 A few minutes before tonight's meeting, the budget and brief as well as the 2020 executive budget was posted to the city's website. So all the details associated with my presentation are available for your review and consideration. As council members, you have received a copy of the budget and brief. And again, if you have any questions, please feel free to contact me. Marty Haverson, director of finance or key members of our management team who are substantially present here tonight, including Eric, who's probably hiding behind me if the camera's on him. Tonight I have a series of slides and I will go through some of the key elements associated with this budget. One thing to mention is that this is the first year that the city has used a budgeting software module. This directly utilizes information from our enterprise resource planning software, Munis, because this is a beta version. We probably have some tweaks that will continue to be made prior to you as Common Council taking action on the budget, typically at your first Monday meeting in November. With that, I like to kick off my slides. Any budget for the city really begins with our mission and vision statement. So I put together that for your reading. Next is the vision statement. Both the mission and vision statement were critical as the city considered back in 2017 its strategic plan included in the strategic plan, our six focus areas of which, again, we attempt to build on and implement through our budgeting effort. In addition to our strategic plan, reality sets in as far as dealing with state mandates. The two key mandates are tax levy limits as well as expenditure restraint program. The budget that's being presented to you does keep intact several local or Common Council based guidelines, and that includes an equalized tax rate at CPI or lower. Also, another guideline is to have a minimum general fund fund balance of 25 percent. Of the city's proposed levy, again, this budget conforms with state law. The city has restrictions on how much the city can raise. It's typically based upon the new tax base as well as a limited consumer price index. For the upcoming year, we had only three million of additional tax base to work with. All the other construction in the community was located within a TIF district. So for health insurance, wages, utility increases, all that was working from only a three million dollar tax base. Also, as you know, the city has imposed or increased our debt service. And again, every year going forward, of course, we need to pay back the bondholders. The 2020 budget tax levy overall for operational and debt services 1.38. For the city's expenditure restraint program, again, this is a state mandate. If the city wants to participate in this reward program, the Wisconsin Department of Revenue allows the city to increase its general fund operations, which again is where most of the city's salaries are located. This year, it's 0.6 percent of the city's tax base, which is our net construction plus a 60 percent of our net construction. And then we get to add 1.8, which is our estimate for CPI or consumer price index. This amount will not be known until probably the last week of October, but prior to you considering it possibly taking action on the budget. So overall, 2 percent, if you add those percentages together, 2 percent increases allowed in order to remain eligible for the expenditure restraint program. A year ago at this time, we were looking at 2.6. 0.6 tens is a lot when you're considering developing a budget. The reward the city received this past year is $744,000. So again, it's critical for the city to maintain its eligibility for this program. Equalized tax rate. Again, this is a local decision by the Common Council. With the consumer price index being again estimated at 1.8, the executive budget recommends an equalized tax rate decrease of 1.55 percent. The 1.8 percent as it compares to prior years, a year ago, we were looking at 2.4 prior 2017 is 2, and in 2016 was actually just 3 tenths of a percent. So 1.8 is roughly average of what we've seen over the last five years. As I mentioned, the recommended equalized tax rate is a decrease of 1.55. That is $0.14 per thousand less. Equalized tax rates takes into consideration properties appreciating or depreciating. This past year, the average property in the city of Sheboygan appreciated at roughly 3 percent. If you were to consider a property that has not changed in value from last year to this year, no building permits, no additions, no new construction associated with it, so looking at what people wrote their checkout for from one year to another for property taxes, that tax rate would be would be 15 cent increase. So approximately $105,000 is the value of a typical residential property in the city of Sheboygan. So that means a $15 increase in taxes for city purposes. Next slide. This shows again that tax rate increase and the change over the last five years. As I mentioned, a 15 cent increase from the again, these numbers are off a year purposely. So in 2019, the tax rate is approved for funding the 2020 budget year. So everything is off by roughly a year. A year ago at this time, we were considering a 17 cent increase the prior year 19 cents for comparison purposes. Next is fund balance. Again, a guideline approved by the Common Councils to maintain a fund balance at minimum of 15% of the general fund. This is to create a financial financially responsible safety net for unanticipated expenses. This is a key consideration by Moody's credit service in their annual review as the city issues debt. The 2020 budget executive budget fund balance is approximately 44%. So we substantially exceed that minimum 25%. At the end of this year, it's expected that we will go as high as 50%. But again, I'll discuss a little bit later the need to use some of that fund balance to in essence balance the 2020 recommended budget. Next is a chart showing that minimum 25% fund balance as a goal or guideline, and then showing the actual fund balance. So the blue is in the front, which is the target and the gray in the back is our actual. So you see that again, we substantially exceed again for 2020 executive budget. 