And we're live. Good morning members of council. And welcome to our second of four budget retreats. I am John all or I'm the assistant budget director. And. What I'd like to do this morning. If, unless there are opening comments. Is. To. Well, perhaps Mary, did you have anything you wanted to offer to begin with? I don't. Thank you, John. Go for it. Okay. Mayor. I'll remember Reese does. I think we're, I've got a number of colleagues who are having a hard time finding the right link. So I know a council that Pierce just, just texted me about it. I don't see Mark Anthony on the list. Mark Anthony has to come a little late today. Okay. But I think. Get him the link as well, just to make sure, but we are, we are live on YouTube right now. Is that right? We are. Okay, great. I'm just going to take a minute, Mr. Mayor, if that's okay to, to thank. Mark Anthony for going yesterday and getting his first vaccine shot. I'm Mr. Mayor. I know you've already had yours, which is fantastic. And I think I just want to encourage all of my colleagues. To, to maybe reach out to the health department. Mark Anthony got vaccinated as part of an effort. To, to increase the vaccination rates amongst our black and brown neighbors. Right now, those rates are lagging quite a bit. And it's my understanding that his, his vaccination was part of an effort to encourage folks, specifically in the black community with, with Mark Anthony to, to get vaccinated when they are eligible to do so. And I spoke with Mark Anthony just a moment ago and he said, he was comfortable with me saying how happy I am that he was, he stepped up to do that. I want to encourage everyone else in the group to do that. Because it's just super important that we get as many people vaccinated as possible. I know there's a lot of reticence among certain parts of our community. I just want to encourage y'all to do that. So anyway, that's that as for me, I'm not in a community where, where I'm an instant rate or the vaccination rates are lagging and so I'll be waiting for whatever my group is called. Thank you. John. It looks like there are five of us. We know that Mark Anthony is in a North Carolina League municipalities presentation. He's making a race equity and I'm not sure. Do we know for sure that Javier knows what the right link is? We, we had a little trouble with that this morning. Um, was sent about five minutes ago to all council members. Yeah. Okay. So hopefully she'll have that. Thank you. Go ahead, John. I think we're ready to roll. Yeah. Excellent. Well, good morning, everyone. And thanks to the second FY 22. Council budget retreat. Budget year. I'd like to kick things off. First, my name is John, a law assistant budget director. And I'd like to. Kick things off by just. Um, displaying on the monitor our agenda for today and briefly going over that, just so everybody. As a refresher of what that looks like. Um, so our first presentation will be a presentation on. Um, the use of the budget equity tool and budgeting gave engagement within the budget department. Um, followed by the financial projections and budget outlook. Presentation. We'll take a short break around noon. Um, and then we'll follow up with the, the CIP and debt discussion, leaving ample time. And then we'll take a short break for the mayor. I know yesterday that was mentioned. It was a priority. You might want to talk a little more about capital in infrastructure and potential for a bond. And then at one o'clock, Dr. Michael Walden will join us from North Carolina State. Uh, university, the economist. And give us an economic outlook. We'll have closing remarks and we certainly this agenda has been extended based on the mayor's. Comments yesterday, uh, And then we'll take a short break. And then we'll take a short break for the mayor. Um, to 30 this afternoon, allowing for a robust discussion around, um, uh, for members and for everyone to get, um, anything they feel needs to be expressed with, uh, what will be a lot of financial information today. So with that, I'd like to kick things right off and move. Right. To our first presentation. And, um, racial are the rate, racial equity budget tool. And then a brief, um, presentation on, uh, budget engagement. I have some, uh, partners in this that I'm going to hand things off to joining me here, uh, is, uh, from our office, office of budget and management services, uh, Tony Thompson and from the, uh, office of budget and management services. Um, I'm the director of the API office, office of performance and innovation, Aaron Parish, and I will turn things over now to Aaron. Thank you, John. My name is Aaron Parish. I'm a design and performance strategist in API. Um, so I'm just so happy to be with y'all today. I wish I could be chatting with everyone in the buffet line, which is my personal favorite part of budget retreat, able to spend this time together talking about racial equity budget tools. So we can move on to the next slide. I will talk about the overview of the day. Yeah. So this is a two-part presentation. So the first part is going to be about the racial equity budget tool. We're going to talk about what it is, how we got to this point developing it, and how we're going to implement it in the FY22 budget process. And the second piece will be about our budget engagement efforts outreach of recent educational outreach and future engagement plans. So the next slide is going to talk about what this tool is. But before I get into the kind of meat of the presentation, I was really inspired by yesterday's musical theme and I was trying to think about how to carry it over. And instead of music, I kept hearing this line from a Spanish poem, which is also the title of a book of conversations between education activist Paulo Freire and civil rights activist Miles Horton. And that line is, we make the road by walking. So the work of building justice is a continual process that works best when we work together. And the racial equity tool is really just one step of how we're trying as a city to walk the talk towards greater racial justice. And there have been a lot of people who have been walking this talk and building this road before us through far more treacherous terrain. And this got me thinking about Durham's hometown St. Pauli Murray, and she has a great quote that I love. And she says, and not one single one of these little campaigns was I victorious. In each case, I personally failed. But I've lived to see the thesis upon which I was operating vindicated. I have lived to see my lost causes found. And it's our task to pick up the causes of others who have done the work of racial equity in the past, and find places for them in our lives, in our work, and in our community. And that brings us back to the wonderful mural that manager page put up at the start of the retreat yesterday, which is a really great theme for the retreat. And I think it's a north star for the racial equity work that we do, because we're always building on the work of those who came before us, such as leaders featured in that civil rights mural. We're walking on paths that others have cleared for us in some way or another. And it's our responsibility to make that path easier and extend further for those who come after us. But I hope the fact that we are talking about racial equity on the same day that we're talking about the money would make Saint Pauli smile down on us just a bit. So what is a racial equity tool? And first, you know, what is racial equity? So racial equity is when race is no longer a predictor of life outcomes and outcomes for everyone are improved. So equity is about outcomes. It's not about intention. It's about the work you do to move the needle towards racial justice. And a racial equity tool is one part of that work. It's a decision making model used to integrate equitable considerations into our policies, practices and procedures. And it's basically a structured critical thinking tool that asks us to purposely consider race to use data in our decision making and to encourage to encourage community involvement in that process. The next slide, we'll talk about why we use a racial equity tool. And this is BMS's contribution to help the city operationalize our racial equity mission statement, which is the city of Durham intentionally identifies racial inequities, engages the community, and uses a collaborative approach in creating solutions to ensure race no longer stands as a determinant of outcomes and opportunities. And a racial equity tool really targets this first piece, you know, it's a tool for helping us identify where racial inequities are in practice in our organization and gives us a structured way to think about how we can think about solutions. So this is part of our larger model for embedding racial equity within our organization. So we're using the government alliance for racial equities model, which is normalize, organize, operationalize, and that's a mouthful. And really what it is is the talk, planning the walk and walking the talk. So normalizing is normalizing conversations of how we talk about race in our organization through things like training, organizing is building the capacity to make change happen through things like our racial equity organizational team and operationalizing is how we make that change happen. So much of this work was done as part of our organizational racial equity team within our tools and training subcommittee. And I really just want to take a moment to talk about the people who were on this team who did this work. So sharing Williams and equity and inclusion and Michael Pullum and community development led this team. Adria Graham Scott and OEWD, Henry Burwell, the police department, myself and Mary Grace Stone King was our fabulous intern. You know, we work together to build this product collaboratively and a lot of the people on the team were facing unparalleled challenges in their work this summer. And they showed up, they did the work and we have a really collaborative product as a result of it. So I'm proud of the work that we did together and I'm proud to call everyone on this team colleagues. So the work that we did, we looked at tools that different municipalities were using and we conducted interviews with selected municipalities. And we also drew from the technical existence that we received from GAIR over our year-long participation in our North Carolina cohort. And that included training in results-based accountability and in using the GAIR tool. So some of the cities that we examined in detail are Seattle, Grand Rapids, Michigan, San Antonio, Minneapolis and Portland. And we interviewed people in the first four of these cities. And the cities used tools in different ways. So some used equity tools just for budgeting. Some used them as a larger organizational decision-making model for policy decisions and programming decisions. Some used them to help guide COVID-19 rapid responses. And some used them for a mixture of all of these. So I'm going to take a moment to do a deeper dive on two of the cities that we learned a lot from. So Seattle is really a national model. They were early adopters of this racial equity work. They've had a racial equity tool for 12 years. They've been doing this work for 16 years. And this model that you see, this six-step model, is really what most cities across the country use some version of this. And GAIR also uses some version of this for the tool that they teach. So setting outcomes, if equity is all about outcomes, it's a really great place to start. So the tool asks you to think about, what do you want to achieve through this action? And how will this go further racial equity? The second is how do we involve community in the process? How do we use data and especially racially disaggregated data to guide the decisions that we make? The next two are really the core of the critical thinking component of this tool because it asks you to take a moment and think about the consequences of your actions. So thinking about who benefits from this decision and who would be burdened by this decision. It asks you to think about what are unintended consequences that could occur as a result of this action? What are ways that we could mitigate harm from those consequences? And what are ways that we could use this as an opportunity to further racial equity? And then the last two steps are really about evaluation and accountability. And how do you evaluate the impact of your decision and how do you share those impacts back with the community that's affected and with your city leadership? The next one is Grand Rapids, Michigan. And this was a good example really for the process that they took. They had a staged rollout in which each step built onto each other and built capacity along the way. And I'm going to brazenly steal my colleague Monica Chapara's local government love language concept and say that clear actionable goals would be my local government love language. And that is all over the Grand Rapids, Michigan process. So in 2018, they completed a racial equity action plan. And in that plan, they laid out how they were going to use a racial equity tool along with many other things. In 2019, every department shows a project to pilot using that racial equity tool. And so that could be a budget request. It could be a program decision or a policy decision. And they offered a lot of structure on how to prioritize thinking about this analysis. So there were opportunity areas that were prioritized for this racial equity analysis, such as education, environment, criminal justice, housing and jobs. They offered even more specificity around impact areas to prioritize like construction equity, workforce equity youth initiatives. They also looked at specific geographic areas to focus efforts on. And multiple municipalities do this where they take a series of indicators like race, ethnicity and income. And they focus the highest, they focus on the highest level inequities in geographic areas as areas to focus resource allocation. And then they also provided department's training and a manual explaining the context of how to use this tool. And they were doing this all while they were also developing a new strategic plan. And in their strategic plan, they had a value section for the goal section. And in the values section, equity was their first named value. And they also had really clear, measurable goals of what it meant to achieve equity. And then the following year, there was an official mandate for an equity tool to be woven into the budget process that was tied to the strategic plan they did the year before. So some common aspects of racial equity tools that we saw across different cities where that city started slow with phase rollouts. They had analyses that focused on key impact areas for racial equity. They needed a leadership mandate for real success. And they had racial equity teams that were oftentimes multi departmental that supported departments in using these tools. And they supported them in a variety of ways. They offered training on how to fill out the tool. They offered supportive material, including glossaries of key terms and data and engagement resources. They offered one-on-one consultations if departments wanted extra help in completing the tool. And they had an evaluation of how well the tool was built out afterwards. And so in the fall, the racial equity tools and training team, we shared our learnings with BMS about these national best practices that we saw. And we shared a recommended model for what an equity tool should include. Good morning. My name is Tony Thompson, budget analyst for the Budget and Management Services Department. And following up on Erin's presentation, I'll be talking to you about how the budget department took the learnings from the racial equity team and developed the city's version of the equity tool. So when we started