Council Budget Work Session   2/3/2021

All right.

So I call this meeting to order.

Ms.

Vice Mayor McGill?

Here.

Councillor Hill?

Here.

Thank you.

Good afternoon and thank you Mayor Walker and Council.

Today we'll be discussing the first of the 2021 budget work session presentations with you but did want to point out that Mr. Boyles is here on the call and he will be becoming the city manager on the 15th of February and wanted to just say welcome

to Mr. Boyles and Ms.

Hamill and Mr. Davidson have worked a lot on this presentation and want to thank them as well as other members of our departments who have contributed to this.

I know Public Works has answered a lot of questions concerning the West Main project as well as the school reconfiguration project and

I just would like to thank everybody involved in this, but especially Mr. Davidson and Ms.

Thank you, Mr. Blair.

Brian, you can go ahead and start the presentation, if you would, please.

Okay.

So tonight, good afternoon.

Tonight we're going to be discussing where we are in the development of the FY22 operating budget.

and some of the areas of discussion related to that development, as well as continuing our in-depth conversations and discussions that we've been having on the CIP and the draft CIP that's been released and the challenges that are going to be faced there.

Next slide.

So I wanted to start with this slide of the important dates.

This is the same slide we have shown you in the past, with the exception of the addition of the first date in red, the February 9th budget balancing date.

wanted to point out that per the state code, the real estate tax rate and rollback rate advertisement must be published 30 days prior to the tax rate public hearing.

So that's going to be needs to be published by February 13.

And that does include the percent change in the general fund budget.

So we will need to have at least the bottom line balanced by that point in time, in order to be able to get this advertisement in the paper in time to meet our state requirements.

Other than that, our next meeting related to the 22 budget process is the February 9 Planning Commission meeting related to the CID.

Next slide.

This slide, again, is the same we've shown you before.

In addition to the public hearings and the formal presentations on the previous slide, here's

the remaining work sessions we have on the 22 budget, but just wanted to point out that after today we're not scheduled to have any additional work sessions on the 22 budget until council has been formally presented with the budget in March.

Next page.

So we'll start with the good news.

Each year we present the slide to Council.

It shows the initial gap in our budget development, and we always continue the work to close that gap.

At the end of last month, as of the end of last month, excuse me, here are estimates for the initial revenue and expenditures.

As you can see,

The gap is at approximately $4.5 million at this point.

Again, we always start with a gap, and then as we go through the budget process, we continue to work to close that gap and eventually present the balanced budget to City Council in March.

We'll go into these in a little bit more detail, but the initial revenue estimates, just wanted to point out that those figures are approximately $960,000 below what was adopted for FY21.

but are showing an increase from the revised FY21 projections that we've been sharing with council.

Our revenue team meets regularly.

We actually met earlier today and we're going to continue to refine these figures right up until we have the budget balanced and then even after that if there's any changes we will inform council in between when the budget is proposed and adopted and we can make changes based on that as well.

The initial expenditure estimates, those are based upon the FY22 budget submissions.

Again, these are the departmental submissions, and we'll continue to go through those and refine those submissions to, again, make those numbers come up to meet the revenue estimates.

Again, still working on both these figures to further revise them, and, you know, as we said earlier, we have about a week to close that gap, but it's always crunch time at this time of year.

Next slide.

So this slide shows our FY22 revenue projections.

I want to give you a little more detail behind the figures in our overall revenue estimate without going into each and every revenue item.

This shows the changes between the adopted 21 budget and the amounts for each category and the projection within them.

As I said before, overall, we're looking at about

$960,000 decrease between what was adopted in 21 and what our preliminary estimates are of the revenue change.

Next slide.

And if there are any questions about any of these, feel free to jump in and stop us.

You don't have to wait till the end.

Ryan, let me take advantage of the break then to ask you.

The slide before showed licenses and permits down $425,000, $425,500.

Correct.

So with the licenses and permit, we do have BPOL going down even more from the reduction we had in 21.

It's being offset slightly by some increases from what was adopted in 21 in the building permit area.

So that's kind of the net is about a $425,000 decrease.

There's vehicle licenses and other things in that category.

At this time, from our original estimates in FY21, we're looking at about a 35 to 40 percent decrease, I believe it is.

I don't have this figure.

We discussed that earlier, and I believe that was the number.

So it was a significant decrease.

We had initially

decreased our B poll taxes from our initial estimate to what was adopted in FY21 by about 25%.

Unfortunately, we really won't have that solid figure until after the budget is proposed.

They're not due until March.

So we really won't have a firm number on what that's looking like until that time.

These are, again, based on the Commissioner of Revenue's estimates, these are our best estimate of where we are.

And that's because of the mix of

the industries in there.

Thank you.

No problem.

No problem.

But again, before we move on to the next slide, each of these items has a larger mix, you know, local taxes,

You have real estate, sales, meals, lodging, all those are going, you know, some are going up, some are going down.

And so there's that combination that totals out to that net decrease there.

Same thing with all the rest.

One, the city county revenue sharing is one that is going up substantially, but that's based on the formula and it has a little bit of a lag based on real estate figures and population and that kind of thing.

Okay, Brian, I think we're ready for the next slide now.

For this slide, this is just to give you a visual of the FY22 general fund budget submissions.

As you can see, the departmental submissions are the largest portion, but still, even with that, they make up less than 50% of the total general fund request.

You know, you've seen schools are in there at roughly 30%, then you have transfers to other funds, which is CIP, transit, social services, debt service,

then outside agencies makes up about 8% of the total request and that's both the vibrant community funds as well as the contractual agencies and then finally the last little piece of the pie there is our other non-departmental and that includes things like the tax and rent relief programs, the various grant matches, our funding for strategic planning, the innovations group, those things are in there.

Next slide.

So we wanted to, there was some discussion around the 40% formula at the work session with the schools last week, and we wanted to follow up on that discussion.

We told you we had a chart, and we wanted to show you this chart.

As this chart shows, we've exceeded this 40% formula in approximately eight of the last 10 years, and we've actually averaged about 70% of the new real estate and personal property revenue on an annual basis, so that's

just to show that I believe I'd said I thought we were at 20% or 40% for FY21, which was actually not the case.

We were slightly below.

But again, with the exception of last year, which we reverted to the COVID figures that changed things, this is where we have been with those.

Also, as was presented last week in the work session, the schools are showing about a three

$0.3 million increase, which does include some new FTEs and a proposed pay raise.

And so they're not requesting, again, they are not requesting an increase, or at least they presented that they would not be presenting an increase in the state contribution in 2022.

But, you know, it is using one-time funds to cover these ongoing expenses, which does increase their base in future years and

Essentially, that means in order to continue with those items in the future, we need to increase the city contribution or they would have to decrease other expenditures.

And then that would be on top of any other increases they may see on an annual basis from other items.

And, you know, city budget again is projected to be decreased.

And, you know, again, what's not shown in this 40% formula calculation is the significant

Capital investment we're making, especially considering the significant future capital investments of the $50 million moving forward.

And so that's, again, this is something that we'll talk about a little bit more as we move through the presentation, especially on the CIP side.

But this is, I just wanted to provide a little more context around some of this discussion from last week.

And just because, I mean, it came up just to make sure that they're all clear that that does every time, you know, every one of these increases, whether it's the actual 40% or whatever that changes that you're reflecting here, a greater that.

that creates the base for the whole next year.

And so over the course of, I think one other time we had a different chart, we looked at this show just that growth beyond what that 40% commitment has been over X number of years in a visual way, because that's where we have to then start from the next year.

And obviously in this case where we're using one-time dollars, it's even further exacerbated because we're not actually providing those funds right now, but that'll be even a bigger jump.

And then my point last week was we can also expect there to be new requests next year in addition to the ones that we'd have to bridge from this year.

That's correct.

So just one more quick point on that, though, I mean, that would be a discussion for council and just sort of a mental note on that, that if the school contribution remains level this year, and there is an increase in the real estate or personal property, but we're not passing on the 40%, what does that do to the base?

So just, you know, food for thought on that.

And again, as Ryan mentioned, we'll talk about that later.

OK, next slide.

So with this slide, we wanted to kind of let you know what's not included in the budget gap we showed earlier at this time.

If any of these things were to be added to the budget, then it would just further increase the gap that we'll need to close over this next week or so.

So I also want to point out several of the items on this slide will relate to discussions we're going to be having around the CIP.

So it may be best for now to kind of put a pin in some of these until after that discussion where we can provide a little more context.

We're happy to answer any questions about them now.

But again, we may have a little bit further context to these items as we go through the CIP.

So just to highlight a couple of the items, one of the items I was talking about that we may have further discussion around the CIP tax rate increases.

We're not proposing any tax rate increases in the FY22 budget.

We didn't feel this was the time to suggest those increases.

But again, as part of the CIP, we'll have greater discussion with that.

In FY21, we took the cash funding of approximately $6.7 million and moved it to a COVID reserve.

And with the draft CIP, we'll be discussing at this time, we're not really proposing any new economic reserve funding

in this budget at this time.

Also, at this time, we're not proposing any merit or COLA adjustments for employees in the FY22 budget.

We have the city contribution to the schools as level funding for FY21, but as discussed in the prior slide, there may be an expectation of future increases as kind of a catch up for the use of their one time funds.

And then there's also those other items in their budget that we had discussed on that previous slide.

We'll talk about the debt service in the following slides related to the CIP, but we, you know, so we don't want to go into a whole lot of detail, but there is no increase in the debt service transfer in the current FY22 budget or the budget gap.

And, you know, the departments, we did ask them to submit any new requests that they may have had.

