INFO-2024-6 : An Update on the Finances of the City of Melrose

Transcript (~42 min @ 33:40)

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▶ 33:35 Maya Jamaleddine: Okay. You, congratulations. Thank you. And now it will be, thank you, um, sent to the full council. Thanks. Thanks, Thanks.

▶ 33:44 Speaker 4: Um, thank You

▶ 33:51 Leila Migliorelli: Adam, Chair. Um, I'd like to make a motion to move out of order info 2024 dash six, an update on the finances of the city of Melrose. Um, just given that we have the mayor and the CFO and financial department here to talk with us about that.

▶ 34:06 Maya Jamaleddine: Um, okay. And we have a motion made, um, by, uh, president, um, uh, to move info item, um, 2024 dash six out of order second. And seconded by, um, Councillor Stewart. All in favor? Aye. Any opposed? Okay. Now, um, this item is before us.

▶ 34:41 Speaker 11: Sure.

▶ 34:49 Jen Grigoraitis: Thank you all, and I appreciate your willingness to take this out of order, I think, or I hope some of the context that we give will be helpful in some of the items we talk about later this evening. Um, I have with me tonight Ellen Donahue, who has been serving as our interim CFO and Carrie Golden, who is our deputy auditor. And we wanted to have an opportunity to really have a conversation with you all and give, what I would argue is a 30,000 foot view of the city's finances. Um, in about five weeks, we'll send down the FY 25 budget for your consideration and start to begin the typical process of having you all have an opportunity to hear from each department. But what I, when I sat in your seats, felt like was lacking from that process was really a broader understanding of the context in which each of those departments operate. So we wanted to provide that tonight about the current fiscal year, which is FY 24, which we are obviously, um, largely through, but really wanted to talk a little bit about some historical context and what we see as the current budget drivers as we're building FY 25. Um, and before I turn it over to the two experts that were with me, I do wanna thank the entire fiscal team, um, Patrick LaRusso, who I think many of you know, has retired but is quietly helping us behind the scenes and has really built a phenomenal team, um, with Carrie, Jill Irvin, Donna Cardillo, who are every day doing phenomenal work on behalf of the residents of the city. So I am personally so grateful for the help that they have provided. I've literally worn a path in the carpet between my office and the finance office. I'm grateful to Ellen for coming out of retirement to be here with us tonight. So, um, I will turn it over to the two of them to talk a little bit about where things are at.

