order, the South Bronegton City Council meeting of Tuesday, 02, 22, 2022. An auspicious day for somebody, I hope. And our first order of business will be the Pledge of Allegiance. And Tim, you want to lead us from that place? Thank you. My Pledge of Allegiance to the flag of the United States of America and to the Republic for which it stands, one nation, under God, indivisible, with liberty and justice for all. I'm hoping my next grandchild gets born today, because I think that would be a cool, but I don't think it'll happen. Her mother doesn't. Any contractions? No, she wants to have a March baby, so I don't know. But I think birthdays that have those resonating with all those numbers are sort of cool. Okay, moving on to item two, instructions on the existing building in case of emergency and review of technology options. So if folks are in the audience, they could use either the exit doors on the either side of the back of the auditorium and go right or left to leave the building. For those participating online, thank you for joining us. If you have technical issues or would like to speak, you can message me in the chat. Otherwise, please don't use the chat for commentary. Please do unmute and put your cameras on and share your comments directly with the full council. Thanks. Okay, thank you. The next item is agenda review. Are there any additions, deletions or changes in the order of business? Seeing none. Okay. We'll move on to item four, comments and questions from the public not related to the agenda. We have nobody in our audience. Is there someone out there in technology land who wants to say anything? Seeing none. Okay. We'll move on to announcements in the city managers report. So Tim, would you like to start with announcements? Sure. Well, I participated in another Queen City Park bike and ped scoping meeting just before coming here literally minutes before I arrived here today. Thank you. And they're going to call a public hearing very soon. I don't know, have a date yet, but they have all the different segments scoped out from Detilio Sonoco all the way to Home Ave. Oh, great. And so there are several options, either two or three for each segment to either have shared bikeway or sidewalk and two bike lanes, you know, it's and then the big issue is the bridge. They're planning this whole thing without any regard for the bridge because they don't know what's going to happen to the bridge, but the bridge did did get evaluated recently and it was deemed insufficiently tall. And we're thinking that is because it was insufficiently tall because because the double stack shipping containers probably can't go underneath that bridge. Yeah, the train. Yeah, it's a train bridge. So but Middlebury just did that reconstruction. So now they can accommodate those trains up to a certain point on over the next bridge. So maybe that bridge will get more attention for replacement because of that, which would be great. Otherwise, structurally, it was more or less sound, but the decking is totally unacceptable because of the pedestrian decking is like a grid work of steel and people don't like to walk their dogs on it because the dogs can't get a purchase with their claws. It doesn't it's not comfortable. So and then it doesn't get the snow get piles up at either end, you know, on the pedestrian part. So but otherwise, you know, there's a lot of question also about the Burton project. Despite it's getting its act to 50 permit, what possible sidewalk might be constructed on that on that plan that beauty and that's not clear to me. And I'm not sure what the future is for that. So they're they're making plans and, you know, in addition to that. So so they possibly if they come up with a plan, it would probably all will always be done in segments anyway. But you could do a segment up to the bridge and then figure out or wait until the Burton project or yeah, I mean, it depends on whether or whatever. I mean, I thought that we saw on the Burton project originally that there was going to be a sidewalk at least around the, you know, the edge of it. But that's not on the act to 50 plan at all. There there's a pedestrian access across the property through some of their parking lots through one of their around their stormwater. But there wasn't apparently one on that on that PUD plan that was shown tonight. So but I don't really know. So that would mean that they would we would have to have either shared path on one side or, you know, a path on either side for bikes. You know, okay, well, we'll count on you to keep us surprised of that. Thank you. We have sounds like a bike and pedestrian pathway over that bridge would be pretty important. That's how you get to Queen City Park. It is. It's really important. But, you know, you can't coordinate that in time. So you got to do your best to get to either end of it, right? Sure. And we have some really great people on it, including Doug Goodman from Queen City Park. And he bikes a lot. And Bob Britt was there tonight as well and some others that that know the area very well. So great. They're inputually great. Okay, thank you. Just a quick question on that. Yeah, there's an advantage of having a single lane bridge in that spot and that it slows traffic significantly. But is that when you talk about changing the bridge, would it be two lanes? We have no idea. Okay. Okay. Matt, do you have a report? No. Okay. Megan. Yeah, I have a few things here. I was just curious about how sidewalks that are uneven due to tree roots, how they are prioritized in the work plan for public works. Is that something? Yeah. So yeah, and you might not have the answer, but if you could, if you don't, you can just say I'll get back to you. So, well, it's a universal statement on that. It depends on the sidewalk. If it's a sidewalk that we can repair in-house, we put it into our regular work plans with our regular crews, assuming the weather is cooperative and we're above certain temperatures and whatnot. If it's a tree that we, you know, then it becomes how big is the tree and are we trying to save the tree? And if you cut off the roots to put the sidewalk back down, what's going to happen to the tree so that there's some planning with that? If it's a longer stretch or for some reason at a location that's harder to construct, then we put it into our annual maintenance plan. Okay. Does that general, if you have a specific location, I'm happy to have public works take a look at it. Okay. We'll get back to you. I was also curious if we could know more about the U Mall plans. That's been in people's minds. Sure. So the University of Mall is still held by the debt holders. They do have a LOI with a real estate development company to purchase them all. Staff has met with that company several times as they do their due diligence. You know, the LOI has certain conditions that have to be met in order for the purchase to happen. So we've met with them several times as part of that due diligence. We are anticipating that that closure, that that sale closure will happen in the next month or so. And with that closure, of course, will come public announcements and opportunities to meet the new property owners, et cetera. We are trying to coordinate that with the city so we can get it out through all of our channels. What I can say about that, about the potential, I am not at liberty to say who that is yet, but that potential buyer is, has a lot of experience with this kind of redevelopment and has expressed a lot of interest in maximizing the development potential of the site and has had several conversations with me and Alana and Paul about what the potential of that site is and what the community wouldn't like to see there. So going back to the previous plans that were developed, what was good about those plans, what wasn't good about those plans, and trying to build that into their plans for the future. So it would be mixed use with residential, commercial, and okay. Really looking to use the site more 24-7. That's good news. Yeah. Yeah. And I also receive feedback about Airbnb's being an issue in some of our neighborhoods, taking housing stock off of the market. And one resident talked about how there are individual LLCs that own multiple properties in order to avoid property tax. And I think that's something we need to look at. The residents who live next to these residences are very concerned. And so I just wanted to pass that on to you. And I don't know what regulatory power we have. I know Burlington's looking into it, but I don't know. Yeah. And the state is looking into it. I'm not sure about this statement that even if one LLC owned multiple properties that they would pay less in property tax. It was just a concern I heard. So I thought I'd raise it. Yeah. I don't think that it would have a tax impact because the parcel is appraised or assesses the parcel. Certainly Airbnb regulation is a very hot topic at the state house and within the planners, groups on the state level. And at a future meeting we can give you an update on what we're hearing or what we're tracking and the implications for South Burlington. Likely if the rental registry bill goes through at the state, that will also have an impact on us locally in the inspections of those properties. See Tom. Yeah. So yes, lots of conversation happening about those. The registry include Airbnb? Yes. Because they wouldn't be primary homes that would be considered unless it's you just rent a room.  Yeah, my understanding of the regulation is drafted, although this could change, is that any that the segment of your property that you are allowing public use of through rental would still be would still be subject to that registry. Oh, okay. It's kind of like if you have a duplex that you live in a half of it, we assess the second half as a non homestead. Right. Well, that makes sense. The property is divided. Okay. Cool. Well, Tom, you'll keep a surprise to all that movement. And just one more thing. I did receive a lot of links from Nick Lango, the acting director of the airport. Helen was copied. And I can forward them. I should have just been busy. And it would seem that it would be really useful to our residents to have, you know, a go to place where they could on our city website as well. But it had a map that the FAA is going to be using to determine which houses are going to be noise insulated first, and then, you know, kind of a schedule going from there. So I think a lot of residents, if we could even promote some kind of, you know, either through front porch forum or through the city newsletter or things like that, that here is the link, especially for residents in my neighborhood. That's the top question I've been hearing. That's a great idea. Okay. Thanks. That's great. Tom, do you have any report? Nothing to report, but I would like to comment on the S79, the rental registry. So if you had asked me last summer how optimistic I'd be that there'd be a statewide rental registry, I would have been very positive. But then the governor didn't veto it. I am still as optimistic now that there will be a statewide rental registry. But you never know with the legislature. And what I would say to this group, as I've said in the years past, that South Burlington is the second largest city in the state. And if the state does not have a rental registry in place by this June or July, I would strongly encourage this council to follow the suit of Burlington and look at instituting a rental registry to start funding some more code enforcement, which I know council Barrett has brought up in years past. I think it's overdue for us to do so. And I think it's useful to keep it on the front burner for us to take up if the state's legislation doesn't get over the finish line, or if it does, if it falls short of what we want to be able to accomplish to address the concerns council Emery was just raising. And I actually had a conversation about S 79 and how we would implement it here. In addition, we think that coming out of climate action task force may be some recommendations related to energy code, which may be a similar team that would similar to municipal team that would need to enforce that. So I think there are a lot of related moving parts that are that will take up some council time and planning in the future. Okay, so that's yeah, okay. Thanks. So we continue to see our covert numbers decrease. We had 49 cases in the last week, which is about half what we had the previous two week cycle, which is great. Keep up the good work. South Burlington residents. I've got a bunch of questions about solar panels on this building here at 180 Market Street. So I just want to give a quick update to the community on that. So in the very high winds on Wednesday, the solar panels had a hard time. We lost seven panels altogether. One came all the way off the roof. The others three others kind of blew around on the roof and damaged four other or three others. So between the time we noticed this was happening and our initial call to sun common to when they arrived on scene was 40 minutes. They were here incredibly quickly and have been here every day since working on the panels. So they have installed a additional T brace on each unit down to the substructure. That's a temporary solution as they look at the engineering and put together another plan that will maximize ensure that they live for the lifetime of this building, as well as have the same efficiency they were designed to. So likely at some point in the future, when that design is finalized, we will have another period where we have to close the front of the building to enable them to do that fix. But for now, the building is fully back open and all the panels are reinforced. And again, and this is all under warranty. Huge thanks to sun common for being so incredibly responsive. At tomorrow night's planning commission, the planning commission is considering warning a public hearing on the next round of the LDR updates. And those are, as your body has talked about, the generic PUDs and the basic standard for site amenities. Pending their public hearing, it is possible that that will come back to the council in April. So just a heads up that that is coming back to you. I wanted to give you a quick update that the fire department has teamed up with the UVMMC emergency department to pilot a program that brings crisis telehealth health out to our neighbors to whom our EMS folks are responding. So our neighbors are in a moment of crisis. They do not want to be transported to the hospital. This gives us the ability to telehealth in an ED doc to that moment and have a conversation with a neighbor and either help them in that moment or have the doctor convince them to come to the hospital. So this is in addition to our community outreach team, but is I think a really great innovation that we are partnering with and piloting with UVMMC to better serve our residents. And that should be up and running by mid-March. Great. The city's MS4 permit has been put on public notice with our Fosterist Control Plan warned. We submitted it last April and Tom wanted me to call out that we are the first for Montmina Spelly to get an updated MS4 permit with the PCP plan approved. So yay, South Burlington stormwater team. Just a reminder to the community that final tax installments are due March 15th. And then of course next week is town meeting week. The city clerk has sent out about 700 ballots and has about 200 back. At this point she's really recommending that people come in for ballots or walk in their ballots as opposed to trusting the mail at this point. So ballots can be dropped off 24-7 here at City Hall and of course at the polling place as well and people can come in to vote anytime. Just a reminder that on Monday the 28th the clerk's office will close at noon to allow them to prepare and really want to thank Donna and her team