this work, we wanted to use the tool to help us achieve three primary goals. The first, providing BMS and city leadership analysis of budget submissions from an equity lens. Second, a prompt for departments to think critically about their role in advancing racial equity. And third, for the tool to provide additional analysis for city leadership when prioritizing budget decisions. And the work of creating this tool and all of the supporting resources were done by the team members that you see on the slide. And I just want to personally thank them for all the amazing work and effort that they put in to make this possible, as well as Anise Vance and Laura Biediger, who helped provide valuable insight for us as we developed these materials. So our equity tool follows from the benefit burden model that Erin just spoke about that was used in Seattle and Biediger and has six overarching sections. The first section asked departments to state the intended outcomes they hope to achieve if their budget requests were to be approved. Then we asked departments to provide information on what specific areas are during populations their request is intended to impact. Next, we asked the departments to critically think about who will benefit or be burdened by this request if it were to be approved. Fourth, if a burden group has been identified by the department, we want them to brainstorm alternatives and additional actions that can be taken to minimize harm on the burden group identified. Then we want to know if any equitable community engagement has been conducted to inform the proposed budget request. And if the requests were to be approved, how do they intend to engage those most impacted by the request. And last we asked departments what accountability mechanisms they intend to put in place to provide progress updates to city leadership and stakeholders if needed. So in addition to the equity tool, our internal team also developed a set of reference resources to aid departments in completing the tool. Similar to Grand Rapids and San Antonio, we created a manual on how to successfully complete the tool. The manual discusses adopted terminology that should be used, instructions for completing the tool, how to use and where to find racially disaggregated data to support their equity analysis, how departments should perform equitable community engagement, and an example of a completed equity tool that they can use themselves. We also provided multiple training sessions for departments curated data sources that provide racially disaggregated data, and a list of key city staff that departments can leverage for assistance if they need to. This has been mentioned already in various ways, but a successful equity analysis will rely on the use of racially disaggregated data, the equitable community engagement blueprint created by NIS, and collaborating with other departments and community stakeholders for support. So the process for using the equity tool that we implemented in FY22, we asked departments to identify their budget requests that may have an equity focus, a set of equity criteria were provided to help identify those requests, and then requests that had the strongest equity focus were selected for analysis. This was an initial set of eight requests totaling just over five and a half million dollars. Departments who had those eight requests were provided additional time to formally submit their requests along with the equity analysis. And different from most recent fiscal years, each department was asked to submit a budget reduction plan. In addition to the plan, we asked those departments to analyze the proposed set of reductions from equity lens as well. So in terms of next steps, our internal team will and internal team will review the completed equity analysis and provide recommendations for BMS and city leadership to consider. Once the FY22 budget process has been completed, the internal team will evaluate the completed equity analysis and process to determine if any improvements need to be made for future fiscal years. And Aaron and I will take any questions that you may have. Thank you so much, Aaron and Tony. Great, great report. And very exciting. And I'll now throw it open to my colleagues for any questions that they might have. Colleagues? Adriana? Thank you. I truly appreciate the work and laying it out so clearly why race equity is important in our budgeting process, which is why I was such a strong supporter of the participatory budgeting process because we didn't have racial equity in our current budgeting process. And so I just wanted to ask one question. How helpful would it be to have an ordinance in place that actually explained exactly what you did around race and equity and why we're pulling the data the way we are as we move forward? I mean, I think that our residential racial equity task force gave us a really great blueprint for a lot of the things that we're doing and that we're trying to operationalize as a city. And so the focus on data and racially disaggregated data, you know, a lot of that is trying to operationalize what residents are asking for. And there are definitely ways that we could institutionalize that more as an organization. The process of how we collect racially disaggregated data, and then the skill set that we need to be able to analyze it is a growth area for us. And it's, I think, something that we're building that road as we go. Thank you. I appreciate that. Thank you. Pierce? Yeah, just a really quick question. I remember a couple of months ago we got a presentation from the water management team where they had analyzed some of the fees that folks are charged, and they put an equity lens on it. Was that a part of this program? And my follow-up question for them really was like, is that going to go, is that going to apply to everything in the department? Because like the Grand Rapids model, or I forget, I didn't write it down in the name of it, where you said they picked like one thing and studied that one thing. And I guess to what extent will that be scaled department-wise and across the whole city after you picked that one thing, you know, and where is our capacity to do that, like at a macro after we kind of micro-tested? So I can speak to the first part of your question. So the water fines and fees work was as a part of a grant that we got from the National League of Cities to study and assess a fine and fee in the city of Durham. And so that's been part of our CAF project that just wrapped up in January. So that's why the Water Department was doing that work in collaboration with the Budget Management Services Department. And what we discovered in that work has definitely helped inform the work we did when we were putting this equity tool together. And I think building on that, we're a part of a policy link cities and counties for fines and fees, 10 municipality national cohort that's trying to expand that fines and fees work with this racial equity focus across other fines and fees and ideally across the organization. So what we've had, you know, we've been doing racial equity work in this organization for years and a lot of people have been doing this equity work before we were calling it equity work. And I think where we are now is saying, you know, let's have clear actionable goals. Let's have this structured operationalized and institutionalized. So I think where we're at in the next couple of years, I'm hoping is really putting all of these pieces together and rolling it out in a really structured and thoughtful way. I see our city manager has popped up to add some comments. Yes, I would just very briefly say that we actually, you know, have a racial equity enterprise wide plan that we are in the process of implementing, you know, from a from a city enterprise, but some of our next steps would include every department having a racial equity plan that is designed for the work that they do and the residents that they serve. So that is how racial equity gets operationalized across the enterprise because we don't all do the same thing. So sometimes a pilot, one pilot, it may, you know, impact enterprise-wide, say if it relates to employees or workforce or something like that. But some of the other, you know, operational functions that we do, they actually need their own plan to make sure that it's efficient and effective. So I hope that adds a little bit more to how we spread it out in the organization. Thank you very much. The slide with the process for using the equity tool, the criteria, the eight requests, Tony, that you mentioned, the total around five and a half million dollars. So did you choose, I'm a little confused about that, did you choose the, I see the ones with the strongest equity focus. I'm reading that here. But what about the ones that didn't have a strong equity focus? Did they, you know, did they receive feedback as well about an equity focus or how does that, how do you all conceive of that kind of thing happening moving forward? That's an excellent question. So I think moving forward as Erin was talking about our goal as we evaluate the process for this F1-2 fiscal year is to find ways that we can build and expand that capacity in order to do more of this work on more of the budget request that come in for departments. Thank you. All right. Other questions? Jillian? Thanks, Steve. And thank you, Erin and Tony, for your presentation and for all this work. It's really exciting to see all these ideas that we've been talking about for the last few years actually get implemented and see the organization moving forward to, I guess the operationalized is the word in that, in that word, in that word cloud to use for that. So thank you. I am wondering, so I don't think we've seen, maybe we'll see this as part of a future budget conversation, but it would be great to get, to be able to actually see how departments filled out that tool and like dig in a little bit more to the details. I don't know if that's already planned, but if not, if we could get sent that information, that would be great. And then I'm wondering how the information that we're getting from this tool is then informing our future decisions, if it is, since we only, since we piloted it on a small number of budget requests, it'd be hard to compare, like to compare across the entire universe of budget requests, but like within those few that we looked at, are we using the racial equity tools results in any way to help us make the actual decisions about which budget requests get funded? And if we are, then how are we doing that? Okay, I'm sorry. So with those requests, they just came in and we're going to have a team, a small multi-departmental team, that's going to analyze how, how they filled out the requests. And so we need to build a criteria for thinking about, you know, how good of a job was done in this? How thoughtful was it? Where is more work needed? How strongly is racial equity really centered in this request? And I think that there are two ways that we can build on that information. One is having it inform how, how things are funded. But the other, and I think a much longer term way of thinking about it too is seeing, you know, where we are as an organization, you know, where do we need to do more work? How do we need to make more connections and using it in a way as a diagnostic tool for thinking about how do we need to build more capacity in departments and across the organization in order to roll this out in a really systematic way? And we're happy to share that information with y'all once it's all collected. Great. Thank you. Yeah, I think more, I mean, it's, it's been clear from the beginning that we need more capacity to do this work that, you know, where we've been adding capacity as we go. But the more we get into it, the more we're going to need people who, for whom this is like their, their dedicated work. So I'm sure that we're going to be in the position soon of needing to put some more resources towards this and very excited about having the opportunity to do that. Thanks y'all. When you, so how is race? How do you think about race here? When we, when, when you're defining racial equity in these discussions, are you thinking about African American, how it's, how it affects African American people and our Latinx community or what is the way in which you are when you're evaluating these proposals for racial equity? What is the, how are you thinking about race? I mean, we're, I think we're currently looking at our Black and Latino communities. But you know, I mean, I think the council member Freeman's point, these are spaces that, you know, do we need to clarify and have these be really specific about what we're talking about when we're talking about race and why we're having these conversations. I mean, terminology questions are complicated too. So, so I think there are definitely spaces for more, there, it's a space to decide, do we want really clear delineations or is there strength in leaving things more up for interpretation? And I think that that's, that's really a decision at the leadership level to think about. Thank you. Javier. Yeah, a couple questions. I know, you know, within the presentation you talk about the community engagement as far as decision making, but then how are we communicating this internal work? Because I think it's really important for people to the community at large, our residents to understand, you know, even if it's just an example that's shared out, right, like this is how this pilot was worked, so that I think there's a little bit more trust in it. So we're not just saying, well, staff did it. And then, you know, out in the community people are like, well, what does that mean? So it's one thing. And then within this, are you also, when we think about equity, are we also going to get to the place around, okay, or how are we thinking about folks with disabilities? How are we thinking about other communities that are often left out in our conversations around equity? And I know that that might be more than we can get into today, but I do want to raise it. Yeah, I think to take that second question, I think that's a really important issue and thinking about equity intersectionally is really important. I also think that a big part of racial equity is centering race specifically and being really specific about that and saying, when we lead with race, that we create better outcomes for everyone. And so I think this also speaks to the mayor's point of, you know, how clearly do we need to define what we're looking at? Because when things get fuzzy, there can be problems. And it's, you know, it's an ongoing conversation. And I hear all of these points. Here, the first part of your question, from a budget department perspective, I think one of the clearest ways that we can do that is through the budget book and having departments talk about how they implemented our integrated equity considerations in their transmittal letters and in the work that they put in their measures that they put in the budget book. Deidreana? Thank you. Aaron, I know you mentioned at the leadership level, I just wanted to clarify, did you mean the administrative leadership level or did you mean the council level? I think I meant both either or, so you can choose your poison. And then I just wanted to note to Javier's point, I mean, it's so critical to make sure that we acknowledge how the bookends of all the otherisms is that race, the black and the white, kind of hold them all together in the systems that have been created across the country, the world. I mean, it's kind of expanded. And as we break it all down, it does create better outcomes. And so as we start to track at least by race, and you get to the point where you're including, because it's inclusion as well, you know, people with disabilities, LGBTQ, like all of those things I think should be built in. And as we move forward, I would love to have more conversations about how we structure an ordinance that lays that out. So it makes it simpler for staff to continue to push on this issue. All right. Other questions or comments at this time? Thank you so much. We, you know that we want to be supportive of this work. And I think that we're going to need guidance from you all to let us know how. And you've heard from colleagues that we understand that this may be taking more resources. And we'll be looking forward to hearing from the administration about what that might be. We want it to succeed, and we want to help provide what is necessary for this to succeed. It's such a huge priority. And I just want to express my gratitude to you, Erin and Tony, and to the whole team that has worked on this. And there's so many aspects now of this equity work within the city. And this is a really critically important one. So our appreciation to you. Thank you so much. Thank you, Erin. Thank you, Tony. If we could move to the next slide, I will give a brief synopsis of where the budget department is headed with budget engagement and I would say that this, this is all, this conversation is encapsulated around outreach and evolving from budget education into budget engagement.  