▶ 36:26 Speaker 7: Sure. Um, so tonight I'm looking to just kind of frame, uh, how the FY 24 operating budget was developed. Um, and so I recognize that there's some new counselors, um, who weren't part of the budget process last year. Um, so last year when we developed the fiscal 2024, uh, operating budget, um, we saw a 6.21% increase over fiscal 23, which equates to $5.917 million. Um, one of the largest drivers behind, um, that is the revenue increase in state aid that we saw last year. Um, there's often a term called a cherry sheet thrown around, um, in municipal government. And so what that is, it's the, um, uh, both the revenues for chapter 70, um, aga, which is unrestricted governmental aid, um, and, you know, other, uh, the library offsets, um, as well as school choice and charter school assessments. So, um, last year we saw an increase, um, and quite a substantial increase. And this was the second, uh, year of this. So from FY 22 to FY 23, we saw a 13.1% increase in state aid. And then from FY 23 to FY 24, we saw a 21.4% increase in state aid. So that equated to $2.58 million worth of chapter 78, um, for the schools. And so prior to fiscal 23, the state that we received was very inconsistent. It varied. So in FY 20 we saw, um, a 2.8% increase. FY 21, we saw a 3.29% decrease. And that's net state. So there's page one of the cherry sheet and page two. So page one is all your revenues. And then page two is are your assessments for charter schools and BTA, um, so net state aid and FY 21 decreased by 3.29%. And then in FY 22, it also decreased by two point, uh, zero 1%. Um, so then, um, and this compromises about 18% of the revenues that we see for the operating budget. Um, then the largest piece of the revenue for the operating budget is the property tax. So that compromises 72% of the operating budget. Um, so for fiscal 25 net for allowance of abatements and exemptions, otherwise known as the overlay. So what that is, is if cases go to the appellate tax board, um, the senior work off program, those are allowances and abatements that hit the overlay. So, um, we recognized $75.5 million, um, which is approximately like a 1.8% increase. That's what the prop two and a half equals annually. On top of that, um, the board of assessors, they projected that we would see $500,000 in new growth. So new growth is, um, captured through building permits. Um, and it has to be captured as of January 1st and online, um, for that year. Uh, so we, we had an estimate of $500,000, uh, for like a five year estimate. It's come in, um, an average of like $750,000. Uh, local receipts which compromise about, um, 7% of revenue are made up of, um, our largest local receipt is motor vehicle excise tax. Um, when we do budget these receipts, we budget them pretty conservatively 'cause there is, um, there's a lot of volatility with this, and it's driven by the economic conditions. So, you know, if we're in a recession or, um, you may see people not purchasing new cars, um, going out to dinner, there's meals tax, um, or doing, uh, a building, uh, project in your home. Uh, building permits are also part of that. And so we have to be mindful that oftentimes we may have a one-time building permit. Um, like a couple years ago, I think it was FY 21, we saw a one-time building permit of $494,000. So we wouldn't wanna build that into the base the following year because that's kind of a one time, uh, thing. And I think it was fiscal, um, 20 or 21, we saw a million dollar payment from waste Management. So that's what we call like a miscellaneous non-recurring revenue. Um, so again, you don't wanna make that part of your, um, base. And one of the biggest things like, um, when interest rates were down mortgage rates, there was a lot of individuals refinancing purchasing homes. So, um, part of that is a municipal lien certificate. So like that was a one time bump in those revenues. Insignificant in the grand scheme of things, but it's a, it's another example. And also just the interest rates that we are receiving on our money. Um, you know, I'm sure people have seen it that the interest rates, um, if you're saving money right now, you are, uh, you're recognizing higher interest rates. So we've definitely seen movement there as well. Um, one of the last pieces to the operating budget, um, that we base, um, other revenues on, and it's an insignificant amount, it's 3%, um, it's called other funding sources. So as part of the budget, there's a sheet that's sent down and it shows all of these other funding sources of the budget. One of the largest, um, pieces of that are the indirect cost. So within the city of Melrose, there's currently four enterprise funds, water, sewer, mount hood, and ambulance. So those all kind of operate as their own business. They all have fees that sustain that, however, they share services. So there's indirect cost associated with that. So, um, for the treasurer collector's office, the auditor's office, um, we're processing payroll, paying all the invoices for that. They don't have, um, their own staff. Um, and so then another piece of that is the debt payment, um, that Mount Hood pays annually to the city. Um, and so there was a field project and as part of that field project, special legislation was passed that Mount Hood would be allowed to pay, um, that debt payment on behalf of the city. Last year for the first time we used, um, the public safety stabilization fund. And, uh, we utilized 250, um, thousand dollars from this. And so what that is is, um, we cannabis excise tax, and so it's 3% on retail mar retail cannabis. Um, and so with that 50% goes to the general fund and 50% goes to a public education and safety stabilization fund sued that $250,000 was drawn from that, um, to go to the schools last year. Um, and it has a very specific use. Um, it was established, I believe in 2019 and it had a sunset provision in 2022. Um, and it was voted to continue to split that money, uh, 50 50. Um, so those are kind of the revenues that we use to build the FY 24 budget. So, um, part of the financial process for the budget last year as well was investment in city, uh, city stabilization funds. And so typically what happens during the budget process, um, appropriation orders are sent down and we utilize what we call, uh, free cash. Um, I'm sure you've heard that term as well. And so last year, um, between two orders and one was an order that was redirected, um, to that capital stabilization fund. Um, but between the two of those orders we invested just shy of $1.1 million in our stabilization funds, uh, which allowed us to have a balance of $8.8 million collectively in all of our stabilization funds. So our stabilization funds, we have a general purpose capital stabilization fund, and then, um, a host of other special purpose stabilization funds. We have a special education capital stabilization contract stabilization, um, we have opep, um, trust fund and um, I think an OSHA one. And I, uh, suits and claims stabilization funds. So those are all the stabilization funds we have. So as part of the budget package last year, there was investment in those funds, um, because we wanna demonstrate that we can, uh, we have money in those funds to be able to weather negative economic conditions. Um, and also part of all that we do on the finance team here is, um, tied into our bond rating. And so we wanna show our outside bonding agencies that we're also making an investment in ourselves and, um, growing those reserves as the budget grows. So the target would be to have, um, anywhere from five to 10% in those reserve funds.