who are doing all of this while we're down a staff person in the welcome center and a part-time staff assistant city clerk. They're really rocking and rolling and doing a great job. On election day residents should bring their ballots to the polling locations and not drop it at City Hall, correct? They can do either but we prefer they bring them to the polling places. I mean they can but if it gets too close to the city closing time they may not get transported to the polls in time so. Last fun thing, self-checkout is up and running at the library. They've been working on that for a long time. If folks want to come in and check it out we're trying it out this week and folks can enter to if you try it out this week you are entered to win a new Jody Pico book. And then just a reminder to our group that our next meeting is the 28th the town meeting pre-town meeting day presentation and then we'll have our organizational meeting that Thursday March 3rd. And that will be fully electronic we're not the five of us or six of us or seven of us aren't coming here to do that. We'll be dialing in from home, correct? The pre-town meeting presentation is fully virtual. Yes, okay, okay. Which is due. I mean different. I didn't we just told that. Oh, oh, and what's the reason for that? It's how it was warned. So we have to comply with how it was warned. I see, okay. It's a little odd, but this has been two years though, Adides. It will save gasoline. This is true. And electricity. Right, we won't have to get dressed up. Tom won't have to wear a tie. Okay. All right, thank you. Any other questions or thoughts about Jesse's remarks? Okay. Item six, the consent agenda. We have four items. Consider and signed the disbursements approve minutes of January 3rd, 10th and 18th from the city council meetings in January 24th from the steering committee meeting. We have an award bid for Kennedy Drive crosswalks, and D is authorizing staff to execute the stormwater system engineering agreements with a great number of entities in town. I'll move that we approve the consent agenda. Second. Just have a question. I saw that the Wheeler house is being serviced with fuel for, I'm assuming, their furnace. Are there any plans to upgrade to a more energy efficient, less polluting heating system? There is nothing currently in the budget, although it is, I believe, built out in future CIPs. But Greg and I do have a, Holly and I met with Carol a couple of weeks ago, and we're going to talk a little bit about what types of energy efficiency we can build into that space. It's an old building. Yep. Thank you. Great. I had a question too. So in the financial warrants, there were $2,700 spent on tires. Was it big tire day at the tire warehouse, or was that just two tires in there for an excavator, or any idea if it was a lot of tires? I don't know, but I can get back to you. Just curious. Just spotted that. Thanks. Okay. If there's no further questions, you're ready for the vote? All in favor of the consent agenda as presented, signified by saying aye. Aye. Aye. It's unanimous, and it passes for zero. So, Helen? We ahead of ourselves, yeah. We are a bit ahead of ourselves. The public hearing starts at seven, but item 16 on your agenda, I can do in five minutes if you want to skip to that. That would be great. Agenda item. Item 16 is an update on the tenancy of 19 Gregory Drive, which is where the police department is. Exactly. So I wanted to give the council an update. As you likely know, when we took full ownership of that building, that came with the transfer of the commercial leases that were associated with that building. So one of the tenants of that building is a company called EPS. They have about 7,200 square feet right at the actually right at the front corner of the building. It's what you see when you first drive up on the second story of the building. They left the building in March 2020 and have been fully remote since and have decided that they no longer need office space and will continue their organization fully remote for the foreseeable future. They were on a month-to-month lease with the Millers, and therefore that's the lease we inherited. And so we are working with them now on when to leave the space, how to leave the space. They have a lot of cubicles and things like that in the space, so we're working with them on that now to ensure that it's cleaned up as much as it can be and the technology is preserved so we know how to up-fit it again when a new tenant moves in. It is a pretty significant financial hole. It's about $116,000 a year in revenue. So it is of concern to us. $116,000, but a little over $9,000 a month. So we have started to engage some real estate folks to look at the space. It is immediately adjacent to the space that we are holding for CCPSA as well. So we're trying to think broadly about those two spaces. What's best to put on the market? What's best to hold back for CCPSA? How might that space? Remind me, what is CCPSA? I'm sorry, the Chinden County Public Safety Authority. Oh, okay. The Regional Dispatch Center. Oh, the Regional Dispatch. Oh, okay. Thank you. So as you have charter authority to use property, I want to give you the update that this was happening. And as we move forward, of course, you will need to execute any leases associated with any tenants who might come in. It's a kind of interesting, it's a, we need to find an interesting tenant who wants to be co-located with in a police department, which is not the marijuana dispensary. The marijuana dispensary. It's not, so it's, it's, they could, it is, it's 7,200 square feet. So it's a fairly large space and it's all open in the middle. So probably about the size of this room open and then ringed by private offices. So they could, yep. It's got cubicles in the middle right now. It doesn't have computers, but it's all, the cubicles are all wired. Right, so Mike is working with the general manager to ensure that the wires are labeled and put up in a way that we know how they connect back to the, they have their own server room. And anyway, you have charter authority over our buildings and properties, so I wanted you to know it was happening and that we were working on it. And if folks have strategic ideas or questions, please let us know. Otherwise, we'll come back to you with a plan in the future. And the police department does not need any more space? Not, not this much. Not that much. Okay. All right. Well, thank you. Thank you. I guess it's good to get it out there in the public that there might be some, I don't know what class this, so it's probably class B, class B space, but very safe. Very safe. A lot of oversight. So okay. We were saying it's, it's two, in some ways it's too bad that this wasn't two years ago when the state police was looking for a solution out of their barracks. They're now building their new, their new parcel right off of exit. What's that? 12? The task corners? Anyway, they would have been a great tenant, but they're building out space. Okay. Well, thank you. Well, it's just before seven, one minute. So why don't we move back to item seven, which is a public hearing on CDBG's application. And it's warned for 7pm and a possible approval of the grand application following the public hearing. The grand or grant? Grant it should be. Mine says grand, but that's okay. It's a grand or grant proposal. It should be more than a thousand though. So I want to do just a little while you should open. Okay. So let me open the public hearing. I'll move that. Second. All in favor? All right. So the public hearing is open. So I just want to do a little table setting and Tom gets us here from Summit Properties to talk about this specific project. So just to clarify a couple of things. This isn't an application for your consideration of an application for a community development block grant award from the state of Vermont. It is not anything to do with our local ARPA dollars. Okay. So we are allowed to apply for one CDBG grant each round. And we have done that as a community a number of times. That funding source supported the development of Allard Square, supported the development of Garden Street, supported Ferrell Street, supported the housing at Lyme Kiln. This is something the community has done quite often. Summit properties who are permitted to be the or in permitting to be the affordable housing developer partner for Orion Farm approached us to apply this round to support that project. So Tom will kind of walk you through the project. It's the information is in your packet and then it's we would be the actual applicant and we would pass through the money to Summit. Chessie, how does this relate to the past agenda items where we've had Summit properties on the agenda? Is this just the final step where we're having the public hearing? Okay. So it's the final step for this application process. Yep. Okay. If the grant is awarded, then we act as purveyors of that money. We apply for it, right? And it comes to us and then we give it to the developer. I was just going to say that to follow up on just Paul Conner, Director of Planning and Zoning, to follow up on Jesse's comment later on, once the project is complete, you'll have another time that it comes before council to demonstrate that it's complete. So there's there's a lot of steps with the grant, but this is last month. Tom and his partner, Zeke, came to introduce the project to you so that you could decide whether to warn a hearing. Tonight is the hearing. If you advance it, then they will apply for the funds. They'll go before the Vermont Community Development Program to present their case, and then if awarded, then there'll be another couple of steps for you after award to demonstrate that the project's complete. Okay. Thank you. Okay. So, Tom, is Tom going to speak? Yes, I'm here. Thank you. Welcome. Counselors, thank you for having me. I'm Tom Getz with Summit Properties. I'm here with Zeke Davidson. And yeah, I appreciate the introduction. And as you've noted, this is the third time we've come before city council. Last, the first time we came was just requesting city council support as we embarked on numerous affordable housing applications before Vermont Housing Finance Agency, Vermont Housing Conservation Board. And this is sort of one of those additional puzzle pieces that will help make this affordable housing development work. So as Jesse mentioned, what we are requesting tonight is your support to help us apply for this Community Development Block Grant in the amount of a million dollars. It's one million out of about 27 million of total development costs for this project. So there are many sources required to make it work. And yeah, we will be, if we get your support, we'll be going in with that application in April for hopefully getting an award in May. So I'll just give a quick overview of the project. And then I believe I sent in some documents that may help just kind of showing that the visual, I don't know if it's possible to pull those up on the screen or during your packet so I can just sort of walk you through the visual representations that you have in front of you. The big picture overview is that, you know, summit properties, we're an affordable housing developer based here in South Burlington. And we have an option on two lots, lots 10 and 11 at the hillside at O'Brien Farm Community. And our plan, which we've just gone through local permitting, so we now have our final plat approval, is to develop 94 units of mixed income housing on lots 10 and 11 that you see there. This is going to be, you know, true mixed income communities of these 94 units, 71 are affordable, 23 are market rate. All 71 of the affordable units are affordable to folks earning less than 60% of area median income. And then of those, another 20 of those units are affordable to families and individuals at 30% or below of area median income who are also homeless, formerly homeless, or at risk. And those units will have supportive services through a partnership with COTS. So it's a full fully mixed community that will be planned as the next two phases of the, you can see if you go to the next slide, be helpful to see where things stand now. So you can see that that's even a little bit outdated. A few more than 77 homes have been completed in phase one. The next two buildings up are lots 10 and 11. And then O'Brien, these are the only two lots that we're involved in. The O'Brien team is also simultaneously moving forward with permitting on some of the multifamily that are just market rate buildings. So on the next slide, you can see we've got just a couple more. Oh, that's okay. This is just the actual aerial that shows where things are in this. So this is the planned next phase. So adjoining the single family and duplexes. This will be the beginning of the multifamily portion of this development. And if you kind of just click through these ones, it just, I don't have anything too specific to point out, just sort of the good, oh, that's a partial view. How big is lots, is lot 10 and 11? Is it a couple acres or is it an acre? Yeah, about an acre. Yeah. I mean, these are, these footprints of these buildings are about 10,000 square feet. And there's plenty of room on each lot for parking. Plus they have pocket parks and grilling areas. And behind the buildings, there's enough room for some green space in addition to the surface parking and underground parking. So that's just another representation of this next phase and sort of the status lots 10 and 11. This is actually a bit outdated too, because we did receive our final plots on those lots 10 and 11. And Brian is in the process and the other ones. And this is a rendering that kind of with the actual landscaping, the approved design that's approved by DRV. So this is all goes well, then next year, you know, we're hoping to start construction this September. And it'll be about a 14 month construction period. So we won't have all that growth yet. But this is the approved landscape plan. And these are the approved elevations. So this is a look at what these two, the kind of sister buildings that the looks basically identical on each of the buildings on lots 10 and 11. And that's the visual overview. And they'll have the amenities each of the corner. There's going to be a gym for the residents.  