City Council Budget Development Work Session   3/5/2026

I see.

On the very end?

Okay.

Right here.

Thank you, sir.

No, I don't care.

Sam's found us.

Don't start that.

Just start it.

Okay.

I'm trying to...

I think your phone's on my cell phone.

Good choice.

I'm great.

We should just order dinner and eat here.

to order for March 5th, 2026.

Madam Clerk, will you please call the roll?

Councilor Payne?

Here.

Councilor Snook?

Here.

Mayor Wade?

Okay.

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

No phone, thanks.

It's a lot of

like $4,000 or $5,000 a year, $10,000.

We can certainly give you the in the in the budget book on the summary page for revenues you'll see all those listed and we've just summarized them here but we can provide you a list if you'd like to see that one.

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

That is just over $388,000.

A way to reopen?

which helped to offset the increase in healthcare for this year.

So I have, I mean, I'm not sure if this is for John, but I am on the healthcare, do I have to like do it to some, not a disclaimer, just a statement or?

Not tonight because we're just, we're not voting on anything, but we'll,

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

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

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

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

That's not including fire.

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

Got it, okay.

Any questions there?

Is this a different line item?

and that is for like capital repairs.

And so what's the 5.5 point?

Do you want to talk about things?

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

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

Yeah, any questions or?

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

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

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

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

There will be a process for council to be able to reduce the amount given as part of the contract.

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

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

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

pretty early in our process in terms of what our revenues might look like.

So it is negotiating a little bit.

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

Jason, do you want to speak to that?

And so there's probably not much that would affect three months from now, but over the next six months, all of those things are going to be revisited to see what efficiencies could be found.

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

So if you wanted to add any further to it, but in our conversation, it was just a capacity for additional help.

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

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

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

find revenue that we're not collecting?

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

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

I said it taxually.

Taxually, yeah.

I got that confused because he asked for two.

Okay, got it, got it, thank you.

And then just get a couple more.

Because as I said, I'm just worried that we're basically placed like a bomb in our budget for the two, three years from now that we're just not factoring in.

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

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

Not identified as a part of what we received today.

Again, I would really just like to try to get an answer, even though I know it's going to be uncertain because we're talking about making a commitment to potentially $5 to $10 million that we're just not thinking about.

So Michael, just a quick tag on to your question about that.

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

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

So the city was not involved in negotiating the contract, but we set our budget and do the finances so the information and decision makers who would fund it were just not involved in negotiation.

So they go house shopping and don't ask the bank for what mortgage they can get is basically what we're saying?

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

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

In terms of total dollars, social services,

I'm missing one.

Let me go back.

They're several million dollars.

It would get worse.

I'll stop rambling.

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

Is there, so.

Will tax, if you will.

Okay.

Thanks.

Jen or Lloyd, do you have any questions?

Mine are more like Natalie's like, why does the UVA service charge 13% less revenue making?

Jump in if I'm getting this wrong.

They give us a list.

It's only like three or four.

There aren't very many of them.

Yeah.

No, it's $4.7 million.

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

Okay, thank you.

It might be transfers from schools.

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

Okay, I can look at it.

Otherwise, everything.

Lloyd, you didn't have anything on it.

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

So hopefully people aren't getting dropped out of the program.

That assessed value limit, is that like a...

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

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

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

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

Chrissy probably did better than I could.

Then it's structured correctly.

Yeah, that's right.

And then this way, it's just, it's all baked in.

More than anybody in the state.

Yes, sir.

Do we have stats on that?

So just think about that.

Y'all good?

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

Remind me, they all have to be the same rate.

Not anymore.

I mean,

It's not easy, but it's... What acronym is further than us?

Yeah.

All right.

Do they have different rates?

It wouldn't really reel many businesses in.

You can use that tool to do that as well.

Other questions or comments?

What do you need from us now?

Do you want anything else specifically?

So, Natalie?

No more than that.

Michael?

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

Two for me, please.

So you have what you need to advertise?

And I think we can clearly acknowledge that we've heard using surplus,

Yes, because it basically indicates that structurally your budget is not balanced.

to make sure that you're structurally balanced.

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

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

We're bringing in roughly $12 to $14 million more a year, therefore more than offsetting the $2.5 million that we're talking about for the real estate.

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

Well, how much money do we contribute every year to the capital program?

about in total or just for schools?

Either number.

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

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

We're funding that with bonds, so it's in our debt service projections.

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

Correct.

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

It has to be.

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

either in terms of debt service or cash.

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

I think it is a good plan.

And we need to worry about the politics.

we're still in the concern mode of if we take 2.5 million in one-time funds to address a recurring matter we haven't resolved that by the prior year and we're going to have to eat that at the start of the prior year is the pressure that it creates but before we even get to that we'll have a date with the bond rating agencies that will have to try to explain and why did you do that and how are you getting out of that and that's the concern.

What is at least a, we're not going to be deepening the structural hole, right?

Okay.

I just, so I, yeah.

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

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

that, for example, you don't want to be tucking current projects in there, but you could tuck in new bonds being sold.

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

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

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

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

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

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

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

or can learn something quickly from their experience.

I can take the temperature down in Richmond.

Because it would make sense if they're like if the bond has already been issued, that's different than if you've already got a school planning process underway.

Because our CIP is to plan.

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

I don't know what one-time expense, I don't know if there's any one-time expenses that are already in the budget that would be getting paid.

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

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

$5 million is chocolate.

$2.6 million, as you said.

Yeah.

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

One times like that, more like I just don't want to do it.

What are we backing up to?

Michael, did you want to add?

Well, now that they know how to go signed.

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

Jen, you want to chime in?

Which in the assessment we can't help that.

Only why would it matter whether it's an assessment or a rate increase?

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

I would think.

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

The assessments will drive the increase, but I read your point.

Well, it's a, yeah, it's a three and forty plus hundred and fifty seven dollar increase in total.

From the assessment, it would go up roughly twenty nine dollars a month and then you would add on top of that another

Natalie, did you

That's fair.

the replacement of those funds.

You know, it's, we've done the work to make sure that we've gotten it as small as we possibly can while still being able to provide the benefits and services to our community.

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

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

That's what we'll be trying to find because that's what it's going to take to find two and a half million dollars.

That's kind of a longer, more root, longer term, more root adjustment, not a just a more positive, right?

A more positive option.

Throw the base instead of deep in the base.

Grow the pie higher, as George W. Bush once said.

Sure.

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

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

Because it says that the Davis Day of Touch Tax is first imposed.

So we could wipe it.

You could strip your CIP.

It's inelegant, but it gets the job done.

I think it would challenge your conversation.

John's going to let that fly?

It's not the right spirit.

It just means we freeze adding anything else.

Just don't commit it to the CFP.

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

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

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

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

OK, thank you.

Good try.

Any other questions?

Did you already say what you were thinking on this?

using one-time surplus would be wise or feasible and I'm okay moving forward assuming a two-cent real estate tax scenario.

I would like to wait for him to return.

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

Somebody bam.

I'll tell you that.

Do you have those ready?

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

How many were requested?

I know it was well over four.

It felt like at least 31.

Well, it's usually a lot, and I mostly say no to that anyway.

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

So that comes at a cost, too.

What different things this year?

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

That's the reasons for those three.

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

Other questions or comments?

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

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

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

What do you guys think?

What dates the budget get adopted?

Day before that?

We'll have another month of sales tax.

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

Can I get a motion to adjourn, please?

Motion to adjourn.

Yes.

Please say no.