There's approximately 4.9 million new requests that were submitted for the budget, but at this time, we're not proposing to fill any of those new requests.

Again, there's still a lot of work to be done over the next week to get this budget balanced.

And the numbers will change and flux on a daily basis.

But just wanted to give you a snapshot of where we are in the operating budget development process at this time.

And if there's any questions about any of these items right now, I'm happy to answer them.

So this $67 million,

So that $6.7 million, with the report that we had given council at the January 19th meeting, we had shown our revenue, our new revenue projection was approximately $10 million, I believe it was $9.9 million below our initial projection.

And so one of the things we had said was,

One of the levers we would have to pull would be using, potentially pull would be using the 6.7 million that we had set aside as kind of the COVID reserve to fill that gap and make up for those revenues by not extending those dollars.

And so that, so it's not available at this time to be carried over.

If we finish, you know, there's a whole lot of ifs in the rest of FY21.

But if there is room to carry some of that over into FY22, if all of a sudden revenues really take an uptick and we've finished better, then maybe we can carry some of that over.

Okay.

And

I think we really need to have a conversation.

We gave the staff the bonus, or I guess the whatever we called it,

which I don't think was sufficient to just give council something to think about.

I know I read an article about the county maybe giving another at least $1,000 bonus.

And so just know that our employees are going to read those things too.

And if they're in two years of going without pay increases, a lot of employees are not going to be able to

and especially our lower salary employees on that end, they are not going to be able to sustain themselves because expenses are not decreasing.

And so that is something that we should really look at.

I want us to talk about figuring that out.

The change in contributions to schools, I shared my thoughts last week, so they are still the same.

We have to, and especially if they are doing 2% increases and we're not, we really have to have those conversations with them.

I don't think it's fair for us to fund it out of our budget and then us not figure out how to do it within our budget for our employees.

And then the same questions I've had for all the years that I've been here and even before I was on council about the departmental request and just what of those requests, how are they being moved up by delaying them?

Are we going to be paying more at some later date?

And is there a system in place to really track that

And I know that was something that was being worked on, but it's not something that I have a better understanding of at this time.

So if that information can be shared, that would be helpful too.

And counsel, you have the

requests that I sent, which was three requests, looking at CHAP, which is something that will come up in the affordable housing strategy, not, again, delaying that for two years, the Office of, you know, Innovation, like how do we change some of these things internally, if

There's not support for at least that office.

I'm still thinking about the solutions team and how do we assess where this money on the path is going.

Back to that screen.

How are we looking at these things through an equity lens and all of that stuff is important, but efficiency also.

So I can come up with a bunch of E's right now, but to make sure how we're spending money and I don't think we have a good understanding of how the city is spending the money and whether what we're spending on is actually doing the things that we are hoping it's doing.

And even if we're just starting with

the outside agencies, other non-departmental or whatever, that is a significant contribution that that team could make.

And then we had this conversation earlier, but the equity fund that Wes advocated for, there are things that are not going to fit into this like college cycle that we currently have and we're still working on the Vibrant Community Fund, making that more accessible.

and equitable.

But right now, we still have organizations that have been funded able to continue funding.

I believe we say that you mentioned this morning and other correspondence that the equity fund strategic initiative funds had about 400,000.

Um, this, the total strategic initiatives fund is at about 300, just shy of 350,000, I believe it is, um, at this point.

And, um, as part of the, specifically related to equity as part of the F, about this time last year when we were talking about the FY 19 year end appropriation, um, we had moved $300,000 into the, uh, council strategic initiatives under the equity heading.

That was a conversation that came from the surplus, correct?

Correct FY 19 year end surplus.

Thanks, Ryan.

So

Council.

Good afternoon.

I apologize in advance for the sun.

I have moved to every part of this desk to try to get out of it and I can't so hopefully it will go down soon.

But anyway, this slide here is a draft of the CIP that we have put online and sent to you last week.

We've been very intentional to

put this out as a draft.

We're thankful for this opportunity to be in front of you before we actually get to a proposed budget.

Again, we're putting this in front of you to try it on for size, to see if we've made the mark, missed the mark, and to get some feedback from you.

Of particular importance or note on this screen is that in looking at the five-year plan and in listening to conversations we've had

you know starting back in the fall we feel like that this plan is reflective of the priorities that we've heard from you and that it it does align your dollars with the areas that are important in that order includes education affordable housing and then transportation and access so next slide please

To kind of look at a history of the CIP, again, want to keep this big picture to talk about where we are and how we got to this draft and the consequences of the draft.

If you look at a sort of a 10 year history, you'll see that in 2012, our CIP was at $80 million.

It ebbed and flowed until about 2017, but we still hovered around the $80 million mark.

Since 2018, the CIP from 2017 to now this draft, our CIP five-year plan has basically doubled.

We've gone from $80 million up to $160 million.

And so as we look at this to try to parse out what's happened or how did we get here, you know, keeping with the top three priorities, we went back and we looked at the plan and the dollars that were associated with those three priorities back in the 2017 to 2021 plan.

And for example, affordable housing in that plan, you get allocated roughly $8 million.

compared to the current draft in front of you, which allocates roughly $38 million.

Same going down the list, education in the 2017 plan, we were roughly $9 million for education.

This draft is up to 65 or 66 million.

Of course, that includes a placeholder of 50 million for the school reconfiguration project.

And then, you know, the third area for transportation and access, the five year plan was roughly 27 million.

And now with the current draft, it's about 34.

So all of this to say that over this time from 2017 up until now,

Of those three priority areas, we've essentially added $94 million of funding to a plan.

Of course, the big chunk being the 50 for the school reconfiguration.

But I think it shows that in some respects with regard to the CIP plan, you know, we've put the money where I'm

where our plan was, where our priorities were, but we've also done that without really taking anything away.

So in the early years, as you can see from the graph, it ebbed and flowed.

So next slide.

So I think

Do you know what were the top expenditures at that time?

In 2017?

This is off the top of my head.

We can certainly provide you with that information.

Those budgets are also online.

But in looking at this to do this calculation, I mean, affordable housing in 2017, I believe at that time, the only thing that was in there was the CAF.

So that those dollars were the five year plan for the CAF.

As opposed to now, we've got the CAF, we have, you know, the CRHA, we have the Friendship Court, and we have the vouchers and rehab dollars, and so I think that makes up a lot of the difference there.

For education,

Taking out the $50 million school reconfiguration project, largely those are the annual accounts, the lump sum accounts, with the exception of between this time period, we also added the school's priority funding, which was roughly $6 to $7 million add, if I recall correctly.

And then with transportation and access, that's just a big group.

And the reason I'm asking, because I think that's an important part of the conversations that we've had over the past few years.

I mean, when you talk about an equitable, diverse, inclusive community, I see that we will be there in 2026 and beyond with this level of funding when we were not able to reach those goals under the previous level of funding.

So hopefully that will change.

It is also helpful to see where we were spending the money and what we refuse to cut, what we are still trying to do at the same level or more, because at some point that's not going to work.

And throughout history, what will happen is someone will look back and say, so when did things start becoming

out of balance, and they'll look back to a chart like this or to the budgets and see, well, you all put too much money into, you know, maybe these three areas, or at least people may say two, but, and especially when, you know, reconfiguration is being viewed as something that's very optional.

So I hope, and especially since Mr. Bowles is on here,

that that help us have a conversation about if you can't do everything, then what really is your priority and how do you make that

not by adding more money to a few categories while a deficit, I guess, is looming and at some point something may crash.

How do we avoid that and have those upfront conversations about, so if we are committing to doing these things, what can't we do any longer?

That hasn't been a conversation we've been successful at having since I've been here

So that's a great lead in to where we're going with the next few slides.

Thank you.

The one thing I would offer here too is just, again, just more tools in the toolbox as you look and analyze the CIP is that

I think when we go and look at these details, one thing that's going to jump out is that they're not a bunch of little projects that have been added to the CIP since 2017.

What we're seeing is we have added a few that have very large price tags, i.e.

courts and other projects that, so now where before we may have had a bunch of, you know, a couple hundred thousand dollar projects,

We've moved into an era where we've been considering projects that are multi-million dollars for a few so that's a great point and we'll definitely get that information for you.

Next slide, please.

So again, just looking at this from the mile-high view, I know, you know, we come to you with these work sessions and we're always talking about very specific things and pieces and parts of the budget.

Do want to just keep the eye at the big picture and to say that what we're going to talk about in the next slides, there are a lot of numbers, a lot of big dollars.

But at the end of the day, they are these very two small pieces of the pie of what we call the general fund.

So although the dollars are material, you know, anything we do to expand or contract these two pieces of the pie means that all the other pieces have to shuffle as well.

So just a mental vision of that.

Next slide, please.

We have for the last few years, we've popped up what I call the ugly debt table.

It's a lot of numbers, a lot of information.

And I wanted to just take a step back and talk about how these tables actually work, what parts of it you all have control over, what parts we don't have control over.

And so at an attempt to do that, I've broken the table down from

What I'm calling the planning side versus the consequences side and then we'll put it all back together and talk about what the big picture is.

But this is the right this this slide here represents the right hand side or the planning side of the table.

These are the things that

are the most under your control, although not all under your control.

And what I mean by that is that, you know, certainly it's under your purview as to how many projects we want to add, how many bonds we want to sell, and it's also under your purview for the most part of, you know, how you

Manage the size of your general fund.

The things you add are the things you take away.

So those are the two things that you have the most control over.

The other thing is you also have control over the timing.

So, you know, this table can can expand.

It can contract.

We can look at it over two years.

We can look at over 20 years.