All the all the heating is with energy electric energy efficient electric mini splits. Just, you know, a really attractive building that's a full mixed income community. So I just do a little bit more. I'll do a short overview and I'm happy to answer any questions. You know, the big picture is that, you know, we this is kind of what we see as the ideal affordable housing development in terms of its infill development and location that has access to the transportation. And, you know, consistent with smart growth principles, it's truly a mixed income and even within each building, there are market rate all the way down to homeless and at risk. And this is a model that we've done several times before most recently and two projects in Winooski right as you enter town on East Allen. We have a 39 unit and a 45 unit that was very similar, similar financing. And those are both full and operating really well. And, you know, they will serve Vermont's residents folks who are most in need. Those are, you know, making less than 30% of area median income who experienced homelessness. So those services will be available to help support that transition from homelessness into permanent housing. So the last slide that would be Excuse me, can I just ask the question? Would you remind me? I'm sure you said it. Who will be managing these buildings once you build them? So we will manage. We're developers and managers. We manage about 15 we manage about 1500 mixed income and affordable apartments in Vermont, New Hampshire, upstate New York. So we manage our own and then we manage for all sorts of we managed buildings for Cots and housing Vermont ever north now. So we have a sort of a big management portfolio and this would be a self managed. Thank you. So the only other slide we have is just that sort of the overall funding sources you can kind of see where this tonight's request fits in. It's 27 million just under that 27 million total sources that we're requiring to make this happen. Low income housing tax credits. That's the application for before Vermont housing finance agency. Those applications are going forward. We have permanent debt with bank financing that will be a big component. We've already presented to VHCB for about three million of ARPA funding. So that's the, you know, the state allocated ARPA. We've got, you know, based on the energy efficiency specs of the building, we'll have rebates from efficiency Vermont deferred development fee. That's our own development fee. We're leaving into sort of help fill those gaps. Vermont housing finance agency has another program called the housing investment fund that we're applying to and then has another program the state tax credits we're applying to. And then we, you'll see the very bottom and I know this is not finalized within the city of South Burlington, but as we try to fill these gaps and this is something that VHCB has requested of all their applicants is really to try to see if local ARPA will be available. So I've got that $400,000 in there, but yet I certainly understand where South Burlington is in that process. So that's a discussion for a later date as to whether or not that could potentially be available or whether we'd have to go to VHCB for additional funds. And then up top, you see that there's the $1 million community development block grant. They call it the VCDP Vermont community development program request. So that is the overview. I'm happy to go through answer any questions about the building, the project. And yeah, anything that I can clarify? Megan? Paul, what will come before us in the future? I would like to know just so I know what kind of question to ask. You mean for related to this grant? For this project specifically. Essentially it'll be a close out hearing that everything was built as expected. So it's really sort of a cross in the eyes and dotting the teeth. So the electric heating, the cot support, the gym. It's really it's a very specific closure of this grant itself. That the funding was allocated as specifically approved by the board as I recall. But how much in the detail of the design can we get? That's what I was thinking right. So is it the 71 less than 60% AMI and 20 less than 30% AMI? Well, so in terms of affordability, the DRB is responsible for ensuring that the minimums of our regulations are met. Yeah. And Tom can speak to this more than I can. What Tom and Zeke are proposing for this project is has much higher numbers of affordable units and much deeper affordability than our requirements. So the DRB would not impose conditions beyond those of our regulations. The various funding sources that Tom and Zeke are applying for, they're requesting to meet certain levels of affordability. That's where the enforcement of that would come in. Does that make sense? And Tom, do you want to elaborate at all on that on what your funding sources are? What commitments are being made through the funding sources? I guess that's that's the question. Right. Yeah. And there's a there's a significant amount of oversight given the number of funding sources we have. The tax credits with Vermont Housing Finance Agency. So those they bring along the perpetual affordability covenant. And then in order they have a basically as the tax credits that you get, they monitor for 15 years and your investor has to stay in the project for 15 years. And if you rent to anybody who's over income, if you have a unit that you said was going to be affordable to folks making 30% and you charge more every year, there's a full we have a full compliance team that at the management company that submits our financials, submits all that, you know, who the residents are in those units to VHFA. And you are at risk of recapture of all those tax credits, if you violate any of those affordability restrictions. And then even after the first 15 years, you still send in those reports, you're obligated in perpetuity. So you've got VHFA overseeing the affordability restrictions, BHCB does as well, actually, the DRB, you know, we have to build the building in accordance with our permits. So that would be where there was, you know, any the aesthetic and everything in the permit approvals would all be through DRB. Trying to think COTS, that's another thing that VHFA enforces. So they make sure that the, you know, if we say that X number of units are going to have supportive services, there's a annual recording process with VHFA on the supportive services units as well. So there's pretty extensive oversight that goes along with these federal programs. So I think the real question before the council tonight is, you know, these VCDP, there are two rounds of VCDP applications each year, we can apply for one award each round. Does the council believe in this project enough to put our South Burlington fingerprints on it and say, yes, this is a project we want to prioritize for funding? Okay. There's no other community partner in South Burlington who has reached out to us to ask us to submit this round. Staff doesn't have a recommendation this round, so we're not necessarily up against another applicant. Sometimes that happens when the councils have to decide we want to support this project over this project. But really, the question for the council is, do you want, do you support us submitting a grant application to award, to have them consider up to a million dollars of financing for this development as presented? Yes. Absolutely. Yes, but, yes, but. Do you have a question? Yeah, I do. And then Matt, do you have a question as well? Matt, do you want to go first? Just to comment, I was around for the DRB for the previous iteration under a different developer. And the commitment that Tom and his team have made to the deeper level of affordability and mixing income levels. So we're not have one box of affordable housing, but it's remarkable and enthusiastic support from Tom and your team for putting this together. Okay. Appreciate it. Yeah. And I agree. Just that, I mean, Tom, I've made a comment before that there's no solar on this building at all, right? There's no solar. Yeah. And it is something we've looked at on these flat roof buildings and just decided that it was not the most efficient way to do it. But what we have, we are planning is to build some offsite solar. So for the existing buildings in our portfolio where the rooftop solar with all the energy, the condensers for the mini splits didn't really make it that efficient to have more solar and trying to interspersed it there. We're going to build offsite solar and to offset the usage from this building and some others in our portfolio. So we did that several years ago for almost all of the buildings in our Vermont portfolio, and that is a future plan to offset this usage as well. And so the other question is, what is the $266,000 from Efficiency Vermont going to help you do? That's a rebate and the Efficiency Vermont applies for meeting their, they call it their high performance tier of construction. So it's got a whole, a whole spec sheet basically of, you know, the efficiency requirements for the heating systems, air leakage, a thermal shell. And so those, those rebates are just basically calculated in as one of the sources when we say, okay, it's going to cost X to build without those, without those rebates, we'd need to go apply for additional funds. So that's, that's for meeting that high performance tier is what those are for. That's great. And then the 400,000 from local municipal ARPA funds, how is that going to be? Is there going to be an official request made of South Burlington for $400,000 in ARPA funds or? If the process opens up in South Burlington and an application becomes available in time for us to keep on our construction schedule, then this was, I want to make sure to put that in there to say, we would love to be able to apply. And if for a variety of reasons, that is not an option, we've talked to VHCB and said we may need to go to them and apply for more ARPA or more another different gap billing resource. But I wanted to, to put it out there that as of this moment that there, if South Burlington chose not to make ARPA applications available, there would be a $400,000 gap that we would be going to fill through one of these other sources. What about our housing cross fund? How much? We have 100,000 in there right now. Right now. Is this a potential recipient project for that money? Yes. Has there any request been made of it at all? No. Okay. We have nine. Yeah, that would be another one we'd be willing to consider for sure. Yeah. Okay. Just wondering. Are any other questions? No, I'm done. Thank you. Okay. Megan, do you have a question? Yeah. I have one. Go ahead. The three remaining apartments will be market rate. Is that, is my math correct? The other building, yeah, the O'Brien phases, the next phases, then the other buildings, yes, those, their buildings will all be market rate apartments as far as I know. Oh, I see. So, though Brian's going to be developing three, three multiplex units or? There are, there are, in this phase of the hillside master plan that Jesse showed a few minutes ago on the screen, there are six multifamily buildings that receive preliminary plaque approval. Summit is proposing to build two of those as a mix of affordable and market rate units. The remaining four are, have not yet gone through the full permitting process, but likely they would come with O'Brien as market rate. Yeah. Let me, let me rephrase it because I understood that there are in these two buildings, 94 units of mixed income housing, and I have the count of 71 being less than 60% AMI and 20 of those units being less than 30% AMI, which adds up to 91. And then there are three units. Sorry. No, I can clarify that math. Sorry. So it is actually, so of the 71, 51 of those are at 60%. 20 of those are at 30%. And then the remaining 23 are market. Gotcha. Thank you. And so does this project, this may not be a question for Tom, but for Paul. So does this proposal help O'Brien to meet the affordability requirements for the rest of their project, or at least part of their development? For the hillside, for these six buildings, yes, we have a requirement in our regulations that a minimum of 15% of units, if they are, if their rentals be meeting 80% of median income affordability. That equals, I believe, 49 is the minimum for O'Brien. So if they do 71, they're exceeding that. And our standard is 80% of median income. Each of these is 30 or 60% of median income. So that's what I mean by deeper affordability. Okay. But you don't necessarily get extra credit for going deeper.  Some it gets lots of credit for that. But I mean, but this would meet for the rest of the phases for O'Brien. Is that right? So the rest of the hillside level or hillside? Hillside, yes. The part of the drawing that was shown up on the screen is for a separate project entirely along Old Farm Road. That's called O'Brien Eastview. It's an entirely separate project for which this is not part of that. So that would have its own affordability requirements associated with it. Thank you. You're talking about Black Square, yes. Orange and yellow squares, no. No. White Square is the current hillside. Top right of the screen. So this would be meeting the requirements of hillside, the top right of the screen. The only relevant portions of it are the multifamily buildings. These singles and twos and the sort of upper right were all approved prior to the adoption of the city's inclusionary requirements. So there wasn't a requirement at that time. The orange, the black, purple, and the yellow are all O'Brien Eastview, a separate project from a permitting perspective that will have its own affordability requirements for anything that's housing. So with the development of this, then they will have sort of be up to date with what they've developed and responded to for affordable housing. That's correct. They will satisfy the requirements of the white slash gray in the top right hand corner. Okay.  So this is a lot of grants and loans that you're applying for. I mean, I'm assuming you have a really good track record and you've done this kind of multiple, I mean, this is a lot of different pockets to pick, in a sense. So I'm just curious if your track record on this is pretty good and this isn't just a, you know, a hope and a prayer, but you have some really good relationships and experience and expectations to meet all this funding. We do. Yeah. So I mean, over the last 20 years, we've developed over a thousand, you know, about 1100 units of mixed income housing. And these are, they're all highly competitive applications. All of the sort of, all the resources that are required for this are highly competitive. So no developer can guarantee that they'll get the award on the first try. And a lot of times you go into these knowing that it may take a year or two. But in terms of our track record, yes, this is, this is our kind of our bread and butter. It's what we do. These complex mixed income developments in Vermont, New Hampshire and upstate New York. So our reputation and experience with all the agencies that give out this money is really good. We had a great hearing with VHCB about a month ago, where they were incredibly supportive of the project. We'll end, you know, constant communication with VHFA, VHCB about making sure, long before we get to this stage, we've vetted these types of projects very thoroughly to make sure they'll get a lot of support. All the, you know, every check mark, these applications all have very specific scoring criteria. And this project, it checks all the boxes. And one of those is the experience of the developer. And we're very experienced in this. And yeah. Okay. So, but I actually have set in on some of these in the past. So I understand that one of them you may not get this year, but you can apply for the next round. Is that the expectation? So you're sort of in this till you get it all put together? That's right. Some of the funding sources only allocate one time per year. It's like the tax credit. That's once you get a shot once a year. Others have kind of a more rolling basis. And yeah, you've got to, you have to go into these knowing that it could be a multi-year effort. That's why we set up our option agreements that are always multi-year, giving us a chance to know that you can't control how competitive those applications are. So if we got denied on any of these, we'd be back again next year to try it again. Okay. Thank you. Any other questions? Last question. Who's the architect? G4 Design Studios. That is out of Burlington. They've designed our last two and they're the architect on this one. Steve Gild. Okay. Any other questions? Well, I guess I am interested that it's underground parking, whereas we see so much surface parking in this design. And it's affordable. How does that happen? Well, the topography of, I mean, like, why did we make that choice? Why did you make that choice? And how did you succeed in covering it, you know? Yeah, the topography of these sites, they're both very sloped so that that bottom basement level would be underground. You could directly get front side apartments there, but it just makes a lot more sense from a construction standpoint to have that whole bottom tier B parking rather than trying to have a bunch of unusable space in the back. So we've got one layer of parking and then four stories above that. And we've done that on our