So a little, a little background. In the spring of 2020, it was our, with our best intentions, we had planned to have a budget academy. And that event was planned actually for March 12th or excuse me, March 16th, 2020. We were going to engage the community in city hall with a budget simulation exercise about how the budget process works. It's a game and the game is rigged, as you know, there are many priorities and not enough money. And we were going to take residents through that exercise. We had planned to have tabling with other departments at the event and get them engaged and, and get them certainly aware of other opportunities to engage with the city, whether that was through the participatory budgeting process, the neighborhood improvement services, the clerk's office opportunities to serve on boards and committees. And certainly at that time, the comprehensive plan was just rolling out and we were working alongside with the planning department on that and wanted to have them there at the table to talk about the comprehensive plan and transportation plan. And so with the best of intentions in mind, I think we all know what happened. If we move to the next slide, the event was canceled. And then as a city, we all literally went home and were quickly needed to adapt and improvise to work in this environment. That didn't mean we stopped, we did adapt and thought, well, what can we do in this isolation environment? And we quickly assessed that we could continue to do some outreach. So we, not myself, a couple of Pat Mora and Lindsey Benot in our department quickly developed some, some outreach and education videos about the budget process, two videos, one of which we'll share here. So you may have already seen some of them. What is, what is the budget? And the second is budget development timeline. We've already promoted these on social media in our website. But we'd like to take a brief moment, if you haven't seen them, to show them to at least one of them to you right now. One of the most important tasks of a city government is preparing an annual operating budget. City Council establishes budget priorities in the form of policy decisions, budget guidelines and recommendations. This means that the budget document is a representation of community values and also serves as management and planning tool for city staff. In essence, the budget helps us plan how much funding the city will get and where it comes from, as well as how much the city will spend and on what. More than half of the city's revenues come from taxes, including property and sales tax. The city makes up the rest of its funding for operating revenues we collect from various services, as well as one of the most important taxations. This means that the budget document is a representation of community values and also serves as management and planning tool for city staff. In essence, the budget helps us plan how much funding the city will get and where it comes from, as well as how much the city will spend and on what. More than half of the city's revenues come from taxes, including property and sales tax. The city makes up the rest of its funding from operating revenues we collect from various services, as well as other sources like license and permit fees and grants from the state and federal government. Almost half of the city's expenses are budgeted for personnel, the nearly 2,500 staff who provide services like waste collection, parks and rec, public safety and more. Additionally, the city pays for the cost to operate these services like materials to test and treat our water supply. The city also pays down its debt each year. This largely helps cover the city's 10-year capital improvement plan, or CIP. The CIP helps the city plan for large capital items like new buildings, fire trucks and stormwater improvements. The rest of the city's expenditures cover transfers between funds, restoring the city's fund balance, or rainy day fund, and more. The state of North Carolina requires that all municipalities create a balanced operating budget. This means that revenues must equal expenditures. The city can't appropriate more than it plans to receive. Each year, as they develop a new operating budget, council and staff consider future needs and priorities while ensuring that the city can maintain existing service levels. If you'd like to view the current fiscal year's budget, please visit the City of Durham's Budget and Management Services website. Like we mentioned at the beginning of this video, the city's budget helps actualize community priorities by allocating funding to city services, projects, and initiatives. We invite you to make your voice heard on the budget by joining a board or commission, signing up to speak at a city council meeting, or emailing City Council with your thoughts. We look forward to your future participation in the budget development process. Thank you so much for that. So I'll close with just a couple of slides here. So where are we now? And where are we going with this? Well, we certainly know we can't simply show videos. It's not our intention to do that. If we could have the presentation restored. So the first thing we're going to do, the folks at Durham can reached out to us and asked if we would come and do a virtual presentation for them. They were quite disappointed that the budget academy was canceled last year. And so they asked us, could you do a virtual version of that? So Bertha and I had a discussion, I believe it was last week with Durham can. And in their words, what they wanted to see was an understanding of the dynamics and the mechanics of the budgeting process. So we decided to move forward with that. That event will be with the folks at Durham can on March 3rd, where we will go through that and go through a virtual budgeting exercise with them. And then from that, we certainly want to build on that event on your budget calendars. You know that we're going to do a larger engagement event. We haven't set the date yet, but it'll probably be at the end of March. Using a lot of these virtual tools as we're still in isolation. And as you can see, we're learning a lot here with this. It's certainly new to us. And we saw it as a great opportunity with even our budget retreats to be able to show them on YouTube. We saw that as an opportunity. Many of you have been to the retreats before. We've opened them to the public, but we typically we had a round table in the back where we invited the community to come. And we were lucky if we got Mr. Erkart to sit at that table, but not too many more people. So I see here today, we currently have 33 watching, but that's better than none. And we certainly want to expand and grow on that. We see a lot of opportunities with this. I'm sure a lot of people sitting in this event today and yesterday find it tremendously helpful to be able to see Council's faces and not the back of their heads. So we are learning very, very quickly about this. But as I said, we don't we're not going to be in a virtual environment forever. It's very hard to do engagement in the heat of a budget process in the months of February through April. So we want to build on what we're learning and we're aiming for a fall engagement exercise, possibly a hybrid of both in-person and virtual, something that is flexible if we're lucky enough by the fall. Building on what we learned, we have partners both in planning and in the participatory budgeting and NIS who are using a tool currently called Social Pinpoint to interact with the community. We're very excited with that and we think we'll have the capacity in the fall to use that for budget purposes. And then continuing to with education efforts and to solicit input and get feedback from residents as well as from Council. And with that, I will close and certainly turn things over to any questions Council members may have on this presentation. Thank you very much, John. Colleagues, any questions for John about this presentation on the process? Mayor Gillian. Thanks, Steve. So weird. And thank you, John, for the presentation. This was really helpful and informative. I have an engagement question broadly. A couple of years ago we did these in-person community conversations around the budget with the county and the school district and we were planning another round of them right before COVID hit. But had also been thinking maybe it would be better really to do them in the fall than in the spring because it actually gives people the opportunity to weigh in on the budget process in advance of even departments submitting their request. So it felt like there was an opportunity for more authentic community engagement at that point. Are we are y'all thinking at all about using that model in the fall with bringing in the county and the school district to do these bigger conversations? I don't know if they could be in person, obviously, hopefully they could be and that would be great. But if not some kind of virtual engagement that involves the other governments? Thank you. That is an excellent question. Yes, we are very aware that you wanted to continue community conversations last year and like our budget academy, it wasn't possible. That is certainly on the table for the fall and if that were council's expressed wish to do that, we would prefer doing that in the fall. Again, we feel we would have much greater capacity. We feel it is a better opportunity for residents to participate in the budget process than in the spring of a fiscal year. Yeah, I would love to see that happen. I am glad that y'all agree that the fall would be better timing. When we do things in the spring, we get a lot of feedback from residents that it feels like the cake is already baked, essentially. We have already been through all of this work and they are coming in at the back end and getting feedback but that feedback doesn't have as much opportunity to actually be incorporated in the process. I think it would be awesome if we could do that again in the fall. I really enjoyed it when we did it a few years ago. That is certainly why currently with what we have coming up, we don't want to be disingenuous and really call it engagement. We want to call it communication because we don't want to oversell or overpromise something that we can't deliver. I don't ask for a thumbs up. John sounded like John wanted a little guidance from us. Are people favorable towards having the community conversations in the fall? Assuming that COVID allows us to do so? Looks like you have that support, John. Javier? Yeah, I want to say that while I know we yearn for the days of in person, I think that there is going to be a place for virtual conversation and communication. I hope as we build, we don't just take away these options because for a lot of folks, being able to join a Zoom meeting, especially now that people have gotten more used to it, is actually easier so that we create opportunities in those mediums. That certainly too. I would say at the beginning of the week, we did not know that this was going to be live on YouTube. We realized about midweek that once we offered that, the cat was out of the bag. We're okay with that. We're definitely okay with that. It's a great opportunity. Thank you, John. Are there questions or comments for John on this presentation? All right. I think we're ready to... Didriana? I was just going to say thank you, John. I appreciate you laying it out. I know that the process itself kind of aligns with where the previous presentation is going and the line and the race equity. I think for this year, acknowledging how difficult it will be, I didn't get the thumbs up, but yes, of course. All right. Thank you very much. John, thank you. I believe we're ready for what's next. So I'm going to turn things over to Bertha Johnson, and she's going to take us through the budget outlook and financial projections. Good morning, everyone. Bertha Johnson, Director of Budgeted Management Services. I was going to jump in a few minutes ago. John is so efficient with the time to thank Erin and Tony for their work on the racial equity tool. It is hard work, and they've done a lot of work with the team. I also want to thank Sharon Williams. She is definitely the support for all of this work, and with her limited capacity, she is always available to support us. And to the point that was made, I think if we're going to start anywhere, the budget is a critical component of the work that we do that supports all of our programs and services that we start there. And so just thank the team who worked on this, and it is hard work. It's challenging. As you heard some of the comments that I've heard from the team, as you all were making your comments, is that you really share some guidance with us and ask some thought-provoking questions that will be helpful to us as we move forward. So thank you, and thanks to John for his presentation. So next, we're going to move into the numbers. I'm going to present the financial projections and budget outlook. I want to thank the team. This is a long presentation about 35 slides. And so obviously, this was not my work. A lot of analysts worked on this. We had a meeting this morning, and one of the things that we mentioned is that we are probably at the point today that we would be much further into the process. In other words, we have worked really diligently on the numbers because of what's at stake and because of all the changes that have happened with COVID to try to give you the best numbers we could give you today. And so we are really excited about sharing our projections with you today. And you'll also hear from Dr. Walden later today. So the presentation outline is that we are going to have a brief budget recap. The actual video that you saw before John actually had a lot of the information and I was going to share that's in my presentation, but it's good to have some redundancy. We will also talk about financial projections and budget outlook and then where we are in the budget development process and what's next. So just as a reminder, our current fiscal year budget 2021 is 502 million, which was adopted on June 15th, 2020. The major components of that total budget are our general fund, water, sewer and debt service fund. You'll hear a lot about the general fund today. You will hear about the water sewer fund at a later date and you'll hear later today about our debt service fund projections and some of the other funds here will come at our next budget retreat. So our current property tax rate is 53.17 cents per 100 of assessed value. A penny on the tax rate is 3.477 million, which