▶ 46:31 Speaker 7: So then, um, as far as the budget was concerned last year, one of the focuses on the prior administration and I think, um, all administrations and the previous CFO was to maintain a level of stability within, um, the community and stable level of services. So one of the things that we did see as part of the operating budget last year was a significant increase in special ed cost, um, as well as special ed transportation costs, uh, to the two point 14%. So, um, some of the, the, um, the prior administration had gone to school committee during the budget process, uh, both the previous CFO and the mayor, um, to discuss the, the other order that we're here for tonight. Um, but when we present the budget for fiscal 24, we had a balanced budget, um, that totaled $101 million. Um, 1 0 1, 1 7 3 3 41 is the exact figure. Um, and it was a balance budget, um, which is required under mass general law. And so as part of that operating budget, um, there's the school piece. And so that's just one piece. We, we, the city council approves the appropriation to the school, but the school committee approves the school committee budget, uh, or the school budget because they have their other offsets as well. Um, as far as the fiscal 2024 budget drivers, um, so some of the largest drivers last year was our health insurance obligation. There's about 750 benefit eligible employee benefit eligible employees in the city of Melrose. Um, we are part of the GIC, uh, we did make some adjustments within the health insurance budget last year. So there's a health insurance incentive. Um, it's called the opt out program. And it's a cost diversion program where, um, a new hire you can either opt out or you can elect to have a benefit plan and there's a whole process to opt out. Um, but prior to FY 24, the opt out for families had been $6,500 annually. And for, um, a single employee it had been 3000. So those were reduced from, uh, to 50 202,000 respectively. And that, I think saved about $250,000 in the operating budget. But even with that, we still saw an increase of over a million dollars in the health contractual budget. Um, a lot of these items that I'm gonna speak to are kind of non-negotiable. Um, so the Vogue School in Wakefield, um, we saw an increase of $225,600 last year to the FY 24 budget. Um, debt, which we have we're obligated to pay every year. That was an increase of 214 between temporary and permanent debt. Um, I talked about health contractual and then Medicare was 35,000. Um, and coupled with the increase in state aid, um, the school got $3 million. So all in all, that's about $4.8 million of the increase that we saw last year. Also during fiscal 23, um, we settled a significant amount of contracts, both I think the school did as well as the city. And so as far as the city contracts that were settled, those were contracts that had been out collective bargaining agreements. And so they were not built as part of the FY 23 budget. And so what happens when you get to the year FY 24, you have to recognize that cost. So, um, FY 24 recognizes the cost of some of those contracts. And I think we had both of our, uh, police contracts out, uh, in FY 23, our laborers and our clerical union.