last two. It's actually the same thing as our Winooski projects, which have the four stories of residential above the covered parking. And it's not enough parking for the whole building. It's, I think, about 20 units here with the rest surface. So it is actually, especially with a sloping site like this, it's a pretty efficient design to be able to use that as parking. Can I just follow up? Is this, I know when the O'Brien's were doing the single family homes on the hillside, they discovered after the fact, I guess, that there was a whole lot more blasting that was required than they had anticipated. So what does the topography of this area look like? Are you pretty confident you won't be blasting? Yeah, yeah, they have to do a lot of blast. Yeah, there was a bunch of sites that had that significant ledge, but we're not, this site where we should be all right on that one. We did our diligence with O'Brien beforehand on that part. So I know it doesn't have some of those same blasting challenges that they had to go through. Well, good. That will keep the cost down. Yes, exactly. Did you have some other questions? I'm sorry, I didn't mean to. All right. I guess we have to have the public. There's a public hearing. Are there any, if you have any closing remarks and then we'll open it to the public, Tom? I thank you for your time and support. The third time I've been before you. I don't know if it will be the last, but I really appreciate all the positive feedback and really looking forward to, like I said, the goal will be, there's a flurry of applications coming in the next three months, this being one of the key ones. So if all goes well in September, we'll be breaking ground. So I just want to thank you all again for your support. That's wonderful. All right. Are there any anybody in the public field who wants to ask a question? Sandy Dooley. I don't want to ask a question. I just want to say that affordable housing committee voted in support of this application at the DRB. I wanted to remind you of that, or if you weren't aware of it, make you aware of it. And otherwise, I don't think, I'm fairly certain we haven't voted on this, but so I will speak as an individual. I certainly support the city making this application and I guess I can say I would be very optimistic that if the committee were asked to support it, that they would as well. Thank you. Any other public comments or questions? Nobody has indicated so on the chat. Okay. Well, then we need to close the hearing. I'll move that we close the public hearing. Second. All in favor. Oh, did Sarah Doc, did you want to say something? Yes, please. I'm sorry. I was having trouble getting my camera to do its thing. I just had a question and I don't know that it's so much for tonight as it would be for the DRB. I mean, this looks really good and I appreciate the idea that there's a lot of variety and mixing of price points within these buildings. So that looks really good. But I was thinking that we were kind of committed as a city to the notion of intermixing the price points throughout the development, not just throughout a given building. So I just wondered how that would work. It was helpful to have the explanation about the map and the fact that this is providing the affordable units that counterbalance the market rates that are already being built. So I get that. But going forward, will we always be kind of playing catch up that way on the other phases of O'Brien that we build the market rate and then, oh, by the way, over in this corner, we'll stick a couple of buildings where we can have the affordable, which, you know, I kind of thought we were wanting to avoid that scenario. Well, this building does have 30% at market rate. So it is a mix. No, I know. Within the building, it's great. You know, it's great. I'm just saying across that chunk of development, it's in one section of it. Okay. Paul, Akana would like to... I can just speak very briefly to that, Sarah. Just a reminder that the city's affordability requirement came in after the single and two-family portion of the neighborhood was already approved. So the only purview for the city and looking at the affordability was within this phase, which is the six multifamily buildings. When the DRB approved that, the preliminary approval for that about a year, a year and a half ago, they put in a specific requirement that said that the affordable units needed to be built. I can't remember the exact point, but no more than basically midway through the building of the six buildings to address the exact concern that you're sharing. In the end, what O'Brien and Tom and Zeke at Summit have done is they've actually put them as the very first buildings. So... Of those six. Of the six, which are the only ones that have the affordability requirements. So they're addressing that concern, I think, because they're front-loading the affordability right at the beginning of the portion of the project that has an affordability requirement. But Paul, I think one of part of your question is, so 70% of these units are affordable at different levels, the requirement is just 15% in a given development, right? 15% of the whole of the six buildings, yes. So I guess, I don't want to ask this question or assume I know what Sarah's thinking, but I guess the question is, does this meet the affordability percentage for the remaining, this is one building, right? Or is it two? Two buildings. Two buildings, the remaining four buildings. It does. Will they all be at market rate? Well, those are two different questions. So as planned right now for the six buildings, 49 dwelling units need to meet our affordability standard. The proposal from Summit is that in two of those buildings, they're proposing 71 be affordable. So they would meet and exceed. We don't yet have all the applications in for the remaining four buildings. They may all be market rate, but we could see additional affordable as well. In City Center, for example, right around this building, we've seen several buildings beyond our minimum that have come through as partnerships for affordable housing. So it's possible that other units could be affordable also, but not required from us. Okay. So this will meet the requirement. Meet and exceed, yes. But the developers may opt to include some additional affordable. They could as has happened in City Center. Yeah. Okay. And none of these, none of the units that you're building, Tom, are purchase or ownership. It's all rental, correct? That's right. Okay.  We don't at this point.  We don't know your apartment or whatever. Okay. All right. Sarah, did that? Yeah, could I just ask a follow up? So I appreciate that explanation. That's good. I guess I'm thinking more futuristically now. We saw on the map those different colors of the different segments of the O'Brien project as we move into those other segments. I realize you probably can't anticipate exactly what the thinking will be, but do you think there will be more of a mixture within those segments of the affordable price points? Or again, would it be segregated into a building or buildings? I'm happy to answer the question. It is a little bit off topic from here. Helen, would you like me to answer the question? Or would you like me to have an offline conversation with Sarah about it? I'm happy to do that. Why don't you have an offline? Because it isn't on topic. And I think we probably don't really know the answer because we don't have the proposals for the other two. Do you?  So I think those are good questions when we start to discuss the other two development segments, Sarah. Okay. Yeah. Thank you. But I think they're good questions. Oh, they're excellent questions and they need to be asked, but they don't really pertain to this proposal or what's before us tonight because they far exceeded meeting the needs. Well, and then they came in late.  Right. Okay. So, so we have a pending question. I'm closing the open the hearing. So all in favor? So the hearing is closed. So our next order of business is to vote on this, right? Yes. I'll move to approve the use of our city services to apply for the CDBG application for the grant application of $1 million and with $1 million. Is there a second? Second. Okay. It's been moved and seconded. Is there any further discussion? All those in favor signify by saying aye. Aye. Appears unanimous. So 5-0. We have agreed to that. Thank you very much, Tom. It's an interesting, really interesting development or proposal and I wish you luck. There's a lot of hoops to jump through. So I wish you well. All right. Thank you very much. Thanks, Karen. I appreciate it. Good. You have experience jumping through hoops. Great. I guess you would. All right. Moving on to item eight. This is receiving the FY21 audit from R.H.R. Smith.  No. Oh, I don't know. Okay. All right. Thank you. So just by way of introduction, this is Brittany Gilman. She is the lead auditor this year for R.H.R. Smith for the city. Correct me if I'm wrong. Brittany, you played a supportive role in a prior year, but this is our first year as lead. I think as mentioned in one of the council memos, R.H.R. typically rotates lead auditors every couple of years. So in the past, we've had Josh I think was the most recent one that we had before you. So yeah, with that, Brittany, feel free to take it away. Great. Well, thank you everyone for having me tonight. Happy to be here. Just let me pull up my dual screens here. I can't remember what it was like before dual screens and I can't imagine going back to life without it. Yeah, you're going to want to share a presentation? I don't need, no. Excuse me. As Andrew said, my name is Brittany Gilman. I am the director of support services in an audit manager with R.H.R. Smith and I had the pleasure of being the lead auditor for the City of South Burlington this year. I don't have any slides. I have found that it tends to work better to just go through the high points of the audit and we can look at the actual document rather than a PowerPoint. And when I go through it, I will reference page numbers and when I reference a page number, I'm referencing the page number on the bottom of the page on the PDF of the audit itself. So I think you most likely have a long PDF with everything in it. So I'll be looking at the bottom page numbers in the audit. And I know this is really going to disappoint everyone, but I will not be reading the audit word for word. So what I'll try to do is hit some high points and then happy to go back to anything, answer questions. And if there's a question that I just can't get too quickly, I can take a note of it and I can let Andrew and Martha know the answer and they can get back to you. So if I can interrupt for just a second for people following along, if you're on the PDF on the City's website and you're on page 174 of this packet at the bottom of that memo is a link out to the full audit. Right. Okay. So you have to leave the Council packet and go to the full audit where it's posted on our website. Sorry. Thank you. All right. So the first thing that I like to go through is what we call the SAS 114 letter that stands for statement of auditing standards. It's just four pages and it outlines the standards that we use. We would note here if there were any significant accounting proclamations. We would also note here if there were any difficulties performing the audit or any disagreements with management. So if Martha and Andrew were giving us a hard time, we'd tell you here, but that was not the case. So thankfully, happy to report no difficulties and no disagreements. And then we just disclose some general scope limitations in our procedures. So nothing really remarkable there, but I do like to let folks know that it's there. The bulk of what we'll be talking about are the financial statements. So the cover page of that is titled Federal Compliance Audit and the fiscal year that we audited was 2021. So that's a year end of June 30, 2021. So I'm going to point you first to pages one through three. So at the bottom, it'll say page one. And that's the Independent Auditors Report or the IAR. This is where we outline the auditor versus management responsibilities. And it's also on page two where we give the opinion paragraph. So at the top of page two, it says opinions. And this is where we note that the financial statements are presented fairly in all material respects. It doesn't sound like a particularly exciting paragraph, but it is the best opinion that you can get. And that's really important. It's very exciting. Next are pages four through 11. This is the Management Discussion and Analysis. We refer to it as the MDNA. And I like to recommend that if you read nothing else, that you read the MDNA because it's a really good synopsis of what the full audit report contains. It's also good where if you're, you know, in a few days thinking about something and thinking, oh, what, what did she say about that? You might be able to go here and pull it more quickly than you would out of the full audit report. I'm not going to go through it because I am actually going to go through the full audit report. But it's a really good summary. So usually the first financial statement that I point people to is on page 16. And that statement C. So there are a couple financial statements before that that sort of aggregate your funds in a way that you probably aren't used to looking at. And it's helpful information, but I find that statement C is usually where councils and boards want to go. And this is the balance sheet for your governmental funds. So your governmental funds are your general operating funds that you're day to day, your main sources of revenue for most governments. And those funds focus on near-term assets and liabilities that we present your major funds here. And there are certain thresholds that a fund has to meet to be presented as major all by itself. And if it doesn't reach that threshold, then it gets lumped into that second to last column called other governmental funds. But there are supporting schedules in the back, and I'll show you where those are a little later on. But your general fund is always a major fund. And it starts with your assets. And it's always in the order of most liquid to least liquid, so most like cash and least like cash, followed by your liabilities, any deferred inflows and your fund balances, which again, this is the crux of what we usually want to get to. So there are different categories of fund balance. So nonspendable are things like prepaid or inventory. Sometimes permanent funds like cemetery funds will have a nonspendable portion, a principal portion you're not able to spend. Restricted fund balances are generally usually restricted by grants or external agencies. Committed fund balances are usually by the voters. Assigned fund balances usually by city council. And then unassigned is just how it sounds. It's unassigned, it's available for future use. And your unassigned fund balance for your general fund was about 2.3 million. That's an increase of about a million, 1.1 million, I think, from the prior year. That's fairly consistent with what we're seeing for schools and municipalities, often are seeing sizable increases in fund balance just as a result of COVID or, you know, lots of COVID funds coming in, being able to sort of move around the categories of where things are spent. And then in some cases, reduced operations helped with that. And we'll go over a little bit of the budget to actual so you can see that. And then on page 18, this is statement E. So this is still your governmental funds, but this is your revenues and expenditures. It's an income statement. It might look similar, maybe a little bit more summarized to what you would see for a monthly financial report or a quarterly financial report. But you can see it's the third to last line is your net change in fund balances. So you can see that 1.1 million dollar increase. I'll just pause for a second to kind of let everyone absorb. We're going to skip a page and go to page 20. These are your proprietary funds. And we call this the statement of net position. So instead of fund balance, we'll refer to it as net position. And proprietary funds are business type funds. And you have three main proprietary funds, although there are two others listed here. And I would have to check with Martha and Andrew, but I think that those two funds will go away. So the ambulance fund and the rec program fund are either, you know, inactive or they would be rolled into a governmental fund because the purpose of a proprietary fund is that it be self-sustaining, usually. That doesn't mean it always is, but it funds itself through charges for services and things like that. So you have the water department, water pollution, and stormwater utilities. And they have unrestricted fund balances and they're positive unrestricted fund balances. So that's good news. That's not always the case. So that means that they're doing what they're supposed to do. There is a restricted fund balance listed in the water fund and that's related to a bank account that's reserved for capital. And as is the case with most proprietary funds, most of your net position is wrapped up in capital assets. So one of the differences in proprietary funds versus governmental funds is that we also present your long-term liabilities and your capital assets. So that's the major difference that you'll see there. And then your last type of fund, I would say, starts on page 24. These are fiduciary funds and in this case it's the employee pension trust. These are funds that are held in trust by others. So I'd just like to let you know that that is available there. That's SEI, I believe, is the trust company. 