means that for every penny we raise the tax rate or we add to the tax rate generates 3.47 million in revenues. Also as a reminder, when we think about raising the tax rate or when we think about the tax rate itself, that that rate is allocated among several different funds, including general debt, solid waste, transit and dedicated housing. So here's just a brief look at our general fund revenues that are in the current budget. The real takeaway here is a reminder that the majority of our revenues, 82 percent in the general fund comes from property taxes, sales tax, hotel motel tax, and that the only tax that we really have control over is our property tax rate. On the expenditure side, just as a reminder, as we always mentioned, at the majority of our expenditures are related to personal services and that includes our salaries and benefits. So just another way to look at this, if you look at the 2021 general fund revenues, when you look here, you see property tax, 51 percent local taxes, which is our sales, hotel motel, 31 percent, all other 12 percent in our state funding at 4.7 percent, which is mostly our power bill, which is our gas tax and our beer wine tax revenues that we receive from the state. So where does it go? Look at it by function. Public safety, of course, 51 percent of the budget is allocated to public safety. That includes police fire, emergency communications and emergency management. You see another 25 percent, which is our public services. Community building is 8.8 percent and then governance is 4 percent. And so the biggest chunk is public safety, but I always want to point out that it's not just police, as some people immediately think. So this is where we really want to take some time to try to explain where we are. When we actually look at our quarter to comparison from the prior fiscal year to this fiscal year, there's only about $185,000 difference. Now, that is significantly closer than we predicted, obviously. We are doing better than we projected. One of the reasons we're doing better is because our revenues are coming in better. We'll talk about many of those later. But I do want to point out here, because we talked about this when we came back to you in spring and we adjusted our revenues. If you look at the power bill revenue, you can see that we almost received the same amount of power bill revenues. That's in the purple this fiscal year as we did last fiscal year. When we came to you in the spring, we were told by the state we would probably see a 25 percent to 50 percent reduction in the gas tax. We did not experience that. We know that some cities, the largest cities, Raleigh and Charlotte, did experience some significant reductions, but we did not. So to play this out throughout the entire presentation, here's an example of a $3 million revenue collection that we did not anticipate receiving that we did not budget. So when we talk about where we are with fund balance and our revenues, this is one example why we are better off than we thought we would be. Property tax, similar story here. As you can see for 2021, we actually budgeted $110.9 million. Our actual, as of December 31st, and this is December 31st, is $83 million. And actually, if we look at where we are today, we're at about $107 million. So we had conversations about the unknown and what would happen with property tax. We're doing well there. We anticipate meeting our budget with property tax. And as a fact, we anticipate going over budget when it comes to final collections. Sales tax, which was the most challenging revenue to project for a number of reasons. One, it tracks with the economy typically. Two, there's a three-month lag in the collections. And three, we're making projections in March for sales tax that we would not see our first payment until October because of the lag. So when you look at this presentation, you only see the one-quarter of collections we received this fiscal year. And I'll talk about the projections and future presentations, future slides. So sales tax, the COVID effect. So to explain what has happened with sales tax and how it has impacted not only last year's budget, but the current year budget because the budget, of course, is based, the current year's budget is based on where we end at the prior fiscal year or where we thought we would end. So last year, we actually collected $68.2 million. Our budget was $68.7 million. But when we came to you when we were making projections for the next fiscal year, this current fiscal year, we thought we would hit $72 million. That was precode. So that change that happened when we had to reduce our revenues, this is where we were. We were really excited. We said we were on track to collect $72 million, which is the red line. Even though our budget was only $68.7 million, which was very conservative because of the issues we had with the revenue collections from the prior fiscal year. So we thought based on what we heard from the state, we would see about a 20% decline in those projections and we only actually experienced 14%. And so our sales tax numbers, again, we came in at the end of the fiscal year. Now remember, when we say the end of the fiscal year, we don't receive our last sales tax payment until three months after the fiscal year ends. So we are really making projections far in advance. And the fiscal year has ended before we know what the actual numbers are. So this year, we're looking at the 21 actuals. We have collected our sales tax for the first quarter, which we received three months later. What is significant about this is that we seem to be rebounding very quickly. If you look at the fourth quarter of 2021, we received $15.6 million. And for the quarter this year, which is July, August, September, which we didn't receive until later, obviously, $18.5 million. So we're roughly $2.5 million ahead of our budget for FY21. Now again, we were making projections in March and we were using not only our forecast as well as the state forecast. So we are doing much better than we anticipated. So our January revenue status, we again, total tax collections, I've given you an update on that as listed here, property tax collections, $108 million. We're at 97.8% of the budget, sales tax, one quarter, 36%, hotel motel, 24%. License improvements, which we'll talk about, which is obviously a driving force in all of this, 144% of budget. Looking at our planning development fees, and we usually don't include this in our presentation. This is usually part of the departmental presentation. But here's part of the why. If you look at where our budget, our budget for the current fiscal year, and then if you look at our actual year in projection for the end of the fiscal year, inspection fees permits, another way to look at what's going on in the economy, just as a reminder, the largest portion of our sales tax comes from construction. So it's really important. When we think about Duke and other nonprofits, obviously their sales tax is refunded. So we're not talking about those sales tax collections from those organizations that get a refund of their sales tax. We were talking about real development here in the city and county when we look at inspection permits. So this is this chart that we always share with you that is actually compiled by the city of Raleigh after each budget is adopted. Raleigh is in green here because it's your chart and they send it to us in a graph and we can't really change it. So we're not highlighting Raleigh here. You'll have to, if you go and you look at the first quarter of that is Wake County municipalities and then not really a quarter. And then you look at the other municipalities and you see Durham in there. It's really small here probably so most people can't see it. But actually when we look at the property tax rate, you know, for me, I don't necessarily focus on the rate. I actually like to look at the actual property tax, the bill. So what people actually pay versus what the rate is because we know what they pay is based on the rate times their home value. So if you're in a city that has a medium home value high, you're going to have a high bill low, you're going to have a lower bill. So going to the next slide, we'll look at that in another way which you see Raleigh here at the 3431 in Durham at the 3,115. So we always want to look at how, where we are in terms of our other cities but it's information but really you have to look at the components of the city organization and where they are and where they're trying to go and also the medium home values. So I move on to our budget outlook. Based on everything I just shared with you, our forecast is that we will have a $674,000 deficit or we have that at this point and that's basically based on what we've already built into the model. Known revenues which will be updated, you know, program revenues by department, our projections around sales and property tax and then our known expenditures. We have received 78 budget requests from our departments totaling 17 million and we received 11 budget requests from city council over 2 million. And just as a reminder, we have strong fund balance but we typically try to use fund balance for one-time expenditures because when you have current expenditures, you have to find those resources in future years. Budget development process, the schedule, we talked about that earlier, early yesterday but you know, just to point out, there are some opportunities for you all to receive additional information as you will continue to receive your quarterly reports. We will have two other budget retreats on the 25th and 26th and I've talked about some of those topics yesterday. John mentioned our budget engagement activity which we are planning for March 3rd as well as some other opportunities that we are thinking about with our residents. Our public hearing on June 7th and then we have our council work sessions on the budget. We have not, you know, planned what those look like in terms of, you know, what the presentations look like as well as, you know, how much time we want to spend on those presentations and then there are some other milestones here. Most important, the city manager presents the budget to city council on May 17th and obviously we have to adopt the budget by the June 30th. We have mentioned that our department budgets, the intact package is due on February 27th which includes that transmitter letter and some other components that we use to bring forward the city wide budget. We also will focus on, you know, funding requests that are prioritized based on our strategic plan objectives and a lot of that is around equity and some of the other goals that are important to the city council and the community and then you'll hear much more about our CIP later today. So BMS, our role is basically to review the budget request and prepare the analysis. Just a reminder, we are not the final decision makers in the budget process. You know, our job is to provide an objective analysis of the request and make a recommendation. We will also look at performance measures and look at the data that supports those measures and we will prepare those recommendations to submit to the city manager for her final approval. So in summary, it's good news. We don't target to meet our current revenue projections, actually exceed those. We obviously projected our departments will end the fiscal year within budget. In some cases, they are projected to spend less than their budgets obviously because at the time we were developing the budget, we didn't know how long COVID will last. We didn't know what our programs and services were going to, when they were going to get back to normal at that time. And so we budgeted it based on, you know, what we knew and what our departments were projecting and hoping for in the next fiscal year. Our revenues are projected based on assumptions in our multi-year departments as part of their budget submittal will update their program revenues. Expenditures are projected in our multi-year and departments will provide expenditure updates, of course, as part of their budget submission. And again, we have a $673,000 budget gap. So we're going to talk about our multi-year and it's unfortunate that we don't have the big spreadsheet so that you can, you know, you can see all the numbers and click through the tabs as we sometimes do at the budget retreats but we are where we are. If you look in the first column here, 2021, that is the current year's budget and we plug that current year budget in and we do that after the budget is adopted. When you look at 2022, you see the 673 number that I mentioned earlier and we will talk about what's in the numbers and what's not. And when you think about this multi-year, it's almost like, and we were talking about this earlier today, like we're starting from scratch. There's nothing really in and we're having to reset all of our revenue projections because we were very conservative last year based on the projections and now we had to go back and reset our projections as well as think about how we prioritize what goes back into the plan. If it wasn't for a major risk contribution we had to make out of the general fund, that we have to make out of a general fund next year, that number, that surplus number would be zero. We would actually be balanced without, obviously without a lot, many other things that this council and the administration and the departments are going to want to add to the general fund budget. So the assumptions, the revenue assumptions are that we go back to 3% property tax projection. Our sales tax, 1% increase over FY 22 projection. We are rebounding in the area of sales tax and that may be an adjustment there. I can see tax, I would see zero increase. We're not doing as well in that area of this current fiscal year and not sure when that will get back to normal and charges for services. We are projecting a 3.6% decrease over FY 22. So other major assumptions, we are continuing the general services maintenance. Those, which is part of the operating budget, we will increase that. We're trying to increase that to 1.2 million by 2023 and so we are adding 100,000 to that as we've done the last few years. Streets, the original 6 million and for streets, same budget as FY 21. Continuation of some of the items that we supported out of fund balance and additional 4 million for streets, which brings that number to 10 million. As a reminder, the request for street funding is 20 million and so we're still that 50% of what's requested. Then we obviously are adding back an election cost for 2022 from fund balance. Benefits, health insurance. We have gotten an updated number on health insurance from finance, so there's no increase projected for FY 22. That was about a $2 million savings. Now that's a one-time savings because obviously when we need to program back in an increase, we need to find the funding. No changes to dental insurance at this point. No change to 401k contributions for employees, which is at 5%. The local government increase, of course, is not controlled by us. It's controlled by the retirement board. That increase has been built into the multi-year. We also have maintained the property tax rate at 53.17 and also maintains those allocations for those other funds at where they were in the current fiscal year. This model does not include any pay adjustments. We mentioned yesterday that will we bring in back some recommendations at our next budget retreat. Fund balance. I mentioned earlier that our fund balance is going to be better than we projected. This is the number we're rejecting when we adopted the budget. We are now projecting that that number will be around 24% based on our second quarter numbers. That is because we have additional revenue coming in that we did not anticipate and where we are in terms of where we are projecting our expenditures