 Madam clerk, could you read the role here present? Yes, present here Reverend me now you mind doing the invocation Know that we say and do words are not adequate enough to say how grateful and thankful we are With all the things that are happening in this city of ours We simply ask that you might be with all of our department heads Those persons who give of themselves through their service and connectedness to this city bless and Keep us in your care We understand that in the midst of all that we do today It is not just for work, but for this community. We call Columbia We thank you And we say amen Moving forward with our city council discussion items for today. This is a budget workshop. And so all of the items Are moving us in that direction And the first is the fiscal year 2023 2024 revenues Miss Missy Kaufman budget program management and grants director And we'll move through all of these items with myself and Jeff chiming in particularly on items one through four I would say that, you know, we always start with revenues is try to lay the Foundation set the tone kind of help you get a better feel for where we are in that regard But I would also ask that you're thinking about some of the things that we will want to accomplish in the new budget year So think about revenues because we have to pay for those things, right? So we'll also Throw out a few of the things that I know and that's just based off things. You've said, you know, particular programs under the mayor We're gonna have an opportunity not to go in great detail about some potential new programs, but a couple of items that Particularly with h tax and or a tax that you all have said and we agree that maybe Based off eligibility. We want to consider Using or maximizing those funds differently going forward Maybe in different ways than we've used them in the past So we'll get to that, but we'll start with the revenue discussion and then jump into that fiscal year 2324 hospitality tax and accommodations tax projections and budget recommendations as well Good morning Thank You miss Wilson so as mentioned With city council we are here today to discuss our Budget beginning with our revenue discussions as we like to start out every year As we begin discussions regarding our budget with with different revenue sources, of course, we like to start out by stating that the Revenue projections are as of today and they will continue to change and update as we go throughout the budget process So just want to keep that in everyone's mind as we're looking forward But as we start the budget process is we start to put together the priorities from city council The commitments and programs that you already have already made commitments for in the coming year as well as Of course continued services. We have to balance that with available revenues in order to to bring us into a balanced budget So this is just a component of that discussion Just a little bit of overview, of course the general fund I mean excuse me our revenue sources are based on the different revenue streams that we have General fund enterprise funds and then grants and special revenues the general fund of course covers our general operations including property taxes business licenses Fines and foratures intergovernmental and so forth charges for services, but also as a part of the general Fund is sometimes is our transfers and other financing sources enterprise Of course would be our business utility our business services water and sewer fund our stormwater fund and our parking fund our enterprise services The grants and special revenues are also general governmental, but of course that we have different grant sources Special revenues would be the hospitality tax Accommodations tax and our tourism development fee They are designated special revenue by accordance to state law in accordance to what the purpose of those funds are Restricted in the specific use for those activities as well Just to point out that tourism development the other other municipal governments and county governments call it the state accommodation tax and We predated the Legislation that established the state accommodation tax, but we never have changed the name of that That is where it's coming from right we have a state accommodations and local accommodations is there's actually a Third in there. I think as well but our When we refer to accommodations tax is referring to state accommodations tax that's collected and remitted by the state I'm Tourism development fee is our local accommodations tax that the city collects As Mentioned a little bit already our revenue projection sources of course We have a couple of different ways that we we do our revenue projections. We look at course that our prior year. Yes I Some of that will cover here, but I think what I'm also hearing you ask for is possibly the codification of what the Rules are regarding our reserves like what we have in terms of like our general funds surplus fund balance Absolutely, that is a good information to have we can provide that So part of our revenue projections, of course, we look at prior year and current year Collections we're still coming out of especially looking back at prior year collections Of course, some of these revenues were affected by COVID. So we have to adjust for that as we're looking at COVID year collections and then of course prior year collection activities We also Get input from our department staff with regarding what they are seeing for the different sources of revenues that they may collect Permits industry forecasts and then of course their customer different Registrations Legislature has an impact on our revenue streams Whether it's our state shared accommodate our state shared revenues that come in from the state of South Carolina That's determined by the state of South Carolina if there's any new rules or expectations with regards to Changes to state law with regarding a certain revenue sources We also look at South Carolina revenue and fiscal affairs office in terms of their projections with regards to the economy and what they see is What's happening in the state and then of course we also utilize rate consultants on on certain revenues that are generated from from Specific revenue streams In terms of our general our revenue forecast overview Our projections to especially at this time of the fiscal this time of the budget development cycle We are pretty conservative We are Obviously at this point in time. We're continuing to review and update our revenues We go along the revenues that are forecast for you today. Do not reflect any rate adjustments or any increases and fees or our rates Of course, we are projecting Our preliminary and then of course the other thing to point out here with this slide in particular Is that different revenues have different cycles of generation? Property taxes for instance come in primarily one time a year Whereas things like hospitality tax commendations tax and parking funds and water and sewer rates they come in every month So some of these collections are able to we're able to get a better idea about where we are actual today Then we are with some some sources Then there's some some revenues for instance accommodations tax that are that are remitted quarterly by the state of South Carolina So we've of course only received two quarters for this fiscal year and something like accommodations was the was most impacted by Covid so that gives makes makes our crystal ball if you will a little fuzzier and so that's important for us to point out Just for you all in a sense of understanding about where we are with revenue projections And why things get a little more clear as we go as we proceed through the budget process Business license is another major source of revenue that comes in for the city. Those aren't collected until May So we're really not when we're looking at those projections. We're looking back from a year And of course the actual collections are reported. So when we did budget projections for the current year We were making those projections in April, but then those revenues came in by May So of course but now that we're in where we are. We're looking back to where we were a year ago as well Missy as to point bullet point number two Right now with where we are as Missy has described and we're giving you Projections based off the best that we know it also doesn't necessarily Reflect the continued discussions will have with you that might require a look which we we talk about this in a few slides Or put a note there that if for example, you would like us to take a heart look at special events, which? The fees associated that we have never charged as a city I've been it's been said that that's an interest that you all have and I certainly have an interest in it That would then be something that we would bring back during this budget process All of our staff and the labor and everything that goes into preparing for special events like St. Patrick's Day that we just had in a festival of that magnitude So those are the type things I don't want you to see that no rate adjustments or increases are reflected in the projected Revenues and think that we're not still early in this process and we've got to come back with some recommendations And I think some of the ongoing conversations as well You know one of the things that we continue to talk about is it's time for pretty much a city-wide audit to make sure that the properties that should be paying into Property tax are actually paying and that's the discussion the ongoing discussion with the county to make sure that we're actually collecting That and I know that every other city on special special events I mean we're a bargain compared to almost every other city because costs have increased And I think we're about $15 lower than the majority of the cities in South Carolina Yes, there'll be those will be things we definitely need to be talking about And I know that we wanted to look at fines as well working with the legislature to give us some more especially around litter and dumping and other things where we're handicapped But yes, I think we need to look at everything as we move forward Special events And then in terms of parking I know we're still waiting for some of the parking study results But we've talked a little bit about potentially changing the fee structure for That as well I think in the past and the $8 Yeah, all right general fund revenues To give you an idea about where we are now we look back of course like we've talked about a little bit of where we Where we have come from so fiscal year 2021 fiscal year 2122 revenues of course were projected With a little with a little less information than what we normally would have had In terms of making projections And then of course fiscal year 2223 we did include in the current year budget a number of one-time revenues That were reflected to include two million dollars from the American Rescue Plan funds that's a part of the budget and then of course in the fall City Council made additional allocations from a number of sources to include our general fund surplus additional Hospitality tax and