see those increases so leaving out 28 because we didn't have 28 in there last year and keeping in mind that we

We funded, we had no bonds in 27.

Once you layer all of those things in, there was just under a $40 million increase in those four years.

so 24 to 27 there's about a 40 million dollar increase that is largely related to inflation and as you see and then of course carrying out some of these ongoing projects to 27 because we didn't fund them or didn't include them in the plan but of the

Of the 40 million, about 38% of that increase comes from these four projects, five projects that are listed here.

And so as we weigh all of that, moving into the 24 plan, that's, you know, we have with our school projects and the large, the size of our CIP, we basically start with this five-year plan.

in many years past we have you know started with the CIP process where it was an opportunity for everybody to say hey what do we have in here what would we like to put in here and there were a lot more opportunities to consider new and great things

But, you know, now we are trying to work from a five-year plan to make sure that it is sustainable and that we're able to afford it as we move forward So it's a challenge and those are the things we as a budget team are working on

and you know I think in the draft that will be presented on Tuesday I think you'll see a lot of this that it's a working puzzle trying to get all the pieces together but we I think it's manageable it's just we have to figure it out so next slide please

so what is new for FY24 first of all this year for the first time that I'm aware of we since at least I've been working on the CIP we made a concerted effort to ask that every project and every submission be linked to a specific chapter

and goal within that chapter of the comp plan and so one of the things that we'll talk about on the 13th is sort of just like we look at the alignment of how it falls within the categories either affordable housing or transportation we will look at that on the strategic from the comp plan standpoint so hopefully that will be helpful

the other thing is is that we have a new budget explorer excuse me budget explorer tool which we rolled out last year as part of the operating budget that allows you to drill down to the line item on operating budgets but we've also enhanced that a little bit to add the CIP so

So for the first time again I think this is new information because typically when we come to the Planning Commission and when we are working through this very short budget season we talk to you about next year and moving forward but we haven't spent a lot of time allowing everyone to sort of look back to say how are we measuring up to what we've done what's been approved in the past

and so on that top where those boxes are at the very top where it says under how do I I'm sorry if you'll just go to that arrow at the very end of those boxes right up yep and just click on the arrow one time oh I'm sorry click on the last box then he added it there where it says CIP right there

So, tada.

I think you have to click on the box that says CIP should be the dark, should be black and not gray.

Right there.

Click on that.

There you go.

No worries.

So here this is and what this I want to be clear about a couple things here because there's a lot of information here, but there's also a lot of room where it can be misunderstood as well.

So I want to take a little time to tell you what this is.

Again, every this is a basically a data dump from our enterprise accounting system.

So every active project that has had funding allocated and still has funding available to spend on that project is listed here.

what you will find is that the very first column is anything this is not I want to be clear this is not a life-to-date budget this is the budget as it stands right now so what are the dollars that are available right now so working from left to right the first column is the carryover from prior year so that means any budget that was previously approved in any prior year

and not spent is in that carry forward column.

The FY23 new funding, that includes anything that was adopted in the five-year plan, so anything that was in that FY23 adopted column, plus any new amendments that council has approved during this fiscal year so far.

And then the third column is the balance of those two.

So by the time you get to the third column, that is the budget that is available to be spent in fiscal year 23 Expenditures are anything that's been allocated to this project, so either we've already written the check or there is a purchase order and there is an allocation for those dollars

and then finally the available funding is the I'm sorry I just I should have

yeah and so that is the percentage that it's there was an extra column there I wasn't expecting there is a percentage of what is left or how much has been spent I'm sorry so a little bit of functionality here this is when you first go in this is everything if you go up to the drop box that's on the left hand side right above the blue line

if there's a carrot there one box over just one box to the left there you go if you click on that carrot here's where you can actually pick the categories so if you want to pick affordable housing for example these are all the projects that are aligned with the affordable housing grouping so if you click on that

you will see all the projects that align with affordable housing if you go over to that box on the right and click on that carrot you're able to choose the percent that has been spent so if you wanted to look at a project where no dollars have been spent you could do that

if you wanted to look at projects where there are there's a hundred percent spent you could pick that category so if you could go back over to the left and choose transportation and access

What you're going to notice in the bottom of this box is again the total of all the lines you see up above so if we just skip to the last box you'll see that there's about 83 million dollars that is available in transportation and access projects

so that looks like a lot of money and it is a lot of money but I want to be clear that that doesn't mean that we can go in here and say okay well what is zero and let's take all those and let's reprogram it to something else if you recall from the earlier slides all of these budgets have to be offset by a corresponding revenue

and many of these projects are state and federal funded and so if we don't do the project we don't get those state federal funds and so this budget is really not available to be spent so just keep that in mind as you look through these projects or you know do these breakouts keep in mind that every project has a has a story

And it's not as easy as just saying, well, we've got this money, so let's don't do this, let's do something else.

We need to kind of look at that and see how these things are funded.

I just had a question, but the money here is our city's money, like the cash or, in this case, bonded.

it does include it so for example if a total let's just take I'm gonna not these numbers will not be correct so this is a sake of example because I don't have these on top of my head but let's just pick Belmont Bridge I think that was roughly a 40 million dollar project of that I think only five million dollars of that is city money

if you were to go here and look at the budget you'll see 40 million dollars because that's what we have to issue a construction contract for but that's going to be offset by bonds and then the let's say the city thing was five million there'd be 35 million dollar revenue budget that we've got to collect for state and federal dollars

So that's what I mean by you can't just go by looking at this available budget and think, oh my gosh, because if the revenue does not materialize, we technically don't have the money to spend it.

So any questions on this tool?

So I want a few other just side points.

So these numbers are accurate as of today.

These are the balances as of today.

As an ongoing process, they will be updated quarterly like all these other reports.

But because we were presenting to you today,

Okay.

I hear none please proceed okay so talked about the comp plan showing you the budget explorer tool the next thing that we're working on is we are going to an online both an online budget book for the operating budget but in particular we have will have an online CIP budget book for this year

so one of the nice things will be is that in your packet next week you won't be getting a bunch of documents that are pages and pages long for me with project descriptions so now you have the available balances for all projects and the tool I just showed you and then next year next week

You will be receiving another link that will also live on the budget webpage and it will afford you the opportunity to click on any project that's in this plan and have all the information about that project in one place

and the goal is right now it just includes projects that are in the plan we are working towards the idea that every project so everything that's in that budget explorer we would eventually like to have a story page for that but because of time and everything for now for this year it's just what's in the five-year plan

so that big long document that I normally send that explains the project will now all be online and you can access it directly and then the I think there's one more bullet on this slide if I'm not mistaken

So that was planned for.

What you just went through in this presentation that Christy just shared with you gave you a good overview of the CIP from a budget perspective.

But there's another school of thought that the CIP is also a planning document.

and that's something that we have probably fallen short in some aspects and since I've been here, I have questioned and questioned and questioned and have been working towards trying to figure out how we can bring those two together.

In my opinion, the planning side of it, the planning aspect of the CIP should inform the budget and those two should work together.

So as we've been working and actually Chrissy and Brian have been doing a lot of work before we even got to have our conversations about what was going on in my head as I started looking at things but those examples of what Brian has done just really bring to light what I was hoping for and that was putting more information out for the larger public to be able to see

but ideally for us to then be able to internally look at how do we better plan for what it is that we're attempting to do.