▶ 51:01 Speaker 7: Um, so those are kind of some of the expense drivers. Um, Sue as far as FY 24, um, where we stand as of today, so this is more than a mid-year review 'cause the information we're looking at is as of, uh, February 29. So we're really like 67%, two thirds, uh, done with the year through the end of February. Um, and so there were some revenue snapshots that were, um, posted into IQM two as well as and, uh, budget. Um, so as far as the budget, like some of the departmental questions, you may, if you have questions about a specific department, um, you should reach out to those departments. Um, they're probably better served to answer some of those questions. Um, and this is just to kind of show a high level of where we are today, um, as far as 24 with some of our revenues. Um, so one of the good things is we estimated new growth at 500,000. It came in at $772,000, which is good. Um, so that's a positive of $272,000. Um, as far as other revenues, they're pretty much in line with prior year, uh, that revenue snapshot that was posted, captured year over year. And some of those have since also corrected themselves in March. Uh, specifically like motor vehicle excise march, um, that's when the commitments go out for motor vehicle excise. So we, we will recognize, um, a bulk of the revenue in March. Um, and I think I have looked at some of the revenues. Um, and so as far as our projections, I think, um, at the end of February for local receipts, we were about 65% of revenues collected. And at the end, or through today were 87% collected of our estimated revenues. Um, so we've seen, um, some growth there. Um, as far as some of our expense items, uh, that we're concerned about right now, um, one of them, and it, it's historically been, um, something that we come back for, um, is public safety overtime. Um, there have been some staffing, um, vacancies in both departments, uh, both police and fire. And so with that, um, with the minimum manning requirement, you have to backfill. Um, a lot of the jobs even, you know, in education, all of them all have to be backfilled that cost typically can't go unfilled. So, um, so as far as public safety over time, we probably will be back before the end of the year. Um, as well as Medicare. Medicare, um, we have an employer portion that we pay and that is, uh, 1.45%. So we anticipate having to come back and we would hold off on those until we get closer to May, June to have the best estimates. Um, and as far as we know right now, um, there's one extra student at Essex Agricultural. So when we set the budget for some of these items, um, you know, typically we aim to have the budget done like mid-April, so we can produce reports and, um, get everything done. And so a lot of that timing doesn't align with, um, some of the things that we have going on behind the scenes such as open enrollment. Um, I know Essex Agricultural, their movement, um, I've talked with the business manager there previously. They're kind of going through their acceptance period in mid, um, April. So, um, we had a late acceptance there. Um, so that's about $17,000 there that we will be coming, um, back for pretty soon. Um, the good news about the operating budget, um, we had a very mild winter. So as of the end of February, the report may be misleading, um, because the public works department, they put in purchase orders to anticipate and estimate costs for snow. Um, and so then because we've been hit with late storms in 2018, there was a significant storm, I think it was March 18th, so we're, you know, they're constantly monitoring the forecast. So as of the end of, or as we stand right now and into the near future, it doesn't look like there's any snow. So that's good news. So we had initially held back about $800,000 in free cash to address any potential snow deficit. So now we're able to redistribute that free cash, um, to other capital needs. Um, and it looks like we're actually gonna have a surplus in snow. So, um, that's great news. Um, and just with some of the staffing, um, vacancies, so we don't save on overtime cost, but we do save, um, on benefit cost. So, um, with that we, there's potentially, um, there will be not potentially there will be money in health insurance. It's just at this point we don't know how much. Um, so that's really the operating budget. Um, as far as free cash, um, our free cash was certified just over $5 million, um, this year. And we recognized positive retained earnings in all four of our enterprise funds. So that's the equivalent of free cash, um, for the enterprise funds. Um, so one of the first priorities of free cash is that we wanted to address the special education and transportation costs for the school. Um, the next stage you'll see this order in the near future is to make investment in the stabilization funds. And then finally we're going to evaluate some capital and operational needs, um, because we do have to rectify any known deficit prior to June 30th. Um, otherwise those deficits get raised of the tax recap, um, which that process happens in November. And um, it takes away from what you can do with that next year's budget. Um, it suits some of the good things, um, about the city. Were, you know, we did recognize free cash. There's some communities that can't say that. Um, we have the $8.8 million in, um, stabilization funds. And I think, um, you know, one of the things we talk about a lot is our bond rating. Um, so our prior CFO, he had come here, um, in the early two thousands and Melrose was not in great shape, it was in junk bond status. And over the course of the years, um, he was able to build the stabilization funds to where they are today, as well as, um, with a lot of hard work, um, get us outta junk bond status. And so we have the second best bond rating you could possibly have. Um, and it's more important than ever as we're about to embark on the historic, uh, public safety debt exclusion project. So, you know, one of the things we wanna, um, keep focus on is remaining in, uh, in keeping our, our service level is stable. Um, 'cause that is one of the things that they do look at, um, for the bond rating. Um, and so then, um, as far as the budget process, um, there's a couple other funds to just, uh, be aware of or types of funds. So, um, one of the budget orders that comes down every year is for revolving funds. So we have about eight departments that have revolving funds and some of them get a, a general fund, uh, subsidy. So to use recreation for an example, um, they've, they have a minimal appropriation on the city budget. It's about $85,000, but they operate, um, a revolving fund and, um, they're able to run most of their programming out of the revolving fund. Um, so as part of the budget process, every year there's a table that comes down and shows what each one of those fund numbers is, um, and the spending cap. And they have authorized spending caps that if there were to be an increase in that spending cap, it would be, uh, through council vote. Um, but they also have a very specific use and a specific revenue source. Um, so that's one of the things that will be discussed, uh, during the FY 25 budget. And then, um, last I just wanted to talk quickly through our enterprise funds. Um, so we have the four enterprise funds within the city, water, sewer, ambulance, and mount hood. Um, so if you look at some of the revenue projections through, uh, February, they're a little off. And unfortunately those are kind of driven. Um, water sewer and mount hood are all kind of driven by weather. So, um, you know, if it's a wet summer, it impacts the water usage. Um, if it's a dry summer, then water usage goes up. I think that there, um, you know, over the past couple years there's been some issues, um, when everyone got sent to work from home, you know, all of a sudden usage, um, goes up. So, um, some of those funds, the revenues are down, um, a little bit year over year. Um, but as far as Mount Hood, they're doing very well. Um, they entered a new contract with a new management team in January of 23, um, Sagamore. And um, their revenues are up and they're doing great. Um, so they've been a really good partner.