some other revenue streams that amended the current year budget by almost 17 million dollars Primarily for investments in capital improvement programs Most of those were of course for one-time revenue revenue one-time expenses, but of course they're coming from one-time revenues as well At this point early projections are showing that we are in line to to meet the budget projections with current fiscal year Which is great. That's where we at least want to be at this point in time In terms of revenue forecast for going forward We are seeing closer to normal collections Projections are still again. How many times I've said this now conservative and we'll continue to update as miss Wilson mentioned We did not include any Fees in the general fund with regards to special revenues or rate adjustments But are in consideration of reviewing staff will be making recommendations regarding special events fees and preparations In terms of our general fund revenues for next year were estimated at this point of a hundred and forty four million That's revenues only There that's a slightly more than two million dollars increase over current year actual revenues, which is right under 2% In terms of transfers in and out that's going to be the some of the biggest adjustment We have not reflected at this point any use of ARPA funds in the 23 20 23 24 budget so that would be a two about two million dollar reduction And then the biggest adjustment is the is from the current the the projections from next year Compared to the amended budget, which again reflects the use of the One-time allocations for investments in capital improvement programs We did continue the use of the three million dollars in fund balance, which is the same as the current year So otherwise transfers in are are coming in In line with what we've used in terms of the normal revenues that we project It might be a little bit easier to speak from this slide. It was too much to try to put all together But you can see where we have Made projections for the current year to mean to be in line with them or our next year projections being In line with the current year and then of course those things that will one time are not reflected next year the Majority of our increases there is coming from other agencies Which is a combination of different sources State shared revenue Being one of them Generally, you've estimated that it'll be the same as the amended budget for now. Okay. Yes, ma'am The and the revenues in the amended budget really you did not change when we amended the budget because of everything that was amending the Amending this year's budget was a transfer in from other sources. We didn't actually end up making any projection changes to Or any changes to the the revenues? Okay Just a little demonstration in terms of where our sources of revenues come in for the general fund the majority of which Comes from property taxes and you can see how we have we're pretty level in terms of our collections of revenues for the general fund Compared to prior years No, no big major swings up or down In particular, no no downward swings, which is a positive sign But probably not the growth that we would maybe like to see But general fund is at least a steady source at this point Property tax assessments just to demonstrate a little bit again sort of where we are with regards to growth in the assessment of our property tax values As pointed out the city has not raised property taxes in more than 12 years We actually decreased with with the assessment we are maintaining The property tax increase in the current year budget Probably the biggest thing in here in terms of showing is the growth of our assessment values, which of course demonstrate The growth in our revenue projections That's just Yes I think they reassess every year because it goes up. I mean, you know, everybody says it's not a reassessment year But the the millage went up. I'm like, yeah, the value did not the millage value And the city's revenue the city's millage, of course, is just a portion But less than less than 20% of your total property 17% and some areas only 14% Yes, I was in an area of the day that they didn't realize that we have a combined residents have a combined property tax bill So that property tax your property tax bill reflects all of your local and Government services not just the city of Columbia General fund fund balance So as mentioned City Council made a pretty significant allocation from fund balance in the fall in terms of commitment to the capital investments Which is a Great use of one-time months for one-time revenues I don't want to throw anyone off by showing that we have a slight $102,000 deficit that will certainly be cleared up as we In the fiscal year, this is based on projected revenues Which this will all be adjusted as we go throughout the year. We're not actually participating we will end the year with a negative But fund balance, but at this point in time, this is just mostly demonstrating that that you have made Significant investments so far in our capital improvements It was we haven't had a negative fund balance at all we've had us we've had a we've had a collected We've had a this is a collection of of fund balances over the years, of course Based on Projecting as of so this is starting with fund balances of June of last year the fiscal last fiscal year. We've completed Utilizing those commitments that are reducing from our starting fund balance of 38 million Right, and then we have a reserve as we mentioned a little bit ago The city has a general fund reserve of 15 percent. That's often called our rainy day fund That that means that that amount of money is set aside in the general fund is not utilized unless there's a Purpose or need for it And then that so that's that is what she's trying to say in a simple way is the deficit there really isn't a deficit correct, correct It just means that there's not available funds out of this fund balance to be a for allocation Really the city's remaining fund balances right at 17.1 million Then the additional allocation like as mentioned six to write at 17 million dollars and then the nonprofit $300,000 City Council's actually returned some of those funds so that $102,000 would be return would lower that deficit as well Fund balance invested in the local government fund in the state Think we're getting about 4.57 percent yield and From other sources, so we're gonna continue our discussions With the capital lease. Oh Are you about to I was just gonna answer his oh, okay? We have our funds, so it'll be the general fund cash from the water and sewer all of our additional funds out there It's an invested in a portfolio that includes the state local government investment pool. It also includes Investments with other banks through CDs through other deposits and then through some treasuries as well Quite a few more slides before you're up. I'm sorry. Yeah So moving on any questions about our general fund Revenues Before we move on into what when do you think you'll have you know, I know this is a guesstimate But you know you're your best guess in the May maybe first of June For revenues, we will definitely have revenue for you by the time the city manager makes for recommendation for proposed budget in May Thank you. It'll change a few times before I know And then we when we actually go to advertise the budget Is when we'll have our final projections that would be in May Moving on to our stormwater fund. We are skipping over water and sewer and we'll come back to that Moving into our stormwater fund Stormwater revenues are coming in pretty strong. We of course were conservative on projections for the current fiscal year city council has paused on a The fifth year of a five-year rate increase So we maintain revenues conservatively in the current fiscal year, however Projections going forward are more reflective of what we actually collected in the prior year. So right about 17 million City council several months back did ask for an analysis of our revenues. So that revenue Analysis or rate analysis is underway and we expected to be completed this month So in April we'll be coming back staff will be coming back to you with the completion of that review But overall, of course our stormwater fund funds our stormwater activities of which there is a Excess of a hundred million dollar CIP that has been proposed over the past several years city council makes allocations every year Towards that capital improvement program with significant investment so far To include that service or are borrowed funds for our see our stormwater capital improvement program Of which these funds are covering that debt service as well as the operations of the stormwater utility which is funds our Public Works department for their actual activities engineering and are the primary uses for stormwater Any questions about stormwater? Okay Stormwater cash is looking pretty strong again It's sitting at about a fifty million dollars those funds are actually of course there's a at least a hundred million dollar CIP over the that has Been around for a while so these funds are utilized for that capital improvement program So it's pretty strong. So when you say a hundred million dollars in CIP projects that we need to spend this on No, that's that's taking that's taking in consideration a hundred million dollar program That was has been in place that council allocates an amount towards every year. Got it That's what the initial five million five-year rate adjustment was to address And of course the majority of these funds are made up from bond proceeds So that's not like available cash just to use in any way it either way it has to be utilized for the stormwater you fund stormwater program With capital and operating Parking fund dr. Bussell's already made reference to use of or looking at our stormwater funds that pit that that freight study is Also underway and we anticipated to be completed in April with bringing that forward to city council for recommendations An input from city council before moving forward and at that time City manager would it be appropriate as we talk about the the parking study also about what we may look at innovatively technology Partnerships, I know that the city of Charleston and other cities have made some bolder moves on on Outsourcing parts that have benefited it may be worth but a good time for us to analyze all of our Especially with some of our upcoming needs Yes, sir. I think part of the Of us waiting on the parking study and and having it come forth now Because we need to go back and specifically ask the consultant to look at some of those things Thank you some of our Conversations about vision of how to So looking forward into our special revenues which includes the hospitality tax the state accommodations tax and our local tourism development fee Starting with hospitality tax projected revenues are right at 13.4 million That's about a seven hundred sixteen thousand dollar or six percent increase above the current year. So hospitality tax revenues Continue to remain strong in terms of collections We prior to the pandemic looking at about a