We have a lot of money tied up in our CIP.

We have a lot of projects.

What we don't have is a lot of capacity.

That's been one of our issues.

Those two don't really work well together when it comes to trying to get things done.

Our project management team in transportation specifically have a portfolio out of this world.

it is too big to be perfectly honest and sitting down and talking with them they are operating from an understanding that the desire is that we always apply for state funds state and federal funds period that's not good practice because if you cannot deliver the project you shouldn't be applying for them that's my that's the Sam school of thought but what we have to be able to do is we have to be able to reconcile where we're having those issues

and try to figure out how do we add more capacity or maybe look at how we do our work, what are the process changes, the improvements that we need to make.

So a lot of time this year specifically has been spent on trying to figure out diagnosing problems, looking at what are the various process improvements that we need to implement, and then from there how do we begin that whole planning aspect.

So I'm going to run through just a variety of things that we've been doing.

and all of them really tied back to the CIP so I think it's important for you all to be able to hear this in regards to the work that's being done and then eventually we hope that it all makes sense when it all comes together and in future years it'll be so easy that's a joke how we do this work but if we take the VDOT portfolio specifically when I arrived and sat down with the team and started asking questions about where we were I learned that we had a very huge portfolio

that we had a good status with VDOT in that Charlottesville is the diamond in the crown for the Culpeper District, which basically means if we apply for it, we're going to get it.

That's dangerous.

because we apply for it and we get it.

And then if we don't necessarily deliver, then we then look bad to the state, to our public, and to everyone else involved in looking at that picture.

When you look at our portfolio and you look at basically a traffic light scenario of grading, when I started looking at everything, we were red light, red light, red light.

Today we have green, but it took a lot of work to get to that point because we basically had to renegotiate our relationship with BDOT.

I went to the district engineer and actually said to him, we need help.

And he said, well, we probably hadn't heard that from y'all before, but we've been waiting for you.

And in that process, it had to be one of those open and honest sharing, so I'm doing that with you right now.

I didn't ask my boss for permission to do it the way I'm doing it, so hopefully I'm good.

But ultimately, this was an attempt to reboot the relationship.

We had a very tense relationship with the project managers on their side because they were looking at a large portfolio that was not moving, and we were constantly applying for more projects.

And as I sat back from my perspective and looked at it, I kept hearing, and we're going to get ready for our next smart scale project, whoa, whoa, whoa, whoa, whoa.

Why are we doing that?

We have so many already on the list that aren't moving.

So there is a number of things that had to be looked at, reevaluated,

just basically set a new trigger for certain things and is now moving.

We have really, really done a good job with the state itself to get them to basically grant us permission to right-size our portfolio.

So we made some adjustments earlier this year with council, allowed us to actually move projects forward, move money around.

Chrissy's now waiting on the numbers to come back and documents to prove that everything that I said is true, but it's been worked out to where our portfolio is actually in good shape.

will hopefully be ready to apply for a smart scale project in the next round I don't make that guarantee at this moment it's not on my call but at this moment I wouldn't recommend it because we have enough we have enough on our plate it's a platter and it's too big but we'll work towards getting through that how we've been addressing the platter though

is that we've looked at adding additional positions.

We have three project manager positions that are at this moment being advertised, one specifically for ADA, one is a senior project manager so that we'll have someone to actually oversee that team specifically, and then just added capacity.

All of that is going to add more hands to the mix to allow us to be able to do that work and get it done as we've applied for it, and that in turn will then make it possible for us to resume actually applying for additional funds.

If we jump from the transportation portfolio and just talk about ADA because we're falling on the sword at this moment, so I might as well fall on all of them, we're underperforming and we have been for a very long time.

We've got to do better.

We will do better.

We're adding additional capacity in that space.

Our traffic engineering team is now going to be a team of three.

If I could just find qualified people, it'd be a team of three today.

traffic engineer, assistant traffic engineer, and a traffic inspector.

In addition to that, we're looking to add an ADA inspector so that we can get our arms around the volume of work that needs to be done.

When you look at the CIP, you see three different accounts labeled ADA.

That money's not moving.

It's not moving like it's supposed to be moving, and in some instances, it's not moving at all.

That's because we have no one to move it.

It's there, and we're adding to it, but there's nobody to actively work it.

So we have an ADA project manager specifically that we're looking for right now and that's how we're going to actually begin to do the heavy lift and the work that needs to be done.

In the meantime we're working on updating our transition plan so we can actually capture what is the scope of our problem and then when that person is here they can do that work.

I know James has shared with you that we've added a transportation planner.

That's been something that he and I talked about when he first joined the team that we have a lot of plans.

We do a lot of great planning work here.

There are a lot of disconnected plans on the shelf.

Now we're going to have somebody who's going to work to weave through those plans and make them make sense.

and help to order the work that it is that we're trying to do.

I'm already excited about Ben being here.

Ben is going to help us figure out how to do this in a way that that work then informs the next smart scale application.

We shouldn't be asking the state to give us money for a smart scale project without truly, truly evaluating, is this the right project?

Why is it the right project?

We should know that.

We should confidently know that.

and then we should also be able to know that we can deliver on that timeline that we set for that.

So there's a lot that has to be done in that space.

I'll just share with you that I recognize that the comp plan is a very controversial effort.

The CIP should most definitely be tied to the comp plan.

The comp plan says that's where we're going.

The CIP is how you get there.

That's really what it's all about.

We've got to make sure that those two go together.

So there's some work that needs to be done in getting that done.

I would love to keep adding positions and Chrissy wants to hit me every time I say adding capacity and adding position but at this point I feel like we've been off track a little bit and we're righting that ship and I'm not going to ask for what I really want at this moment is the CIP manager.

That's what I want.

I haven't gotten approval for that yet but I'm building the capacity in other ways

Don't do that.

We're building the capacity in other ways so that we can actually do that work.

And in my mind, it's to prove that we need one.

That's what I'm doing.

That's how my friend works with me.

So we're going to get that work done.

James has already been in that conversation with me.

I believe we can build up the capacity in a way that we can take a stab at really managing the CIP for what it is today.

Actually, you're going to help because you're an advisor.

That's why the screen is up here.

We know that you're going to do this.

We have no doubt that we're going to receive a bunch of questions from some of you.

You might be sending them now.

We expect that.

But part of what we want to do is then we want to be able to engage back and forth with you on some of that stuff.

So I think that's really what we're getting at.

The planning aspect of it is for us to take a step back.

We should be asking ourselves questions all the time about the CIP.

Why is that in there?

How did it get in there?

Has something changed?

When it's stuck, is there a good reason why it's stuck?

And it shouldn't always be capacity, that's the reason that it's stuck.

It could be something else that's contributing to that.

If no one is really asking that question, we will never know and that's why you have a list of items that sometimes it's not moving and you don't understand why it's not moving.

Part of the other aspect of it is that in our office, at the level that we are, we don't understand this stuff either.

We have to rely on project managers to tell us, I don't want to do that because then they can do things and hide things and express things that we don't necessarily know is exactly the way it needs to be.

it should be working together we should be sitting down with them we should be having them make presentations to us and tell us what's going on asking for help that they need I am I'm doing my best to triage as many problems as I can that actually lead to why we're stuck in so many different ways and in some instances it's been the chaos that the city has gone through this is how it plays out when that list doesn't move that's a symptom of a bigger problem

So if we stabilize the way we're trying to stabilize, all of this gets better.