Those are the things we don't have control over the interest rates.

And so in terms of the annual debt service, we can control the debt, we can sort of structure how we sell it to, you know, keep our costs down.

But at the end of the day, the market's going to dictate the rates.

Right now we're in historically low rates, but that doesn't mean that we'll maintain for the future.

Um,

And, you know, again, sort of some of the things that we talk about and, you know, not to state the obvious, but, you know, the more debt we issue, the higher the annual debt service we have to cover.

As our general fund

grows, it increases our capacity, but also in the situation we're looking at now as our general fund has decreased or is projected to decrease, that means that our capacity has shrunk.

So, you know, I think when we last spoke in November, we were looking at a capacity of 192 million.

It's a little bit less than that right now.

Again, a lot of numbers here are subject to change.

It changes significantly.

frequently and so not as much right, you know, not as much a takeaway here on specific numbers as it is sort of the big picture.

So next slide please.

This is the left-hand side of the table and this is the part that I'm calling the consequences.

So this is the part that you have very little control over.

Once we actually execute the sale and we've sold the bonds, we cannot change the debt service number and we are tied to that payment for 20 years from the time of the sale to the time they're paid off.

The way we have set ourselves up to do that is we pay those annual debt payments with money out of the general fund, so going back to the pie, that little sliver, and then also as sort of a

you know getting ahead knowing that we were going to have additional capital needs in the future many years ago we set out a plan where we were each year sort of ramping up the general fund contribution to the debt service fund in an effort to be able to offset or level out the pressure on the general fund as our debt service needs grew and so that is what has helped us

sort of build up this debt service fund balance.

So sort of putting this all together on the next slide, here's the big picture.

There's a few key takeaway points from here.

Again, we talked about on the planning side, back in November, we were looking at a capacity of about 192 million.

If we look at what we know now, our capacity, because we are projecting a smaller general fund budget for 2022 at this point, that has decreased our capacity to roughly about 185 million.

We know from prior conversations and from prior approved CIPs, we have a list of projects that have been authorized to be funded by bonds of roughly $74 million that have not been issued.

This draft in front of you contemplates $121 million worth of bonds to fund those projects.

So

If this draft, you know, has hit the mark and it is reflective of how you want to move forward, we roughly are looking at a need for a capacity of about 195 million.

So looking at this calculation, you know, does that automatically mean this won't work?

And the answer is no, it doesn't mean that because as I've said, things are subject to change, you know,

This assumes a very modest growth in the general fund of one and a half percent.

We are starting from a reduced base because of COVID.

And with any luck, if vaccines are successful, it's very possible that we could have general fund growth in 22 or 23 that are much higher than that, which would impact your capacity.

So I don't want the takeaway to be you don't have enough capacity.

The other thing here is that in the scenario that I'm showing you, we can run a million, literally a million different scenarios here to see how this will work.

This is in some ways the worst case, most simplified scenario we could come up with in that I've assumed that you're gonna issue all of the capacity within the next six years.

Usually this table is not a problem when we talk about this because we hedge on the future and we hedge on the fact that all of this is subject to change, but we've also been in a scenario where we, with our CIP plan, we've always had capacity left.

And so we've always had capacity that if a million dollar project was delayed or didn't happen or if we had to add 10 million one way or the other, it didn't matter because we weren't spending our capacity.

But with this current draft,

It is exhausting all of your capacity in theory.

And when you have a $50 million project, we're going to sell a $50 million bond.

And so when that drops in here, your ability to contract or expand this table is limited because again, once we sell the bonds, we're stuck.

with the payment and so you know looking at the right hand side of the table a couple of takeaways with these highlights is that you know if you do the school reconfiguration is left and if we're going to issue bonds and we're not going to take anything off of anything else that's been previously approved there will be years in the very near future where

All of your credit limit on, you know, we've used the analogy of the credit card will be spent and your credit card is going to have to go in your pocket for a while before you can pull it back out.

So again, just a scenario, but in this scenario, that would be as early as 2028.

And it also means that if you go forward with this plan as planned,

As drafted here, our CIP process next year would literally only be looking at what we've put in for the current draft in 2023 and figuring out what we can either take off or replace.

There would be no function of what new projects can we do.

And so

That's sort of the first set of yellow highlights.

For the annual debt service, you know, if we get to a point where we're issuing 185, $195 million worth of debt, in this example, it's 185, the debt service doubles.

So you're gonna go from a debt service payment of roughly $11 million to a debt service payment of $22 million.

And it doesn't matter whether we sell that all at one time, whether we spread it out.

At the end of the day, once all that debt is issued, then the debt service has doubled.

Again, in the third column, you know, the 190 million is highlighted just to highlight the fact that that is a decrease in the general fund budget, which has the, you know, impact of decreasing your amount of capacity.

And then in the last column, you know, just to show you that with $185 million, you've not only, in terms of your policy, exceeded your target of 9%, but you've also slightly

Gone past your 10%.

So you cite, you know, all things being perfect, which we know they're not, you will have exceeded slightly your 10% policy and you remain there with no new projects being added for at least three years.

And the reason for that is also because this scenario puts forth an instance where you are literally issuing more debt faster than you can pay anything off to make a difference.

That's another difference between where we've been in the past is that our bond issuance have been at a level where we do get some benefit of payoff, either through refunding or just because of the timing of our bond issues.

But the last few bond issues that we've had have been historically low interest rates and so refunding opportunities really don't exist for us, which is a good thing because that means our payment is low, but it's a bad thing in terms of future.

So that's sort of the right-hand side planning of the table.

If we get over to the consequences side, again, we talked about the fact that in the past, we tried to add extra money, if you will, to build up a debt service balance that would help offset some of these debt service payments.

It would help level off the ebbs and flows from the general fund.

by being able to buy down a lower general fund transfer by using some of the funds that were already accumulated in the debt service fund.

So as of 2021, or even if you want a definitive number, as of the end of FY20, we have a fund balance of roughly $13 million in the debt service fund.

Under this scenario in 2021, because the meals tax has been negatively impacted because of COVID, that one cents on that rate that we dedicate to debt service obviously is not available to transfer at the same amount to the debt service fund.

So we're looking at about an $800,000 reduced transfer than we originally planned.

The

If you look at, to go down further, the orange highlights was an attempt on my part to figure out what would it take with the current draft that's in place, what would it take in order to pay for this doubling of the debt service?

How could we address that?

because there's no way that this current draft is affordable without significant revenue enhancements.

And so applying the logic that the easiest path, right, from a numbers person and a budget person, not from someone who sits in your seat, but from a numbers person, if you were to take two cents on the tax rate right now, that's roughly about a million seven.

If I took an annual two cent tax rate over the next five years, so a total of a 10 cent tax increase,

We are able to make the debt service payment, but in doing so, we have also spent down $13 million of the debt service fund balance.

And so there's essentially no debt service fund balance left.

And on top of increasing your tax rate by 10 cents just to pay this debt.

So what happens with this story is that it's really not a story about capacity as much as it is about affordability.

Because even if we had a general fund budget that was endless, you have to find a way to pay the debt service.

And you have to have a way that sustains that payment for 20 years.

So in thinking about this and how we prioritize and, you know, to Mayor Walker's point of what goes in and what comes out and if there's a trade off, you know, all of these things impact not only going back to the pie chart, not only the CIP

and what you can do, but also your general fund, because as these pieces get bigger, other things get smaller.

And if you're gonna contemplate a 10 cent tax increase, then that also means, are you gonna dedicate the whole tax increase to just this one piece of that pie?

So moving on to the next slide,

Some of the key takeaways that we wanted to, you know, leave you with.

Again, this CIP is a draft.

It's our attempt to focus on what we thought we heard you say were your key priorities.

It is not an affordable plan without significant revenue enhancements.

So whether that means a tax rate, whether that means looking at other ways of funding it.

Again, there's a lot of work to be done between, you know, council to make that decision and also, you know, staff to run different scenarios and figure that out.

But as you think about that, also think about the impacts of the general fund.

So as Ryan pointed out to you earlier with your decisions on wherever you land on the school's request, that has an impact and is on top of anything that you would contemplate here.

So again, reallocations for funds that are already committed, the $74 million that we've talked about for the authorized but not issued, there's certainly an opportunity to reallocate those.

I want to be clear here, though, that reallocating them does not make the affordability issue go away.

It only allows you either

more money for the school reconfiguration, which we've had conversations about the fact that the 50 could be the floor and it could be higher, or it gives you the ability to say, hey, some of the things we prioritized before maybe aren't as important and we're gonna try to hold those back for some capacity for something new that might come forward, but it does not solve the affordability problem.

Future needs.

Again, same thing.

If you were to decide to go with a draft such as this, it will hamper the needs for the future in terms of CIP.

It will have an impact because there won't be much ability to spread the cost out over 20 years with a bond.

It will be a cash

only CIP, which we already know you've got cash pressures everywhere.

So future needs are a real consideration.

And then again, to Ryan's point, with this draft, it does not contemplate using any money to, which is

sort of an easy place, the painless place in some respects.

If you are weighing new projects versus core services, you know, that was sort of the decision that we used to make the decision with last year's budget to defer cash funded projects to use that for a reserve.

This draft does not give you much ability to do that.

Next slide, please.

So, you know, a lot of times we get to these work sessions, we throw a lot of information at you guys.

And, you know, one of the first things that you say, which is a fair question is, what do you need from us?

I want to be really, really clear about this.

Again, this is a draft CIP.

This is something that we put together strictly from a numbers base.

There is no attempt to make any value judgment or to pair one project against the other.

It's simply from a numbers base.