five-year average. We're seeing about three to four percent growth per year That's up a little There were a few years, I think Little slower growth, but now we are seeing pretty steady. Of course, that's based on also on budgeted collections are actually Coming in strong as mentioned collections are coming in closer at normal levels We have not utilized any use of fund balance in the proposed budget, which is typical Usually We bring to you a budget that just reflects revenues collected for that year For the projected revenues for that year There was a significant amount of fund balance that was committed in the fall with the Finlay Park Project the budget that is presented for you at this point while we're talking about revenues today For hospitality tax and accommodations tax We are looking to have some some input from city council in terms of allocations potentially For specific functions so that as we're building the budget and the city manager brings her proposed budget to you We can reflect those allocations that way with regards to hospitality tax The only we have not met we're not making reviewing any recommendations for funding today Other than discussions that what you have funded in the current fiscal year So there's a couple of different allocations that we talk about with regards to hospitality tax Of course, there are the there's the committee recommend a the committee allocations That amount is is what the committee would use to make their recommendations of funding for the applications the hospitality tax grant Applications that will come back to city council for for final approval Current fiscal year city council allocated three million dollars in the budget for hospitality tax As you recall not all of those funds were committed and then council came back the committee made a second round of allocations That were done again for a second allocation that was made in December for the January to June period is a much smaller amount but was reflective of the of the Some allocations that were made Post the committee recommendations Then of course, there's also line-on emergencies while they also submit the allocations to a Committee or to they submit an application just like Any other agency or any other alloc any other organ grant? Recipient and they are still subject to the same rules and laws that everyone else is with regards to H tax use city council makes those designations for our funding the one thing to point out in line-on agencies is that that does reflect the use of Final commitment a multi-year commitment to the Museum of Art for their capital improvement program of $300,000 so roughly $300,000 is is is Additional available if city council were to to I guess find it at the same levels as the current year Actually, it's an additional just a supplemental page So the the 7.2 million that you have on the bottom line there out of that comes the 3 million or 3 million plus that goes to the committee for allocation and the 2.8 that we did last year for line items, right? So the only thing that has reflected in next year's budget that's already that's already Programmed if you will out of the projected $13 million revenues is the debt service would of course that has to be addressed up front and first that would be for the hospitality tax bonds and then also since we've already reflected $3.7 million from into which is Same amount as prior years in terms of transfers to the general fund So those are the amounts already programmed into the budget the remaining balance of 7 million would be available for city council to allocate To these other other components the other allocations or some other Commendments that city council has funded in the past that's separate from the committee They're not necessarily line items, but they are commitments that city council has made over the year for instance to the partial recreation foundation specifically for some city sponsored events and then also to Mrs. That is that similar river alliance we did multi-year allocations So the multi-year did we did that? We did city council did you made an allocation to The commune museum of art Or a capital improvement campaign that they had and rather than funded all up front you funded In a certain amount for over a multi over a five-year period This year's budget reflects the final year of that five-year commitment. That's the question The current year that we're in today Yes Part of the seven point two five It will be paid out this year Correct it. We paid out of the current fiscal year That's right The the three that three hundred thousand dollars is reflected in this two point eight million under line item agencies Okay, got you There was a question on meeting track minute track Same thing For you, it's meeting there was a question on minute track from dr. Bustle's about the line item agencies and you've got an explanation in in your Presentation here, but I think it's important to to Say that because I've got a meeting tomorrow with a group that wants to be a line item agency The line item agencies have traditionally been something that we have a Connection to the city has a connection to like CMA. We own the building I Think the only one does not Doesn't have a direct connection to the city is the I think it's important for us to be consistent as to why something is a line item agency Which is we talked about this briefly last year, but you know as we continue our conversations I think we need to be transparent about if there is a clear Connection to the city whether it's a fiduciary responsibility or some other Thing that requires it. I think they should stay a line at them, but I don't want this to become a Referral You do Continue to be able to grow the hospitality committee pot I do think the committee has valid and does it a really good job because it is really Based on folks from all over the community The end of the day the line item at designation doesn't really Do much? I mean we still get Yeah, but there's I still feel like for groups that are coming on, you know getting off the ground or groups that haven't traditionally Had like those equitable opportunities It does get perceived like it's a little bit more important because it's written out in the budget, right? But they have to go through the same procedure They do the interview So that's correct line of agencies They still have to submit an application They are still subject to the same rules as any other organization that's receiving funding just like the city is we are also Beholding to state law in terms of the use of these funds and according to what is eligible The other part about the age to I would say about line of agencies for a long time eight The line item agencies were helped flat for many years So they were held it up. They were actually Locked in a certain amount the committee has fluctuated and of course the number of applications that come in are fluctuated City Council has not in the has over the years Sometimes has designated or is asked that certain types of groups be or types of activities if you think about committees whether it's more Investment in startup groups or if it's more investments in events or if it's more startups in like brick and mortar There's not been those type of specific designations or considerations But we do try to share that information with you whenever the committee does make its recommendations And this I would add I think the discussion is really relevant what You know, Dr. Bussells is bringing up and Mr. Devald that It's a balancing act to because whether or not the Whether or not yes, you all have the ultimate decision-making authority about it I think they're over the years becomes a reliance upon those groups that are line items that you know they just maybe feel like it's an automatic thing and As you all particularly this council has put forth new Initiatives and things that are internal needs of the city and priorities I do think you you know should continue to put it on the table. So it's not just a you know, like it is Necessarily going to happen because our needs are changing and we're growing and there are other eligible expenses Of h-tax that you know, we've I've already said we want to put on the table and you all have asked us to so I think it's very Responsible of you all to at least put it out there that it's not a guaranteed thing and that other You know other entities may Be wanting to take advantage through the committee as well And so just that whole balancing act that you all are bringing up. I think it's very important I do agree with the mayor also that the committee is 3 million that we give the committee needs to grow at least at the 6% that we are Rejecting for the fund Everybody everybody wants to be a line item Everybody wants to be a line and I think the needs Has to be sort of centered around Whatever those priorities are in the city and how that configures itself in terms of allocations We just cannot continue to just give out money Without specific without a specific understanding of what those priorities are For the city now I understand that priorities are going to change They're going to change and as we accomplish Say one priority we have to put another one in place. So Everybody wants to be at the top of the heat Look to have them at the top of the heat But of course, we've got to understand that those priorities are central What Well said Reverend That is exactly in line with what city staff Discusses in regards to how we utilize these funds The way city councils allocate these funds of course stays flexible from from as priorities change So does your your direction to like for instance the committee in terms of where you'd like to see the funds go That one in part be some of what we would discuss for And I think it's probably best to go ahead and just mention to miss you will do I'm sorry Just one just one last thing with the committee itself understand What those priorities are and now they are relatable to each That's a great segue. So the committee The the application process for I think that's what you've been trying to do I think that's what he's been trying to do and it would certainly be a way for us to get at some real critical and crucial needs understanding that the committee itself has a general understanding of what Correct. So the committee so the hospitality tax application grant applications are though that grant process is currently open applications are due The end of this month March 31st So while there's not been specific instructions in the hospitality tax guidelines It's it's still of course possible that city council may want to give specific direction or instructions to the committee in terms of What you're looking for with regards to the epic to their recommendations Between now and when they meet which they meet in early May I think you know the the committee but outside the committee as we move forward There's we have several ideas that we've talked about from city-wide arts programs to some of some opportunities to invest in some of our historic neighborhoods and Prop up some some opportunities there that will make a big difference. So I