22 dollars in cash equivalent? Yeah, it's a little silly. Usually the statements will break out like cash and cash equivalents and then investments. And we present it that way but it does look a little silly again. It's 45 million, doesn't it? Yeah. Usually it's like a timing thing in how they were moving money around or and then the actual notes which is really the bulk of your financial statements starts on page 26. And again, I won't read everything to you much to your dismay but note one obviously is where it starts and this is kind of a summary of the rest of the notes. There is a standard COVID-19 note disclosure in there. This is where we talk about policies, methods of accounting, definitions, all those things. The notes or follow in general the way that a financial statement reads, so most liquid to least liquid. So we have a note about deposits and investments. We have a note about interfund transactions all the way down to fund balance and I'll show you your fund balance note. The two notes that I think sometimes folks are interested in start on page 42 and goes through page 46. So these are your capital assets and your long-term debt. I don't have anything particularly remarkable to tell you about it but I do find that sometimes boards and councils like to see these presented in this way. You don't always sort of see it laid out on the page in this way. So there's a really neat schedule at the bottom of page 43 where we show you all your debt additions, deletions, which is payments obviously on principle and then your end of the year balance as well as your current portion which is what's due within one year. And then the following few pages actually list each bond or note. They list the terms. We tell you whether it's governmental or business type when it's going to mature usually. So it's just and then there's a amortization schedule. I'm at the bottom of page 45 that goes into page 46. So it's a nice sort of compilation of that information I think to refer to throughout the year. And then your fund balance note start on page 47. So this is where we would list any restricted net position, anything non-spendable. So as I said your inventory and prepaid items are typically what's non-spendable, anything committed, anything assigned where we list those out. And then the remainder of the notes is largely related to pension. It's actuarial language and it's good bedtime reading material. So on page 70 is I think where the next place you'll be really interested is, although maybe you're really interested in actuarial documents and pension information. They'll be here a little later. Yeah, exactly. So there's kind of a summarized budget to actual on page 70. And then it goes a little bit more into detail on page 80 through 83. Breaks it out in a little more detail. So one thing I want to point out that maybe looks a little alarming is if you're looking on page 80, but it's not alarming, which is why I want to point it out. Your revenues are looking based on this schedule as though you collected quite a bit more than you anticipated to the tune of about five million dollars. But most of that is debt proceeds for refunding a pension note and there's an offsetting expenditure. So it shows you know there's no budget for that. So it's showing favorably on the revenue side and then unfavorably on the expenditure side. But it really, for the most part, nets out. I see that there's a, I don't know if you want to take questions now. Oh, Tom. Yeah. Are you okay with the question now? Okay. Tom, go ahead. First of all, I want to say this is the best audit walkthrough I've seen in my eight years on Council. So thank you. This is very thorough. You jumped to page 80, but if I could maybe go back to page 45, I'm just trying to understand this debt table and what's happening in 2027 to 2031. Let us get there. Oh, and I think I just answered my own question. So you rolled up five years into the road. That's why I jumped so much. I'm sorry to have bothered you. No, that's no problem. No problem. Trying to save a few pages. It's already 120 pages. But yeah, once we get that far out, we present in groups of five years. So what page should we go back to? Back to 80. Back to 83, I think. Maybe I, no, 80. I lied. I'm sorry. So if you see almost towards the bottom, it says debt proceeds, refunding from pension notes. So I just want to point that out that there's there's an offset there. So really what happened is that when you kind of take that piece out, your revenues were a little bit under, but your expenditures were also under budget. So your expenditures were under budget by about 1.3 million. Your revenues, you didn't collect as much as you budgeted by about 600,000. And it looks like that's mostly in the charges for service area. But because your expenditures were so far under, you were still able to add to your fund balance. And then I'll just let you know that on page 87, that's where some of those breakout schedules that I referenced start. So it's all your non-major special revenue funds, your non-major capital funds.  You'll have like computerization grants or impact fees. Your housing trust is in here. Anything that doesn't by itself meet the threshold of being presented all by itself as a major fund. There are a lot of these, which is not uncommon in a government your size. And it does help kind of keep things organized and segregated and for its own purpose. So for each group of funds, we'll present the balance sheet and then the following pages are the revenue and expenditures. So I'll pause for a second because I'm going to ask you to skip all the way ahead to page 114 between where we were and 114 is largely those schedules. Which I also think is, you know, useful or helpful, especially if you're looking for something in particular. So page 114 is your SIFA. It's your schedule of expenditures of federal awards and it spans two pages. And if you hit $750,000, that's the threshold where we have to do additional compliance testing, which we call the single audit. The program that we tested this year was the Clean Water State Revolving Funds Cluster. And we talk about starting on page 117 what we tested and what our opinion is of that. So we first talk about our report on the financial statements and internal controls over financial reporting. So this is where we would disclose if we found any significant deficiencies or material weaknesses and we did not. And then on page 119, we give our opinion about the major federal programs. And we say that we believe that those are fairly stated in all material respects. And we also found no internal control significant deficiencies or material weaknesses in internal controls as it relates to federal programs. And the very last page is a summary you're probably wishing I had pointed you there from the beginning. But the type of auditor's report issued is unmodified. That sounds bad, but it's the best you can get. It means we didn't have to modify our opinion based on anything that we found. And you can see as I said no material weaknesses, no significant deficiencies. We didn't note any material non-compliance. And there were no findings or question costs related to federal awards. So this is what this is all great. And this is wonderful news. It's a clean audit. So a lot to be proud of here. And then the last thing that we review is called the management letter. And this is where we would note opportunities that we found for improvement that don't rise to the level of a material weakness or a significant deficiency. So we do testing. It's not like a best practice audit. It's not as though we go in and say, are you being as efficient as you could be? But we go in and say, what are your policies and procedures? And are you doing what you said you would do? And then do your policy. We'll take a sample of policies and say, do these measure up to what you should have based on state or federal compliance. And so the only comment that we really had is that there have been some updates related to federal procurement and the requirements for that policy. So we're recommending that you update your policy to be in line with that. I provided Martha and Andrew some samples. So I think they'll they're looking at that and we'll be bringing some recommendations to you. But overall, this was a really great experience for everybody, I think. We were able to kind of look at some things learned together. And there's there's a lot to be proud of. There's a lot of, you know, I think streamlining things that have happened related to internal controls, really making sure that you're following what you said you would do. So kudos for that. To Martha. And happy to answer any questions. I just I would just like to add that this all happened in FY 21, which was the middle of the pandemic. Yes. We had several leadership transitions, including losing a finance director mid-year. And we've been short staffed throughout that period. So big extra kudos to Martha. And thank you, Brittany. This was a very seamless audit this year. I think a lot of the pre audit work that we do early on in the process has made this go a lot a lot smoother. So that our auditors are only in the office for a couple of days rather than sort of the two weeks that they kind of set up shop. And it has a significant staff during during those times. So thank you. Yeah. All right. Are there any questions? Any from the peanut gallery who are listening in? Where's the customer sass-saxons for me at the bottom? I don't see it. They'll email us after. So we'll say one. Oh, Tom. Yes. Just want to make sure I made that point clear. That was the most systematic thoughtful cogent presentation of the audit I've seen in the eight years. So thank you for walking through that. I feel really good about what you've come up with and how you took good, how you went about it. So thank you for that very informative and useful presentation. Thank you. I very much appreciate it. You can't see, but I'm beaming behind the mask, so thank you. I agree. This has made it much clearer to me. This isn't my real strength, I would say. Thank you. Do we need to do anything? We just receive the audit. We just receive it. Okay. Well, we appreciate your run through and your work. Thank you. Thank you. Do I turn this off? Okay. So the next item does impact you, but you're not on the seat. We need to consider in the possible improvement of a three-year audit contract for RHS Smith for the FYs 22 through 24. Is she allowed to stay? Yeah, right. Strategically, we had this after the first time. Yes, you are not. Mathemature, finance officer. December last year, the city and the school district, we did a joint, went out for a joint request proposal for audit firm to see what we can bring in if we need to change because it is a practice to switch auditors after a certain number of years. And it is a best practice. And we mail it out to 13 auditing firms, put it on our website, and put it out on other website, Brumman, GFOA, and VLCT website and Brumman Bit Registry. We only received one proposal from our current auditing firm, RHS Smith. And with that, we had a committee, a selection committee that was made up of Andrew, myself, Suzanne Restem, who happened to be the CPA and did her dissertation with concentration in the audit rotation, which was really pretty helpful to Andrew and myself. We learned a lot from her. And through her expertise in that area. Christa's child from the school district was also involved because they wanted to do this with us as well. They're not required to do it for the child out of the city, but they can choose to do it. And so they did. We did interview. Brittany was here, Ron was here, and Josh did a presentation based on their proposal. And after our little briefed, we decided that based on what they do, rotating audit managers every couple of years, we decided that we would go with them. And part of the charter, the city council appoint the auditing firm. So today we are here recommending that you appoint RHS Smith to be our auditing firm for the next three years. Okay, thank you. Can I ask you a question? It's not our purview, but I'm just curious. Did the school board also agree? Are they going to propose? I am not sure if Christa reached out to them or anybody from the school district did that, but Christa did actually inform us that they are okay with the recommendation. Oh, okay. Would you like the motion? Yes, please. So I move that the council award a contract for auditing services to our HR Smith and company CPAs for fiscal years 22, 23, and 24. I'll second. And there's a second. Further discussion? Okay, ready for the vote then? All in favor? Signified by saying aye. That's unanimous. Well, thank you very much. Thank you. And thank you, Martha, and the committee. All right, moving on to number 10, the city pension asset update. The net performance report from the city's pension fund manager. Pat Blizzard is going to... Yeah, so Pat Blizzard is remote, and we'll be presenting that way. Pat, I will make you an organizer as we did earlier today. For Tim and I, this will be kind of the second time around as we had this discussion during the Pat committee meeting earlier today. Okay, great. Thank you. You're welcome. Let me find it on my... Do you have it here too, Helen? Oh, right. Yeah. So I don't need to do that. Good. All right, so whenever you're ready, Pat. Okay, I still cannot share my screen. Is that what you wanted me to do? Yeah, let me see. It looks like you are an organizer. Oh, wait, make... No, I gave you the wrong, the wrong ability. Make presenter. Now you should be able to. Okay, perfect. There we go. I'll put this in slideshow mode so everyone can see it a little bit better. Well, thank you for having me here this evening. I apologize for not being in person this time around. We switched the meeting date to this month and I had a conflict, but I was glad to be able to call via video. We've been doing it a little bit during the pandemic, and hopefully we'll see people in person much more going forward. So I have a lot to talk about. The information we have within the booklet is through the end of December, but I'm definitely going to give you an update through January and February as well. Obviously, voluntarily cut back in. So we want to discuss that. So I move ahead and just get into the capital markets. And on page seven, some of you have art copies, I believe. So this is just a snapshot of the major global indexes on the right-hand side. We've shown this to you in the past. And as you can see, it was a good year. The gray bar represents a one-year number for equities. U.S. kind of led the way behind small caps and international had strong absolute returns. Actually, the big winner was commodities. We'll talk more about commodities and inflation in just a bit, but that was the big winner. Now, we haven't seen commodities outperform in more than a decade. So definitely a children's leadership there. On the fixed-income side, your U.S. investment-grade bonds were negative for the year, longer-duration bonds, longer maturities, they were down further. The bright spot on the fixed-income side was high-year bonds. So more risk-efficient credit instruments did better.  