▶ 1:01:56 Speaker 7: So yeah, that's a lot.

▶ 1:01:59 Speaker 6: So I don't, but we're happy to take questions. Yeah, thank you.

▶ 1:02:08 Maya Jamaleddine: Um, anything anyone wants to add before we open up for a question? Thank you. Um, any question from my colleagues?

▶ 1:02:18 Maya Jamaleddine: Counselor Repe?

▶ 1:02:20 Mark Garipay: Yep. Thank you all for being here. Just a couple of clarifying questions on the local receipts. The cannabis host fee is that, uh, I'm sorry, the cannabis was 179,000 last year. Zero this year. Is that the host fee that went away? Yes.

▶ 1:02:34 Speaker 2: Yes. That's the And um, non

▶ 1:02:38 Mark Garipay: miscellaneous, non-recurring on the bottom, um, it's down 184,000.

▶ 1:02:45 Speaker 7: Yep. So those are t that those are often one time receipts. So actually an FY 23, um, the opioid settlement money came in from the state. And so at the time, um, there was no provision to segregate that revenue into a special revenue fund. Uh, so $101,000 came in in local, in that miscellaneous non-recurring, um, account in FY 23. Since then. Um, as part of, uh, the free cash certification and encompass in that $5 million is that $101,000 DLS has, um, passed guidance that we can segregate that money into a special revenue fund. So there'll be an order, um, in front of the council in the near future to move the 101 that came in through the general fund into a special revenue fund, uh, for opioid settlement. And there's very specific purposes that that money can be used for.

▶ 1:03:48 Mark Garipay: Okay, thank you. And then, um, just curious on the ambulance enterprise fund, that's down about 12 to 13%. I mean, it's not based on usage, right? But, um, I know we have an outside company I think that handles all the billing Mm-Hmm. For that, yes. Um, is it, is it based on, this is a pretty important enterprise fund, right? It pays for a lot of the Yes. A number of fire, fire, uh, positions. Um, are we having trouble collecting money or is it just, just usage right

▶ 1:04:18 Speaker 7: Now? No, no. So it's based on, um, so it's based on number of runs, um, and I think what some of the staffing challenges as well. Um, you know, the fire department I believe has 11 vacancies. Um, but it's, um, it's based on number of runs, but it's also based on product mix if you're a Medicare, um, patient versus a private insurance insurance patient. So we could, um, you know, you could have the same number of runs but a different mix within that. So it is definitely something that we're watching, um, because also, um, for each of these funds, uh, sewer, water, mount hood and ambulance, they also have their own savings accounts as well. Um, so if if there were any concerns with that, then um, we would look to have an appropriation before year end. Okay.

▶ 1:05:20 Mark Garipay: Um, this is probably for the fire, the the fire chief, but um,

▶ 1:05:26 Speaker 2: when you ba when you said a number of runs, um,

▶ 1:05:30 Mark Garipay: are we not using the ambulance? I know we got Cataldo as a backup. Are we, do we have the ambulance? Is it always in service? Do we know? Or is it, um, that more for the fire chief? Yeah. Okay. For the fire chief. Um, 'cause that would affect, if we're using gaal, there was a, as a third party option, then that, that would affect this number, right? Mm-Hmm. Yeah. And then, uh, just one other, uh, thing I saw on the budget, total budget is 48%, we're nine months in, is a lot of the expenses back loaded or 'cause one would assume we're, most of our costs are fixed, we should be up around maybe 70%, um, used for the budget as of now.

▶ 1:06:06 Speaker 7: Yeah. You would expect to be like about 67% if we're nine months in. Right. So, um, we'll see some, um, like some of the park expenses come at year end, getting the fields ready and stuff. Um, but we're kind of in line with where we were last year we're a little bit under. So last year as of, uh, the end of February, we were at 50.2% and I think we're at like 48, so we're kind of right there.

▶ 1:06:36 Mark Garipay: So we shouldn't see. We shouldn't, um, as we're sitting here today, we shouldn't anticipate big windfall coming in under

▶ 1:06:42 Speaker 7: No, no, no.

▶ 1:06:44 Speaker 10: Thank you. No, we will call you. Yeah. We'll have a party.