think it's gonna be a Think as we continue to want to do things as you know New Year's Eve Maybe you know Christmas in the city pop up some things to really get folks to feel good about the community and I think We're looking for options that we can have throughout the year You know that really engage our community in all four districts so I think as we move forward we're gonna be creative we're gonna try some different things and Hopefully we'll have a good response and get a lot of engagement So I think we we're in a good path and I think You know moving forward on you know the allotment to the committee and increasing that somewhat I think would be very beneficial as well. So There so we will have once the process begins an opportunity to revisit some of the things we've talked about and making those changes Okay, yes, ma'am and to I think Councilman DuVall made reference to the 6% I think that would work roughly worked out to be about 1.8 million $180,000 increase if you were to look at making an additional increase to the committee be a hundred eighty thousand and and and I would hope that we do that and give them the Flexibility not to have to dish it out all at one time You know if they want to do two allotments because things do pop up and I personally rather it go to a committee Than people coming individually to counsel which then creates, you know a Whole series of other issues, and I think a committee is a process. It's application based You know you have to submit all your paperwork, and I think that's probably the best way to go So I think hopefully we can do that of course looking at the hospitality tax fund balance We had a beginning fund balance of about 5.5 million with the Budget so far in terms of use of the fund balance of 4.7 million 4 million of that was for The largest portion of that was towards fiddling park Program or filling park rehabilitation project Some of that is also carry forward from groups that are allowed to carry forward their commitments to a future year So at this point we are projecting a use a fund balance of about a hundred and twenty thousand Staff has made recommendations in the past to preserve about 10% of those funds But so that as we have fluctuations in the collections, we have some adjustments there Of course, that's up to city council consideration. It's not a codified road I think at this point we ought to try to hold on to it So that as things pop up and opportunities for us to do some some city-wide things We have something there if we don't need it right now to fill any gaps Let's just kind of make a plan to hold on to it so that we have a little flexibility over the year 820 yeah, it also keeps you from having to dip into the committee or the line of the agency allocation So it makes available Flexibility for city council used to do exactly the things that you've mentioned so far and some other things that are That will be discussing today Okay, commendations tax. There's a lot more discussion here with regards to Just some information that is available for you We are projecting at 2.9 million, which is slightly below What we actually collected last year and in part that's just because of how accommodations tax revenues come in We only have two months of collections to actually look at while they are on target to meet budget We want to make and to meet the projections that we've made. We're saying conservative Especially conservative here because these funds are I mean you allocate these funds entirely except for this current fiscal year So it's not a lot of fun balance there to To work with so we and we do have debt being issued now from accommodations tax So we want to make sure that we're we're conservative in our projections The the only designation in this budget is not Specifically what to allocate but the projections in this budget that is before you is just reflective of what state law designates For the use of these funds $25,000 off the top by state law automatically goes to the general fund 30% is allocated for advertising and promotion of tourism 65% is allocated for tourism related expenditures and then 5% that are for general purposes the Staff will be making recommend some funding recommendations regarding eligible use for communication and marketing services of the city that's been discussed with city council We've not designated an amount or recommended amount this time as we continue as we Make sure eligible use of those funds for the purposes that we're discussing But wanted to make sure that that we did acknowledge that city council has asked for that Um Consideration so the the Combined 30% for advertising and promotion of tourism and the 65% allocated for tourism related expenditures That equals about 1.8 million dollars of the projected budget In the past those funds have been allocated primarily to two groups The experience Columbia and Lake Murray tourism Have both been the recipients of those specific funds state law does is pretty clear about those funds being allocated to a visitors bureau organization So that's why those funds have been Typically reserved specifically for the two tourism Bureaus that cover the city of Columbia Of course, we've reflected $25,000 from the transfer to the general fund and then the debt service of $900,000 that this point is an estimate But we we've considered that it's an approximate that approximate amount. We'll know that closer to Any questions about the 5% general purpose? So about 150,000 that's where we would have flexibility to you for other uses other than the visitor. Okay, that's correct city council in the past as use those for Specific the current fiscal year you use a portion of it to allocate for community promotion grants Which are grants that you it's a grant program that we've offered in the past or that you've done that have less restrictive use than like the general Then the hospitality tax would use And then also too you've done that is also where you've been at the other portion of one Columbia's contract And I think we've talked about potentially using it for some of our beautification efforts and so Any other questions about accommodations? That committee also was meeting and I was corrected there. They are the the accommodations tax committee the accommodations tax Grant program will close at the end of April looking towards Tina. Yes. Is this missing? Is this a Is this a committee that it would help for us to give Ideas about the where we would like to see funds go for them to Kind of like we talked about each tax I would I would say a couple things one is state laws very specific much more specific about use of accommodations tax Than it is age tax state law also designates that there has to be this committee process So that committee does make those allocations They do of course make those allocations in accordance to what city council has Recommended or as would like to see in the past that meant that 85% has gone to experience Columbia and 15% went to Lake Murray tourism There's That's just again. That's just been a historical designation for those funds Except for the current year. There's You know, there was a shift in that that that committee But yes, we would be looking for direction for that committee as well in preparation for their meeting and review of applications to A lot safer thing for the city to do to maintain the 8515 room Unless unless we have a specific project that the city wants to do Because this fun is reviewed by the Turk community. Yes That's why the city years ago decided to do the 8515 those two organizations clearly are Eligible for the funds that we get so unless the city has a Use for it family park, etc. I don't think we ought to open that pot up to the to Applications from no, I agree And I think Howard you you you bring a good point up because if you look at the other cities how they're utilizing it They're really using it for those type of projects in the city So I don't I don't disagree with your thought process. We just need to think about as we move forward What what's eligible and what makes sense to utilize some of that is beautification and litter eligible? I have to look back to see where that one sort of fits I do think it's it's specific to Promotion, but there are some allowable uses especially once you exceed $900,000 Usually it's related to allocations towards the roadway No, we have it But we should consider things like that right that layers into Columbia sea experience. I see and yeah Yeah, because these funds are review not just the the The expenses are reviewed by a specific state review committee So they do determine whether or not something is eligible and that's why we haven't put a specific number to the marketing services, but again the CVB utilizes those funds for Communications and marketing services of the region so hypothetically we ought to be even a portion I mean, we're going to determine the eligibility with clarity But that's you know quite the effort that we're about to embark upon and we'll have to pay for that So if it is eligible, I Would sit that's a great considered Yeah, and I think that would be a good use of it as we see especially now with I think the process Mr.. Mayor should be that we determine What we want out of the park first first and then the rest of it's 85 15 I don't have a problem that I think that's a good good simple way to look at it We can we can get that I think that's clear and easy that was 85 to the committee. I'm sorry Oh, whatever Right now And there's I mean we the committees won't meet until the end till early May So we we have some time for those discussions, but we did want to put this out for city council so that they Already we should have their feedback to you from from the marketing as well Which would give us a good indication of what we could a lot as well General theme is the accommodation tax is meant to put heads and beds. Yes, the H tax is to put butts and boots Your words those are not my words It's an easy way to remember it live from New York Last but not least tourism development feed this is a new entry into the budget discussions these funds have certainly been committed over recent years or the Immigrant center bonds that retired in June The city has historically collected about three and a half to four million dollars so we have projected a budget of four million dollars and We have we have put in there a line item for marketing and promotions and Convention center, but leaving those both as to be determined of course again by city council discussions as we continue through our budget process But I've also reflected a debt service of nine hundred thousand dollars again. That is for the commitment towards the family park rotation well, I think once We have the rest of the meetings with the convention center and Look at all the projections and understanding What shortfalls will be there as we know they they have a shortfall every year that has to be covered And so how that splits between us and the county now that Lexington is no longer part of the the equation I think that will give us a better look It to what we may be able to use this for fill gaps with