If we've made the mark and this is a CIP that reflects your priorities and you are interested in moving forward with the school reconfiguration project,

then here are some recommendations from a numbers perspective that make this potentially work.

One of those would be that the West Main Street Project

that you could remove that entirely.

That gives you about $18 million, again, to reallocate.

I wanna be really clear and say this again, if that were your decision, the reallocation does not change the affordability.

If you decide to plan and promote that to a different project, you still have the affordability issues, but it does give you more room on that right-hand side of the table in terms of capacity and flexibility.

Real estate property taxes.

Again, this scenario contemplates the need for a 10 cent tax increase and that needs to start soon, now.

We've set this up that would give you roughly a year to figure out how you would afford something.

There's a lot of conversation that council and the school board need to have.

on what you're comfortable with building community support.

How would you look to do that?

Again, this speaks to the funding formula.

How would you want to use that?

The 40% growth on that formula, is that something that you want to allocate to operations for schools or is that something you would want to consider reprogramming to use toward payment of the debt service on this project?

That's something that would be considered.

But it needs to be done soon.

You know, we took a hedge on putting the school reconfiguration in 2025.

Not clear on what the timing preference is.

But in terms of lining up affordability, we felt like you needed some time to get that done.

And then finally, you know, just the realization that the CIP, the operational budgets, tax rates, you know, a year in advance, all of these conversations have an impact on future councils and sort of the scenario that we've put in place here.

If we were to move forward with this as a proposed or even an adopted budget,

For us as council, I think something we have to be realistic about too is that $50 million placeholder for school reconfiguration, we feel pretty comfortable is on the low end and it could get up to 100 million.

So even in this proposed scenario, if we're cutting West Main Street, doing a 10 cent over time increase in the real estate tax rate, reexamining the general fund contributions to schools,

If it's $50 million on top of that placeholder, we're still nowhere near close.

And that's very, it's very important, Michael.

You know, when I went to my niece graduation last year at Johnson, it was the first year, I think, that the seats in the auditorium were not the same seats that I sat in in the 80s.

So

Part of figuring this out and prioritizing is, so what's been happening?

Because there's money that's been flowing somewhere, but where has it been going?

Because she should have not been graduating sitting on new seats for the first time, you know, going, moving on to Walker.

And so I think that when we see because I just pulled out the CIP stuff and I'm looking there like even if we decided to cut some things when we talk to our directors, they are going to say these are things they've been waiting for for a long time and that the infrastructure is crumbling.

And we've been talking about

I don't see where those cuts come from.

So I think a major part of the understanding is understanding what has been happening and how can we do that better or in a different way so that we actually see some of the results.

I saw one here earlier, the East High Street signalization.

And I know the traffic engineers have said that is something that the entire city needs.

And so this is just one component of the city.

And so just what does that mean when we're talking about traffic, the money that CAT is requesting, when we say we want people, the bike and pad people come out talking about they want people to be out of cars more and on buses and other transportation modes.

If the traffic lights, that's something that has come up in the past, if we can't figure that out, then we can't get a city that's moving.

in a way that people can rely on those other modes.

So it's just so much that there's so much to every piece of this.

And I guess there's not a lot of

way back institutional knowledge among us, but I'm just curious from staff's perspective, what are, I mean, obviously when Christy, you showed that chart about just how much we're putting into the CIP versus historically, that's just a very big shift in general.

And so in those older, those more historical CIPs, you know, what was the main composition just generally speaking of those things?

And on a scale of where we are now, it just seemed like it was a much smaller kind of

component, and therefore there was a lot less debt with that, but now there's been some shift, obviously, over the last several years

to really reinvest.

And I agree.

I think that people on the infrastructure side would just say that we've ignored that just as much as we've ignored our schools.

And so, but that's happened over a very long period of time.

And I guess I'm just at a very 10,000 square foot, 10,000 foot view.

Like what does that look like historically with CIPs and some of those drivers versus where we are today?

Because as I heard you talking about responding to the challenge, it really does come around like with this $50 million ask for the schools.

Like this is the first I've kind of like with,

We've been in this situation where putting that number in, which we decided not that long ago, has just really shifted our thinking about everything else.

I agree with what's been said around, I don't know that that number is going to get us there, but I also recognize the same observations that the infrastructure in our schools and in our city and in our transportation systems is just not where it should be.

I'm also not clear on what got us here.

Yeah, I think it's a good point.

We can certainly go through.

I think you'll be surprised when we do this exercise and we'll definitely send it to you.

I think what you're going to find is sort of the point I made earlier that earlier CIPs sort of kept the status quo, if you will.

in that they were funding, you know, lump sums, our paving, you know, the general business kind of stuff.

And I think from 2017 forward, we've taken on some big projects, you know, renovations of two courthouses, new fire station, you know, there've been some big high dollar projects that add up quickly.

You know, we have made great strides in our funding for affordable housing.

Those are big numbers.

And so I think that's where we're going to see it.

And then when you're doing those bigger projects, it does defer you from maintaining some of the more regular things that need to be done.

I had one sort of broad question as I looked at the

proposed fiscal year CIP revenue and expenditure description summary.

You have gone through many pages of explanation, 12 pages of explanation of the various projects, the amount proposed for the fiscal year 22, the balance of the lump sum to the school in that particular account.

And what struck me is

that there are a lot of accounts here that it seems to me have been building up and building up and building up and not getting spent.

And so I said, okay, let us assume for the moment since the balance for this project in every instance is given as of December 31st, 2020, half of the fiscal year is gone.

Let's look at any account where the balance for the project is more than 150% of the amount given last year.

We can reasonably expect that unless there is something dramatic that is going to change with the spending of that money, that we won't need that much money.

for that account for this year.

And in fact, we could completely not fund that account for this year and still at what would seem to be current rates of funding, still be in good shape.

and applying that metric, I came up with about $2.7 million that could be cut without even touching schools, without even touching things that we already kind of know what the money's going for.

For example, for the courts or for Friendship Court or for CRHA or things where we know that it's actually there.

There are an awful lot of things in here where out of a

desire to have level funding to make things work for the long run.

We've been putting money into these accounts that we just haven't been spending that much.

And maybe the amount of money we initially selected for level funding is just the wrong amount of money.

And so, I mean, obviously, I'm not going to, I mean, I guess the one that strikes me most immediately, and it may simply be that the right opportunity to spend the money hasn't come along, but if we're putting $150,000 a year aside for economic development strategic initiatives, and we've got a balance in that fund of $1.5 million, in other words, 10 years worth of the amount that we would be putting in this year,

Maybe that's a place where some money could be saved, at least in this year.

There are other examples.

Again, to me, it comes up to about $2.7 million.

And I wonder if it would be appropriate for folks like Ms.

Hamill or Davidson to take a look at those issues to see where the fund balances are simply out of whack.

And I'm not saying take the money out of there.

I'll just build that because I know it was something that I called you about specifically Ms.

Hamill was a couple of these trying to understand those numbers but I think that for one of the examples I asked about the SIA and I got feedback from staff that there are projects that are waiting for that in some cases it's you need a certain amount of balance in order to execute on a larger project and so I'm not sure of the case in economic development but that those are some of the things that I had asked as well related to some of these more sizable balances that were there and certainly Ms.

Yeah, so I mean, I think absolutely you're headed in the right direction with your thought process that and we touched on this a little bit last year with the CIP was that we really tried to look at, you know, account balances and not just say, oh, well, this is what we've had every year.

And how can we better spend these budgets down?

I think there are two, I would caution you on two points with just setting a

you know a blanket that if it's some percent or should we go look at it I think we do have to look at each account individually with this one Heather alluded to is that there are some accounts where we put money in to build up a balance to get to a big end point and so you know the strategic investment account is one that you brought up but typically and I you know

I would defer to Chris Engel on this, but typically when we spent money out of that, it's been a pretty sizable expenditure.

So 150,000 in one year, or even 1.5 million, you know, may not really get us to something we need if there were an opportunity that arose.

Same thing with some of these other lump sum accounts.

So I agree with you.

Are there accounts that have big balances that we need to look at?

And is there an opportunity to reshuffle dollars?

Absolutely.

And we could certainly go through that process.

The other thing that I would think about is that the COVID

So if you recall, we put a freeze on all capital projects expenditures and asked that anything that could be deferred be deferred.

So in this year in particular, there are accounts that have slightly abnormal higher balances than maybe they would have simply because with the natural delays of just COVID and also because we asked that anything that could be deferred be deferred.

So

I absolutely agree.

I would simply note that if we got to next year and we were being asked to raise taxes by two cents, which is basically a $1.7 million, you said, hit,

and we've got $2.7 million sitting fallow in accounts.

That doesn't make a lot of sense.

So obviously somebody's got to figure out what truly is fallow and what is waiting for the right time to spend the money.

But I don't want to be sitting here looking at a tax increase when I'm also looking at accounts that have

I agree.

And the only thing I would just say is, in thinking about that, as we've talked about before, and as I pointed out when we talked about reallocating, even if we're talking about the West Main Street project,

the CIP budgets.

So the budget that's left or remaining in these projects in some respects are just numbers on a piece of paper, especially if they are projects that are supposed to be funded by bonds because we are saying we can spend this money because we're gonna sell the bonds to pay for it.

So if it is a bond funded project and we are able to free up $2 million worth of budget,

It's still not going to solve or alleviate the need for you to have to do a tax increase if that $2 million was supposed to be funded selling bonds.

So I don't want to create the scenario that reducing the project fund balance alleviates the need to have to look at revenues because it only just reshuffles the deck.

Just because it's at a simple level, even if it's in the fund balance, it doesn't mean that the dollars are actually there.