And that's the big picture.

That was a lot.

Questions on that?

No, it's good.

I like what you're doing.

I like the focus on the budget.

All right.

Is there more presentation?

A little bit.

It was a sort of a process question.

The online book, is that a skeleton right now?

It's going to roll next week and it has a lot for the CIP it's it's flashy I'm excited about it I hope you all find it useful I will say that it remains a work in progress and so you know if there are things that you wish were there that aren't there please do let us know because we do want to

Yeah, so I guess the question, so a lot of the things that are holding out CIP items, I mean, kind of maybe the main thing is like staff capacity, right, which is an operational budget kind of thing.

And I guess the question is, where do we come in as the advisor on the CIP when it's an operational thing that's

precluding maybe putting money into the CIP, right?

Like every year I bicker, you guys cut new sidewalks to zero and we say, put some money in new sidewalks and you put 100,000 in new sidewalks.

But I'd rather spend 100,000 on a new project manager that can get me one more smart scale every other cycle that's worth $15 million in new sidewalks than 100,000 a year, right?

But that's not in the CIP.

So I think that's a perfect segue to the next slide which I want to and I'll if we can go to the next slide so I think that the one the one way that you help with that is

you know you take the data that we have you take the draft that we have and as Sam mentioned we look to you to be an advisor and as a as a group we look for you know what are your recommendations for the plan and so you know to your point while operations is not really within the CIP it certainly would be

you know this board could certainly put that in your recommendation to the city manager that hey instead of doing this do this because you know as we know all of the funding for the CIP and the general fund it's all one big pie and so how we divvy it up you know whether it's in the CIP or whether it's in operations it's still a relevant discussion so

I think I'll add to it that the

the part the thing that will contribute to your ability to do that consciously is our providing more information one of the things that I would like to be able to do is for our team to be able to share their progress reports and put that out forward as well that then kind of feeds you a better understanding as to how the project may be moving looking at schedules you'll start to see adjustments to schedules and then that might actually lend a question

and then we can actually be able to respond to that.

Part of the assessment work that's being done right now is to try to figure out, so what are we doing in the way of project management?

How are we tracking the work that we do?

And then is it something that we could actually not have you do anything extra, but I could just promote it to the website somehow, figure that out.

That's one of the things that I'm working on at this time.

If I can feed you and the public more of that information, that then I think as a body, it makes you a little more informed about what's going on.

So then as you make that recommendation, you can feel more confident about it.

Great.

And so does that answer your question?

Okay, so these next two slides are basically just an excerpt from the formal recommendation that the Planning Commission made to City Major and the Council last year for the CIP and each of the ones that of those recommendations that were implemented are noted with the notes in red here so one of the things was one of the first recommendations

that example to put this one first but it was to reduce the million paving line item and we actually did not implement that change and I'll just I'm not gonna go through each one but in this one in particular that line item was already reduced as a function of dealing with COVID and so that's why we did not accept that recommendation

There was another recommendation that the existing money that was in the budget for the parking structure be funded to only a minimum of what's necessary for the Albemarle County agreement and so consequently we reduced $1.3 million from that and reprogrammed those dollars elsewhere in the CIP

Is that the last one?

Okay, that one.

So on this one, the commission made a suggestion that we fully fund the request for tree planting, new sidewalks, and bike infrastructure and the hazardous tree removal.

We did fully fund the request for the ash tree removal and we made some increases in the other line items and I think for sidewalks last year we had actually which Rory you just brought this up as well we had actually taken new funding out simply because because of COVID and other things there was a large existing balance and so we just took a year off but we did add it back in

The next one was the economic development strategic initiatives account, the small area plans, and the strategic investment area.

We did decrease funding from all of those.

I think that it's one more bullet.

Okay, and that one, because of other initiatives that we were working on, we didn't actually increase there, but there were other increases throughout the CIP for affordable housing.

Do we know what the impact of the reductions in bullet number two were?

The reducing the strategic investment area implementation, what was the impact of that?

And they spent 3,800 this year.

Yeah, and that's, you know, that's one of those things that sometimes the ask is little.

Sometimes the ask could be big, depending on what we're trying to leverage.

But, you know, we heard the commission, and so therefore we reduced the funding there.

I wonder what our thinking was as opposed to that, because we're in the...

in the midst of doing a lot of strategic thinking about the SIA.

So why do we reduce that budget?

Maybe it was.

So it didn't zero out, but it did have existing dollars.

So I'm going to turn it over to Mr. Rogers to wind us down and then give you guys the floor.

Mr. Rogers, upon my note, I believe this is the first time you're addressing the Planning Commission.

You are most welcome.

Thank you so much.

Thank you so much.

I've been watching from afar, but keeping up.

So I hope that having heard this presentation of where we are,

that you can see that there's some significant progress that's been made in terms of our thinking about the CIP, the depth that we're going to to kind of dig and understand what's in the CIP and what our options are, and the information that we are providing you, because I think through that,

You can make better recommendations to us in terms of the direction.

The notion of connecting the CIP to the comprehensive plan, this is an important step, and I hope you guide us in getting all the way there.

So I look forward to our next meeting, the public hearing on the 13th.

and from that your recommendations around which I will build the budget that we submit to council.

And this is a journey.

It's not a marathon.

It's very long distance in terms of what we have to do together.

But I think this is a good start.

So I'm glad that I came out tonight.

And just one follow up.

I did get a message from my support of the public.

either.

Is your presentation complete?

Mr. Mitchell, can you start us off?

Anything, all right.

Last year was obvious.

For the next five years?

I guess I can say not any big projects like the school configuration at this point.

But again, what I'm trying to get, I want to hear the answer, but what I'm attempting to understand is what guidance have you gotten from council, because they're always in the background whispering in your ear, and clearly they were yelling, we're going to fix the school.

Specifically, instructions that went to departments were, let us know what's out there, but be reasonable.

Our CIP is a full plate, not quite a platter like Sam talked about, but we have, as we worked our way through the budget process last year, we started saying, if you do this school project, you're going to have no more net capacity.

And we finally got to a point through renewed projections and other things where we said, look,

Hey, we can actually afford this.

We can get this in here and still leave you a little bit in the out years for a while.

And so with that in mind, we ask that departments be reasonable about their requests, but to also not leave us blindsided.

So if the law is going to fall in, please let us know.

But essentially, we are looking for things.

And I think what you will ultimately find in the draft is that we

move forward with the five-year plan as is.

It's basically rounding up to be a budget about how do we address inflation, which is significant.

So a couple of years ago the focus was clearly housing.

During the CRHA stuff, the last year was reconfiguration.

So this year there's nothing as significant as the 10 million bucks we put into housing over five years or the

7 million bucks, whatever it was for the reconfiguration.

Okay, cool.

So what's like the magnitude of that, like ballpark?

Like we're at 68 for, or 66 for next year for reconfiguration.

Don't make me, don't steal my thunder.

I will say, you know, if you want a better gauge of that on this list that compares 23 to 25, it's about a $5 million increase on that project.

Overall, it's about $40 million, and a large part of that is inflation.

And so that also affects our limit, right?

So two things.

We do have a debt policy which basically says that we will issue debts no more than 10% but we have a target of 9.

So we don't want our annual debt service to ever exceed more than 9% of the general fund budget.