or if we just want to You know start creating a reserve account as well as part of it for future expansion or growth or whatever So I think you know I would tell us that you know it's here But we got a we got to get some details figured out first and understand what who's committed to what portion is right now But the city's a little bit off balance So we want to try to get that where Richland County and the city of Columbia are equal partners in that process We don't have to share the tourism development No, but we have to pay the debt at the convention center. That's how we've been paying it They're they lose about two and a half million dollars in Yeah The last item for and it may not be a slide deck. No, there's not in the slide deck, but we did provide you a hard copy Regarding some city council considerations for specific allocations Just so as we as the city manager is preparing Some allocations some discussions for specific projects that city council has been discussing that could be funded out of current year budget But then also to you looking as you've mentioned Some direction with regards to next year's budget and things that you would like to see reflected Yeah, the city-wide that's like four different projects. That's not one Just to clarify so As we talk about those and the proposals that go with it and we'll get into depth when at the certain time That's four different projects And I know that we've we've talked about The program It's part of a marketing and the show with the influencers. There may be a way that we can do that with a local group that I think we should entertain and look at that may be more cost-effective and Really add the local flair that we're trying to portray But those are all for discussion purposes only Yeah, it was important to me though that we start capturing Let you be able to put on the table some of these things and Again, some are ready. There's funding already allocated in the current year budget I don't know. Mr. Brennan you had had some Discussions to previously with the council which led to some of those allocations of funds to go towards You know cultural arts and these type initiatives So we were just making sure everybody was aware that we're still tracking on that and Ready to move forward with them. I think the bigger discussion is gonna be there too Is we move forward as we talk about what our commitments are to one Columbia and others I think mr. Brennan has some ideas there that I think will benefit the community especially the arts community as a whole so I Think as we do that and I know that there are some other important significant arts Centers and stuff that we'd like to look at Just telling our story set aside That that that's a big piece of this RFP for marketing We're putting out to get feedback from whoever we choose right, so that that will be a layer of the RFP We put out if you know if this is the direction we want to go and I think it's a great direction to promote nationally and regionally That was trying to take advantage of a syndicated opportunity But I think we got to do a little bit more digging Is a group and talk about that and also to be honest I'm really like to see what comes back from the marketing group because it We don't want to be redundant Yeah, it was something separate this was the 300,000 was more of a Guest minutes for what it would take to have like an influencer to a series of Shows or something like that and that we would discuss before the RFP mr. Brennan, but the RFP Process as I just mentioned we think could be eligible for a you know local Accommodations or well and then have the selected group give us the best feedback on how sure how to leverage it Absolutely, that's great. Yeah, and I think it also will allow us Really to have some flexibility Yes, and then of course we already mentioned the Continuation you've got funds that we've presented to you already on the beautification efforts But if you want to continue with those type efforts as you just described We'll see if there's eligibility with these funds as well What I'm hoping is is you know, that was one of our asks from from our legislative Team to help us secure some more opportunities because we heard from DOT in the process That they don't have any real Allocated money for our roads and so we're hoping that they'll allocate some this year that we could leverage with some of this to Keep those gateway programs Going because we know we have what almost eight different gateways that come into the city And so making sure those are maintained at their best and that you know, not one is done and not another I mean we want to make sure Monticello Road North Main to notch All the way around each each gateway to the city is is equally Maintained and beautiful beautified All right, so we'll move ever to just transition to Jeff and pick up on the capital lease program and there were We talk about the program all along because on your agenda as you all always support us and Allocating funds for the various needs But I think we need to have an overarching discussion of the program and the Repayment and debt service schedule. So Jeff will cover that as well With items 3 and 4 Good afternoon Yes, it's now afternoon. So they left me for the really exciting discussion on capital lease isn't that service So glad to be here Right, so I will go fast because I know y'all are really dying to hear from Robert on water and sewers Much better, but I want to go back to I want to go back to October November when we first start talking about we brought y'all the ordinance for a lease Which we utilize I know Missy has provided memos and staff throughout we utilize annually most of the time a financing lease for a lot of our general fund rolling capital So that's our police cars public works in various other vehicles. There is also sometimes some IT Equipment that has purchased through that as well, although that's beginning to change as that industry has changed how they provide services One of the questions that came up and and it was a good question is Trying to understand what when we call it a lease what it really means So what I wanted to point out is what is a lease? So there's a traditional lease and in general That's what a lot of people think of A traditional lease is entered into In connection with the cities for the use of possibly office space or equipment We had traditional leases for the copy machines that are right out here for telephones for cell phones things like that And I'm going to talk a little bit more of how that offer what that means in a traditional lease Financing lease is entered into with respect to the city's acquisition of vehicles and other equipment You will generally hear us call this our capital lease instead of a financing lease Although I guess If you want for we'll start calling it a financing lease. So why what are the differences between these two? in a traditional lease Another party owns that asset The city may utilize that assets in exchange for the city paying rent But in that asset we never acquire the title to it We don't enjoy the benefit or burdens of ownership of whatever that equipment is and at the conclusion of that term of the lease That equipment goes back to the original whether it's the landlord or whoever we're getting the equipment from Since we do not acquire title to the asset. We don't exercise rights of ownership The city cannot finance the payment with tax exempt obligations. So that's important our ability to issue tax exempt Debt loans notes whatever you want to call them gives us a interest a little bit lower interest rate They can stretch depending on the term anywhere from maybe 20 basis points to a full 1% that has effect on our annual costs. There's a line item out of the general fund basically to pay for them If you were to lease a lot of times it's going to show up just as someone's operational cost For a traditional lease. I don't think we've really shown y'all full line item for a budget on Half of the things that are leased out there It returns to the owner. So that would be for our copy machines That would be for some of our smaller equipment. That's not what we generally bring you for our Vehicles just because that's what we usually buy for that's going to be a financing lease So in the financing lease the city enters into a lease Or a financing agreement with another party that provides financing for the acquisition of the asset Purpose is to provide a method of financing the acquisition and for the city to own the asset at the conclusion of the agreement The term may be from more than one year. However another important part and I'll explain why afterwards Is that it's always? Subject to annual appropriation. So every time every year that we pass a budget. We're approving The payment of that financing lease now. That's important and The mayor mentioned this earlier. He talked about restrictions on debt service So in the past you've heard us talk a little bit about our general obligation debt and the 8% limit that state law Applies to how much you can have out there this in general some people question how this gets around Not being part of the 8% I see you smile Because of the annual appropriation clause that's in there. It is not subject to that 8% limit now Which really means if we chose not to make a payment one day, we don't have to I wouldn't recommend that We'd never get another lease and it would probably affect everything else Credit-wise for the city, but that's the legal language that allows us to do what we do So the term will be for can be for more than one year And then the rent will be divided into principle and interest payments similar to payments on a bond So that's part of the similarity between a financing lease. It makes it look more like a loan But it's subject to the annual payments and the final bullet point is because the city acquires the asset employs the burden and benefit of the ownership the asset and makes rent payments that are split between Principle and interest a financing lease may be eligible to be treated as a tax-exempt obligation so It will so So our rate if it's tax exempt will pay less interest That's the new way that you know miss Wilson mentioned that Providers are coming up with different ways for leasing Can you speak to how that is that affecting us? the General funds amount what? So a lot of our it type Subscription base yeah, it becomes more of a subscription base So it's something that me and this see and and staff have talked about for the last few years If you go back five ten years ago, we'd buy a software up front That was easier for us for a one-time purchase, and then you might just have some annual maintenance type Contracts that were you know much smaller than what the amount of the original purchases I would kind of say I won't argue I'd say The IT industry has changed. I like to say they've annuitized their product So they've basically instead of you just paying one number up front They're still charging you a big number up front But then they're also charging you annually and it's really kind of set up as a lease in fact through accounting Standards