A lot of that had to do with the pandemic and then just kind of behind the curve with their vaccinations and everything else. So that was the big sell-off there, an emerging market debt. Anything inflation-related preferred well, so inflation-grade bonds actually did well. As you can imagine, we're in an inflationary environment now. So I'll just take a step back briefly and let's talk about a couple of things. One, did GDP growth last year in the U.S. was 5.7 percent? So that was quite robust. And then looking forward this year, you're probably asking, what are we looking at? I mean, most forecasts are around for the whole year, about three and a half, maybe four percent. But then going out the next two years after that, probably back down to that two and a half percent range. So we're seeing a real best recovery from the pandemic. Obviously, things are looking much better from the pandemic standpoint as we look at our numbers all the way down across the country. Even in Europe and other places, we're starting to see them being more lenient with travelers coming in, dropping vaccination mandates in some areas. So things have definitely improved and improved pretty quickly since Omicron came into the picture. So that's good news for everybody and the economy abroad. We'll talk about other things impacting the economy in just a minute. So looking at the U.S. equity markets as a whole, last time we met there last year, we were talking about the big mega cap stocks, the tech stocks, how well they performed and how they propped up the equity markets as a whole. Some of the big fang stocks, if you add them up collectively, they represented more than 25 percent of the S&P 500. So risks started to build within indexing itself because you have such a large push of the index represented by those big tech stocks, what happens when they sell off? So what we saw in January was exactly that happened. So I'll give you some more recent numbers. The S&P 500 year-to-date is down 9.7 percent. Theoretically, they call correction territory 10 percent or more. So it's right there in the threshold. The NASDAQ is already in correction territory. It's down 13.15 percent. Now, the good news is the PAC committee and SEI made some recommendations to de-risk the indexing portion of the portfolio by entering into the U.S. factor-based strategy, which is more value-oriented, more defensive sectors. That played out very nicely. You'll see that as we get into the performance. Looking on the bottom of this page, last year growth and value picked up. It was close to the growth, but still it performs as a whole. And on the right side, the sectors, you could see we're seeing a big rotation here. So many of the meetings that came out prior to two years, technology was always on the left side of the chart outperforming. But now they're seeing areas like energy, real estate, financials taking over that leadership. So we're seeing a lot of sector rotation, which is good. And that's both well for active management. Part of the reason we made that decision to go into the U.S. factor-based strategy. And also there's much more focus on corporate earnings today than there has been in a long time. So all that fiscal stimulus and monetary stimulus, that's all going away slowly. So there's much more focus on corporate financials, their health, their revenue outlooks and forecasts. And I'll give you one example of what happened in January. So Facebook came out with their earnings, I listened to some of their call, where users should go way down. And their revenue forecast went down. That stock took a 25% hit in one day. So that's just one example of how there is a much bigger focus on corporate fundamentals than there has been in the past when you just had a handful of names running the markets higher. I said a lot there. Any questions around the equity markets? No. Okay. So talking about international markets, as I mentioned, they lagged the U.S. but they did provide nice diversification and strong absolute returns for the one-year period. I guess the big story on the international market side would be China last year. It's not really shown in this chart. It's included with Asia. But you could see, I'm sorry again, about 5% there, the collective Asia. But Chinese markets were down 30% last year. So that was a significant hit. A lot of that had to do with their zero COVID rate policy. It had to do with a lot, you know, some of the real estate blowouts that they're having now, some banking issues and, you know, just supply issues across the board as related to COVID. So the economy was hit very hard. And the good news is we had some strong outperformance in our emerging market equity fund because we had such a strong underweight to China last year. We also talked about and fixed income used to be really bad to talk about because we were range bound for so many years. We just were moving and everyone kept saying rates are going to go higher. They never did. Well, they started to go higher over the more recent periods. So what we're looking at in the bottom left-hand corner chart here is the U.S. yield curve. So that represents, you know, very short-term treasury instruments and they're going all the way out to 30-year maturities. And you could see the dotted line from 1231, 2020 and how the yield curve has moved higher across the board on the short end and the long end through 930, 2021. And then when you look at 1230, 2021, you can see the short end continue to rise and the long end actually came down a little bit. So there's a couple of factors that are around here. Well, the last meeting I met with the PAC committee last year, the fourth quarter meeting we had, or actually third quarter, that actually, we were talking about maybe two rate hikes in 2000 and 22. And the matter here with a lot of financial funds, including SEI, we're running all the lines of four, five, or six rate hikes this year. So that's pretty dramatic. Inflation has been a big part of the picture and the Fed is really concerned about that and the rate of freight inflation has had higher rates, especially on the short end of the yield curve. So we do anticipate we will probably see at a minimum four, I don't think we'll see six or seven. We could see five. But that's a pretty dramatic change from just the third quarter of last year because of inflation. Let's talk about inflation. The most recent inflation data came out was 7.5%. That's a very high number. That's a 30-year high. So if you think of what happened 30 years ago back in the early 80s, we had mortgage rates around 18.5%. You could get a CD for 14 to 15% coupon. Obviously, we can't get that today. You're lucky to get a half a percent on the short-term CD. So much different environment than we were back there, but it's pretty significant because we are inflation was risen just as high as it did in the early 80s. Is it transitory? The Fed has dropped that transitory language for no minutes. We do think it's going to be longer lasting, especially with the new developments with Russia and Ukraine and the impacts that we'll have on energy across the globe. So Senator, are there any questions about the capital markets? No, apparently not. Okay. I'm going to get into similar performance and then I'll bring you up to speed on the where we cut on today. So looking back, last year, calendar year, 2021, we're up just over 12%. I think fiscal year, you're up over 25%. We'll talk about that in your actual report on the year of the valuation. Fiscal year to date this year, this fiscal year, you're up around just under 0.5% through December 31st, 2021. I could say you're probably about flat to down a little bit after, if I look through last Friday's business close, because again, as I mentioned, the NASDAQ's down 14.15% and the S&P 500's down 9.7% year to date. So definitely frightened out that return you had through December. But if actually we could see a lot, we're going to see some volatility here with this whole Russian Ukraine crisis that's going on at the moment. So any questions or arms? Affirmants, we did have significant output requirements. So if you looked at the calendar year to date last year, return was 217%. We outpaced the index that was at 10.67%. And I've gone through some of the fund returns and you can see where that happened from on the next page, actually the page after this one. So this is just your cash flows. You can see the money is coming in and the receipts, disbursements, management fees, SEI fees, and then what makes up your return are realized gains, unrealized gains, interest and dividends that makes up your total return. So looking at some of the funds, so as you'd expect, a large cap index, you would have performance that's pretty much spot on with the actual index itself. So calendar year last year, about 26% plus on the large cap index. Small cap was up 21.4%. We had significant outperformance there. We had a very defensive posture in that fund. So those zero negative earners, which really cropped up the S&P markets over the last several years underperforming that made us outperform. The newest allocation is US equity factor-based allocation. We implemented this last year to take some of the risks that I talked about. That is a large cap index. And that had a really strong fourth quarter. You can see it was up 10.3% and that outpaced the index of 5.3%. And then on the national side, we're up about 7.6%. That was the only fund that's slightly underperformed in our calendar year basis last year, 7.8%. And here's the big one. It's a small part of the portfolio that with that relate to China and some other way in some of the South America, Central America countries, we're able to generate a positive 8.6% return versus the index of negative 2.33%. And this is the last page, I promise. Actually, there's a couple more I'll go through real quickly. So a quick fix income, that has a duration of around six years, but that is a safety net in your portfolio in case markets sell off. So that was down as interest rate rose last year. So it was down by 227%. As you'd expect with rates going out, that fund's going to have negative returns. High yield bonds did very well, as I mentioned earlier. And then your shorter duration vehicles opportunities income fund, we implemented this couple years ago. With the belief that we would see rising rates, and you can see that had a almost a 3% return and a rising rate environment. So that did protect you on the fixed income side.  That was down about four and a half percent. Dynamic asset allocation funds. This fund is really where SEI interjects are kind of short to medium term thinking. There's a lot of trades going on here. I will go into detail about all of them. But the good news is last year in 2021, this was your highest performing fund. It was at 31.5% relative to the index. So it was almost 3% of outperformance versus the index. And then clear property. So clear property was definitely impacted during 2020 when the pandemic hit. Obviously people were going to the offices. There was a lot of struggle with people paying the rent and many other things. So the return of 2020 was really muted from previous years down to 2.4%. But as the economy started to reopen, as people started to go back to work, we saw a clear property really bounce back strongly in 2021. You can see it at 25.5% return there in 2021. And that's all I had. Are there any questions about the markets or? Any questions? No. No. We're making it easy for you. Yep. Too easy. Well, thank you for having me. I appreciate it. If anything comes up, feel free to shoot Andrew an email and he can forward it up to me and I can answer any questions yet. Okay. Thank you, Pat. We just wait for Putin to make the next move. Yes, right. We'll see what happens. Thank you very much, Pat. Thank you. Okay. Okay. So moving on to item 11, the city pension actuarial update, the FY21 pension evaluation. Hi, Eric. Welcome. So briefly by way of table setting, you heard from Pat kind of where the markets ended up over the last couple of months. But kind of the really good news is 2021 was an exceptional year in the market and our portfolio increased significantly. So I think some of that good news, Eric will show in his presentation. All right. Yep. So for those of you that don't know me, my name is Eric Shate from the Newport Group and we do the actuarial work on the retirement plan of the city. We focus mostly on the plan liability side. So we're going to go through that today and just have an update of where the plan was as of 7-1-21 and then just go through the recommended contribution amounts and an update on the funded status. And we'll just jump right into it. So as a brief overview, when we talked about the plan's liability, there's two major ways of looking at it. And this is just a summary of the two before we get into explicit numbers. But the first is unit credit, which does not reflect future compensation increases. It's just the current value today based on today's compensation. And then there's entry age normal, which uses projected compensation. So we're going to look at both of those. But the difference between the two is the unit credit is kind of a look at what would it be today if the city ended the plan? And the entry age is more of funding long-term towards your future liabilities that you'll have in more future years. And just to note that the entry age is what goes on your GASB liabilities for the city. And that's what we'll use to do most of the funding, but we consider both methods. And then just to compare, we kind of went through this a little bit, but for the entry age normal, all expected benefits are to be paid at a future assumed date. And so the present value of the expected benefits is allocated as a percentage of compensation over time. So the goal is to keep the contribution amount equal as a percentage of pay as time goes on rather than as a flat dollar amount. And when participants reach retirement age, ultimately the liability will be the same. So what we're doing is the period that we're allocating liability over as opposed to actually calculating any liability. Ultimately what the liability is, is what gets paid out. And it's just how we assign that over time. So then just graphically, the top line here is the entry age normal liability. The bottom line is the unit credit. And we'll see over time the entry age is always above the unit credit, but it grows more slowly. Whereas the unit credit, as you get closer to retirement, there's a big jump. And that's generally what we want to avoid in the funding because it kind of spikes the funding up over time. And when we go through this, I'm