It's just that they've been allocated to be there.

That's correct.

Yeah.

The only dollars that are actually there are anything that we've planned to pay cash for and that are funded with that general fund transfer or that 3% policy.

And, you know, frankly, that's why the rating agencies, when we go and

A hallmark checkmark of a AAA is your ability for PAYGO.

And all that means is how much are you able to pay for this for cash?

It's not as attractive when you have a robust CIP that is largely debt funded, especially when you're starting to push up against your target and affordability.

Again, one of the things they always say to us in these rating calls is if there's an economic downturn,

Or if, you know, there's a big project that has to be done, is there the will and the desire of counsel and management to do what's necessary to make that payment, i.e.

Another thing that comes to mind sort of thing through it is, you know, that pie chart from the beginning, these are about 8% of like the general fund budget.

And my understanding from the presentation was like with, you know, with this, again, if we assume that $50 million for school reconfiguration is far above that,

Even if we're reallocating some of the CIP budget and doing a 10 cent real estate tax increase over the next five years, that basically also leaves no room in the general fund for new expenditures there.

And we can look at that general fund and reallocate some money there too, which could help with the situation.

But one of the big concerns I have is

and Mayor Walker brought this point up earlier too is how many deferred departmental requests there are and the need in our general fund to I guess in some ways get back to basics of ensuring that we're investing in our departments in some of the staff positions in

especially when thinking about our affordable housing plan, the climate action plan, to have those not just staff positions but resources in NDS, in public works to actually execute these projects and you know I know I'm certainly concerned that again with that 10 cent tax increase still leaves no room in the general fund and if we're committed to these large projects but we haven't invested

in those departmental requests and the staff positions, we probably don't have the capacity to actually execute a lot of these projects.

Again, I think especially with our affordable housing plan and like the staff positions and resources needed to do that.

Again, same with the climate action plan.

And so in some ways it's like,

It feels like we almost need to prioritize some of those departmental requests and investments in staff positions to just have that basic foundation to execute these things.

And certainly it seems like with this current CIP budget and our prioritization within the general fund, it's almost like we haven't invested in the foundation to take on these big projects.

And to that point, someone

Argue that that's maybe inhibited us from getting off the ground with some of these larger infrastructure projects.

I use the Belmont Bridge as one of my favorite examples of things that just, you know, maybe from the beginning, we just weren't in a position to be staffed to implement on that in the most effective way.

And I don't know, but it's just, it raises the question of like, why have some of these things, you know, taken so long?

And in the future, they might be things that drag along and time is money in this case.

And what further, you know,

pressures that put on future budget cycles if we're not able to act upon those.

So I definitely agree that we need to make sure that we're setting up the team to be prepared in a way to act upon the priorities that we're laying out in a time efficient manner.

Well, and I would also offer this.

You know, other localities have a CIP technical advisory committee that comes up

based on council's preferences that come up with criteria to rank different projects.

And they try to use that as sort of a winnowing effect on the CIP budget as it goes through the process during the year.

I know Albemarle County has something like that.

And that's one way.

but to your point, Counselor Payne, about looking at a climate action plan and an affordable housing plan and, you know, are there departmental resources to execute these plans?

I mean, I think one thing that I had mentioned before to Ms.

Hamill and Mr. Davidson is, you know, this, I don't want to be too

too much into breaking the mold.

But a lot of times I think where we find ourselves in local government, not just in the city of Charlottesville, is we view budget as a season, right?

And I think a big, not a big, but something that could help smooth that process and sort of not get to the point we find ourselves in right here in February is

to make it more of a year-round process, right?

I mean, you all, as a council, I think, need more information throughout all 12 months and to understand how the budget is working and how revenues are coming in so that it doesn't all hit at one time.

And it isn't a season, but rather it's a 12-month, you know, just it's part of your duties, you know, during the entire year.

You're not

You know, kind of time constrained from February to April 15 of getting everything done, basically.

Well, in the way it needs to be because some information we're going to get is going to come outside of the cycle.

So even like when we think about the schools, we don't have clarity around that until we get more information.

And if we're talking about a hundred million, it might be a whole different conversation that, you know what, that's not a direction we can go, but we're going to allocate this amount of money to do these other things, knowing that we can't do a hundred million dollars.

And so that's just kind of that point, but we're having to make some decisions now without perfect information.

You're not always going to have perfect information, but that's right now in this current plan, this is a big

Yeah, and I also want to say, you know, just because the example that we have here includes a tax increase.

There's lots of opportunities to be creative and think outside the box.

I think it's a good opportunity for council and the school board to talk about these things.

It's a good opportunity to re-up the whole 40%.

That's cash.

and so you know I don't want you to lock yourself into that the idea of if you do school reconfiguration then it means you're looking at a big tax increase there probably is some element of that because there's just no way around needing more money but there are also other ways that you can look at this and and come up with other ways to finance the project but to your point Heather I think you know

What's the commitment?

Is it 50?

Is it 100?

Is it somewhere in between?

You know, if 50 really is the ceiling, then you're looking at the worst case scenario right now.

And I, you know, I think there's only room to go up from here.

I agree.

Relative to the schools, I mean, at the time that the chair McKeever and I went and met with CACF just to try to explore what it would be like to set up

just some funding that might be from the private side if there was interest in getting private dollars because I believe that this is something that when the real price tag comes in may not be achievable by public dollars alone.

And so what are other options that we have even outside of the municipality to help with this, whether it's larger like grant type dollars or if it's just literally philanthropic dollars.

And I think we have to think outside of the box and literally outside of the city in terms of what other resources we could pull in for a project that the community will care about.

But I said to them, we need to go out as a team into the community and kind of show, this is the reality where we're in.

This is what it might cost us.

Are we really on board with what we're trying to do?

Or is this really what the community is going to sign up for?

I guess my final thought I had just thinking about it is I guess some of the

opportunities that could help lessen the crunch is one, if there is a strong rebound after coronavirus that our general fund is growing above that 1.5% rate and we can't count on it.

I think we have to plan for this scenario, but that's certainly possible as well as additional stimulus from the federal government and the state government could help a little bit.

But

That said, I mean, it seems to me like we're just in this situation where over the past couple years, we've made a lot of new big commitments, which were a long time coming and needed, especially in affordable housing and other areas.

But I guess as is human nature, if it can, if evaluating the

everything needed to make it happen can be put off for a couple of years.

We've done that.

And now we're in a situation where we can no longer put off dealing with either the revenue adjustments needed to match these commitments or cutting things to match these commitments.

And I think there's just no way around that we're going to need to identify

Revenue increases, but also what we're going to cut or readjust both in the CIP and our general fund and just have to be more prudent in terms of just honestly evaluating what we need to do to afford these commitments we want to make.

And I'll just reiterate again, I think

Again, Mayor Walker brought this point up earlier about the deferred departmental requests.

Those are less exciting.

I can see why they get deferred because they're not they don't jump out in the public.

They're not like a new big project or item.

But I think we really have to get back to that basic building block and really take those seriously in terms of the staff

investments in staff positions as well as resources for departments because I just don't see how we could, again, especially the affordable housing plan, the climate action plan, I don't see how these things are executable if we don't just get back to that real basic investments of those building blocks there.

And it seems that is one of our central challenges as well.

And yeah, I mean, I guess that's my thought.

And when it comes to the CIP, which

And these things still aren't really going to get anywhere close to grappling with everything needed to handle the reality of the budget situation.

But within the CIP, I think we definitely, as was discussed earlier this week, we've got to honestly evaluate the West Main Street Streetscape project.

And if that jumps out as a bigger priority than other things.

And again, I see the vision of it and the value of it.

Don't see it as jumping out as a bigger priority than these other things.

And again, another thing that my favorite hobby horse, the quartz parking garage around 10 million.

I know that's rapidly approaching.

There's an RFP deadline this Friday, and there's not a whole lot of time necessarily to handle that.

But

Like with West Main Street, I get it.

It's tough.

There are real trade-offs.

But when we're looking at the reality of our CIP and some of these priorities, I think we really need to at least initiate conversations around other ways to meet that court's agreement outside of a new parking garage of that size and cost, or at least attempt to enter in conversations.

Are there ways to

at least have some initial conversations with the county or other stakeholders about just the fiscal impact of this project at the current time in our budget and what, if anything, can be done again to not abandon that agreement, meet it, honor it, honor our relationship and commitments with the county, but see what we can do to reduce that cost there.

But again, I think those are necessary in the CIP, but even that is not really going to get us there.

I guess the elephant in the room is definitely the school reconfiguration, especially if it's that hundred million dollar cost.

And I don't think as a council and really even as a community, we've yet had a full conversation around what the full cost will be, what the trade-offs will be of what needs to be cut or not, what's not going to happen.

The revenue increases are going to be needed.

I don't think we've had conversations with the school board around if we want to re-examine

that 40% each year and shift that into these capital investments.

Likewise, I don't feel like we've had a full conversation around

that full, if it were $100 million reconfiguration, what exactly are we getting from that versus other, we know there's a huge amount of deferred maintenance and the facilities are outdated, but what if any, what investment levels meet that need versus this potentially $100 million reconfiguration, as well as what are we getting out of it in terms of

and I think there's a deeper, bigger conversation around that up to $100 million that we're going to, we can't avoid.

And I think we can't answer that question about the schools until

we get the feedback back from the firm that needs to be hired to give us that information.

But I think if you even look at that, what has happened during the pandemic through the equity lens, there are, and we heard from some students last week, one of the youth that spoke during, or this, I mean, the week, the days are long.

So council was this week, right?