to be. That is contingent upon all of those things coming to fruition as we are projecting them as of the end of the second quarter in December. What's not included? Again, pay adjustments for employees are not included. New budget requests. Any new budget requests from departments, city council, or otherwise. New CIP requests that are not included in the 10-year plan, which we will hear about next. Play plan structure adjustments. Water hardship fund increase. As we mentioned before, whenever we increase our water hardship fund, that has to be paid from another source outside of the water rate model. The tax increase for the housing fund is not included. Obviously, there is a discussion. We mentioned about that later today when we discussed the CIP and debt. Our future challenges, when we look at the numbers, we have to think and continue to want to make it clarified that when we are making decisions about the next fiscal year, it impacts future years. Whatever decisions we make about pay is not just a one-year. The pay is always built on the base of the previous year. Whatever decisions we make about any type of recurring expenditure program or services have an impact on the multi-year. Again, the multi-year looks great now, but as we add additional expenditures into the multi-year, that impacts future years. Again, we mentioned how do we get to the number we want for street maintenance, and that's going to be part of the discussion later today. Additional needs for deferred maintenance, and how to be fund our police pilots from the RTS study. We believe that we have some funding for some smaller pilots, but obviously based on what you hear at the retreat and what this council wants to see implemented, there will be some resource needs there, not only from the perspective of the pilots, but how those pilots are actually implemented and managed. We have some challenges. We are at a good place. I think it's good that we are basically building our budget from scratch again because it gives us an opportunity to prioritize where we're not coming to you, and there are some one-time costs that are built in like the streets, but we're coming to you with sort of a clean slate, and we can prioritize whether it be around our strategic plan, racial equity, and some of the other important factors that are of interest to this council as well as our community. So those are their challenges, but we definitely have. We are in a great position to meet those challenges. I'm happy to take any questions. Thank you, Bertha. Can we take down the slides? Thank you so much. Bertha, what a great presentation. It was fun to see your picture in Triangle Business this week, a great portrait of you. I'll just note that the cover story on Triangle Business was how cities across the country are in bad fiscal shape, but then when they got down to talking about our city as well as Raleigh, they talked about how we were in good fiscal shape, and I was really glad to see that. This was a tremendous report. I think we're all just thrilled that we didn't tank like we thought we would, that the revenue had really held up much better than you all rejected and that we all thought, and so we are in much better shape than we might have been. I'm going to now throw it open to questions, and I see Charlie and then Pierce. Thanks, Steve. Just want to welcome Mark Anthony into the chat. How's it going, buddy? You got those superpowers yet? The mutations? Are they happening? What's the report? Just over here moving things with my mind. Oh boy, good times. All right, I didn't have any specific questions, but I just wanted to highlight for my colleagues what an incredible report this is. So I pulled last year's budget outlook from the budget retreat where we were all so excited. The budget was in great shape. At that time, Bertha came to us and near the end of the presentation was the slide that talks about the deficit as we enter the budget development process. And last year, at this time, it was $753,000. This year, as we are pushing through and maybe seeing the light in the tunnel through a global pandemic that has wreaked havoc with federal, state, local budgets all over the country, we go into this process with a deficit of $674,000. And that is unbelievable, but here it is. But I appreciate the fact that Bertha has tempered my excitement with the long list of challenges that we have ahead, the needs in the community, the things that we want to try to do this cycle. And obviously staring us right in the face is the need, in my view, the need to begin to make the investments under the affordable housing bond that will require increasing the tax rate for that. And so I'm so grateful to our staff for keeping us cautious for helping us navigate these incredibly difficult and unprecedented times, as I think Bo Da Vinci said yesterday, hopefully soon we'll get back to precedent in times and I'm going to try to use that at least once a day from now on. But as we approach the possibility of more precedented times, it's amazing to see this work and this report. It gives me a little bit more hope, and I hope that my colleagues feel that as well, but also a sense of responsibility about the work ahead and how while we are in, while from a deficit perspective we're in slightly better position, we know that that tax increase for the bond is going to have to be, in my view, part of what we do. And so I think that tempers maybe some of our, some of our ambitions with respect to some of the other things we can do in the budget. And so we're going to have to make part of the choices. I just want to thank staff for getting us in this enviable position. And that's all I had, Steve. Thank you very much. Pierce. Thanks, Steve. Thanks, Charlie. That context is really helpful for me as a new council member, because I wasn't plugged in this time last year, but kind of building on what was said earlier about the 30 people who are joining us and folks who are joining us on social, for whom this might be their first time in a budget retreat space. I just wanted to make sure that I'm hearing correctly, because I recall kind of throughout the year being told, you know, we're potentially looking, I can't remember if it was a $17 million shortfall or a $7 million shortfall, there was a 7 in there somewhere. But now we're being told that we're actually, we're like coming in where we thought we would come in. Is that correct? So, so I'm not really sure exactly which number you're referring to, but you received a first quarter financial report and you received some projections there. And this, we have just completed our second quarter financial report. And so these numbers are based on where we are at our second quarter financial report. So at the first quarter we would not have had, you know, our significant amount of sales tax and we, I don't think we received, we knew what our power bill number was, was going to be, because I think that came in October. But we've updated the numbers, we've updated the numbers with our departments, we get all of our departments submit their updated projections on the expenditure side, as well as revenue, which is what you see from inspections and planning. And so at this time of the year, we always go, we do this, we go through this process to make sure we come to you all, we can give you the most up to date numbers. We've also given you some numbers from major revenue sources as of January 31st, like for our sales tax and our property tax. We actually received another sales tax payment yesterday. I think we're about 2.4 million ahead of budget at this point. And I just remembered that because Pat sent us the email yesterday with the updated sales tax number. So these are the most updated numbers. And we have updated our multi-year financial plan with our projections for sales property tax. And so we're, we're, this is where we are at this point with that updated information. Okay, maybe, maybe this will be a better, a question for Steve. I don't know if we're, if that's appropriate right now, but I guess I'm trying to understand in context. So for example, you remember a couple weeks ago, we were talking about, you know, whether to go big or super big on, on violence interrupters and you were concerned about the budget. I thought I remembered you bringing up like, Hey, we're looking at a budget shortfall that could be, you know, in the millions. So I really want to be conservative. And there were other reasons why, you know, you had other good reasons for that. But I'm curious about understanding if we're doing much better than we thought with this information kind of a couple weeks ago, is this what you were referring to? And were those concerns somewhat addressed now that we're doing much better than we thought? Does that question make sense? I see. Yeah, let me address that. And then I see the city manager also has some comments. That's a great question. So when we look at the multi-year, we say that, or, you know, even just next year's projections, we see a $674,000 gap that needs to be filled. But it doesn't include these things. It doesn't include a pay increase for employees. It doesn't include any other work we might want to do related to our, you know, the police reform work that the 911 call analysis might bring us. It doesn't include any increase we might want to have in the Water Hardship Fund. And a normal year, I'm going to ask the manager to confirm this. But if we were to give the pay for performance that we were planning to give, that we would normally give, I believe that would be in the range of $7 million. But I'll ask the manager to confirm that. So that's not in the budget. And so the $674,000 is good if you don't have any of those other things in it. And so thinking about, like, let's say, I'm just, you know, there are all sorts of options here. I don't want to, I don't want to presume because what usually happens, Pierce, I can tell you, is that our budget department takes this back. They work a whole bunch of magic. And, you know, that's still to happen. But if we were, if we were in the present situation, we've got all of our, we've got $2 million in city council budget requests also on top of that, and $17 million budget request for new initiatives from our departments. So if we did all those things, you know, we won't fund all those new initiatives, but we'll fund, we'll want to fund some of them. And, but just raising the pay would be a two-set tax increase if, you know, if we were everywhere else that we are. So, you know, just to raise the pay for performance, as we normally do, would add another two-set tax increase. So, you know, we did much better than we did on, than we expected on the revenue side. But, and we are showing for this year, a, you know, as Charlie pointed out, a very, you know, low budget gap from what we often get. Some years would come in, we have millions of dollars in budget gap we have to fill. But this year's budget gap doesn't include key decisions that we have to make going forward about possible expenditures. Do we want to raise our employees pay? I know that we all want to. You know, how much can we do that? How many of the new budget requests that the departments have come in? How much of their $17 million are we going to be able to meet? How about the council's budget request? What do we want to do in funding the police reform work? I know we want to try to increase the water, you know. So, these are things that are still on the table. I don't know. I'll ask the manager if she thinks I put that in reasonable context or birth that either of you all would like to contact. Mr. Mayor, you did a wonderful job.  So those pay increases were included in that very low deficit number that you saw when you saw it for the first time, and it's not there this time. So that is a, you know, there's a lot of other good news about actual performance here, but when you look at budget to budget, that is just one thing we can point to that you may be, you know, kind of having numbers in your head about because we've always talked about, you know, our full implementation of our, you know, of our pay plan is about $7 million. So hopefully that's helpful. Thank you for explaining that. Bertha, did you want to add to that at all? I just want to add one component of looking at the departmental budget request. Just it was mentioned earlier today we have as our departments to submit budget reduction plans where there are opportunities to look at the way they work now to make the decisions about how they move forward if they can make reductions in some areas to support priority programs and services. And so that will be some of the offset with that. Hopefully we don't know what that looks like yet because we're going to look through those reductions as Erin and Tony met also through an equity lens where departments may put up reductions that we're not willing to sacrifice based on who is served by those programs and services. You know, I'll say Bertha, I've just taken about the council's reductions that we submitted with the help of the clerk. Most of those reductions would still stand. I know they're related to travel that we won't be doing and that kind of thing. So I think, you know, ours is just a very small portion, but I bet there are probably some other departments are in similar situations. Thank you. Jillian and then Javier. Thank you and thanks Bertha. This is always my favorite part of the budget meeting because I get to nerd out over all the numbers. I'm wondering if you have a sense of whether we can anticipate any additional federal aid that might help balance the budget from any of the bills that are, you know, working their way through the federal government or any new initiatives that the new administration might be considering. So the one that I would prefer to use what the mayor sent out to us earlier this week. And I, you know, that would be absolutely awesome if we were to receive those resources. But, you know, anticipating what they got, it's maybe around those resources in terms of how they utilize. So that would be, you know, that that is what's key really is how, you know, if it's important that we get the resources, obviously, but how we're able to use those resources in terms of not being in supplant or not using them for revenue losses or whatever that is. So I'm excited to see and I anticipate we'll get something. Just don't know what that is and what the guidance around the utilization of those resources are. And I would, you know, the mayor may have some additional information. Thank you, Bertha. So the current federal legislation that is past the House or is about to pass, I think it has passed the House. I sent this out in the email and can't quite remember, but it either has or it's about to pass the House. No, I think it's just come out of House Committee is what it is.  