Good thing, our nice thing, and one of the things that sort of saved us on that capacity question was that our revenues performed so well and our assessments grew, which meant our general fund grew, which means our percentages decreased.

But for this coming year, we would be blessed if we are half as good as last year, but we're expecting much less.

and the other but to that as well is that while we have this capacity we have to be able to pay for it and so affordability becomes a much bigger issue because even in this plan that really if you follow along in the budget process we have

a debt table that everyone loves to hate.

But it does have a lot of good information.

Even in the current plan that we have, we're doubling our debt service in, I think it was about seven years.

So we have to be able to pay for that.

And debt has to be paid first.

Actually, most of that was actually an illuminating exchange, and I'm actually thinking about inflation versus cost of debt and the way that can be leveraged to one's advantage over time.

making everyone very unsettled while it happens, though, because the math, if it doesn't math.

But actually, in terms of in-depth questions on the CIP, I'm actually very interested in digging into the story.

One of the things narrative-wise, so recovering academic that I am.

So a quick question to follow up on the zeroing on the 27th.

So we don't see all that change when we get the new real CIP for 24.

Yes, so the way we typically fund our contingency is that we don't include it in the budget.

Our contingency is typically funded by our fund balance policy, which says that we maintain a minimum of, well, we maintain a 17% fund balance policy in the general fund.

and then any excess over that at year end automatically transfers to the CIP and that's typically how we funded our contingency fund and then those dollars sit there until council reallocates them for other projects.

The reason that there was that 1.9 in there last year is because the debt table that I referenced earlier when we were going through those scenarios for the school project we showed that for three years the debt service was going to increase by a little over 1.9 million dollars a year in those three years

We'll be, so again, because we have to put all of the budget in so we can actually encumber dollars for the contract, all the bonds are in one year.

I have another question, which maybe you'll know the answer to.

Does the school reconfiguration also include PV, like adding solar to the schools?

I am not sure.

I don't know.

We can find that out for you.

I do know that what you will see in the CIP for a lot of the project requests

Some of the increase on this sheet that you see for the CHS roof, which has increased significantly.

Part of that is just inflation and material cost.

Thank you.

I think Buford was going to be PV ready but without the panels.

Ms.

What, and this is kind of related, what's the last page in the packet?

It looks like it's priorities and proposals.

Were those things not funded or not included?

Thank you.

Thank you.

And actually, I meant to address that.

So what this is, is this is a listing

of all the new requests that departments submitted this year.

So these are things that are not funded in last year's CIP, but they're requesting that they be put in this year.

There's been no work done here in terms of what you see.

There's been no, you know, determination.

When you get the draft next week, you will see what things came off this list to go into the CIP.

I do want to make one note here, I don't think that, let's see for the

Buses at one point what was submitted was the total cost of the buses and not just the city match which is typically what we budget because the rest of it goes to transit and so if that's not a couple hundred thousand dollars a year that that has been a correction couple million yeah so that's that's the full cost of the bus replacements what

And again, that is the full freight of that.

Okay.

Yeah, but the rest of this is just as was submitted.

We did ask the departments to submit with a priority.

They had up to 10, 1 through 10, they could assign the priority, and we asked that every project only have one number one and one number two, and so...

Okay.

And so, you know, obviously staff's going to be looking at those new requests and thinking about them.

And specific to sustainability and climate action, does the CIP reflect opportunities to take advantage of the IRA?

Yeah, so that's an ongoing process, and as Mr. Mitchell asked this question, I started thinking about it.

There are two areas of attempting to work in, and that would be climate and transportation, and that means transit in a transportation sense.

Climate, we're having a lot of conversations right now because we're working to get the Climate Action Plan adopted, which you'll be having that next step coming your way very soon.

One thing that we want to do is to actually go through the existing CIP and identify what items are actually contributing to the reduction in greenhouse gas emissions because I have been told that we are moving in that direction with some of the things that we already have proposed.

One thing that I would love to be able to see and I talked to Chrissy about it is that we then start identifying it, actually labeling it green or making it green fun or something like that so we can see that visually.

But then also working with the environmental team to look at what they're doing and being able to capture that and report that in a more tangible way.

They'll be working on their work plan for 24.

The priority that I have for them is that they will come before Planning Commission and Council once a year, giving a full update as to what progress are we making.

That sounds like a great tool.

I've asked for that.

I've asked for that.

I understand.

They just produced an action list, so it's a list of projects, and we shared that with council for them to then weigh in and tell us what their thoughts are on that.

That was more from a budgeting perspective, what are the costs associated with that so that we can then come back to what made it to the new request list and then prioritize accordingly.

But beyond that is to do exactly what you just said, then add that measurement.

If we do this, how does it contribute?

If we do it, how many years in a row, how much does it contribute?

Yeah, thanks.

Thank you.

I don't know the answer.

I don't know how you see him in the chat room.

He has his hand.

Sorry about that, I guess.

Am I there?

Yep.

Okay, sorry.

No, I apologize.

I actually don't have any questions.

Listening in is being very helpful.

Thank you.

Um, I mean, I guess I have some things about the maybe content of the CIP, like specific sort of items or categories of items, but I don't know if we want to get into that next time instead.

I don't either.

I'll shoot for some of them.

So there's a few things where they're kind of just investments that like pay for themselves.

For example, maybe ash tree removal is an example in that if they fall down and hit someone, we'll have to pay more in the lawsuit.

In the climate action plan, there was one like if you replace all of the street lights, it would pay for itself in like four years.

It's not as direct as one may think and the reason for that is we typically in all of those cases you have to come up with the money first and then the payback comes later and so as we certainly that is a factor as we evaluate projects like is there an offsetting revenue how fast will it come in can we make that work

But depending on the size of the investment, again, it becomes a priority issue.

Like how do we allocate the dollars now

Even if we're going to get the payback in four or five years, is there something we've got to do right now that we can't really give that money up?

So it's a good point and it is a factor that's considered, but it doesn't always make it a go.

The other thing is a lot of those things, there are a lot of solar programs and other things in which there are funding mechanisms to do that kind of work.

Yeah, and it's interesting, you know, if something like streetlights where we're paying out every year to pay for the electricity for it, but if you essentially eliminated that electricity cost by putting in an upfront investment, you're actually increasing our debt service percentage

Yeah.

So like, is that just how it is?

Or do creditors like, say like, oh, well, that was, you know, that's a good investment.

You know, I think this is a little bit of an area where we would rely on our financial advisor, but I think it's fair to say that in terms of our policies, we have to be careful with that, and I think that debt is debt is debt, regardless of whether you pay it out of cash from the general fund or whether you're paying

you know we we still have to pay it back yep fair um and then uh I guess um for well Mr. Sanders mentioned like you know the idea of like things in the CIPs that we

put in there a long time ago and maybe are still putting money into all the time and don't quite know what they're there for.

And to me, if we go back to that slide, we don't have to literally do that, but we recommended last year reducing funding to economic development, strategic initiatives, strategic investment area implementation.

Those are accounts that have been building up these funds that rarely, if ever, do we spend anything from them.

Every year I ask what economic development strategic initiatives is.

It's a very nice name.

And like the canonical example is Hillsdale Drive, but that was like 2013.

And like this year we spent, what, 1.3 million on that parking lot on East Jefferson.