talking about liability. The accrued actuarial liability is the present value of benefits earned to date. And then we'll talk about the normal cost, which is the benefits attributed to a single year period that's coming up. And it's just what's assigned to the past versus the future. And for the funding method, we use the entry age normal liability in order to smooth out the cost as much as possible. It provides a less volatile annual contributions. It helps to fund towards your future liability rather than what you have now and keep it more smooth over time. And just to note, both methods are valid ways of looking at the liability in the plan. They both provide different perspectives on it, current now versus what you're funding to. Neither is better than the others. It's good to look at both. All right. So the actual recommended contribution for 2021. When we look at the contribution, we take that past liability and we compare it to the current assets in the plan. And then we get an unfunded amount for past liability. And then so we want to pay down that past liability over time while also funding towards the current benefits being used. So in any one year period, the recommended contribution is going to be a payment on the unfunded liability, plus the normal cost for benefits to be earned during the current year. So you're keeping up with what's being earned plus paying down towards the unfunded amount. Historically, that payment has been based on a 20 year amortization. We'll see in a little bit, we have been accelerating that a bit to shorten that 20 year term and quicken the amortization of the unfunded. And the funding will all be based on what's a smooth value of assets. So we'll go into that a little bit later, but rather than using the market value each year, we'll use a smooth value to help smooth out the contribution as well. But we'll look at the funded status on both. So comparison of this year's current contribution to last year's, focusing on the 20 year portion, the total recommended contribution is $1,383, which is 17.2% of payroll, and that is just payroll of employees in this plan, not the entire city. And that's a decrease from the prior year of $1.3 million, which was 19% of payroll. And so the decrease is primarily because of the large asset return during the year, which was kind of smoothed out a bit by the smoothing of assets, but which will help us in the future years on the opposite side. And then if you just broke down that $1,030,000 contribution for the city, it's made up of $487,000 of normal costs, which is that benefit for the next year. Some interest just for the delay from $7.1 to when it actually gets paid, and then an amortization payment of paying down the previous unfunded. And the employees will also make contributions during the year, roughly $288,000. So I guess several years ago now, the plan was officially frozen so that no new employees will enter it. And then over time, it'll slowly work its way down. What that means is that the future life of the plan is no longer indefinite, it'll slowly work its way towards a point where it'll get closed down, there'll be no new employees, but that's a way off. But several years ago, we looked at an alternative way of making the recommended contribution. And instead of doing a 20 year amortization, each year decreasing it by one so that you would get to a fully funded amount in 2039. And so that was never formally adopted anywhere, but what the city has been doing is making that payment to keep up with that schedule over time. So this year, it's $1,054,000, which is slightly more than the 20 year amount. But over time, that amount will differentiate more. But up till now, we've been keeping up with that schedule to reduce the amortization towards 2039. And then funded status based on the smooth value of assets, and using that unit credit, the present value of liabilities, you have, you're where 102% funded on 7122, 2021. Using the entry age normal liability, you were 89% funded overall using the smooth value of assets. Go to the next one, we'll see the market value of assets was 113% funded for the present value of crude benefits, and 98% funded on the entry age normal. So each year we'll look at both. It's helpful to look at the market value because it reflects the actual market conditions on that date. But we do also like to consider the smooth value just to smooth out those fluctuations. But both of these are improvements from the previous year. And the 98% is an extremely well funded plan on the entry age normal basis. And it would help lead to, as of the state, because of the smooth assets, you haven't fully recognized the asset gain from the prior year, which may be a good thing, going into this year with the markets, how they're looking right now. But as you get towards 100% funded that the amortization piece of the contribution would start to drop off. And then just the reasons why we have an improved funding position, mainly during the fiscal year, there's about a 26% return for the assets compared to the assumed 7.25%. There was a small change in, small change in experience, which experience on the liability side are items happening different than expected, which could be mortality, retirements, compensation increases. Overall, just a small net gain from those during the year. And then historically, we have a chart here of the two funded methods over time. We could see the last several years, we've hovered around 100% on the unit credit and around 84% on the entry age normal, and then a jump up this year to 113 and 99%. And just to compare those funded statuses with other plans, you were about 98, 99% funded. The average public plan was 85% funded on the entry age basis. Beemers was 86%. Vistors was 58%. What is Vistors? The teachers. Oh, okay. Vistors and teachers, okay. Burlington was 70% and St. Albans was 54%. And the discount rates are listed here just because a different discount rate could lead to a different, would lead to a different liability. So if you were to compare, say, a 7% and a 7.4%, the 7.4% at the Burlington at 70% is probably closer to 65, 68% funded if you were to decrease that rate to 7%. And it's hard to make those adjustments here, but they're just there for reference to know that not everyone uses the same interest rate for calculating their liability. Do you know what the city of South Burlington would be if we were at 7% approximately? I can get that relatively quickly. In a couple of slides, we'll see what it would be a 1% difference, and it would really just be in between. If I could make a comment? Yes. If you could go back to slides for me real quick, just in case the other papers watching, it's just always important to highlight how good South Burlington has been stewarding our financial position over the years. This is really quite remarkable. And I remember when I first got involved in council from 10, 12, 13 years ago, I got involved seven or eight years ago, but there's a real concern about the unfunded pension liability. But Tom Hubbard and Kevin Dorn really stewarded us to a place where I think we should all be very proud of. So I just wanted to highlight this slide and how it didn't happen easily. I remember some tough years where we were looking at the pension contribution and it was really heavy. Like this year is going down 300,000. There were years where it was going up 300,000 dollars. It was hard to make those payments putting it on the taxpayers' backs, but I just want us all to be proud of this slide. So I thought I'd make that comment. Thank you, Tom. Okay. Just to briefly, I'll try not to go into it too much, go over the assumptions. We come up with these liabilities each year. In order to generate them, we have to take the participants in the plan and apply assumptions to their benefits to come up with that liability. And the major one for that is the discount rate. There's also an assumption for salary growth, inflation, retirement, withdrawal, which is leaving employment without retiring, mortality, and disability, and form of payment. We're not going to go through them in depth. They do get reviewed each year just to make sure they're still reasonable. And every several years, they go into a more in-depth review just to determine if anything's necessary. Any changes are necessary. We use the most up-to-date mortality tables. They're updated each year from data from the Social Security Administration. Long-term rate of return, we're currently using a 7.25%. The median rate for public plans was 7%. We haven't assumed retirement age of 53 on the public safety side. 65 on the non-public safety side, experience for those has been pretty close to those assumed retirement ages. We assume compensation increases of 5% on the public safety side and 4% on the non-public safety side, and the experience for the last several years has pretty much matched those as well. And to Andrew's point from a little while ago, the discount rate here is just shown the sensitivity of what a 1% change can do to the liability. And a 1% increase or decrease in the rate could change the current liability of the plan by about 5 million either way. So a quarter of a percent would probably be about 1.2 million increase or decrease in liability. And the plan assets, we talked about the smooth assets. This is just a detail of how we get to that smoothing. But if we go to the next slide, we can it's very hard to read on this, but this is a graph of the smooth value versus the market over time. The relatively straight line is the smooth value. And then the market value will fluctuate above and below it each year and kind of pull it towards each other. But the smooth value is what we use for the calculations just because it's smooth over time to avoid these large jumps from year to year on the market value. Soon rate 7.25% last year, we had about a 26% return. The year before that it was about a 2.9% return. Three year average was 11%, five year, 10%, 10 year, 8.6%. These are all very good returns for the plan over these periods of time. And then just to compare the return each year versus the soon rate, we did make a change several years ago to lower from 7.5 to 7.25 on the assume rate. But you can see that there is decent volatility from year to year on the returns for the plan. And then the the census information for the plan. I mentioned before the plan's closed to new participants, so there's no new active employees going into the plan. But there are currently 78 active employees earning new benefits in the plan that are employed by the city. And that will slowly decrease over time as employees retire, leave to go work somewhere else or do whatever that that 78 will continually decline where the other two will kind of pick up, they'll move into those buckets. The 47 are participants who worked for the city have a benefit in this plan, but are not currently drawing their benefits, either they may not be old enough, they may have chosen not to start retirement yet. But they have a benefit that's just not being paid to them yet. And then the bottom 89 bucket is retirees receiving monthly payments from the plan currently. We can kind of see over time how how the demographics have shifted, and they'll continue to shift. You'll see the retirees grow and the active shrink, the overall bar will slowly shrink over time as some of the retirees pass away. What's the difference between deferred vested and active is again. Deferred vesteds don't work for the city. Well, they don't work for the city. Oh, okay. Okay. They just have a benefit. It's sad it won't change. It's just not being paid. All right. So they're vested to just. Correct. And just as a reminder to counsel in the 2015 contract negotiations between City Hall and Public Works, those employees were moved into VEAMers. In the 2018 negotiations that were resolved in 2019, both fire and police, so all the public safety moved out. New employees are all going into VEAMers. So that's why you see these numbers decreasing over time and will eventually. So we have contributions to our pension fund. And then for the new employees, we have contributions to VEAMers separately, right? Correct. And those those payments are set by the state, right? Correct. Yep. Are the payments on the VEAMers side, are they proportionally more than our own pension, or are they roughly the same? So our total payment to VEAMers is around $600,000 by way of reference. This is a little over a million. So it ends up being about a little more than a third the total. That does not include, however, the pension, our pension note that we took out in 2011, which is about a $600,000 expenditure every year, even the refinance one that we did plan FY21. So on a proportional basis, even if you if you include the burden of the remaining balance on the $8 million alone, is the VEAMers plan more expensive to us, or is our plan more expensive? Overall, the VEAMers plan is less expensive. Less expensive. Okay. Thank you. And we don't have the same amount of liability, which is one part of the reason why we, yeah. And then just quickly, participant statistics in the plan, the average service is 16 years on the non-public side, 13 and a half on the public safety side. For the average remaining active participant on the non-public safety side, we expect another eight years of service and a public safety side about nine years. The average ages are 56 and 41. And then the duration, which is 10 on the non-public side and 12.7 on the public safety side is you can look at that as the sensitivity to the interest rate changes. So we saw how like a 1% interest rate change would change the total liability. This is just how sensitive each group is to that. And it's kind of just a measure of maturity. The lower duration means there's less active, they're older, they're closer to retirement or they're in retirement. And kind of historically the non-public safety side stopped putting employees in before the public safety side. And if you look, that's kind of why they're lower than the public safety is right now. But they're both, both those numbers would be trending lower over time. And the average retiree age for public safety is lower than none because they also get to retire earlier, right? Right. They can retire at 50, whereas non-public safety is 65. Don't they have to retire earlier? Or is that the state police? Yeah, there's no, there's no requirement that they retire at a certain age. But you don't have too many active policemen who are 80 years old or anything. No, we have very few over 60. Right. So that's all I have? There's any questions? Are there any questions? Tom, we can't see you, but if you have more questions, thank you. Well, thank you very much, Eric. Thanks for having me. Thanks for having me. Thank you, Eric. Thanks. Here's hoping that this year will be as good as last year. I know, another 25% would be terrific. Or at least, you know, comparable. Sure. Okay. Why don't we take a 10 minute break? Or two minute, two minute break, five minute break. We'll be back for item 12, the ARPA. LinkedIn City Council meeting of February 22nd, 2022. We are at item 12 discussed, and we'll be discussing the funding received from the American Recovery Planned Act, better known as ARPA, and discussed values for the use of those funds and consider possible processes for moving forward. So, Andrew. Good evening. So I have the exciting opportunity to talk with you about how to spend money, which I think is always an exciting conversation. We really do, at the end of the day, just have an incredible opportunity with the $5.6 million that the federal government has allocated to help the city of South Burlington in its COVID relief. I talked a little bit about, in the memo, I run through what to date we've already allocated, which, believe it or not, is already $1.5 million. That is a portion of that with the caveat that's pending voter approval at the March Town Meeting. So, you know, some of those expenditures, just as a quick reminder to the public, refunding three city staff positions, smoothed out over the entire period that we can allocate funds, which is up until FY26. We have some deferred CIP expenditures that help improve community resiliency and investments to public safety in particular, as well as our dispatch councils being part of that. We also have some money allocated in the FY23 budget towards some cybersecurity measures that will allow city staff to work remotely, as well as to secure kind of public information or private information, and as well as some funding that council previously allocated for a Market Street event, which is planned for this winter.  