and Christine is here, and I'm sure she would love to talk to y'all about the gas be standards that are coming in effect We're gonna have to actually start recognizing some of those leases and subscriptions a little bit differently I'm not sure that that's gonna have a true effect that y'all will ever see But it may have some impact on how we report things out. So do they have the annual funding text in there? No You know what that's a good question I'm gonna have to check on that because that's one of the questions a few years ago We used to get a phone council is whether or not it has the annual appropriations type clause in there So it doesn't get reflected as a true obligation of the general fund that would go against the debt I'll check on our most recent one For like our subscriptions for IT that part. I'm not a hundred percent sure on Like coffee or machines and all that they're not changing the format. That's not a subscription base But you know cameras is a good example if you take a look at our cameras we purchased Spent a large chunk back in 2014 or 15 now it is an annual missy. What is that gonna run about 1.8 million a year? for over a seven-year period, so It's if you're on the other receiving end of that. It's great. You've annuitized that out over the life of the asset We preferred it's usually easier to find the funds up front for a one-time purchase and to try to spread it out over a seven the 10-year period How much Talking about how much that all of our leases combined These are the last several years of what we've actually issued each year so back in 14 we issued 7 million If we start paying at that year we make monthly payments on on the financing leases 2015 we did not issue I honestly cannot recall if that was a budgetary issue or that was also the year of the flood And we usually issue in december. So that was probably a rather busy time We probably had to push that off and then we've issued every year other than 2020 2020 was That was right in the midst of The beginning of the pandemic. So we had a lot of things that changed during that time So here is our total outstanding amount over the next roughly 10 years our payments total principal paid that will be 24 and a half million our interest cost is 1.4 million So the total is 26. Yeah, when we say So I see that you say we enter into an agreement when we say issue. Is that what you mean? We're entering into an agreement for x amount of dollars Yeah, that that would be like for 2002 that would be our 2002 series or maybe issuance got it. Okay And we're basically in debt at this point Our max don't yes, sir. So just out of curiosity when When you said I'll be paying that's on a monthly I mean looking at the interest payment for an annual basis, it's about Is that right? um I think if you go through each year, it's going to be right around probably one and a half to two percent um looking at the history someone had asked Um A question just the other night on these our interest rates on all of these have ranged anywhere from 1.17 percent Over a seven-year period to the most expensive was this past year this past year. It was at 3.24 percent It's still a pretty good rate when you take a look at what the market's currently doing and that was just issued three months ago So we're pretty happy with that Based on the number it shouldn't affect our cash flow, but i'm just curious if there's any benefit for that We can take a look at that. I think The way they'll calculate the interest um You've got five months of Potentially of a small amount of principal that it might change the interest costs a little bit I don't know if it actually improved it though, but we'll we'll take a look at that Traditionally, we go out. Well, we go out for bids on these every december So we get a lot that come in and most all have structured owes out monthly But this upcoming year we can talk with We utilize bond council and staff to put that out so we can take a look to see if there's a benefit to do it that way Yeah, I thought about something else that maybe we could do locally too that maybe we ought to talk about at some point We can know based on what we have for deposits. Is there a way to trade off the interest for Similar program or something. I don't know. I've seen it done in some other places I just don't know enough about it to talk about it intelligently yet But just curious if we couldn't leverage some of Some of our percentage points, especially with some of the rates we're getting today Yeah, so and we do open this to everyone We try to find all of our local banks are asked to participate as are a lot of the national banks I will say certain banks. It depends on the type of Loan that's out there. They have a tendency to be focused on Bank of america has probably won every bid except for one year in 2017 I think regions bank had the best pricing Regions bank Well, you know, we got to be creative today. This one's the one that always scares me Yes, so these these get into the big numbers. So since we're talking about fun things. Let's talk about outstanding governmental debt 2053 I don't believe I'm going to be here, but I hope somebody else celebrate that payoff Yeah, I'm hoping I'm not here too if I'm giving this presentation to y'all in 2053 y'all great in some ways But I don't know you'll get the albury jinkins award Oh, yeah gc So this is all of our governmental debt this encompasses both our geo bonds that are still outstanding from 2015 and 2016 Also the jeta bond that we issued in 2020 There's a very just small Little piece of that that's mostly all repaid and then our iprb is also a governmental bond So it's included in this and that was the larger one that we issued just a little over a year and a half ago And that was for about 50 That was about 51 million. So our true Outstanding government obligation debt right at the end of this year will be roughly 15 million Which has come down when we were having these discussions a few years ago. We were around 35 to 40 million So that has a true impact on what we say that again, jeff Um when we were having these discussions less than I don't know Time flies. I was going to say it wasn't that long ago. Maybe it's been 10 years now But uh, we were as high as 35 to 40 million. I've you know one year 10 years What'd you say the outstanding was currently at the end of this year our outstanding principal of just geo debt will be About 15 million Which has come down We've been paying that off now. I'd like to It's a part of the 67 million Or that's the outstanding principal So just so we're clear that's how the principal total is 67 million. That's all of our governmental outstanding debt Each year. That's how much we're paying off towards that Now this will go up next year, uh, the finley park bond Even though we're going to pay for it and missy showed y'all with tourism development fee and state accommodations tax It'll actually reflect as governmental bond debt Yeah, I'd like at some point I'd love to dig into a little bit more to understand if there's some advantage points to Pay down some principal earlier if we have an opportunity how that affect long term and saving us because the interest is good portion Yes, on most of these our interest rates are typically under 5 percent which is still good But over a 20 and 30 year period you can see the amount of interest that Gets paid out so it does have a overall effect on the budget each year Water and sewer debt service schedule Robert will talk to y'all a little bit more about that Probably not as focused on water and sewer debt service today as he will be in about Two to four weeks Our storm water debt service. We have one storm water bond outstanding. We issued that back in 2016 or 2017 at the time it was 43 million. So we've paid off about 7 million of that Then parking debt service We really only have one outstanding bond. It was issued in 2005 and built several garages around the city We're down. I think the initial issuance on that was about 46 million. We're down the 31 million I will add this does not include future debt issuance that will be necessary To repay back the cash that we use for the bolster reparking Dex that'll be about 16 and a half million which will issue We need to talk about that at some point I'm concerned that we start pushing that out that far We're really paying for it for so much longer than the Value and what we're gonna have to pay for upgrades and everything else And that you know as we get the parking study back and we get the the value of what we have maybe we can Can you know bring it to economic development or something and talk about what creative things we could do to lessen that burden For that far out. I hate pushing something out that far And I know we had you had to do what you had to do when you had to do it But now I think we're in a different position to look at some things We are so the fact that we all have actually are requesting a parking study a parking rate study again In 14 15 years now we we've never had a serious conversation about that So if you look at other markets, we're well below us being having the capacity and willing to Raise some of those rates may impact whether or not we have to issue that debt or we can just pay it straight back out of cash If we pay back the For the parking system, it would require that we don't have a current rate structure Um to make additional payments or to pay early I'm paying that off. Um, I think our first focus though for the rate study for parking and again I feel like i'm i'm being Parking radiance isn't here, but One of our focuses is taking a look at the at the current maintenance of the current parking garages and making sure that we can Increase those rates and make sure that we can bring them back up to the standards that we want them to be at And then secondary we'll take a look at repayment of this debt before the bonds themselves are actually issued hospitality tax debt service schedules That's our total outstanding debt for majority of that's the the stadium, correct Uh, yes, sir. We issued a bond in 2023 I'm sorry 2003. I was not here Um We should have bombed that most of that's been paid off, but I can't remember I wouldn't hear them But I don't remember if it paid for uh tennis courts. There was numerous projects around the city that it paid for It's been a while. So we had someone anyone's still here Oh southeast park I think it started some of our signage program that we Kind of redid about two years ago as well Um, and then I think we've utilized it on smaller projects throughout the city with some of the proceeds really even as late as five or six years ago But yes, the majority of that 29 million is what helped pay for uh, segment park we paid for roughly two-thirds of the park in the baseball park And robert will be next with water and sewer operations I will say the mayor asked and I don't have it up here about reserves and how we look at each Particular debt service and what the type of requirements are a lot. They all vary. Um, it depends upon what the rating agencies Expect and then some of them are own internal policies So I'll we'll