And we took it out, instead of taking it out of the economic development strategic initiatives account, even though I guess it's supposed to be an economic development initiative, we took it out of the parking structure account

because we had a ton of extra money in that one, which is kind of why we, I guess, recommended that we reduce that one to the amount needed to fill the agreement.

So a couple responses to that.

One is I'll just give you a spoiler alert.

We're not adding any new money on any of the five years for strategic investment this year.

But the other thing is that every year when we get ready to sell bonds, we send out

what is now online to our project managers and we ask for a status update on those projects and we take the opportunity to look at those kind of things

you know again it's a philosophical question on some of these you know is 1.5 million dollars sitting around in a strategic investment account a lot of money maybe but you know is it possible that there could be an opportunity that could cost us three million dollars and we wouldn't have money to leverage that deal sure so it's a little bit you know specifically in that situation it's kind of you know

I would add that, and we can't get through all of it quickly enough, unfortunately, but now, we're starting now.

I mean, that's really the point that I'm making.

So much of the CIP falls into the operations portfolio, so I've been on a listening tour, and I'm hearing stuff, and it's in conflict.

And it's not that anyone's doing anything wrong.

They're doing what they think is the right thing to do based on prior information that was given, prior situations that they were in.

and part of what I'm trying to do is empower folks to tell me that doesn't make sense anymore.

I don't think we should do that and be comfortable saying that knowing that I'm not going to say that we shouldn't do it if they didn't really make a case for why that makes sense.

So we'll begin to reconcile it.

I think that's the project, that's the work that has to be done, is actually going through and evaluating it.

And if we put forth that better story, you probably will have less questions about it.

So that's really, it's give and take.

And maybe like a philosophical question is like, does it maybe make more sense to have that million and a half dollars sitting in the contingency account that's broad and could be used for anything by council, rather than this economic development account that is...

kind of ends up being used for anything.

I mean Hillsdale Drive is like a road project, right?

But I mean I guess it's not a difference.

Let me make a plug for strategic investment as a strategy.

As I think about it, when you think about strategic investment, I'm looking for an opportunity, an opportunity that's going to generate more revenue for the city, you know, if the opportunity comes along.

Yes, it might sit there a year or two before that piece of property comes on that the city should have and that we can leverage that money to it.

But on that property could go a affordable housing project,

could go, you know, another Whole Foods, you know, that would generate income revenue for the city.

So, you know, it's not all bad.

Yeah, I mean, like I said, it's like the name is good, the concept seems good, we just have never really used it.

And kind of the same for the SIA, right?

Like the idea is we wanted to put more investment in an area of the community that needed it.

We put a bunch of money into an account and we still don't really know what to spend it on.

Yes.

And I'll tell you, and I've had that conversation, I know Alec is back there, like, please don't go there.

We're going to talk about it, and I'm planning to have Brenda come to the council with a work session on SIA and SAPs, period, just that whole concept.

James is going to be participating in that conversation as well.

because part of what we've done is we've decided to create, we do an SAP and we don't necessarily set aside an implementation fund to go along with that.

Well, what is the point of studying it if you're not going to then do something with the study?

So it's those disconnected moments keep coming up over and over and the SIA was not one of those.

So it wasn't, the circle was not full.

It wasn't a whole circle.

And that's part of where we are right now.

So we're trying to figure out what the right approach is.

Cool.

And that kind of relates to the CAF and other affordable housing stuff, right?

And if I understand the consultant's recommendations on the CAF or on affordable housing funding generally in the affordable housing plan, it's like basic ideas like put all the money in the CAF, have a standardized process to disperse it.

And it seems like we're kind of getting away from that and we're still putting the standard

We pulled all money out of the VCF that's housing related and is now being added to the CAF, so that's one change.

So the Vibrant Community Fund will not consider housing applications at all.

All applications will come to the CAF so that we can centralize that approach.

So the CAF goes up to 1.5 million going forward.

And in taking the recommendations from HRNA, we have ANOFA,

with a series of RFPs categorized so that individual projects can be considered by which opportunity is the right one for them.

And it gives them a chance to be in a competition with that light type project.

And then we can actually consider taking those to council and asking even for more money if that's what they so choose.

It was a better way of doing it so that two big projects wouldn't cannibalize the small guy.

It gives the small guy an opportunity.

That's part of an equity initiative that we prioritize as well.

Yeah, I mean, I think that's fair.

And it's a hard problem.

I don't know that tossing all the money into the calf and allocating the giant projects and the tiny projects is the right move.

I guess where I have a little heartburn about it is whether it really is true competition to have a NOFA

where we put out this funding availability for about the amount of money that we know particular projects need.

I mean, I guess part of the problem is there's basically one, maybe two providers who are building these big projects, if you include CRHA, which is sort of in its own way too.

And the costs for those are very high, and we're already hitting

the $10 million a year or more and without really adding any new housing, like affordable housing projects to what we already knew we were going to build, right?

So it's a tough situation.

We'll continue to work on it.

Okay, thank you.

Mr. Palmer, are you with us online?

If so, thank you for your patience.

In that case, I rescind my thanks.

It is to me.

I know a little bit about math.

I have a procurement background.

The FY27 fiscal cliff going into FY28, it's been worrying me for a year.

Again, this is a big thunder steal, but we're not going to jump off that cliff, are we?

We're not.

Again, I think that what we have found out

from where we were when we started the budget cycle last year to where we are now is that, quite frankly, COVID has had impacts that nobody could forecast and guess.

And so when we started the process and we started talking about the cliff in 27, we were right in the midst of COVID.

We still weren't sure how we were going to make our way out of that.

And if you recall, you know, going back to the 21 budget, so two budget cycles ago, we actually didn't put any cash in the CIP, and we held that back and created a contingency for operations for COVID.

It turned out we didn't need that, and that cash was put back in the CIP.

But I think, you know, we have since found that our revenues have recovered strongly.

and we had a big assessment increase last year which has really helped to make that cliff maybe just a little step now so you know it's not that we have capacity to add you know eighty hundred million dollars more to the CIP but certainly we're not at zero and we're much more at a manageable level you know we can add ten fifteen you know teens and millions if council chooses to but again

We still have to be conscious that for every dollar we add in debt, we've got to be able to pay it back.

And so as our debt climbs, even though we're able to not have that cliff, we can put that debt number in for revenue.

If we issue it, we have to be able to pay it back.

Thank you.

Do we have counsel online?

You'll hear plenty about this, but if you've got questions for clarity, this is a great time.

I have one other question.

Yeah, we're over $10 million for 24 and 25 projections, and that's without counting CHAP.

So we're already there.

26 it dips a little bit with the CIP but if we added CHAP it would hit 10.

So we're hitting the number recognizing that that is still not enough as Commissioner Stolzenberg mentioned that we have all these big projects that are coming.

Can we talk a little bit about our debt?

My question to you guys is, shouldn't we be worried?

Because we pay for that in the general fund.

The general fund comes from tax revenues for the most part.

So that's part of all of the sort of puzzle that we work out.

And so part of what we went through ad nauseum, quite frankly, last year as part of the budget process is we actually ran a lot of projections and a lot of different scenarios that we presented to council.

And part of that was to discuss how we would pay for it.

So is doubling your debt service concerning?

Only if you can't pay for it.

And in terms of passing the budget,

you know we work through that and council work through that and through other means we feel that we can comfortably cover that through year-end surpluses they did move the tax rate up a penny in preparation for that and so we have done some things to shore up our

But we do have to be concerned about, as we double that debt service,

other general fund expenditures being crowded out.