The council meeting about being able to afford their lunch, and they know other people can't, right?

And they do that every day.

Just at,

a visit to the schools.

And I'm not going to spend this time doing a lot of advocacy for that, but you can just go and visit.

I had a conversation about the maintenance at Venable.

a few years back versus the maintenance at a school like Jack Savire or Johnson.

Even after I think the renovations last year, which was a part of the million dollar or the year before million dollar annual renovation, during that graduation ceremony, I noticed there was duct tape on the screen at Walker, right?

We should be able to fix that.

and that shouldn't be a problem.

And so if you talk about the maintenance at Venable,

Elementary and what hasn't happened at a Jackson via Johnson and how things are prioritized, you are going to land on an equity conversation.

There's no way around it.

What streets have sidewalks?

What streets are paved?

How often?

How frequently?

I'm sure we arrive at the same conversation.

And

Back to the solution and measurements.

I know that's requesting spending more money when we're already saying we don't have any, but we don't know where our money's going.

We know where it's going, but we don't know whether it's effective and why we keep doing it the way we're doing it.

And I've been talking about that even before I got on council because watching and participating in budget meetings before that, it was clear that there were some questions.

And even the housing, I don't know where we are on replacing Mr. Sales position.

And then there has been conversations around

How do we track all this money that we're investing in housing and how do we ensure?

I think it was Jeff Levine last time he was before us said that there was still a vacant unit sitting in the West Main Street, his development there because he couldn't find anyone to rent it.

We're back to probably equity discussions there too.

But if people are getting SUPs or whatever from us, that project was approved before I arrived, and then the apartment is just vacant, and how do we know it's even vacant?

Who checks on that?

So there's a lot of needs from a staff perspective that even makes some of the stuff that we do from the CIP perspective

We don't know what Friendship Court is doing with phase four.

I've always thought that this investment that we are making into PHA needs to be tied to something.

We haven't done that.

We make decisions based on relationships and not based on like what people would do.

We are taking taxpayers' monies and we are investing those dollars and we should have strings attached and we shouldn't base that on

It's purely whether we like someone or not. But what does these home ownership opportunities that they were talking about in the packet that we got the other day? What does that even look like? Who's monitoring whether the money that we are investing in this

and right now we get all our information from the individuals and there's not a lot of oversight to make sure that the reasons why we're investing this funding in the first place happens.

I don't know if other counselors agree, but something else that came to mind is certainly over, you know,

not necessarily within this immediate budget cycle but over the midterm because of the hunt that school reconfiguration I think really driving a lot of the challenge here is at least from my perception

I don't know if we're yet having enough even like joint meetings or communication collaboration with the school board to really hammer this out, especially because of how big the impact of it is.

I don't know if other counselors agree is over the midterm, just the value of kind of more

through joint work sessions communication.

I don't know what it is to get more on the same board with the school board to really hammer out a lot of these questions.

So there we have a group

that meets that Heather and I sit on with staff members and members from the school team, Dr. Atkins, Kim, Powell, two school board members.

And we've been having these discussions about what reconfiguration.

We don't have any more information to share either because until the firm is hired and they give us back some numbers because right now we've been guessing we don't know if it's going to be 50 million dollars it's probably not right but whatever it is we'll know what we're working with once we get those documents and we'll be able to determine

whether we have to make 50 million work, whether we have to make 75 million work, whether anything over 60 is too much, but we don't even know what those numbers are until Michael's team hires the firm and the firm does its work and we get those fees.

So what you are proposing is what exactly will happen once

I would say like I think because I know there is a lot of frustration whether we this is just taking a while and a lot of it was put on hold, as we were referring earlier, a lot of CIP stuff was put on hold just because of coronavirus and so we did lose some time there, but I do think that knowing that the magnitude is in the ranges of the 50 to 1 million, I would be interested in talking with the schools about understanding like what does like research say about if we're going to invest this much and it's going to accomplish this reconfiguration,

versus if we can't do that or if we have another alternative that we have this much money and if we invest it in this way, it's actually going to accomplish more for equity.

I just don't know what that is.

I have spoken to some people at UVA who this is what they focus on and when I told them the numbers we're talking about from a capital standpoint to reconfigure two schools, they were mind blown that that amount of investment was going to go into doing that and all of the ways that programmatically that

This is not our real house.

This is why I only keep a lot of that to myself because this is really for us to have a conversation with the schools.

But I think that when we're talking about this much money, we have to understand what the gains are going to be from that and what our options are.

Because if it is $100 million and we really can't do it, we know we need to do something.

And we need to make these facilities better.

We need to make those transitions better.

We need to be focused on the equity for everyone in the system.

We've had this conversation and brought up these points.

Maybe not you talk to someone at UVA point.

That's maybe the first time I've heard that.

I agree.

I'm just saying I'm letting my colleagues know we are the ones that are having to make these hard decisions.

I'm letting you know these are concerns that I've had.

I've raised to the schools.

and I think it's important that what this is looked at holistically so that when we get to a big decision point we understand what the options are because it could be a situation that we cannot go down that path and we need to understand our options are.

I'm just saying that in efficiency we can parallel path that and I think those discussions are important and I just I agree with Counselor Payne that engaging maybe even the broader group on that will might be helpful because I've been saying those things and it's only gone so far.

Maybe others have thoughts.

And so I think

when we there was a discussion this was delayed the school's reconfiguration project moving forward based on you know everything that was going on with COVID understandably so and we have had these discussions I think we had three two-hour meetings where there were majority of people in the room saying we need to know

what is even possible and we won't know until the experts weigh in.

I voted for us to do that first segment where it gives us more of the range without spending the additional dollars.

And I was the only one that wanted to just get that more information so we weren't investing more than we needed to to get that information.

And then we were presented with three options with moving forward.

And there was a decision that I think it was the 35%.

I don't have my notes in front of me.

I wasn't prepared to have this discussion.

But anyway, I think what I'm trying to say, so we can move on in our just a little 15 minutes.

We've had these discussions, and I think if we had a meeting now without some additional information, we're just going to sit there and spend our time with people saying, how do we even know until we know?

And we don't know.

So I know that there could be votes to say we're not moving forward with the school reconfiguration project and we want to ask the schools to do something different.

And we have the ability to say that.

And if that is what's being requested, then, yes, there can be a decision to do that.

But based on what when we allocated the three million dollars,

to get enough information to be able to make a sound decision, we are still in the same place as the beginning of that discussion, I think, two years ago, where we don't have enough information.

And so if we had that conversation, unless we're telling them we're not going to do a $50 million project, but you all can invest, you know, we are willing to do a $25 million something, what would you want to spend $25 million on unless we're going to go through the schools and say something of that nature?

until the firm is hired and we get that information back, we're not going to have enough information to have a conversation because the schools are going to tell you that they've been having the same conversation for over a decade about the needs of the schools.

And they know that those two potential projects and that firm is supposed to look at the elementary schools, I think.

is what we said last, because the elementary schools and the fifth grade returning to the elementary school is not a component that even would necessarily be taken care of in this $50 million.

And that was definitely one of the biggest kind of

Looking at this holistically was one of the biggest points I've consistently tried to make with the schools and has been challenging at times.

But those are two buildings.

And when you get back to the equity discussion, you have two buildings where wealthier parents have pulled their kids out.

during those school years.

And it leaves who in the schools.

I attended those schools.

I walked through those hallways still with family members who go there, and it looks very similar.

And so we can talk about why the investment hasn't been made in Buford and Walker, where investments have been made in CHS, where parents typically send their kids back to the schools.

So we can't have any of these discussions without having equity discussions.

And if we want to have a

Meeting with the entire school board and Dr. Atkins staff, we can do that, but we know based on how the discussions have gone previously that I don't think we're going to get very far unless council is saying that based on the information Ms.

I'm sorry, if I could just interject here just one thing because I think is a really important part to this conversation is that keep in mind this draft has the 50 million in here.

But it does not in any way contemplate the prospect of 13 additional million dollars that may be needed for the West Main Street project.

So, you know, I know we keep harping on this, like, where are you?

What's your decision?

What is?

But, you know,

Unfortunately, we're at a crossroads where these two projects are big enough that they impact each other because looking at the worst case scenario that we've put here in front of you with only 50 million doesn't get you far with West Main.

And so if you are serious about moving forward with the West Main Street project, then it may not be 50 million.

We may need to back that down to 13 million less.

And, you know, relative to, you know, I'm not trying to say we should come to a decision point now or even in the short term about schools.

And I don't think there's going to be, you know, I'm not saying, you know, those discussions need to happen, you know, within the next month or anything.

I'm just talking mid to long term, you know, the need to dive into it more.

Um,

But to the point about West Main Street, again, I mean, you know, I've stated where I'm at earlier this week and earlier this meeting, I do see the value and vision, I just can't justify it as being a bigger priority than these other things.

And we just have to drop it down as you know, if we're looking at affordable housing, CRHA, Friendship Court, investment in schools.

I can't justify being at the top there and

I don't think it's an easy decision without trade-offs, but would have to say, given the trade-offs that, you know, it should be, I would say it should be something we need to reprioritize in the CIP.

I don't know if other counselors agree.

And the second point is, I feel that same way about, you

the new parking garage as part of the court's agreement to at least engage in some conversations to look at that or see if there's other way to meet the agreements.

Let me address those two points because I've been

a consistent and occasionally persistent advocate of both.

I spent a lot of time in the last couple of days trying to figure out

why it was that the figures that we got last week about the West Main Project struck me as being so out of whack.