And just to quickly mention, I talk about a little bit in the memo, is initially the initial rule from the Department of Treasury was that there was only a portion of those funds that could be used for lost revenue purposes. The city reported back in October that those are $1.4 million in lost revenue over the course of the pandemic. However, just this just a month ago, the Treasury amended its final rules, which allows a municipality to claim a standard allowance of $10 million, which means the city can claim its entire ARPA allocation as last revenue. The reason this is important is because ARPA allocations for lost revenue can be expended for any government purpose, functionally, anything that we would expend in the general fund. But that's a one-year expenditure, correct? No, that's for all of the city's $5.6 million ARPA funds for the duration of the allocation. So anything that we spend, we can claim as lost revenue. So it's another way of putting this. The lost revenue in the initial rule, the lost revenue category was what gave us access to use the funds for any governmental purpose. Now the Treasury is saying any community can use up to $10 million of their allocation, so but for Burlington, any community in Vermont can use ARPA for any governmental purpose. We still have to allocate it by the end of December 2024 and spend it by the end of December 2026, but to what end is up to council allocation? It has to all be used by 2026, so we can't roll it into the future if that's what you meant. Right. What do you mean by that? I mean, in the far future. Beyond the end of the year. It has to all be expended by December 2026. Well, let's go shopping. Let's get some coffee beans before the price goes up. I smell some solar panels for the wastewater treatment plant. I smell maybe potential money for affordable housing, right? I mean, we're just brainstorming about things that we can spend it on, right? We could possibly purchase some property, right? If we wanted to, you know, assist our open space fund, right? If the opportunity came up. We could. The other question is the school district, have they a similar situation with a similar bucket of money? It's different money. Yeah, it's different money. I don't know what the sort of the bumpers are around their funding. I do know they have a significant amount in this year's budget. I don't know what their future plans for that. And the state has a large, like 400 million? No, more than that. So in total, 1.25 billion was awarded to the state. And that has to also be spent by 2026? Yeah. I'm thinking, I mean, I know that people are screaming for school construction, right? Right. For various number of reasons, right? Not including PCBs and aging infrastructure, right? So, but I don't know how you could possibly spend that money in, I mean, maybe you could in four years. Well, does it have to be if it's in a constructing something? Can it just be allocated for the, you know, construction might take six months to build something, a school? I mean, maybe it won't take about three months. Oh, it'll take six months, okay. Yeah. So, years. So, once you award it, and it's, it's got it, it's got to be spent. It's got to be spent on that, but it could be spent after 2026. It could not be spent after 2026. Oh, so it has to be, the building has to be built? Well, no, you just had to pay the person who built it by 2026, right? Okay. So, what we would do if we were at the end of, say it was 2025, and you said we want to spend the last million dollars on affordable housing at that point. And we knew that the construction of the affordable housing wasn't going to be complete by the end of 2026. We could work with a developer and say, we're going to give you a million dollars to build the foundation. And then they could demonstrate to us that they built the foundation. You know, there's a way to, there's a way to layer on that for early stages. Yes, no, no, I understand that. Or we could give the money all to CHT before 2026, and they could then do a project after the date. Yeah. Oh, they could do it after? Because we've essentially spent already. Given or awarded it to them. Oh, or to, yeah, Habitat for Humanity or something. Yeah. So to help frame this discussion a little bit, just because, you know, over the past six months, you know, there's been kind of a long list of things that come before us. And I think I get a couple a week from city leadership team. And I know Jesse gets a lot from, you know, kind of committees wanging on these questions. So what I wanted to do was just kind of take a step back and think about kind of the four kind of critical questions that I raise. Number one being kind of what's the community need here? Where do we want to spend these dollars? Do we want to have a, you know, a significant one-time influx of community investment? Is there one project we want to put our hat on? Or do we want to spread this out over time? But kind of wanted to sort of set that framework for the, you know, the value statements that council sees with this money. This is, again, a one-time opportunity to invest in community. And how do we want to, how do we want to do that? I have plenty ideas from our CIP, plenty ideas from staff in terms of, you know, funding infrastructure and other things. But I want to kind of take a step back from that and just ask council, you know, how do we, how do we get the most for our money here? What is your sort of policy goals structured around this funding? And then sort of the last question is what type of community engagement would you like to see? There is a requirement under the, the Treasury rule that, you know, we engage with the community in some way and sort of hear their feedback. And what are your thoughts in terms of what that will look like? Whether that's at a committee level, whether that's, you know, surveys or public hearings or, you know, any number of things. And, and sort of once you set those policy goals and, and a little bit of a, a runway, you know, we as staff can sort of build out what that, what that will look like in terms of dates and other, and other decision points for council. I guess I was going to say, I think that our committee structure is a, is a good way to, to begin. I, I do have a concern that, you know, we've seen just acrimony between committees and, and I don't quite know how to manage that because I do think that the vetting that they do for the most part is, is useful. And it, it, you know, it gives direction to the public discussion because they've been able to, to consider various things very closely. But to have them all think they're competing for the funds is, is a little bit daunting to me. So I don't know how we, how we do that. And if we could, you know, break the amount like the chunk of change that we have into different pots and say it's possible that you get this amount so that they're not competing for the big chunk of change. I would be interested to know what they would suggest. And then we could go up to that amount, we could come below it, we could go above it, depending. Yeah, you could certainly say a affordable housing committee were considering a million dollars for affordable housing. For example, what are your recommendations is the best way to allocate those, that, that million. And we'll consider that at a later meeting.  You know, there, there are many different ways to, to handle that so that committees aren't buying for, you know, one big pot. They've kind of been given specific policy direction from council. This is what we want to be spending this money on committee. Use your expertise and time to bring forward an idea. I would, this is really a good question, because we're in a pretty good position right now, right? I mean, you just heard from the pension fund and the actuarial response to it, right, that we had a good year last year. And I think, you know, our revenues are, seem to be good, right?  But the question from a leadership team is, where, despite all those good things that are happening, right? Where is the stress in city management? Because, I mean, I know planning and zoning just relieved it, right? With a bunch of ARPA money to hire some more people here and there. But like, is it, is it public safety? Is that where the most stress is right now? Because you just don't have enough people that you'd like to have in order to relieve overtime? And it's not just about relieving overtime, it's about, you know, whatever structural changes you can make with that money to, to help, because, because I'm thinking of quality of life, first of all, for city employees, right? Because they're here every day, right? And then it's quality of life for the citizens in the city, which is like, Dorsey Street is a mess, you know, and it needs to be paved. And we have a lot of initiatives that would all love to be funded to some degree, you know, whether it's open space for affordable housing or bike and ped, you know. And so it's that whole priority balancing that we've got to come up with. So, well, I sort of think when, when you have access to a good amount of money like this, I appreciate that it might be that what we really need is five more people in public safety, or whatever, I don't know. But this money won't pay for that. It'll only pay for it for two years. And then we have to come to the reality of, all right, so now we have to find that money somewhere else. So I always think a really the best use of this kind of windfall, unexpected money that's like one time. When it's gone, it's gone. That it ought to go to something that has a longer term value. And something that we don't necessarily commit ourselves to a huge amount of additional spending every year. To maintain it. I mean, I think there'll always be a little of that. I mean, if you pave more walking paths, at some point, you got to replace them. So there is, and you got to plow them. So there is some cost to that. It isn't just you build it and walk away. Sustainability question. But it is that sustainability. Yeah. So that's a piece, I think, of the value in that I think is important when we think about how to invest this. And see it more as an investment that sort of pays back. Tom? I completely agree with you, Chair, really. When I think about these dollars, I think two things. One, one time investments in infrastructure. I think of when I travel, we'd like to do road trips. When I go to cities, I always appreciate and see how both locals as well as visitors appreciate city parks. I think of Burlington City Hall Park. Long time ago, those city leaders bought that land. And today, both city residents and visitors enjoy and appreciate that beautiful asset. And so when I think of these one-time dollars, I think it's something that 20, 30, 100 years from now, people think back to the America Reinvestment Act and putting the moneys towards those types of things. One other piece that I would add to this that on top of what you just said, Chair, really, is impact and reach. So a big measure for me is I fully support the affordable housing. As one tool and the tool kept putting some money towards an affordable housing project makes sense. But I also love us to think bigger about how do we impact and improve the quality of life for all the residents living in affordable housing, living all across the spectrum, visiting as well. How do we put this money towards the greatest impact for all of the residents of South Burlington, including facilitating just higher quality of life with public amenities and public infrastructure that are accessible to all of our inhabitants? It sounded like two votes from the Chittenden home. Your dogs agree with you. And a pool would be great too. I knew that was coming. And that certainly can be part of the conversation. But for me, then, that also we have to quantify the caring costs for that going into the future. I mean, it's one thing to build it so you don't borrow money, so you don't have that piece or have to borrow as much. But there's also then it's the staffing, it's the um, caring costs. It's whatever you need to to keep it a valuable piece for the community. Well, I think that the parameters that we're setting out here would be useful questions to put to our committees. So what what use of the funds could be, um, uh, you know, ongoing, right? Something that would generate, um, a benefit long term, right? What use of the funds would allow for a big major public amenity that otherwise we could not we could not fund? And, you know, to think about the, you know, the hidden costs of that, that's what you were talking about, Helen. And I don't know if there are any other uses. I do like the idea of having the committee's vet. Well, do people like the idea of maybe giving a, you know, an amount to possibly spend to the committees? I mean, because each one of them could probably come up and say, Oh yeah, I got a four and a half million dollar project or projects. No problem. And that's when you get in the, I'm committed to the million for the affordable housing. Yeah, I just wouldn't want to set the dollar amounts before we hear what the ideas are. I said, get every committee, give them blank carte blanche and make a wish list, but it has to be really well justified. Yes. And then we'll take all those and we'll put them in a tumbler or the wishes. Yeah, pull things out and evaluate them plus leadership team. Well, yeah, there's some other things that I think, you know, part of, I don't know if this, well, I guess when you say it's a one time transformational investment could be something that really improves the lives of the staff and their ability to work. I mean, is that, I think you already did that. Yeah, but yeah, but it's a good point.  So, you know, if council said this is, this is a priority, we want to address mental health crises that has been magnified as a result of the pandemic. I think that would be a leadership team discussion using our experts in public safety to come forward with ideas there. So just just saying that there are other other things leadership team can bring forward if given the kind of the allocation or funding. I am for allocation. I do not want to see people saying why'd you give it to them and not to us. I that just so there's been some rancor. Yes. So I just want to, so we have 10 policy committees. So if we divide it up into buckets that becomes really, I mean, $4 million is a lot of money, but we're talking all of a sudden about $400,000. And that's that is that going to be transformative to our community the way we want it to be transformative. I agree that the committee structure is a great structure for public engagement. And I'm wondering if there I think Megan you started to kind of tee off some questions. I wonder if there are value statements you as a council want to give to committees to say we are specifically looking, we think the things in South Burlington or the communities or the infrastructure or the things in South Burlington that were most negatively impacted by COVID were X. We would like to see your best ideas to help us solve