▶ 1:06:47 Speaker 7: Yes, we will. We'll have a party.

▶ 1:06:50 Maya Jamaleddine: Um, next Councilor Vandiver.

▶ 1:06:52 Kimberly Vandiver: Uh, thank you for being here tonight. Uh, I, I'll try to stick to a few higher level questions. Um, so I'm looking at the, the budget report Sure. That you included. Um, so on page 21 of the budget report, um, it, it has the school section Mm-Hmm. Um, and it's showing, um, zero expended under salaries in school. So what happens, um, all of the school,

▶ 1:07:22 Speaker 7: the school budget is contained within a separate fund. So the general fund for the city is fund 0 1 0 0. The school is 0 1 1 1. So that, um, is the budget, but there's also a transfer out in that amount. Um, and it's probably not captured on this report 'cause it's not department specific. So we take that operating budget and transfer it out into the school fund. Um, and so that has happened. Okay. They, it's, yeah. Okay.

▶ 1:07:50 Kimberly Vandiver: And, um, on page 52 of the report, um, it's a section, uh, about the cherry sheets and it's, it's showing, um, about $3 million, uh, split across these seven lines. Um, but showing $0 appropriated towards them is, is there a reason that isn't represented in the budget? Sue? As far as the cherry sheet, um, it has never been part of the appropriation. Um, it's looked at as net state aid. I've tried to capture that since I've been here. 'cause it, it just allows for historic purpose, um,

▶ 1:08:30 Speaker 7: reporting purposes. It's easier to track. Um, so it is factored into the overall operating budget. Mm-Hmm. Um, but it's not included in the 1 0 1.

▶ 1:08:44 Kimberly Vandiver: Okay. And, um, I guess my, my only other high, high level question would be, would it, is it possible to get this, this report that's in A PDF, is it possible to get a CSV version of the report? Um, to be able to, you know, look at the numbers and the percentages that way?

▶ 1:09:00 Speaker 10: Yeah, that would be great. Thank you.

▶ 1:09:04 Speaker 4: Any counselor?

▶ 1:09:07 Cal Finocchiaro: Um, just a clarification for me, just 'cause I'm still learning about this, but the five to 10% that's put aside, um, for the free cash or the stabilization fund, is that recommendation from the Department of Local Services? Or is that, is that the

▶ 1:09:20 Speaker 6: Best practice? Yes. Okay. Excuse me. Best practice from the Department of Local Services. Um, and some of it is also turnbacks, but the majority of it, I think is, is from not budgeting all your money. And again, as Carrie said, we're going into a period where you're gonna have a lot of capital expenses. Um, we came very close, we thought last year to getting the AAA bond rating. Uh, Catherine and Marta was kind of surprised that we stuck with the double A. So we think it's really important to stick with that Mm-Hmm. To the extent that we can, so that we lower your costs as we go out to bid in a few years upon this project. Mm-Hmm.

▶ 1:09:52 Speaker 1: Okay. Great.

▶ 1:09:57 Speaker 4: Next I have Councilor Stewart.

▶ 1:09:58 Robb Stewart: Thank you Madam Chair, and thank you all for being here this evening. Um, great explanation. Uh, one, just one clarification. You talked about the model of winter and, uh, the $800,000 that is gonna go back to free cash. You mentioned that it's gonna be used for, used for other capital needs. Did you really mean operational needs?

▶ 1:10:19 Speaker 7: No. So, um, when free cash is certified every year, we kind of put placeholders in for what we'll utilize free cash for. And we always set aside a reserve, um, for snow and ice. And so of the 5,000,047 that was certified by DLS, um, we set aside 800,000 of that for snow and ice deficit. However, we don't, we're not on the hook for that, um, because of the mild winter. So then we would book to use that money for other purposes. Uh, for other free cash appropriations.

▶ 1:10:56 Speaker 6: The city has a long list of, you would call them capital projects maybe because DPW is going to do them, but they're short term, they're smaller amounts of money, so you really wouldn't bond those. Um, so we have a, a laundry list of requests that we're still putting together from the agencies, seeing what their priorities are with some of the bigger, um, problems are that we could fix in a relatively short period of time. Uh, those will go to the marriage, uh, for her final decision for a recommendation to the board.

▶ 1:11:24 Robb Stewart: And what are you gonna recommend?