And I realized the first place that I was thinking, I was looking to think about was in last year's budget when we had $4 million

for West Main Street for this current fiscal year and $4 million for next fiscal year, not $13 million and not some expectation that there is going to be a whole lot more than that for phase two.

Phase three appears to be paid for.

Phase four, Laura only knows.

So we had as recently as last May, an expectation that we're going to be spending no more than about $8 million.

In the session we had back in November, where we discussed the project in more detail, the numbers were higher, but still not as high as they are here.

I've tried to figure out

and, you know, a list of questions that I wanted to ask, but yesterday got away from me before I had a chance to call up the right people to ask them.

I am concerned, number one, I share Michael's concern about how this fits in with other priorities.

I've said all along, you know, certain things that are base demands that council has an obligation to make sure we fund.

and one of them is schools and other police and fire and things that are core functions of our government.

And West Main Street gets a little bit away from that.

Not that I don't think it is important.

I think I've said before, I think it's the most it's probably the most important mile we have of street in the city.

And it it bothers me greatly that we haven't been able to get our act together.

but it's also something we've spent seven years of council's time on about $6 million in sunk costs for designs to this point paid to the consultant and so on.

And I don't think that we ought to walk away from it at a work session without having given everybody proper notice that that issue is truly on the table.

So if that, I don't know what

guidance that means for Ms.

Hamill, except to say that I do think we need to have the conversation in upfront terms and where that's specifically the issue on the table and people are all prepared to talk about it and people who want to defend it can come defendant and so on.

As far as the parking garage goes, I sent an email to council a couple of weeks ago where I expressed, again, I've been a real passionate defender of the parking garage, but I also, as someone who uses the parking garage that we have now, I'm looking around and seeing

We don't have a demand for parking right now.

Admittedly, things are slow because of COVID, but we don't know when things are going to come back.

We don't know when people are going to resume working downtown as opposed to telecommuting or as opposed to doing any of a number of other things that everybody seems to be suggesting it'll be at least a couple of years before we get back to the point where our downtown is

is as vibrant as it was a year ago.

And given that circumstance, and given all the rest of the problems that we're facing, I too would be willing to have the conversation that six months ago, I would have said I didn't want to have it all.

And that conversation would look at whether we should defer the parking project in some way, and under what circumstances

a year or two from now, we might say, okay, circumstances have improved now.

We look at the demand, we say, yes, yes, there is need for it.

The last thought I have, and I'll be brief on this one, is simply as far as the school board goes, I hope that we don't end up casting things with either the school board or the consultant where the consultant seems to think that the consultant's job is to go think grand thoughts.

I think the consultant needs to think practical thoughts.

And I don't know how to convey that, but I just want to make sure that somehow the message isn't out there that whatever you come up, we'll figure out a way to fund because we clearly aren't there.

Okay.

So

I probably you know of most things right now probably closest to line with Michael on um this I I would love if we could talk to the county um and see if we could work something out to reevaluate again I do not want to not honor the deal that's that's in no way um that's very important to me I want to be a good partner um I think it's very important that the city and the county work well together um

on many of these upcoming projects.

We have some other, I mean, there's other potential partnerships we can do down the road as well.

I would love, again, we were not anticipating COVID, and I would love to see if we could be a little bit more creative with this space.

As far as West Main goes, I also, I mean, I don't,

I really think the public, these are all projects we are talking about right now are going to affect people for a long time, whether it's West Main's development, whether it's school reconfiguration or putting lots of money towards working on our schools in general, a lot of the buildings.

I mean, I only recently found out that Jackson Bayer doesn't even have a kitchen.

Um,

So I think it's really important that we take this time and make sure that the public has a chance to come forward and knows that in some cases projects that for like 10 years people have been thinking are going to be happening are really seriously on the chopping block right now to some extent.

I know we have a lot of delayed maintenance and everything that has to happen.

and I'm sure there's things that we're going to be able to do especially as utilities get undergrounded ones that already have to but I would like to see how much of this really has to happen right now and I mean we need the public to hear that what we're looking at right now is going to affect people for the next 10 or 15 years

And we need to hear from people about if they're willing to say, okay, that's what we're going to do.

That, you know, in five, ten years from now when people's property taxes have been up and they're just starting to see the school reconfiguration happening or a bunch of work done to school buildings, that they remember that this was all, you know, that we reached out to as many people as possible to hear voices of the citizens of the city.

that, yes, they do want this to happen, and they're willing to do, I mean, I'm willing to authorize a tax increase for this, but I also want to make sure people understand that that's what that means and the reality of what these projects are going to mean.

We're kind of used to being, trying to be the best at everything, and we just were not big enough

So we really need to start figuring out what it is we want to prioritize being the best at.

So just for clarification, you all want to have a meeting to discuss like West Main Street.

a public meeting before we make the decision to not go forward with West Main Street.

And then you want to do the same thing with the schools.

You want that before the firm is hired or you waiting for the information and then doing it after we have the information to share with the public about the cost.

and then the parking garage.

The answer to the question is one with schools.

One, I mean, those are CIP expenditures that are coming in a couple of years.

So from my perspective, I'm not anticipating those conversations before we get more information from the consultants or within the next month or so.

I'm just saying, and I think we all agree, like midterm, we're just really going to need to dive into those conversations.

Um,

have a lot more conversation with the school board about what it looks like with that 40%, et cetera.

But because that's not immediate, at least from my perspective, I'm not saying that that needs to happen again within the next couple months.

Two, I'm curious, staff, when it comes to West Main Street, you said once these bonds go out, you're locked in, you can't go back.

Both the West Main Street and the parking garage, those are slated to happen sooner.

So what's the timeline you're looking at for when council needs to come to a decision point?

on that in the parking garage.

You know, I do think it needs to happen sooner than later, but I also recognize the difficulty of that because we've got an RFP deadline coming up this Friday.

And I would just echo the questions that Michael asked.

And the only thing I want to say about the parking garage is I think if there's a direction, a different direction, or if there's a delay that we want to seek, I just think that counselors who are interested in seeking that need to reach out directly to our county counterparts to have those conversations because the fact that I don't want to create any kind of question mark in their mind that we're not committed to our agreement.

Yeah, and I would say in terms of timing for the bonds, it's really not a timing issue on the bonds because we're not going to sell bonds until the project is well underway.

It is a timing issue in terms of your planning.

So going back to that right-hand side of the debt table,

and as you start talking about conversations with the schools if you are still contemplating West Main Street and it's full complement of all four phases there are no dollars in this draft for West Main so you know if it unfortunately if it becomes one or the other and these two just happen to be paired against each other because of their size then there's you know

Your two cent tax, you know, your 10 cent total tax increase to pay for the 50 million dollar project.

Oh, by the way, now you've got another tax increase because now you have to add another 13 million dollars to the CIP or you're starting conversation with the schools is something less than 50 million.

So that's really the timing issue on on, you know, where you are with West Main.

and I would just add that's just from my perspective.

There are other project deadlines in terms of the garage and also in terms of West Main that certainly the project managers and or Chris Engle could speak to related to that.

But just from a purely financial numbers perspective and how it would affect this CIP budget, clearly stated as this draft stands, West Main Street is not in at all.

Phase one is accounted for in what we've approved, but phase two is missing a 6.5.

So I'm going to step out of the conversation and let the project experts speak to that in terms of what's funded or what's not funded.

It looks like that would cover all of the phase one and part of phase two, but not all of phase two.

Yes, so what Heather said is correct regarding the funding, but I will say from a staff perspective, we're looking at direction from you all.

If I continue full pedal to the metal here, I'm spending money that you might not want me to spend in a couple months.

So we have been moving forward hesitantly with environmental work and with the VE study.

looking to get a determination on where is this project headed?

And where Chrissy mentioned her budget perspective and how there might be other deadlines, we have committed to a schedule with VDOT and there are certain deadlines we need to meet.

So we're already behind on right of way.

And from another perspective, I think from staff, these very large projects take a very long time to actually get done and to amass the money.

So

Yeah, and I would just add to along with that is in terms of, you know, the impact on the budget, we have to be balanced by March.

So, you know, whatever that means in terms of where you decide to go,

And I'll just say where I'm at with West Main Street, I think

I hear the desire for more community input.

I'm not saying I'm necessarily opposed to that, but I think we're just, we have to reach a decision point and it's a tough one.

And we just, we can delay it and try to push it off, but at some point we're going to have to come to decision point where I'm at.

I think we have to move down the priority list.

I mean, this is a project I believe in 2015, a majority of council voted not to move forward with, but it's continued on.

I understand there's a lot of dynamics and reasons for that.

And there's a lot of justifications for the project, but not just in this project, but clearly a lot of infrastructure projects, we just have to come to decision points and stick with it.

Mayor Walker.

Mr. Engel had sent me a message.

He'd like to address some points about the parking garage.

Okay.

Could we just, just a second,

I think this is a, just stay, if we could stay here for just a few more seconds, and then we need to, after Mr. Engel, make sure we do public comment, even if our discussion is going to continue for people who thought that we may be ending.

But, so, Heather, Sena, and Lloyd, Lloyd, are you still at the, what you just said, more information, and then Heather and Sena, like having a public meeting before making a decision, and Heather and Sena, do you want additional meeting

Well, I mean, again, my position is that I've still, if I were to go ahead with it, I would have a lot of questions that the documents available to me in the last couple of days did not answer and in fact simply confused.

because the numbers keep changing without apparent explanation.

If we're gonna ax this project that has been agonized over for seven years by council, I think it ought to be at an actual meeting where notice is given that that's on the docket.

And if that's at a regular Monday night meeting, so be it, doesn't have to be something special.