But it came out of a favorable report with the House Committee would give Durham $47 million. This hasn't obviously, this hasn't gone through Congress. It hasn't passed the House. I expect it will. But the Senate, you know, could be very different. I don't, I'm saying I don't think we should necessarily anticipate that amount of money. And as Bertha said, it's we don't know exactly what the constraints will be. And so, yeah, that I think that's where we are. And I mean, my thought about this is we ought to plan this budget now as if we get zero of that. And then I think in a month, we'll know how much of that we're getting and what the constraints are that our staff can help us. I will say I'm very optimistic that we will have a significant positive impact because it looks like the Democrats are pursuing reconciliation as the method of getting the legislation passed. So, but there may be compromises with, you know, some of the Democratic senators who don't want to give that much to cities and counties and states. So I think, you know, it's quite possible that we'll have, you know, I think it probably will have less than that, but we should still have a very positive impact. Awesome. Thanks, y'all. Steve, you said you sent an email earlier this week. Yeah. I can't remember what it said, but it said something like something about the federal budget. If you can't find it, let me know and I'll try to resend it. And the spreadsheets were helpful. The spreadsheets were helpful as well because you can go in and see what our factor is and see what amount that Durham has slated to receive. So hopefully we'll receive some portion of that. Exactly. Yeah, I know in the original CARES Act, the cities that got that funding, it was incredibly flexible. Like they were able to use it in all kinds of ways. And it was, yeah, really disappointing that we, that, you know, that smaller cities, mid-sized cities were excluded from that. So I'm glad to see that there's something coming through us, something coming our way, hopefully. A couple other questions. Bertha, you mentioned that a lot of departments are under budget because they haven't, like they haven't spent what they anticipated to spend on things like travel or probably like meetings, events, food, that kind of stuff. Do you have a sense of whether any like new department initiatives might be able to be covered by rolling over some of those savings to the next year? Yes, we did not do a carryover process this year. We hope to do that to, you know, do that again at the end of this fiscal year. We also are not dismissing department's ability to ask for funding, additional funding during the year. So if there are departments who have been continuously, you know, doing their work the way they've always done it, they come to us because of whatever COVID or whatever issues and need additional funding for their programs, we are still entertaining those and implementing those when we can. So we anticipate that we're also, when departments have needs, we are allowing them to use their budgets to implement those needs in a current fiscal year versus waiting through the budget process if it's something that's needed now. So we're definitely being flexible and being in communication by departments. We certainly don't want any department not to move forward with their programs and services because, you know, their revenues are slow or for whatever reason. So yes, there's opportunity. We hope to have a carryover process at the end of this fiscal year. And that usually does occur when we have, you know, additional, when we understand the budget. Awesome. And one last question, the property tax chart for other cities in North Carolina, I've always found super helpful just to like see where we are. Do we have any kind of resource like that that looks at cities, like other cities are sized around the country? I feel like lately I've just been hearing a lot from resident and I'm sure, you know, the economic situation is, is rough now. And so people are concerned in general about their personal finances. And everyone always thinks that their taxes are high, but I feel like I've heard a lot from residents recently claiming that their taxes are high. And I'd like to be able to, I personally think our taxes are very reasonable, but I think it'd be helpful if I had something to compare them to also across the country, because I think North Carolina's taxes overall are actually low, like we're in the middle of North Carolina, but we're North Carolina in the Southeast in general, our rates are lower than lots of other areas of the country. And I'm just wondering if anyone has data on that. We can certainly work on that. I mean, we have a lot of resources in terms of our peer city group list, as well as the groups that they use for ETC survey in our, in our population size. So we definitely can work on something for you and bring it back to council. Thank you. Yeah, I, I, especially if we're going to be, if, and I think that we need to raise taxes for the affordable housing bond and potentially for other needs, that it would be good to show folks kind of what people are paying all over the country in addition to in North Carolina. Thanks. I think that's a very good point. I know I was, I had called on Javier, but Javier, do you mind if I make one quick comment before I get to you? That's fine. I can't even talk right now because the dog's freaking out. Okay. Life under COVID. I think with Mark Anthony's new powers, he can probably take care of that just remotely. I can see he's doing it now. I just wanted to say, and mainly for Pierce's benefit, the slide with the municipal services that Jillian is referring to, these, these would be slides 18 and 19. They don't just show, people say sometimes Durham has high taxes. What we have is two ways, two ways of funding our government. We have middling taxes and we have low fees compared to most other governments in North Carolina and everywhere. And so the thing that puts us, this chart is really about total local government revenue, not just taxes.  You know, several of these cities, but our total, totally what we ask for residents is lower than a whole lot of these cities because we keep our fees very low. So we don't have a solid waste fee. And a lot of cities have a big solid waste fee and we don't have it because a solid waste fee is regressive. And we would, it's more regressive than a property tax. We'd rather pay for solid waste through a property tax.  In fact, as I was looking at this, Bertha, our water charges were some of the, actually may have been the lowest or one of the very, very lowest on this entire chart. And so we, and I think this is a good thing, that we want to fund our government as progressively as we can. We don't have a lot of real progressive options. We don't have the income tax, for example, as an option. But the property tax is definitely more progressive than a lot of the fees that we could institute. So what I like about this chart is it doesn't just show taxes. It shows the full range of things that we charge people for. And we're about in the middle of the pack in North Carolina, which I think is a good place to be. I agree with Jillian that um, yeah, but when people say to me, my taxes are high, I like to send them this chart and say, here's the total cost of government for you from dirt, you know, as a, as a, as a Durham taxpayer and rate payer. But I think the Jillian's point is well taken. It would be good to have some other national context as well. Okay. Javier, are you ready? If the dog barks, I apologize. I just wanted to say my basic interpretation is if we're, we're in the deficit, which is rather small, if we do nothing, we just replicate what budget we had last year, which did not include pay raises for employees. And I'm just saying that because I know folks are watching. So if we want to do exactly what we did last year, which is, which I think, you know, we did it because we knew we had to, but I don't think any of us were pleased with it, especially with that we couldn't increase employee pay. Um, so I appreciate this. I think we are in a better place than we thought. I think if you'd asked me in August, you know, it was definitely the, the sky is falling kind of moment. And I know it's because city staff worked really diligently and we're very, very conservative and I appreciate that. And I know we have a lot of really difficult challenges in the next few months to make. I do want to know, and it may be something that we don't have an understanding of yet, but the county commissioners decided not to do the reval in 2023, I think. And so just wondering if that hasn't, what impact is that going to have for us? Have we even been able to think about it yet, but just curious to know more? We do not factor in the reval. It was scheduled for 2023 into the multi-year, because we make those decisions based on when it actually occurs and then when we get some projections around, you know, what the percentage increase may look like. So it's not factored in the multi-year and we never included. And so we have, we get closer to the, the year that we're actually doing the budget for, for which the multi-year will be included in the revenues. Thank you. Adriana? Thank you, Steve. I, I, I appreciate that Council member Reese, Charlie noted in the chat exactly what I was thinking, just responding to Gillian and acknowledging that as long as we, when we're doing the analysis that we're looking at exactly the resources, because it's not also not just at the, the options they have for revenue, but also what state specifically in like California, there's like state credits that are assigned for folks that aren't here in North Carolina. And so just noting the North Carolina tax system is very arcane and doesn't allow any flexibility. And so it's, yeah. And anyway, I, I just also wanted to, to just note, I really appreciate the presentation. I think that, that you really, I mean, consistently over the last four years, I've seen the budget and management department really come up with, I mean, you can see like all of the hard work poured into making sure that the entire organization is looking at exactly where we are and how we cut as much as possible to, to not raise taxes. And so that three, three cent increase seems very conservative. And I appreciate at least putting it forward and not like trying to hold us back to say that we're not going to do an increase. I'm almost sure we're going to do an increase, but how much of an increase is the issue. And so just noting on the side of the, the conversation that John Allure mentioned, the game is rigged. Just coming all the way back to that race equity aspect of this, noting that if there isn't a real, you know, tax relief plan in place, the game is still rigged and it hasn't changed. And so for people who are fixed income, regardless of race, these shifts and changes can be the difference between whether they have food or, you know, food or prescriptions, because they have to pay their taxes to stay in their homes. And so I'm always tempered by that aspect of the conversation and, and, you know, looking at the projects or the, you know, different initiatives that folks want to bring forward. And so I'm mindful that there, we cannot do what we did last year to Javier's point. I think it's going to be really important to do not only the pay increases, but to move forward in the pay structure shifts. And so I know if there's a way to have a conversation about where those pay increases occurs, I would love to dig deeper into that because it doesn't necessarily have to be across the board. It's not, it's not as pressured for me at the top level. I'm just going to say that outright. But I do know that it's important that we do do the pay increases. And then also just noting the, I know that I mean, about 19 million and just requested items. I really feel, I really want to hear similar to how Jillian explained earlier what the race equity kind of lens looks like around the 19 million that's being requested. And so I'm really looking forward to seeing an analysis or even just giving us the tools so that I can use it for an analysis on the items that are coming forward, because I think that's going to be really helpful to kind of break down who benefits and, you know, who's harmed. And I would also note one more thing, there was one more, hold on, had a note. The police and fire pay plans and the additional appropriations for street maintenance. And I mean, I think all the future challenges areas are my priority. And the areas that were kind of not included, like I said, before the pay adjustments for employees, some of those new budget requests, the CIP, I mean, I could see how we could end up well over 7 million and deficit. And so I wanted, I really want the staff to take a stab at prioritizing based on the equity lens and really giving us just the real lens of or real sense of what should be the priority in the next year, because this is only one year, and there will be another year. And so noting, we came out pretty well, I think I attribute it to to the work of the budget management staff in kind of tempering us enough last year, so that we didn't come out worse and worse shape. And so I appreciate that. I can't say, yeah. And so I'm just thinking through, I'm similar to Jillian, I really want to look at all the numbers together and kind of over the years. Yeah. And I'm also very interested in what the police, the RTI study returns. So it's a lot here. It's a lot. It's almost like, what are we taking off the list? I don't see it. I don't see that yet. So that's always the big, that's always the big difficulty issue. There are always so many good things. Thank you for that. That was a good summary. Mark Anthony. Thank you, Steve. And good morning, friends. It's good to see all of you. I want to thank you firstly for giving me a leave and pardoning me for my tardiness. I was at a meeting with the North Carolina League participating in a racial equity thing presenting there. I have to tell you how gratifying it is when I'm in these other contexts and they, particularly with other electives and folks start asking, well, what are some data points or examples of things that are going on in other cities that you think are replicable or worth replicating and how Durham constantly comes up amongst our colleagues from race equity to the budget to where's the coolest place to hang out and what kind of innovative cool things they're doing. And it was no different this morning. So I just want to say how deeply gratifying it is. And I know that's reflective of our staff, this incredible staff, maybe a little credit for us colleagues, but we know it's really this staff. It's incredible. I mean, this is what we're working for. So I want to thank Bertha and Wanda and the entire team, the entire apparatus that goes into keeping us in the black. And, you know, a city that operates in the black has options, has different options and we approach conversations differently. So I want to also associate myself with just about everything my colleagues have said prior to me speaking. I think each of you have touched on an important aspect of how we need to guide this shift moving forward. I'm encouraged by the revenue, the lower impact on revenue that we had thought that COVID would bring about. But I do want to, particularly for those that are watching who are not government heads or who aren't like into this stuff, I do want to point out the tension of a disconnect between how a government can be doing well and folk are still hurting and folk are still feeling pressured. This was a devastating year for a lot of people in our city. We've lost businesses in Durham and we've lost some institutions in Durham. So for the lay person, it's almost like the stock market when folks say the stock market is soaring. And that's a good indicator for a certain sliver of people. But if you're not in the stock market, you know, stock market may be soaring, you can still be having really hard times. So to hear that the government, we did better than we thought we were going to do, may translate to some people listening, oh, we did all right. That means we can do more for COVID, we can do more for folks that are unemployed, we can do more for all kinds of communities. So I want to say to the folks that are watching that it's possible for us to have a good year as a government, but we also don't want to downplay or mute our understanding how tough a time of a year this has been for so many people in Durham. And sometimes there's that disconnect. And I know we get that and I'm not saying we don't get it, but for those listening, we still have some choices to make. I think Charlie was spot on in terms of us needing to honor our commitments in terms of the housing bond. That's something that we're