put that information together and get that back out to y'all great Hey jeff before you leave a question. I had earlier that I wasn't sure about is on the hospitality tax revenue We showed in 21 21 interest Negative and then next year positive and then we showed budget included a negative I mean, it's only 37 000, but I couldn't understand what we had a negative interest I'll have to look at that, but I suspect um each year our our investment portfolio has to be marked to the market When interest rates are going up Anything you currently own Becomes a little less valuable because it's at a fixed interest rate In fact, you could kind of say that's a problem. Some of our banks around the world are having at this very moment The effect on us is very minor because we have a very small Portfolio that sits in interest rates sensitive investments But that's the effect at the end of the year. It doesn't mean we took a physical cash loss You only take that loss if you sold it. We have a tendency to hold ours to maturity So we'll pick that back up somewhere. I hadn't seen that before negative interest The last time that we've had that was probably 2011 because it was very painful Because those were some rough years to begin with uh to the bottom line We have not had that as a major issue until just this past year I mean, we're all aware of the federal reserve has raised rates numerous times and so that has an effect on your portfolio Jeff does um The various athletic events that happen in our city the food and bad sales to that does that qualify for hospitality tax? it does So fireflies, usc They all pay a hospitality tax off of in fact, we had we saw an increase in it during the eclipse of 2017 Yeah, but we spent that increase on glasses. I know So it was a net it was a net break even I think I still have two million How many did you buy it was some great 200,000 We had quite a few Five minute break. Yes, sir Thank you, chef and We'll take five minutes robert. Okay He's out there pacing He's ready My dear friend roberts in the house So our water and sewer rate study overview mr. Robert chambers mba principal consultant with black and each Thank you. Thank you all Morning Again, thank you very much for having us here We're here today just read by yourself. I am today You know, we're just here today to to talk and discuss The process what it will take What are some of the things we're seeing? As we kind of go through this study And just you know as we typically do get the feedback and guidance from you all Um so that we can understand and incorporate it as we go forward So this is a quick layout of the agenda. We'll go through the drivers You know speak about how we got here lay out some objectives going forward And then briefly discuss our approach And this is important because there's a structure and a framework that's utilized that you have kind of Policy and a strategic direction lay the foundation for us and it's important that as we go through the process We keep revisiting to make sure that we are doing what it is We're supposed to do as it relates to the development of the rates And meeting the objectives as highlighted So we have three You know three basic purposes you know The first of which is to go about doing a study So that we can Appropriately and fully fund our operating and capital requirements Which becomes the first step of three steps The second step then becomes making sure we understand the cost of service What it costs to operate the system? What costs may be expected in the future and incorporating those costs? Um as we analyze that particular year into the cost service In order to understand what is the impact the different groups of customers have on your system And then going about pricing the services making sure that from a rate design perspective We price rates and have rates that achieve the adequate revenues to allow you to meet your revenue requirements So your cost on an annual basis Robert, um, you I'm sure you're familiar with the epa proposal Regulation of PFAS pass. Yes, we've been following. Will you be able to touch on that during your analysis of cost to show us? what $150 million to the cost of water But can we can we clarify that because one of the things that All this is being put out in the news, but it hasn't actually been put into place and or authorized So I mean it's we don't even know that it's going to be a requirement yet They they were out putting this information out Creating stir and scare in people's neighborhoods and and then there's the water systems But it hadn't even been authorized at the federal level. So I think we need to follow up on some information Exactly where it is as well. Um, you know one of our arguments though, mayor would be we need to know What impact it will have on the water cost in the Columbia? Um, so that we can take those comments to epa and to our congressional delegation To show that you're talking about a major increase in the cost of water I'm not disagreeing with you, but I just want it's how we frame it because if you read the headlines And the newspapers and everything you thought it was coming down as a edict tomorrow and we're suddenly Yeah, and that's not the case. So I think how we present that and how we plan for it I think you're absolutely correct We want to be able to talk to those the folks in Washington about the effect it will have adverse effect It will have at this point and there's got to be a different way To handle that going forward for the future So totally agree mr. Mayor and what what I would add is As more information comes down As we start to get a better understanding of You know how to deal with these contaminants Processes and procedures a framework that will be instituted from a regulatory and an operating perspective And as a result of that framework what it will cost you To implement and maintain these Mitigation activities, you know, then we'll be able to understand and incorporate what those costs will look like Let's say from a capital and an operating perspective But I think everybody's well aware of You know This issue and that is something we need to keep track of as we go forward And I think there's a lot more technology and treatment processes than have been explored so far We've seen that there's a lot of technology, especially Um in Israel and other places that are are addressing issues at a lot higher rate and more efficient and effective cost rate than we are So I'm curious to see, you know, what all comes to the table. Yeah You know, it's it's funny because You know every year we we do this study And some of these same issues and and variables keep coming up. They may come in a different form or shape You know, like like for example, you know, this slide highlights You know what are the big issues affecting the industry age and infrastructure You just asked me about how do we justify the cip right managing capital costs, you know resiliency Uh treatment of treatment technology You know, it's it's the same thing everybody's dealing with and even right here in South Carolina as we understand a number of utilities are Every utility I could say is dealing with some of these same issues in a different in varying capacities You know, but these are some of the things that are driving the industry and continue to drive the industry And you know, at least we're here talking about it and going through it as as we continue to understand and grow through it So moving on so from an industry best practice perspective There are a few things we like to highlight that we do we try to do on an annual basis Just as a part of the process of Aligning this financial planning process with your budgeting and your operating processes So from a financial planning and a rate Setting perspective There are a few things that you do on an annual basis So you do period to make sure that you're aligned with certain best practices for example understanding and defining your your your your financial performance standards meaning What are the metrics you're going to abide by and utilize and tracked an annual basis to make sure You know, you are financially operating in a sound manner. For example, debt service coverage, right? In addition For this type of study, how often do you do the study? You know, typically the best practice is that you check it and do it every year And you do it as a part of your annual Budgeting process. We're here in the budget meeting presenting. So that's a bit. That's a check And then perform cost of service Periodically annually so that you can keep and understand how what are the characteristics of how your system is generating cost Who's driving that cost? And you're and you're doing that And then reviewing your rates annually to make sure that You're self-sufficient and as a whole your system can stand on its own So these are certain best practices that we Would like we always highlight because you always get questions. Where are we doing this? What's the purpose? What's the value? You know, these are the value and the big blocks that we stand upon as it relates to how we plan For waltz and sewer So Focusing on focusing on the drivers You know maintaining revenue stability and financial sufficiency. We just went through that in detail on the previous slide you know Operating resilience, right? you know for The investments that you're making How you're implementing these projects and then how you are executing the maintenance of these projects, you know Are you doing it in a in a way that allows you to Extend and preserve the life of these assets Maintain a resilient system that allows you to to react the unforeseen Events and understand when events are coming so you can plan ahead. Mr. Mayor I know you just spoke about that service and how we can get in front of it, you know The goal is to always have the opportunity to get in front of These, you know maintenance. This is for example doing more preventative versus corrective All right, and in that that same Thought process robert one of the things I think would be helpful for us as we get back together is also What are the opportunities for us to leverage private partnerships? To increase, you know, we talk about Real resiliency you got to you got to think about other things too is is is there opportunities for us to work And create some more opportunities to get more methane gas out of the system by working with a private group So that we could offset some other cost structures In that that allows us to make more investments. I mean we spend what clint of 1.8 million on sludge removal Roughly, you know, if there's ways that we can leverage that we could create the gas market right now It's pretty resilient You know putting that out and could we reap the benefits from that Or even put it into a drying system to dry the sludge or bring in a partner to do some more Enhancements, it's our biggest power user is the wastewater plant And how do we offset some of those and just getting what what are other people doing to be creative? To deal with some of the issues without having to either create more employees to handle that or Have to put out so much more