But I just think as a matter of process, as much time and money and energy as has been put into this, we shouldn't be just killing it kind of on the side in a work session.

I guess

I understand the timeline that we're in, we're having a budget, we're trying to get through our budget cycle, but I guess when I was speaking with Counselor Snook just about, you know, obviously recognizing that three people, this is, a lot of this is new to, it still feels like part of it, like I'm always familiarizing myself because this started when any of all five of us were on council.

I do think there's still questions that, you know, at least, you know, some counselors have had.

and just some understanding about the history and just having heard from folks in the community that were part of like the earlier parts of this, I do think that it is important that given the magnitude of this decision that we do allow for an additional time for the public to weigh in and for us to make sure that we're fully informed and understanding what our options are.

I guess for me just understanding like looking at knowing that phase one is fully funded but phase two is not like is there a timeline that all of that has to happen and the timelines has been out there even for like that phase three to be able to get the funding that's there.

I'm interested in, can you hear me?

I'm interested in hearing, I'm interested in hearing what we're getting for what we've already funded.

And if we don't fund any further to phase two, I mean, I don't even know right now if we're, if we like, if we are scrapping West Main, if that means we're pulling back all the funding we've already funded as well and putting that back in the pot.

or if it's just meaning that we're fully funding at where we're at, but that four is not even being looked at and half of two is still really up in the air.

So a federal or state for their federal or state funding could be garnered for that, then it could go on.

If we could do phase one in phase three, or if there's things that still happened.

I mean, I

At this point, I cannot prioritize any additional funding going into West Main with our competing priorities.

It's too far down, especially for the expense that it is.

But I don't really know what stopping the project means right now.

And I do know we also have a meeting with

the Planning Commission coming up for our CIP budget as well.

And I'd like, I guess, hear their thoughts on that.

So OK, so it sounds like we're having a meeting, another one.

For anybody who ever questioned whether I ever want to be strong mayor.

This is the answer.

I would jump out my window.

Well, Mr. Bowles, you're on the call, but obviously it sounds like you all would like to hear from the planning commission, but I would

Knowing how that meeting will go, I think you'd probably want to get their input.

PB, Harmon Zuckerman, I'm good with that.

And it sounded like Lloyd, you were okay with it, not necessarily being an additional meeting, but attached to either PB, Harmon Zuckerman, Council meeting is that would that be sufficient for you to cover this big discussion of it.

Yeah, that's what I was envisioning.

I have a question before Mr. Engel goes.

We know who watches planning meetings and who generally comes, and those same people watch every meeting typically that we have, the majority of them.

So it's really, I guess, for just future decision makings if we don't get that here for this one to be more efficient, like we're asking the entire government.

All the times that we've had these discussions that you all have been aware that we were going to have the discussions that have been talking to people or not about or could have been about the discussion that that is probably the time to do it because we're asking staff again to be available to have the same discussion.

They don't have any new information.

And so

This is frustrating for me.

Denying it's frustrating.

I just know that even the last two days, there are people that were not aware that we were going to even talk about it on Monday.

Sorry, I have a company now.

And that

It was coming out today that there wasn't an opportunity.

We haven't even had public comments.

I'm not even sure.

I've heard from folks that are just like, oh, I didn't even realize that was within a scope.

This is a project that the city's been working on this long.

I participated in the engagement early on, and I just feel that

I just feel like it's important just to give the public this the proper notice that this is something being strongly considered, especially in light of the size of the investment that we're making for, you know, the schools and reconfiguration and just giving people a chance to kind of digest that and give us that feedback.

And I understand.

Well, the reconfiguration project, I think, is different from this because we're looking at all of our priorities and having to make decisions within those priorities.

We did not have the information to present to the public, but we had conversations in our working group that we were going to have to have public conversations.

So this was not something that just that group or just the counselors or just the school board was going to make.

We knew that once we received the information that we would have to sell and market it to the public.

No, I agree.

I'm just saying that right now, the amount we're looking to invest there and the minimum floor we put in here is now prompting us to possibly cut a major infrastructure project that's had a lot of engagement and a lot of $6 million of investment and other dollars, UVA dollars that are part of it.

I'd like to reach out to university people.

That was something I considered the last two days doing, but I had paused just to see kind of where the rest we were at.

But I just feel like this is

there's just there's a lot of other factors and I don't want to waste any of staff time.

I want to be able to give an answer on this, but I want to make sure that we all feel like we have as much information as possible.

And if in the case of Lloyd, he's spent a lot of time last evening just really trying to get to the root of a lot of the questions that he has.

And there's still questions unanswered.

Pivoting just a little.

It sounds like the February 16th Planning Commission meeting will be discussed there.

What's our regular meeting, Michael?

Planning Commission's the 9th.

I was, Mr. Blair brought this up.

Sure.

Can you all hear me?

This is Chris Engel.

Yes.

Okay, good.

Yeah.

Regarding the question of the timing of the garage, as you all know,

The MOA with the county was signed in 2018.

So since that time, staff has been working towards this.

There were some other issues of the existing leases on the property that we committed to honor.

So those have been running out.

But suffice it to say that the process is moving forward.

And the RFQ process is ending day after tomorrow.

and then a short list is developed for design builders to respond and actually spend their own dollars to get in the mix for the contract.

So long and short of all that is to say that to meet the MOA, the letter of the MOA, they're really

isn't time to delay.

There's 2 million put in the CIP last year.

There's 8 million in the request for this year.

And to do anything outside of that would require the agreement of the parties to do something different.

We're inside of three years to delivery.

of the project, 34 months.

It has to be designed, it has to be approved, it has to be built in that time.

We have no indications from the county that their process on the actual building piece is off track in any way.

They have a designer under contract that is working to get that done.

Let me say one other concern I've got is one I've expressed before, which is that I've read Mr. Engel's white paper and I've seen some other contrary views on things, but I would like to have a more, frankly, exhaustive discussion

of what else could be done with the property.

Because I continue to believe that if we build it, and I say this as an advocate for the project, if we build what is being prescribed, 10 years from now, we're going to look back and say, that's a waste.

We wasted an opportunity.

And I don't want to be saying that 10 years from now.

And I think that there are other discussions to be had

and if that means that we defer it for a year and we tell the county we're going to reserve 90 spots in the parking garage for you because the Lord knows they're there right now.

I don't see that as being a problem.

Recognize this is a change for me.

I've been on the other side most of the time, but I've just looked at the realities of the situation more recently.

I don't think anybody would fault us

for recognizing that COVID has changed a lot in our landscape, physically as well as financially.

And I'm willing to do that as one of the advocates for the program.

And if that means that we don't build it right now, if it means we don't execute on the RFQs or whatever is going out right now, that may well be the right answer also.

I just think we need to be talking more about it and we need to be talking with the county and I'm I had when I sent the email around a couple weeks ago, I got a response back suggested that I shouldn't be discussing it.

I'm happy to go discuss it with various other people in the county as well.

But I just don't think like I just don't think that it makes sense for us to move forward with that particular project right now.

and the fact that there's RFQs going out this week.

Well, let's maybe we just call them back.

Well, if that's the case, I certainly encourage those conversations to happen quickly so we can get some clarity as to whether we continue on the process now or we're taking some kind of pause.

I understand.

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or watching via Facebook or one of our other streams, you do need to be on the Zoom webinar to participate and speak to council.

You can register for that at charlottesville.gov slash Zoom.

I'm going to first let me take the staff out who were previously speaking with you.

Okay, first up is Peter Krebs.

Peter, you're on with city council.

Good evening, Council.

This is Peter Krebs from the Piedmont Environmental Council.

It's a lot of wisdom being spoken.

Pretty much everything that everyone in this meeting has said is also things that I've thought.

I'll try to just be quick with a couple of things.

First of all, with the parking garage, I and PC bled to get the courthouses located downtown.

It's very important.

Having said that, I think we have to be much more creative about how we honor the agreement with the county or get much, much more for the 10 million we're looking at investing.

Both of those things, really.

I mean, from where I say it, we're looking at 100 years of the sidewalk budget for this.

100 years for more parking.

This isn't really in line with

with the other things that we're thinking about as a community.

Moving on from that, I think one of the things that went wrong with West Main is that we asked ourselves, we have a plan.

How much is it going to cost to really get it right?

And instead, the question should be, what are your goals?

What is the most cost-effective way to meet those goals?

As you're thinking about the school's reconfiguration, I wouldn't say, you know, here's $100 million, what can you get with it?

Nor would I say, what do you want?

And they'll pay for it.

It's going to have to be a question of working through the goals and figuring out smart ways to solve that.

Here's what I think you should do for West Main, lastly.

And, you know, there's a lot that needs to be accomplished.

It's super expensive.

It's frustrating.

But I think the easiest thing would be keeping in mind that it's four phases that can be independent.

I would go forward with phase one, already funded.

And as Nikuyah mentioned last time, there's more to it.

We can't just undo certain things that we promised to people.

Phase three is also funded.

Go forward with that.

Phase 4, I would look to SmartScale.

And now SmartScale is not going to pay for the undergrounding.

Either redo Phase 4 so it can be done with SmartScale or get UVA to pick up the difference if that could be managed.

And then Phase 2, I would also look at reconfiguring that so SmartScale can fund it.

That's all I have for this evening, but you guys are doing great work.

Really appreciate it.

Thank you.

I don't see any other hands.

Right.

Thank you, staff.

I know this is extremely

difficult situation, a lot of tough decisions we're going to have to make.

And I appreciate the honest perspective and sobering information as counsel.

We definitely need a lot of it.

Thank you.

Thank you.

And we know you're ready to throw rocks at us.

Like, we know.

We're sorry.