We have to keep an eye on that because it limits our options and reduces our options in some areas.

Did you get a clear answer on strategic priorities?

We got questions on that.

We got some of that material from folks.

I think broadly from a transportation perspective, I think it's been the sense of the Commission, not to speak for you all, that we should

Right.

At this moment, it's not a money problem, it's a performance problem.

Any questions for us while you have us?

Well, thank you very much.

Thank you.

And then... We have a little bit more time there.

Let me pull up a calendar.

So the packet for the meeting on the 13th will be posted on the 6th of December.

so but we will actually on the budget web page the budget the CIP budget book will go live on Tuesday the 29th and the which will contain the draft of the CIP so so we'll just make sure that that we get that contact information to you guys as soon as it's available and then you'll have more time to review that item

So you guys aren't working over Thanksgiving to make it happen, right?

No.

So there's a little person, not a little person, he's big in my mind, that's attending as a panelist who is the man behind the curtain on a lot of this stuff and making this happen.

He is my colleague, Brian Ray, and we're not having to work over Thanksgiving.

Thank you both for that tool.

Brian gets all that credit.

Do we want to take a short recess or do we want to cruise through?

How are we feeling?

Will this be quick, or what do we got?

I'm suggesting five minutes, a bathroom break.

No, I think we're in the next discussion, right?

By the keys.

Short break.

I don't know, there might be questions or things like that.

I'd like to call us back to order.

Mr. Kifuna, you have a tough act to follow, but I'm sure you're up to it.

Are you sure?

Because you're being awful.

Torturing in such a bad way.

Good evening, Commissioners.

It's good to see you again.

Tonight I'll be providing you an update on the affordable housing program.

And there has been a lot of activities prior to the adoption of the affordable housing plan and also during the process of approving it and thereafter.

The plan itself has five major focus.

One is funding.

Two is governance.

The third aspect is land use, tenant rights, and subsidy.

Of these five elements of the Affordable Housing Plan, the funding aspect, the governance, and the subsidy, there has been substantial improvement or implementation, if you will, in terms of moving those elements forward.

The tenant rights, for the city to make an inroad into the tenant's right, there has to be

some initiative at the state level in terms of providing the city authorization to do some of the things that the city needs to do.

The plan itself was adopted on March 1st, 2021.

It informed a huge part of the comprehensive plan, which was further adopted by the City Council, I believe, in December of the same year, 2021.

Prior to the approval of the affordable housing plan, we are already, like I said, implementing some activities designed to create affordable housing within the community.

In the past three years, the city is averaging approximately $10 million, which was a major

of overarching goal in the affordable housing plan, $10 million every year in terms of meeting its goal of investing $10 million every year over the next several years.

I just want to touch on this note.

There was a comment by Rory, so I just want to clarify that.

Sometimes when you are investing a lot of money in affordable housing, you don't see the results right away.

the reason being that in terms of creation of new housing units it requires an extensive amount of planning the planning goes as some of you may know through the planning commission city council subdivision rezoning site plan development and then of course after that the next thing you have is trying to bid the work out and then construction and the construction takes a

is quite a long, a greater period of time for it to materialize.

However, in the next few years, what the Planning Commission, the city and the community is going to be noticing is that the city, as part of what's going on, has created this pipeline production.

So every year or every other year now, we are going to be seeing a huge chunk of affordable housing being created.

If you look at the city's investment in CRHA,

PHA and perhaps the wholesale renovation of midway manual.

So over the next year you will be seeing incremental production of affordable housing including preservation.

So that's why right now we are investing all this money that we are not seeing immediate outcome.

There has been a delay

in terms of completion of project by housing authority.

But hopefully by January and February we'll be seeing those initial investment coming to fruition.

So I just want to clarify.

In terms of what's been done and what's going on and some of the activities that we've completed, we've revamped the application process and my boss Sam just

touched on it.

One of those is changing the application process.

This is in line with the provision in the affordable housing plan.

In essence, we are making sure that 50 percent of the CAF money

goes to projects that assist units and household at 30% AMI or below.

And then 30% goes to 50% or below, and then 20% goes to projects that assist people at 80% or below.

These are recommendations in the affordable housing plan.

So we've put that in place, beginning with the last funding cycle.

We have recommended to the City Council, this is also in line with what was provided in the affordable housing plan.

We recommended to the City Council to restructure HAC, Housing Advisory Committee, and also to create a new CAF Advisory Committee.

In other words,

The HACC responsibility of this new committee will change.

HACC will be responsible for policy decisions related to the affordable housing.

And then this new advisory committee, CAF,

will focus exclusively on funding issues and then recommending to the City Council the funding situations whether it's going to be increased or decreased or what have you.

So this new committee is going to be addressing that.

It will be a nine-member committee.

and the new HAC advisory committee will be 11, down from 21.

And I think I received, I believe last year, early this year, there was a request by the planning commission to have a representative on

on the hack, my recommendation at this time is that the application process is on the website.

If one of you can complete the application, you know, we discussed that with the City Council during the review process for appointment.

At this point, you know, we, during the

the redesign and review of the affordable housing fund by the consultants.

They went through all this in terms of who serves on that and they made their recommendation and canceled.

We have found their recommendation.

The recommendation did it include to have

didn't call out the Planning Commission.

However, I think the Planning Commission may very well meet the intent of the institutional representation.

So my recommendation at this time is

And I'll add, and it's not to speak for council, because that is not my role, but I'll share that in conversation with the reduction of seats.

I don't know if it was missed in the early consideration for what was actually placed into the plan as a recommendation for reducing its size, but there are three seats that were then dedicated to the term that we refer to has even had been confusing.

we took it as low income meaning we would have to verify income in order for them to take the seat but that is not how it was written up in the adoption language it's beneficiary so then we just simply need to recognize that they receive affordable housing or live in affordable housing and it's immaterial to confirming income that's already been done three of the nine seats on the HACC are for those individuals

Or 11, I'm sorry.

So that's... Why would you exclude people with low incomes who aren't beneficiaries?

Like aren't... You wouldn't.

And if they're not a beneficiary, then we would verify their income?

Possibly, but that's not what they did.

So yes, I understand because part of the concern that I have and have expressed over and over in trying to clarify it is that we have three bodies that we're trying to fill and nine of the seats from this beneficiary pool.

And the question is, are we going to get those applications?

Are they really going to apply?

Are they really going to be available?

Are they really going to be able and even interested?

Because there's also a conflict that's also been placed before council, that there's an expectation that individuals from that income group be compensated.

And that's another conflict because you can't pay CDBG task force members.

That's not a part of the regulations.

So I live in a world of conflict.

Okay.

Other things that are going on in terms of the housing program.

If you guys recall, sometime in April this year, the city council approved CRHA's request for $23 million in revenue bond for wholesale renovation of Midway Manor.

you know so that's part of the affordable housing, housing preservation you know and that's gonna renovate fully 98 units and about three months ago I had a discussion with HUD

because HUD was looking at extending their contract with Midway Meno.

So I had to have a meeting with them to discuss the service provision and then the residents' needs.

So that, it's a major undertaking by the city in terms of contributing to affordable housing retention.

We've talked about

the overarching goal of $10 million.

I just want to add, just for records, because often people don't talk about this, but it's India and the Affordable Housing Plan, and the city is at $10 million over the past three years.