▶ 1:11:26 Jen Grigoraitis: Stay tuned. Uh, I mean, if you all didn't realize we, we entered, um, free cash time tonight. And the reason why we wanted to do this tonight and then also the schools are here, is because we're looking at free cash as in order of priorities. So we need to pay our bills first and foremost, hence the request for the schools to be the first thing out of the gate. We can't really assess capital needs until we know that we're gonna close the year. Um, in the black obviously. 'cause that has huge implications for the city. Um, so that's request one. We are, you know, assessing internally we had had an $800,000 placeholder for snow and ice. Um, it seems like we're gonna be able to free that up to hopefully do other capital projects. Um, our next request to you all that you'll probably see on your April 1st agenda. Yes, I got in first, um, is to fund some stabilization accounts. So I'm looking at this as we need to pay our bills, we need to make sure we're doing savings for anticipated costs, which would include, we are back in, um, collective bargaining agreements with both fire and police. So getting ready for hopefully for those contracts to close and know that they'll be cost associated with them. That we wanna do some savings for, obviously funding our special ed stabilization accounts since all we talk about are special education costs. Um, and then looking into capital projects. So we're prioritizing, you know, the CIP, which is a list that exists that we need to kind of revamp that process. But what have been high priority projects? What are things particularly in school buildings that we can get done this summer. Um, so those will likely be the first requests that come to you so that those projects know that there's a funding source and we can get moving while we don't have kids in buildings. Um, and then looking at some other critical infrastructure needs. So I would anticipate, as you all think about free cash, it's gonna be stabilization accounts. And then as Carrie mentioned, as we get closer into the end of the fiscal year and feel more confident about particularly our overtime costs, um, capital projects.

▶ 1:13:15 Speaker 5: Great. Thank you. Thank you Madam Chair.

▶ 1:13:16 Maya Jamaleddine: Thank you. Anyone else? Councilor?

▶ 1:13:20 Devin Romanul: Sorry, very quick. I promise. Um, first of all, thank you for all this, this was outstanding. Um, and I'm a hundred percent for setting aside money because I'm imagining, I'm really curious about the anticipated interest savings that you would have, AAA versus aa given the volume of money that we're gonna put out, would probably far out script the amount of money we'd be talking about setting aside out of this. So anyway, I'm just curious what those numbers are, but we have to talk about it right now. But we can Talk to Catherine to Get Yeah, yeah. The, um, on that just it's morbid curiosity. So, and Stay tuned. She's gonna come before you to do an informational order about bonding, so, um, can't Wait. Yes, it is hugely important. I, I did want to ask, um, just very quickly, what is the, and forgive my ignorance on the subject, this being my first go around here, but what is the driver of the volatility in the state aid? And is there a way to, is there, other than the madness of the legislature? Um,

▶ 1:14:09 Speaker 6: I think sometimes it depends upon what their revenues are, what they're hearing from their constituents. Um, as Carrie said, it's been some years we've had very large increases and some years not so much. I think some of those, not so much years were around the time of the pandemic when they were a little uncertain about their own revenues. Sure. When we look at this year's budget, unfortunately the governor's budget is not a great budget for us. I think it's under 2%. Um, unrestricted state aid is a little higher, but when you average it out with the schools, the school aid came to is not very high at all. I think it's not, uh, 0.9%. Um, and then I think that's not the final number. The house ways and means typically releases their budget the Friday before April vacation. But when I went back and looked at five or six budget cycles, the house often replicates what the governor does. The highest number has typically over the last several years been the Senate number. So we'll see what happens. Um, we'll know soon enough about the house. As I said, they come out right before school vacation. They do their amendment process that week. And so we know by, uh, late April, and then the Senate usually comes out sometime early to mid-May now, US Senator is on, uh, I think a absolutely a member of ways and means, and I think he's the vice chair. He may be the vice chair. So hopefully that bodes well for us.

▶ 1:15:19 Speaker 10: Duly noted. Thank you very much.

▶ 1:15:22 Maya Jamaleddine: Thank you. Anyone else?

▶ 1:15:26 Maya Jamaleddine: Okay, what is the will of the committee

▶ 1:15:29 Leila Migliorelli: Motion to place on file?

▶ 1:15:31 Maya Jamaleddine: Second, I have a motion to place on file made by, uh, president Ali, seconded by councilor. Um, um, Karen Sheti. All in favor? Aye. Aye. Any opposed? Okay. Thank you. Thank

▶ 1:15:44 Speaker 11: You. Thank you.

▶ 1:15:45 Speaker 7: Next