44% is what is estimated to be end of 2020 after all the purchases and revenues are received. Next is the city's budget facts. This is really a one page synopsis of what's going on as part of the 2020 budget in your budget brief packet on page 14. Again, I know this is kind of hard to read with a small font, but on page 14 is that summary. City of Sheboygan overall, the recommended plan is $103 million worth of expenditures for 2020. This is a composite of 95 individual budgets. So the city's accounting process, our activities are varied and ultimately complex in that it makes up ultimately 95 individual funds. It's probably easiest to describe the change and again the change being the amount of increase or decrease in a budget or the levy associated with it to fund the operations. You can see under the change column that the levy required for the general fund, the recommendation is to increase roughly $173,000. The levy required, additional levy required in the special revenue fund category is roughly $24,000. This specific dollar amount is going toward the library to help them additionally. Under debt fund expenses, the additional levy that's being recommended is approximately $120,000. Capital improvement fund expenses no change in the funding level as it pertains to levy, property tax levy, fiduciary fund expenses zero is assigned to this account. And then the last is proprietary fund expenses. Under this category, only transit receives property taxes compared to the other funds located within this account. And a very slim additional amount of little over $5,000 is my recommendation for their operations. So all in all, again, $103 million recommended for expenses. The approved budget for 2019 was $123 million in change. So a $20 million decrease, roughly a 17% drop. The next is a stacked bar chart which shows which, again, which categories of our activities or funds received funding support. You can see really not a lot of changes from one year to another. The red bar, which represents general fund, again, which is our operation fund, is increasing slightly over that time. The rest of the funds, again, are receiving limited increases over the five-year period of time. So red is general, green is special revenue, pink is debt, blue is capital, and orange is transit. For the tax levy itself, overall, roughly $322,000 increase, approximately $175,000 is coming from existing property taxpayers. Only $27,000 is coming from new construction. So again, with that roughly $3 million of assessed valuation limited coming from new construction. As you know, during calendar year 2018, the city had a lot of construction, but most of that construction was within a TIF district, not eligible for funding our general operations. And for existing properties, specifically assigned to additional debt service, roughly $120,000. Again, overall, $322,000. A year ago at this time, the levy increased by 446, and in 2018, $1.2 million. So again, a lot of development was occurring outside TIF districts in calendar year 2017 to support the 2018 budget. Personal changes for 2020, an additional full-time grant coordinator in city development, which will be substantially supported by non-property tax dollars. A lot of our special funds will underwrite the cost of that position. And another position that will not be property taxpayer supported is a distribution technician. This full-time position is supported by the water utility. Some reductions, one full-time equivalent network administrator. Originally, this position was planned to be filled July 1, 2019. And two and a half position, reduction in public works, maintenance worker level two positions. Last is I want to identify, again, we have a major change in service and where that service is funded. As you know, we discussed approximately five, six months ago, the movement as far as a base funding from the general fund to its own to its own proprietary fund. And that is the planned recycling changes going to a cart system in 2020. So two positions have been transferred out of the general fund to this new proprietary fund, which is logically identified as the recycling fund. Overall public works in 2020, we'll see a two and a half position reduction. 2020 general fund revenues. Pie chart probably is the best way to describe the major activities within the general fund revenues. Blue and purple are the number one and number two. Roughly 43% is property taxes and blue and purple. It's approximately 38. Intergovernmental revenues between the two, these two categories represent 81% of our revenues bringing in funds, again, to fund our operations. The next table again gives you a comparison of 2019 to 2020 request. What's interesting is, if you look at the changes as far as major revenue sources, some of the changes that are part of the recommended budget on the next slide is again the property tax increase in the general fund 173,000. The recycling grant is actually dropping in this fund because we're reallocating a portion of the recycling grant into that new recycling fund, which is a proprietary fund. The applied fund balance, I'm recommending a $354,000 increase over what you approved a year ago. Interfund transfers $140,000 