It's in keeping with this.

In the southeast, the only community or city, rather, that is investing more money per capita

is Washington DC than the city of Charlottesville.

The city in terms of investment in affordable housing per capita is the top in the state of Virginia with $140.

per person compared to the rest of the other cities that are putting a lot of money in affordable housing.

So the city is doing pretty well for the city of its size in terms of investment in affordable housing.

So I just want to add that.

to reflect the city's performance in terms of $10 million per year.

And we are discussing right now in terms of focusing on the policy of 60% AMI as opposed to 80% which is currently the city's policy.

So we'll be looking to changing that.

going into the future.

We are also working on inclusionary zoning, for which the planning commission, you are in the middle of that, and you've heard a lot about that, so it's coming.

It's going to inform the rewrite of the zoning ordinance, and we believe

that going forward, it will be part of the toolbox that we can use in terms of dealing with the affordable housing situation.

And we've also consolidated, my boss talked about it a few minutes ago, we've consolidated the housing-related funds from the Vibrant Communities Initiative

so they are now housed in our departments and we now have about 1.5 million dollars and those carry over from a vibrant community to focus exclusively on housing operations not production per se so we'll be putting out a request for proposal for that and then

will also be putting out requests for proposal for the actual production of conventional units, among others.

And with that, I will entertain your question, but there are something else I need to add, which is the first action that the debris city manager, Mr. Sanders did, or took, rather, when he got here was to upgrade

the housing program coordinator.

We've been looking for somebody to be in that position or to fill that position for a while, but when he came here, he upgraded that position with increased salary benefits.

and we are currently and actively recruiting to fill that position.

We've completed the interview process and hopefully we'll be able to have somebody in that position in the next few months.

We are also

looking to hire grants program manager, somebody who will be dealing with grants citywide and also coordinating grants with the city department that are looking for leverage investment and things like that.

We are also looking to hire our grant analyst that deals with our

Entitlement Administration.

We're interviewing for that position right now.

And hopefully in the next few months we come up to full capacity in terms of staff, and then we'll be able to, next time we do this, we'll be able to provide the Planning Commission a robust presentation with pictures and what have you.

MR. Let's get some questions on this.

You mentioned tenant rights as one of the five focus areas of tenant rights.

And you mentioned that there's lots of work that we have to do.

You know, like the city attorney reminds me all the time, this is a Dillon rule state.

If we have to do things like rent control, some of the things in that area, we have to get an authorization from state legislature.

So, but most of the things under the tenant right bullets we're doing, it's just we need the enabling legislation to do some of the other things.

One of the key items that's underway right now that it's not happening within the Community Solutions office is the fair housing

aspect of what is being added to the Office of Human Rights so that they will actually have enforcement powers because that's something that we have not had and Todd has been doing that work for a long time without the real weight of being able to bring about the kind of change and the intervention that a resident may need.

Got a question on that.

It'll be,

It's intended to be complaint-driven at this time because it's capacity-based.

Once we are able to add additional staff with the support that we would gain by getting the designation, we may be actually able to hire investigators to actually do the proactive work.

Ideally, that's what a fair housing program is.

It does both.

We're hoping that we can get there.

I just don't know how quickly we can get there.

Sounds good.

Mr. D'Oronzio.

So, I mean, clearly I can, I could take a, I've got several issues that I could go down a couple of rabbit holes with you because I've got some depth on this.

But I wanted to circle back to the Dillon Rule issue.

and this is not an appropriate question for either one of you but it is for city attorney which is we are carved out with our own affordable housing program law

that we, with a very small number of other cities in the state, are excluded from the normal restrictions of an affordable housing program under the statute.

We're in this special category which says you can do basically whatever the hell you want to do.

The question I would have is, is it worth exploring with the city attorney's office how far we can push that issue

on these matters of things like expanding enforcement and in the tenants' rights world.

Because the statute was essentially written so that the state legislature wouldn't have to mess with

and getting into a throwdown fight with Alexandria and Fairfax County every year about what they wanted to do.

And Delegate Hudson got us stuck into that category.

So have we explored how much stretching we can do on that?

Not yet.

Because the way you read it literally,

Yeah, we'll look into that, but rent control.

Well, yeah, well, I guess I'm making that comment in the recognition that I'm not expecting

Although the governor did come out with a housing program today, which I haven't read, because he came out today.

And I will encourage you to follow up with whatever other heartburn you have, and let's talk about it.

Well, it's not so much heartburn.

I mean, there is some intestinal distress, but good to it.

It's called conflict in my world, and I welcome that.

Anything we can solve tonight?

Doubtful.

I just had that that just popped into my head.

That's about consistency.

It's being able to have somebody do it, own it, check in on everything.

We approve proffers.

We don't follow it.

We don't even follow the project to completion to even know if the units were delivered.

If somebody's certifying it, we hear from zoning.

That's not our job.

So someone's got to do that in order to then maintain good information.

That was the basis for increasing the role of the housing program manager now instead of coordinator.

Anything additional?

No.

Ms.

I have no questions.

You can hear me now.

Hello.

For the CAF committee, who makes the final decision on how funds are allocated?

And one of the things we are looking at start doing is it goes to the question you asked earlier on.

It's before we issued an offer.

You know, we go to council or when we provide council some kind of briefing, then we ask them,

you know their priority for that funding cycle so they'll be able to tell us you know so that the NOFA will reflect that you know just like we do with the CDBG because in a given year the city council may decide okay we've got a homeless issue we need to deal with this so we are directing staff

to allocate all the money to addressing the homeless issue.

Cool.

Yeah, I asked the question about that because I think the affordable housing plan says staff makes the final decision in our last work session with council.

They seem to have some heartburn about that.

And I will add, just because I've been honest tonight so I shouldn't stop, there's conflict with that position because it's been stated that, yes, staff should have that ability to make that decision, but I've also heard from those that are putting in proposals that they don't want staff to make that decision because of tense relationships that have existed there.

I've tried to work to mitigate that to the best that I can with the limited time I have I have more work to do in that space but ideally it would be that we should be able to trust that staff is not working to penalize anyone because that's not why they're here but at the same time if we have to in order to build trust allow council to do that then I'm good with that too we have council setting priorities and then we're trying to implement priorities and then getting questioned on if we're being

If we're really maintaining high integrity and doing that work, it's hard to really balance that.

But I take that as my responsibility to work out.

I mean, it's a problem if it's based on trust.

Right.

Last question, I guess, for the, is it a NOFA for the big one or a request for proposals for the multi-million dollar

So the NOFA is the bigger announcement of funding available that lays out the schedule of the RFPs.

That was one thing that I heard from people saying, we don't know when we can apply.

We don't know how to apply for this.

We don't know when to submit our LIHTC information for council to even consider it.

The NOFA is an attempt to give a schedule.

Every year, predictable.

It'll drop.

Okay, cool.

So for the LIHTC,

part of it, rather than the calf small stuff.

You know, if I'm the only applicant and no one else happens to submit one this year, and I submit like a $10 million project with 100 units, or sorry, with 10 units.

There we go.

$10 million, 10 units.

And it's a $10 million, actually.

You apply for a project for $10 million.

Let's assume you are applying to the city for a leverage fund.

You know, maybe we have $1 million.

And you submit an application like that.

The city is not obligated to approve your project because the city is looking for a project that is cost effective

Of course, we have to look at the cost per unit, you know, as part of evaluating the project.