self imposed upon us amongst the voters. And I think that by the voters, and I think that a pay raise for our staff has got to be top of mind. I'm not telegraphing now how that's ultimately going to play out, but I think that's got to be top of mind for us, which has not been factored in yet. So I just want to acknowledge to those watching that, although we may as policy heads as wonky government types, maybe a bit excited about our revenues being better or revenue short for not being as bad as we thought it was going to be, we still understand how painful and how tough a year this was for so many of you watching. And we've got some tough decisions to make as a city moving forward. And the position that we're in up strength is directly attributable to, as someone said, and forgive me for not remembering who it was, the strength of our budget team. I think it may have been you, DeGirana, the strength of our budget team and the guardrails that you guys put in front of us, no matter how wide-eyed our ideas are, no matter how noble they are, and they are noble. You continue to provide us with with very sober guardrails and solid math, which is hard to argue against math for us to move forward. So I just wanted to put those things out there and acknowledge, I think, all of the important things that my colleagues have said, and let folk know that Durham is a well-run city, and we're blessed for that. But we also understand that it was a tough year for a lot of you, for a lot of us. And we're mindful of that. And we're not overly giddy about where we are as a government, because we understand that ultimately, how you're doing in your homes right now, where you're watching this from is the ultimate measure of how we're doing as a city. So let's get to it. Let's get it on. Thanks. Mark Anthony, I want to put a period on what you just said. Before this meeting, we had a meeting of the Recovery Renewal Task Force, and we heard the latest economic statistics for Durham. Total sales were only down, and I'm going to not sure the exact time period, I think it was the last year, about 3% better than expected. But 33% of our small businesses have gone under, 33%. And we heard from Susan Amy an estimate that unemployment in our hospitality sector, which is mainly made up of low-income workers, is up to probably around 40% still. So we know that not only do we know that from people that we know who are suffering the unemployment or whose businesses are gone, and have lost the work of a lifetime, but we also now, you know, we have the statistics to confirm what you say. So I want to appreciate, and second that it's really important to keep that in mind. Deejana. Thank you, Steve. I could just third that I would even harken and even think about what the numbers look like when you disaggregate by race. And so I fully want to thank Middleton. I'm not going to be able to do for just a noting, just specifically, just what's kind of like my heart is beating faster right now. It's like, I don't know how we're going to get to the end of this, but I know that I trust the process and we've done it before. And of course, you know, not without scars, but you know, we managed to get through it and passed it. And so the city is always better for it. But I do want to just make sure to also note that this pandemic has caused death in our community. And, you know, there are many families that are now single-parent with children or, you know, single senior now home alone. And this, I mean, it's the devastation that we're not seeing in our numbers is definitely felt in our hearts. And so I do appreciate Middleton making sure that we censure that aspect of this. Thank you. Thank you. And I was just looking through the attendees. I see Ryan Smith is here. And I'll just ask Ryan if he could make sure that council members receive the report that we got at the Recovery and Rural Task Force on those economic. Thank you, Ryan. Colleagues, other questions and comments for Bertha at this time? We're going to take a couple of these issues up during the CIP presentation. Bertha, let me ask one other question. The multi-year, so the pay, no pay raises are built into that. Are there any pay raises built into the multi-year after, yeah, they're not this year, but are there in future years or any pay raises built into the multi-year? Yes, we actually built in the pay raise back to restoring it to its previous level in 2023. So it is built in future year. Part of what I was going to say is that to, you know, the sentiments around, you know, what's going on in our community, you may recall that in previous years, we've come to you with the pay increases already built into the multi-year. Yeah. Because we did not have pay increases last year, we did not presume that we would restore those to 100%, you know, full level. We didn't know what our numbers were going to look like. And so we did not restore those. So if we had have done that, you would have seen that, you know, that huge deficit. But again, as I said before, you know, because we stop, you know, pay increases and a lot of, didn't do a lot of things we normally do in the current fiscal year, we're kind of starting from scratch and we're building that budget. So we are very much aware that there are hard decisions that need to be made. And we want to be transparent in making those decisions with you all.  But I'm glad you brought that up because we did restore the pay increases in 23, but did not, we did not include those in the multi-year as of yet. Thank you. Colleagues, any other questions or comments for Bertha before I ask Bertha if she wants to make any concluding comments about this section? Bertha, would you like to make any, after hearing the council any concluding comments, any other observations you might have for us? I just want to thank you all for your feedback, for your questions. Of course, my team is on the meeting, they're taking notes, continue to give us your feedback, your guidance. We have to do additional research that you may need for decision-making. But this is really helpful, the feedback is helpful. You all making sure that you reiterate those things or lift up those things that you think is important for the community because a lot of times we do, we do this all the time and we gloss over things that maybe that's really important to pull out or point out for our residents. And so continue to do that with us and we really appreciate your support. Thank you Bertha. You have our support. We are so respectful and grateful for the budget work that always goes on in this city. I just am amazed and impressed and I know my colleagues share that. Thank you. I think maybe we had some of the discussion that I was concerned that we might not have time for at the end of the day. So maybe we'll be able to end it too. We'll see how that goes. So we're scheduled for a break, 15 minute break. How about colleagues and Bertha, I'll ask you, can we make it a five minute break? Absolutely. All right. Colleagues, are you okay with a five minute break? I see a thumbs up from John and I see colleagues. Okay. Can we make it? I just want to get the kids straight. All right, well, let's make it 10 minutes. You want to make it 10, Adriana? Is that enough? Thank you. Yeah. We'll be back at 12, 10 everybody. Thank you so much for those of us that don't have kids and don't have to worry about that. I'm glad that you said that. Well, I have them, they're not here. Thank you everybody. We'll see you at 12, 10. Thank you. Thank you everyone. Just a reminder that as we break for 10 minutes, your mics are still live. The feed is still live on YouTube. So please be mindful of that and mute your screen and your sound. All right. It's now 12, 10. Let's see if my colleagues were able to make it back. I see Adriana. You made it with the kids. Everything cool? Right. Yes, I have to make sure he's ready for his test. Yes, you do. Your house is not on fire, so things are going fine. I remember those days. Oh, and I see that we have the cat with us again, which is awesome, the legal cat.  You're killing me. All right. John, we'll turn it back over to you for what's next. Good afternoon, everyone. John Allure, Assistant Budget Director for the City of Durham. And we're going to kick off the afternoon with a CIP depth presentation for you, if we could have that pulled up. And just before I begin this, if I may, sometimes you're asked to give praise, and sometimes you want to give praise. And I do need to take a moment to acknowledge Vivian Cruz from the Public Affairs Office, who has been a tremendous help to all of our staff through this week in basically taking us all to Public Affairs School and teaching our office how to be really good stewards with public information. So Vivian, thank you so much for all your help. John, can I second that emotion? Vivian has had a lot of extra duties this year through COVID, and she's just done a fabulous job for us. So thank you for doing that. So to begin the presentation on the capital improvement plan, I'm joined by the finance director David Boyd, who will be joining me about Midway through this presentation. I think if I can presume the best thing here would probably be to get you through this information as quickly as possible. And I think it will be very helpful to you in having a discussion about future capital needs, et cetera. So if we could go to the next slide. To begin with, just a refresher for you. So we have a general fund CIP funding plan that was created in about FY 2017. And it involves looking at CIP through the lens of a 10-year time horizon, included in your package was a spreadsheet of what we call the 10-year plan. Sometimes it's called the fundable CIP. I won't ask anybody to project it. It's very fine print, but all of the information that we have planned out for capital projects is within that plan. We try to maintain a contingency reserve of cash of between a half million to $1.5 million every year. And I'd say that the plan is very dynamic and fluid. It's subject to annual review. It can change. It can be reprioritized to more accurately reflect future needs, changing circumstances. And certainly that was the case in FY 21. Probably the most, as you all know, substantial difference in FY 21 is we suspended the CIP plan. We stopped the plan in the spring because we didn't know exactly where we were going fiscally. So we suspended things and we did not adopt the CIP until the fall of 2020. So a lot of what we built on from the fall has not really changed, but this will tell you where we're going forward from what we adopted in late 2020. So in December, we started something new, which I'll get to in the coming slides. We conducted our first stat governance meeting. This is a project we hope to do on a reoccurring basis with city management and project managers to review CIP projects that have already been approved and to review the progress of those plans, those projects. The CIP was kicked off in December of this year. The requests were due on January 29th. Through the month of February, departments will be presenting recommendations and doing internal scoring. In April, recommendations will be made to the city manager. And then of course, the city manager will bring those recommendations to you in the proposed budget, which will be presented on May 17th. So with our partners in technology solutions, we have over the last couple of years been developing what I would call a more robust, more visually pleasing tool for looking at CIP projects. If you look at this first slide and I'll ask Christina Tux, who is our CIP project coordinator or CIP budget coordinator, to just share the link to this in the chat would be helpful so people can go to it. Christina is the real person behind all of what I'm presenting here today. So another thank you, which I have no problem giving a thank you to Christina Tux for all of her hard work. So the project viewer, as you can see, it's a more attractive overview of all of the active projects, what's on hold, what's delayed through bar graphs, which is again a more pleasing way of seeing the information. A tool that I think everybody will agree is again a more pleasing way of seeing things is the ability to look at capital projects geographically, so to have a geographic data representing where the projects are. And if you go to the next slide, you can certainly scroll down to this on an individual basis to see projects. So there's a lot of geospacing. We worked hard with the folks in GIS to develop this with an internal team that included not only project managers throughout the city, but again technology solutions, the finance department and the budget department. You can see the link there on the bottom of the slide if you want to go live to the to the project viewer. The status project updates, we show this slide every year and it's to show you where we're at in the process. We have, as we say, CIPs were due at the end of January and we are in the process of evaluating projects. Anything bold represents something new. Anything in italics represents a revision to something that had been previously planned and the thing that probably sticks out to you the most here is the street paving and Bertha alluded to. Currently in the financial model you saw previously we have 10 million allocated, 6 million from operating and another 4 million from fund balance and the department again, the public works department is requesting a total of 20 million. And with that I'm going to turn things over to the finance director David Boyd and he can take you through the debt model. Good afternoon. Thank you, John. I'm David Boyd. I'm the finance director and as a refresher for most of you but perhaps the first time for council member Freelon. How do we pay for all of this? So we have a 11 cent fixed piece of the tax rate that goes into a fund to pay for our debt service on new capital and previously constructed capital as well as using some of that to cash fund new capital projects. The financing scheme we use includes a line of credit where we pay interest only during a construction period and then once we've got accumulated a significant amount of borrowed funds then we do a fixed rate refinancing of that over 20 years to pay for that accumulated debt. We tried to fund 10 percent of our new capital with cash as opposed to debt and we are only talking here about projects that are for general fund general fund fleet and the non-self-supporting enterprise funds like the ballpark and the parking fund. This does not include any of our enterprise funds, water, stormwater, those types of projects. Next slide. So John alluded to the the other exhibit that you all have in your materials that is the 10-year CIP. That's the same CIP that you saw in fall when you all adopted the delayed CIP plan. We have not changed that and that plan results in kind this outcome. So this is for the mayor and the mayor to protest so they can get their dose of spreadsheets. What we've got to do is keep that bottom line above zero and so we're trying to maximize the projects that we can fund during this 10-year planning horizon without running out of money between the amount of projects that we're paying for with cash and and those projects that we are going to pay for with debt. And as you can see during this 10-year planning horizon we have we have used up all of our capacity with the existing 10-year plan. What we have not yet done yet, I'm sorry, what we have not yet done for this year's budget is re-evaluate financing assumptions or incorporated any of those new project requests or changes in the plan to see what we can move around within this plan to fund as many priorities as we can. Next slide. So how can we get more capital? Well the only way we can do that is with additional taxes pushed into the CIP. If we wanted to do it all at once depending on on