in change coming from Minnesota court and I'm recommending an increase in transferred funds from the tourism fund. My goal is that 10% of the room tax received, 10% of that those funds should be transferred to help the general fund operations and this budget incorporates that concept. Next is a pie chart. Again, red and green are the largest two pieces of the pie, red being public service or public safety at 57% and public works at 24. So between the two, almost 80% of our budgets, our general fund expenses are associated with these two large service categories. On the next slide, if you compare 2019 to 2020, again, you'll see not a significant change as far as how the pie is allocated as far as major categories. Of the changes in the 2020 budget in 2020, of course, we have planned elections, including a presidential, so we're going from two elections to four. Transfer of again, as I mentioned, transfer recycling to a new fund. This by comparison purposes reduces the general fund by roughly 319,000 and then property tax refunds. We have a couple claims by some of our big box commercial developments and I wanted to plan for the possibility of a refund and so I recommended an additional 65,000. I think 15,000 is currently in the 2019 budget. Next are some of the other specialty funds, special revenue funds, and again, we have a series of these, roughly 16 individual funds within the special revenue. Park Forestry and Open Space is one of those. The goal is to build our construct Evergreen Park Bridge. This is funds received from the National Resource Damage Assessment. We think we'll receive roughly $205,000. This activity is associated with the Schwoigen River cleanup and again, damage assessment the city anticipates receiving. Next is a brand new fund, Neighborhood Revitalization Fund. This is as a result of fairly new state legislation, which allows communities to hold open for one additional year beyond the normal sort of termination date of a TIF district, a tax incremental district. By the city holding open TIF district number 11 for one additional year and transferring that excess increment into this new Neighborhood Revitalization Fund, the city will have additional $712,000 of funds to use. The requirement by the state legislature is that it should be used for residential or neighborhood revitalization. In the 2020 budget, roughly $420,000 of that 712 is identified as potential uses. Upper floor rental rehab, residential facade grant, public improvements such as sidewalks and crosswalks, and then overall administration of those programs are proposed for 2020. Next, Park Impact Fee Fund. Again, this is for those elders that have been here several years. There is a $547 per residential unit, a fee that was imposed I think in 2017 or maybe late 2016. This fund continues to grow with the activity expected yet in 2019 and the additional projects that have been already publicly discussed within construction anticipated to commence in 2020. We expect to be close to a quarter of a million dollars worth of revenue in a fund balance to gain use for park projects. In 2019, 293 residential units are expected to pay into this fund and in 2020, 275 additional units, so a lot of activities occurring in our community. Uses for the projects, 25,000 for additional ADA-related walkways in our parks, and then 25,000 dollars associated with a new playground in Moose Park. Another major source of city's tax revenue is funding and supporting the Mead Public Library. The recommendation is to increase our funding levels to approximately 24,000. This represents a slight decrease of additional levy that was added to their funds in 2019 budget where 63,000 additional dollars were recommended and approved. Again, I'm recommending an additional 24,000 above and beyond that for 2020 budget. Tourism Fund, with the payment, full payment or payoff of the Blue Harbor Conference Center debt, all room taxes now is available to share with visitcheboygan.com. With some new hotels that are coming online, we expect the room tax amount to grow. So 1.4 is the amount we expect to receive in 2019 and up to 1.7 of additional room tax dollars in 2020. City gets to retain 30% of that. So we expect our share to increase by almost 300,000 dollars. Uses of that Tourism Fund, as I mentioned previously, transfer to the General Fund and additional 170, roughly 175,000, which is roughly 10% of the room tax estimated to be received, and then transfer to debt service to help with our debt service payments, 320, almost 330,000 dollars. The next special revenue fund is Harbor Center Marina. The recommendation is to transfer an additional 225,000 in calendar year 2020 to help reduce the debt that is in the Harbor Center Marina. To give you a sense as far as, I guess, the success we've had in transferring money and trying to reduce the debt, in 2016 there was $6.8 million of debt still on our books, and by the end of 2020, we hope to be under $5 million. So we're slowly making progress, and this was one of the items mentioned by our auditors as far as a large amount of debt still outstanding for that fund. But again, it's not going to be erased overnight, and as long as we're making progress, I hope you, the community and the auditors, will feel we're making substantial progress. The next category is debt service fund. Again, to give you a sense as far as the amount of taxes needed to support our tax levy, I thought it was helpful to identify of our tax rate what per thousand is being used for our tax service, our debt service from taxes. $1.30 is the equivalent debt service that's being allocated to the debt service fund. This is similar to 2019 and 2018 tax rate, and again, this is equalized. In 