So the city is not obligated to just because you are the only one applying and just give you the money.

If the cost of the project is prohibited and doesn't give the city a cost-benefit return, there is no reason why the city should be approving that project just because it's doing the application.

And there's no preset amount of money in that category.

The RFP is intended to receive the request because those are over and above the money that's available.

That's where it goes.

It goes within the budget process or whatever funding they may have available.

We don't have that much money in our hands to even consider putting a number on that particular round.

So it's just an invitation for you, if you're producing affordable housing, apply now.

Put in your request and tell us what it is that you're looking for.

And that gives us then an orderly process of putting that in front of council where they then can look at six applications at one time and make the best decision that they can at that moment.

if there's a chance of getting more than $10 million, I think that better frames it for them to then be able to consider what it is that they want to do.

Because right now we might get an inquiry in June and another one in October.

It can be varying degrees.

I think the concept that I had is problematic for me when I saw what we were doing is that there was no clear moment in time that we could communicate to the developer community for affordable housing.

If you're planning to submit, come through this portal at the same time so that all proposals can be considered and let's give council the best opportunity to make the best decisions.

This is fixing that.

That's absolutely what it's intended to do.

The timing is what we heard that the timing should be to be able to meet when they have to submit to the state.

Sounds good.

I had a couple of questions.

Same thing I ask every time.

I'm going to identify that.

Conflict again.

Yes, of course.

Land bank.

So we went around and around.

I participated in multiple conversations with council about the idea of establishing a land bank of its own or through evaluation done by the city attorney's office.

The city already has land banking authority and that is what CRHA is for.

CRHA has that ability to serve in that purpose.

The problem with that is that's earmarking for one entity over any other.

I understand that conflict, I recognize that, and I express that conflict.

Having been in that space, I would have had a problem with it too.

But it's available that way.

That is the choice that they've made thus far.

If there's a different opinion, they need to hear that.

Because the direction at this moment was not to move forward with establishing a separate land bank.

One, that's more capacity that's required that we do not have today to then run that land bank.

Thank you, boss.

It is an issue.

Thank you, Mr. Chair, for bringing that up.

Because we do, after all, have a fully fleshed out land bank proposal that's forward-facing, that doesn't cost the city a dime, that has

Let's do that.

An issue I know about very closely is coordinating between the HACC and the Planning Commission was very challenging.

It took up a lot of my time and then some sleepless nights.

Coordinating between the Planning Commission

the HAC and the CAF committee sounds harder.

I challenge the HRNA folks to figure out a solution, and I don't know that they did, so I fear it's come upon you.

Well, we'll see how that goes.

I didn't get the benefit of seeing it, so I'm not 100% sure I even appreciate what the conflict was there.

We'll probably have to figure that out as we go forward.

It's going to probably be once we get the table set and have more time with each other, too.

I don't know either.

If the member of the commission is interested in applying, please talk to me.

I'd be happy to tell you what I know.

Well, the only thing I need to, I think the proffer that is coming to the Planning Commission right now for rezoning and the special use permit, I think that's one of the activities that's going on right now.

Proffer.

Any in general.

Oh, any proffer.

Oh, I thought you did.

So, in the past, we usually don't make recommendations.

But following the completion of affordable housing and then a consultation with the city attorney, the city attorney has...

affirmed that, yeah, we can make a recommendation to the city council or the planning commission to deny a proffer.

So I think that's a good thing.

You're going to have to explore.

What do you mean?

You want us to.

No, no, that's not what I'm saying.

I'm saying that in the past, in the past, you know, we weren't used to recommending denier.

So we've changed that and the city attorney backed the changes.

So I think it's a good thing.

And I also think perhaps depending on the issues, the planning commission, I don't think the planning commission, you gotta approve everything.

that comes to you, especially if there are issues with that.

But hopefully, with the direction we are going right now, that's going to elevate the confidence of the Planning Commission to take action in terms of denial.

And what we are noticing right now is every time we send staff comment back to NDS, you develop a thing to step back.

and then try to refine the staff, excuse me, try to refine their profit so that it will be a little bit, not totally for the most part, in line with the recommendation in the affordable housing.

So I think it's a good thing.

Have we done the math?

For the developer, we don't look at whether the development is viable.

I think in terms of economics, I think it's something that the developer, we have to calculate based on their pro forma.

However, when we look at the requests, we look at the city's goal, the city's interest, compliance with the

the needs of the city and public benefit.

That's what staff looks at.

The affordable housing, the inclusionary zoning recommendations that you all received from HRNA back in August, which is what we're referencing as we look at what the affordable housing policy should be going forward, those were derived from extensive study of our local marketplace and kind of a generalized understanding of what a development project could afford.

Yeah, that's a question.

I guess one thing that came up with the Mountain View that the developer said, and it comports with my understanding, is when you pass an inclusionary zoning ordinance that's guaranteed, some of that gets capitalized into prices where they're then buying the land for less because another developer couldn't then build it for buy right with whatever unit's all market rate.

And so if it's like a, you know, a sort of de novo project from after we pass the IZ ordinance, like that's where that pro forma applies.

And how do you, maybe the question is like, how do you deal with projects that are already in the pipeline?

And it might be a matter of just saying, I mean, we can't ask for greater proffers, right?

We don't have to take the office of community.

We don't have to take the recognition either.

It's just a tool.

If the project is already in the pipeline.

Yeah, we can't go back.

It would be tough unless the developer willfully decides who's going to do what we are requesting, but I'm not sure.

Also note that the analysis that was conducted by HRNA incorporated current land values.

Right, so they based it on the current marketplace as it exists today because, yes, the theory is that when you introduce a new regulation, ultimately that should push land prices down, but that butts up against human reality that people don't like to lower their land prices.

In a hot market especially.

Yeah.

So they took all of that into account.

Yeah, I mean, that's a fair point.

And I think Commissioner Russell's point is also very good.

It's like, I think it's helpful for us for you to say in the staff report, you know, this complies with the proposed IZ or this doesn't comply in this way and this way.

I will note there was a question raised about monitoring, and that's something that's a space we're moving into.

Alex is working hard on that.

Do we know how many projects we have already passed with like kind of ad hoc proffers that we have to monitor?

Yeah.

Yeah, I mean, maybe it would be useful, I mean, probably, maybe not for us, I guess, maybe more for you to, like, just get a list of those, right?

Well, I mean, there is, I mean, we have a list of projects where proffers are associated.

There's a list that have housing proffers specifically.

Many of the housing proffers of the past are difficult to enforce anyway because they are not clear.

so the ones that are more recent are more specific in what is being required and so when we get kind of near an end of those projects or at different increments in there the language now is much more specific so you must reach x at x point in time that's something that we can you know do whereas

And it's really counterintuitive to do a proffer where you have a 10-year period of affordability when you have an affordable housing plan that's supposed to be addressing that problem in a much, much longer period of time.

So that's conflict.

As I started hearing all these different things that we were doing,

All I could think of is how many more people have to be actually able to do that work because that's hard work to actually make contact with all these different folks to find out did you fill that unit?

Is it someone at that income level?

Did you verify that if we're going to believe that data?

Did we answer your question?

Yeah.

I believe we have no other items.

Yes, sir.

Boss, I recommend that we find the best microphone in a Zafdig woman to come up here and sing a song.

Thank you.