interest rates and how we structure things we could get about 45 or 50 million dollars for another penny on the tax rate but currently we're maxed out. What's not on here and a piece that we've still got to do some work on is what does a penny on the tax rate mean if we just added it into the 10-year plan? So as opposed to taking that penny and issuing debt right now if we just increased funding from 11 cents to say 12 cents roughly that over the 10-year time period we would get probably double the amount of capacity compared to just issuing debt right now and funding it with the tax rate. What else are we doing on the borrowing side? Switching to the enterprise side we do have a large line of credit on the water and suicide to fund their extremely large capital improvement plan. We'll need to refinance that line of credit this summer. We are looking at when do we need to borrow our next amount of money for the existing 10-year plan because within the existing 10-year plan we are intending to issue a significant amount of debt to pay for that. It's non-voted debt. It's installment financing debt that does not require a referendum but the existing plan already anticipates a large amount of debt to fund it and we're just trying to maximize the resources in the CIP by making sure we're doing it only when we need the money and structuring it such that we get the biggest bang for our buck. And then obviously we're thinking about when and how much of the affordable housing bonds do we need to issue and I know you all want to talk about that as well. I think we've got a couple more slides and then we can tackle those topics if there aren't any other questions. Just rounding things out, we spend an awful lot of time talking about the general fund and the tax rate and that impact on what we call the multi-year financial plan. There are other funds with other capital projects, primarily enterprise funds and they sort of are islands unto themselves. They have capital needs in this and so what we've seen this year come forward are solid waste, stormwater, transit fund and water and sewer fund needs and all of those are individual funds and of course their debt capacity, the way to pay for that revenue is dependent not on necessarily on a tax rate although some of these funds are tax rates subsidized but on increases in fees, stormwater fees for example or water and sewer fees. And then the final slide is just a reminder that we also have fleet request needs. That's for existing fleet needs and fleet replacements. We have much like the 10-year plan, we have a about a five-year time horizon for fleet replacement needs and this is just showing you in the current proposed fiscal year what the needs will be for those fleet requests, all of which as I say has been there's no surprises here in what we're seeing despite you may look at a number like 8.5 million dollars for general fund. That was anticipated, we knew five years ago that we were going to be at that horizon and here we are and the debt fund is capable of, has the capacity to provide for that. And with that David and I are happy to answer your questions. Thank you, John and David, much appreciated, always a great and important presentation and colleagues just to remind you you do have in the packet we received the CIP exhibit for the 10-year CIP which has all the specific items in it. I don't know that we want to discuss those today but of course that's fair game and I know staff would be happy to respond if you have any specific questions about that you know after the meeting as well. It is in, it's in pretty small but still readable, still readable type size on our on our iPads. So I'll just first ask if there are questions or comments by colleagues. Anyone have any questions or comments to begin with? All right, so I do have a question about the fleet numbers that you showed us, John. Remind me about what our policy is on, I thought we had a fleet commitment that we kind of built in and we're trying to remember what that is and do these requests exceed that? So we have a commitment to replace what we already own, so to speak and we do have the the means to provide for that and and what we want to avoid in that scenario is what we call fleet creep is is that we don't want new requests to start without bleeding into the the replacement program because then we cannot provide for it so any new vehicle requests need to come essentially as a new budget request. Okay, and then once we make that replacement do we then then build that into the following years? Correct, correct. And the the the exhibit the 10-year exhibit that we got that I just referred to matches up I'm assuming with the the tax rate for capital slash debt cash funded ballot sheet that David showed us. That's right. Yeah, and so just again you know I think for Pierce's benefit, Pierce when you look at that slide that's the David mentioned that chart I think that this is always something that was always hard for me to understand because in the in the first years we show a whole bunch of money at the ending fund balance so we show 14 million dollars of fund balance for capital but then when we see what our commitments are up through year 2026 we realize that just with the commitments we already have we're down to basically zero dollars and so that's why I think that it can it's easy for that to be misleading when we see that because we think we have capital money but we really come truly we've actually committed it already. That's an excellent point Mayor because we are borrowing for our capital over a 20-year time period the decisions we make today have a very long implications and that's why we've got a 10-year plan and and we make sure that we're looking at it on a long-term basis. So I could go ahead and approach this well let me just ask this David I'm assuming that the interest rate environment you're thinking that next year's interest rate environment is still going to be extremely favorable. Yes okay all right colleagues any questions I want to I do want to think there are a couple things that we know we want to talk about one is the affordable housing bond what tax rate we would need to finance that this year and I know that we are interested in talking about the possibility of a green infrastructure bond and how we might get some guidance from our staff about how to think about that and there may be other issues but before we hit those two issues I want to ask if there are any other questions or comments my colleagues I see DeGriana and then Mark Anthony. Thank you I appreciate the level of detail that's always included in the CIP process but I'm not sure if I'm maybe I'm missing something but the debt that we carry I know I think last year asked about whether we have like a spreadsheet around that and I guess like in the same framework do we have a spreadsheet that displays how much debt we're carrying in that and I guess in that 10-year fashion or 20-year fashion because I think some of the bonds are that long so that we're also balancing not just against the projects that we're looking to implement but also what we're carrying because I know that the number is there but it doesn't quite spell it out so like specifically like on the parking decks that we just built I know that we didn't fully pay for them up front but I don't know how much we're like I don't know what we're carrying right now. Sure so councilmember the the the summary spreadsheet there that I'm showing you anticipates that we are already paying for any of our current obligations and we have most definitely built them in to what capacity we have and what tax rate we need to pay for the existing debt and on any future debt that would be associated with any new projects in that 10-year 10-year time period and again the what you're looking at here and where we focus kind of most of our attention because it's got that 11 cent tax rate attached to it is is just the debt that's that's covered by that 11 cent tax rate and so so for instance you make reference to that the debt we issued for the parking deck that debt is carried in carried carried in the parking fund and paid for within the parking fund there is a certain amount of of old debt in the parking fund that is funded from from the 11 cents but any new any new debt is carried in the parking fund but but I think I think the key takeaway for you is that that we've already made sure that all of our existing debt is is covered and that our projections are are are taking into account anything we've already issued and need to pay for and I would like a detail on on the outstanding debt we've got a number of publications that that that have that that I can point you to yeah that would be helpful I just noted that the there were two at the bottom of the sheet and I can't I can't pull up the slide right now but I'm thinking there were two at the bottom that were kind of low and the listing of uh I guess current I'm trying to find it but there were two that were really low and I was just wondering so what happens when they hit zero so if that fund if the park so say for instance that parking fund we're not having anyone parking right now so they're not necessarily bringing in parking funds in a way that they would normally so what happens when it hits zero does it go up against the general fund does it go up again like so so so that is another one of those those topics that that we'll have to talk about throughout the budget process is you're absolutely right the parking fund is is challenged with getting revenues we do have a multi-year model for the parking fund and part of what we're going to have to do in balancing the budget this year is look at that that exact problem and to the extent the parking fund can't cover its operating expenses and its debt service then we'll have to have a conversation internally do we have a way to cover that and if not you know what decisions do we need from council about how do we deal with it but so that's that's a separate a separate but important conversation that we'll need to have and I think I appreciate that I just really wanted to make sure that I wasn't going crazy because I'm like I know that these things are here and we're going to have to come up with some strategy because I know the funds are not there but I get you it's separate I think the place Mark Anthony do you mind if I just make a quick comment before I get to you of course of course go right ahead please I think that what DeGiorna is saying is important and that we all have to keep it in mind that what we're really looking at here and David described it is really only a portion of our debt and so I think we tend to think about it because what we have to raise taxes for is the is the debts that's described in David's chart and that we actually have a whole lot of other debt for example in water in water and sewer we're really I believe David our largest debt probably by far exists is that right it will be shortly yeah and so maybe it would be useful as you said David to provide us with just a piece of paper at some point you know that gives a little snapshot of that so everybody gets the big picture be happy to just a note Mr. May I'm sorry Steve the the number that Bertha shared earlier which is why I'm pointing it out where she said that we had 56 as opposed to the like the the reserve amount that we have like it's as much as I felt like that was a really good number I still felt like we have a lot of debt outlined and I don't know what's going to come up the next 18 months but I'm hopeful I'm very hopeful I'm optimistic that we'll get back to everything but if not all of that debt still has to be covered so I was and I think what I want to reassure you is is that that the 11 cent tax rate that we have currently is sufficient to service all of our debt and that the the rates we have in our our utilities are sufficient to cover all of our existing debt and and that that there's nothing that you all need to do at this particular time to to be concerned about our ability to repay any existing debt that we have thank you David Mark Anthony thanks Steve and John and Dave good to see you both thanks your math is always on point so my question isn't so much about the math but something's kind of a undergirding philosophical thing and it goes to equity I apologize that I missed John the equity presentation at the beginning firstly I want to say I John and Dave I think I owe your shop a bit of an apology and a clarification I was looking at a previous meeting that's what I do because for whatever reason you guys have not put my Netflix expense in the CIP so I watch all the meetings probably racism so I watch all the meetings and I asked them I asked you talked about questions we can ask contract these potential contractees about their demographics and the workforce and I don't think I struck the right tone in my questioning because it seemed that it could have been interpreted some of the things I said was minimizing the importance of that for going after bigger fish for you know not just white companies that have a few black employees but actual black companies and wealth building and that's not the tone I wanted to strike I don't want in any way minimize the incredible work that you did because we asked that all the time as a council and you guys were spot on and delivering something that we have telegraphed as a council time to time again when questioning potential contractors for the city so I wanted to apologize for that tonal I think error that I may if it can in any way have been interpreted as minimizing what you guys work for if I want to go on record clearly and without hesitation today and without qualification that you guys did exactly what we wanted to it's critically important work and it's going to make us a much better city I think in terms of furthering our goals for equity and inclusion so please uh accept that and I want the record to reflect that um secondly with the cip and this might be better a question better suited for the uh the exhibit next but if if so you can tell me from an equity point of view John and David how much are we agile enough if from an equity point of view we came in one day and said we wanted to just shake the cip up like literally just start moving things around in it from an equity point of view as opposed to from an equity point of view adding things to the list within already existing algorithms and equations which you know sometimes may in and of themselves have systemic stuff baked into them in terms of who gets on the list first how much have it would that we can even foresee a time we'll have that type of agility from an equity point of view to to literally just go in and start moving things in the cip even if it's by years if that question makes any sense to I think I'm going to let David answer that but before he does I just want to tee it up with one thing and that's to say so the mapping tool that was displayed earlier the cip stat that is potentially a powerful equity tool and and it can tell you where the capital assets are so um I mean with that as to using that tool as a is a potential means of reallocation I'll let David speak to the the how nimble the cip is to to reallocate they see deputy city manager Ferguson popped up here maybe you as a comment before I can talk about the mechanics of how that might work thank you both Ferguson deputy city manager for operations uh very much appreciate the question council member and just wanted to offer and and I think this is a common thing that we put forward each year when we talk about the cip this is a this is a policy document this is a reflection of the city's values and your values and so I think the whole reason we created a 10-year plan was to get more clarity about what the council's expectations were about what the organization's um work plan looked like ove