2020, the recommendation is to issue $3.6 million of non-TID-related debt. If you add TID-related debt, it's approximately $3 million additional or overall $6.5 million. This is substantially less than the amount of debt issued in 2019, it was over $10 million. Debt service as far as net debt outstanding, you see from 2017 to 2020, it's increasing by roughly $15 million. But when you look at our ratio of net debt capacity, it's going from roughly 21 to 29%. Our debt schedule is fairly aggressive with almost all of our debt being paid off in the first 10 years of creating a debt schedule. Next, I'd like to discuss capital projects. Superior Avenue, $2 million. This is North 29th to Taylor, Boots & Sports Complex, again, $590,000. This funding source originally came from Tourism Fund or Room Tax Money. Union Avenue, $500,000. Georgia Avenue to Taylor, this is associated with upgrades to the approximate area where the hospital, Aurora Hospital will be constructed, so just east of Taylor to Georgia Avenue. Geely Avenue from Calumet Drive to North 23rd, $700,000. And last is a $750,000 new roof at Shoreline Transit, of which we expect half will be funded by the federal government. Next, identify some additional larger capital projects. Fire station number two improvements, $318,000. And last is $195,000 for HVAC and security-related entry systems at our police station. Tax incremental district, which are typically projects to leverage new developments by the private sector or to shore up some of these areas that are in need of revitalization. In tip 14, $50,000 is identified for branding or wayfinding signage. This is primarily in our downtown area. Badger State Loft redevelopment project on the former tannery. This roughly three and a half million is our estimates for improving Illinois, Maryland, and South 11th Street. Tip 17, this is part of the Innovation District along Indiana Avenue with the expectation that there will be an innovation hub or fresh tech hub, roughly $300,000 to construct a surface parking lot. Also, that general vicinity is to purchase a former railroad, Union Pacific Railroad right away, referred to a shoreline 400, and roughly 1.3 is the estimated purchase price. On Niagara, east of 14th Street, so this is adjacent to the future LTC classroom site, half a million dollars to make that improvement. So this is again between the former boat doctors and Bitter Newman. Internal service funds note changes in workers' compensation, liability insurance, health insurance fund. Recommendation is for a 5% increase for health, as well as a 5% increase in dental insurance, and the elimination of HSA contributions at a savings of $229,000. Wastewater Utility Fund, $750,000 for additional reconstruction relining of sanitary sewers. So as the city continues to work on reconstructing streets, specifically surface pavement, we of course want to be disciplined in not making those, that additional investment, without checking what's underneath the pavement. So we look at the water sewer lines, and the expectations will have roughly $750,000 of, in essence, companion-related infrastructure projects to our street projects. Other improvements at the treatment plant are rebuilding a floating digester cover, as well as a digester heat exchanger, both projects for $450,000 or $150,000. In the parking and transit fund area, no material change is in service, but there is an additional $70,000 parking utility street sweeper. Both facility fund, no major change, no material change. One of my last slides is about our proposed recycling utility fund. The recommendation is in January of 2020 to start the monthly charges. The budget identifies a $4 per month charge. In the months of April through May in 2020, both the trucks will, we will receive the trucks as well as we will begin receiving the carts, both recycling and, and recycling service pickup. May of 2020, the goal is to start up that month. One thing that is new for 2020 is our garbage and recycling processor has identified a first-time charge to process our recycling. Currently, we get a zero per ton charge. What's been identified in public works committee will be discussing this soon, is a $90 per ton charge. This is more on a per ton basis than what we're charged for disposal of our garbage. This adds up to $363,000. As I mentioned, this is a new charge. And the last is the initial lease rate of our recycling carts, roughly $31,000. Beginning in 2021, this initial lease will go up to roughly $83,000 per year for a total of 10 years lease for our carts. That really is a summary of the details associated with the 2020 budget. Again, the budget as well as the budget brief have been posted on the city's website. Hard copies are available at city hall, hard copy will be available at the public library. And again, I really want to thank all the management team and their support staff. Marty Harberson being fairly new to our staff as the director of finance. This was his first full-fledged budget. So a little bit of baptism baptism by fire for him. Carrie, Aaron's put a lot of work into this as well. As I mentioned, this is the first year the city's been able to use our accounting payroll software to generate information exported into a spreadsheet where in the past the city worked solely off of a spreadsheet and then tried to make it fit into our accounting system after it was approved. So with our new process, we're able to make one change in one fund and instantly be able to see how it ultimately floats to the top and affects our overall budget summary. So definitely in advance for our organization and will substantially improve the process in 2021. So again, I appreciate your time to see you.