capital where there's an opportunity to partner where both parties win I get to use more about trying to understand As that example with sludge removal what we're doing. What can we do? What are others doing? You know, how can we and I know y'all meet with so many different groups that you see that I know Jacksonville does some stuff in Nashville and some other places, but you know, where are some leverage points Yeah, we we I'll get with Staff and we can Come back to you and because I don't want to ask the engineers because it'll cost us twice as much And they'll over build it. I want to do it. Uh, what the where somebody has already figured that out We've had some preliminary conversation about methane gases and that sludge The sludge that is a gathers on the water We've had some preliminary and how that could very well be Lack of a better word useful But we've had those I know that inside now But you know my question is what are other people doing and how how how could we look at that and figure out a way to to leverage that okay so Continuing as it relates to the drivers One of the emerging drivers that we've seen over the last let's say 12 to 18 months You know is the advent of of inflation um The cost of money the price of goods and services and you know that is having an impact on the cost of your operations and You know, we are taking that into consideration and we'll be Working with staff to understand and meet the necessary adjustments So that you know, we can recover what it's costing you to operate as a result of of inflation And you know, we want to continue to watch and understand it But you know, I just want that knowledge that It's a reality that we're dealing with right now And it's something that we will come back to you with And then, you know, how you engage your your your customers and your stakeholders, you know, because ultimately Your customers are the ones we all serve and They will continue to ask questions about their rates Better service maintenance of service And it's about how do we continue to engage them in a Handstand enhanced and optimized manner that is clear transparent and allows them to get the information they require If we comparatively look at The drivers the drivers as I'm looking at it today relatively How they did So okay, great question One of the biggest there is a few differences Overall the drivers Are not that different the general structure the drivers Are the same Because it takes a little time for a driver to not become a driver anymore for example But one of the changes we're seeing or one of the new items and adjustments is inflation And it's not that inflation last year the year before Was not a driver or Didn't have a component or part Of let's say the cost of services It has just taken a more Significant role with regard to how you operate. So it has to be acknowledged and highlighted Okay, another component could be Let's say staffing Right and how do we go about And staffing was a driver last year for example, but it continues to Be a driver and it continues to have greater greater Significance because of how the the competitiveness of the job market and The challenges that staff goes through with regard to finding resources and this is not just The city of colombia. That's something that's happening nationally across all All disciplines, you know all industries So that becomes another Component that has a little more prominence now because we are about two years through This process and we're getting to truly understand What those realities are but the the general structure and the framework Is It will change over time But probably not on a year-to-year basis unless there's something significant as is the case with inflation currently Staffing would come in both for Providing the labor but also for the inflationary Pressure of the wages that we will have to pay to get staffing To fill the vacancies. Yeah, I think staffing hits us Double whammy We got to get the labor in order to get the labor you're going to have to Raise wages Yeah, that's uh Well, I think at the same time you got to now you got to look at what are The shortfalls and are there things in today's world that technology and a third party can provide and how do those leverage out with that because You know between raising salaries and you got benefits that are 40 42 cost structure. How does that all balance out? So I think it's a great time for us to to dive into some of that And this is where I think robert's knowledge Like in beach, you know serve so many cities like ours that that we can kind of see what other people are doing too And how it's somebody else has done this and they'll tell us if it works or it doesn't or the pitfalls and So I think there's you know, this is a great exercise for us. So I I think In working with staff and working with your management and executive team, you know They've been really holding this ball and trying to You know sort out staffing trying to understand I know You know, when I look around on your system and look at what you're doing as it relates to program management And the augmentation of services to support your existing services you know I I can say and see That as an organization You're trying to implement some of the same processes and procedures And the diligence most importantly That others around the country are Are doing In order to try to challenge this issue, but you know, it's it's one of the things you really don't understand The challenge until you get deep in it, but it takes some time to get deep in the challenge So I think you're you're walking through that process But there's always things you can do to to keep being better Robert you can be able to you know, we look at the the work order work orders in the field and then Balancing staffing levels like we're talking about are you are you able to look at our commitment to bringing on smaller contractors these subcontractors that we're using to to see if that is a benefit The cost savings as we move forward to continue that so I I wouldn't be able to look directly into Like work orders or the nature of the contractors and the size and the value as such The you know, what we would do is just get the costs associated with that cost center department on a total system basis Incorporated into the financial plan that we developed and then say So the actual impact the implementation of the Efficient season of effectiveness is not that's you're you're a bigger picture for this project We won't we wouldn't do that for this project, but So councilman one of the things that we've been doing internally and we will share the information with robert, of course, but Looking at our pace of of the decrease in work orders And backlog and and and how much Contractor support we've been using to help accelerate that pace versus staffing We've also done some cost analysis that we'll share on you know, what it's what it's costing We capture all of our work in city works What it's costing our team to do a repair versus what our bid prices are and our indefinite delivery pricing is for Contractors, so that's something we'll share as part of the columbia water update What we'll be asking for contractor support as well as our our staffing that combination to continue working down that backlog In that package of requests gets rolled into robert's rate calculations To determine. Okay. What are our needs and then we can talk about how aggressively we want to be to Continue working down that it is based on funding level and how many staff we hire but also how many contractors we employ Well, yeah, I think understanding the timing that goes around it You know, I think your goal is to eliminate having multiple multiple calls over one issue And so if we can solve that but then also at the same time Allowing our team to do what they do best and let them excel at that and let us fill the gap where Where they get too much pressure and have to try to You know scrounge to make something happen. That's not fair to them either And I think you know get them focused on what they do best That's the model. Yes, sir. Have you trained the contractors in city works or do you have a Teenager assigned to put it in for them. They're not a teenager But we do have junior staff assigned to do the input that the the work orders We don't allow the contractors access to the city works platform But they fill out the work order summaries and then that's entered by an administrative person to to make sure we're capturing That's how we're cost accounting for theirs and are able to do a comparison with our our repairs sorry Robert So, you know, we We're discussing these issues, you know, and I think this slide is very relevant at the time because You know, we have a a bunch of competing variables For example, you know some significant events You know have happened. Let's say the clean water 2020 program You can't set decree You know your flooding event the AMI program, you know building out your storm water system You know kind of restructuring and building out the operations of Columbia water And you know you do this with the intention of building And maintaining a resilient utility But as you do it you implement specific programs and requirements, you know And in implementing those programs We try to maintain let's say financial viability We try to maintain our ability To manage the cost to operate We try to understand for example, let's say the AMI program. What will be the impact of the AMI program on your operations? And and that's something we're looking at, you know right now to understand And you know, we're seeing some some impacts. I'm just as we are seeing impact to the inflation So you have these active programs that you you you have in place that are so connected to these events Uh And for example, you had covet 19 and in all of these programs for all of these events You know, for example, the issues around covet 19 touch these programs. So The highlight here is What we do as it relates to how we manage and monitor the financial program becomes a a balancing act as it relates to these competing variables and In one case you may have something like the PFAS requirements that may come down Having a significant impact You may have AMI that may have an impact on revenues. You have inflation So from year to year the challenges that are presented become different And it's a matter of just trying to continuing to understand the challenges as we go about Presenting the decisions that have to be taken and presenting the impacts to your operations So you've seen this slide before and the big thing we wanted to highlight with this slide is You know historically There was a little lumpiness You know as it relates to revenue increases Over the last few years, I know in 23 there wasn't an increase in 22 21 there was not And You know, all we're seeing here is typically, you know cost keeps going up You know, there's a certain consistency would cost We know that you know, we've been through some tough times But as we go forward, you know as best we can Take the necessary steps, you know to Adjust rates as needed In order to provide the services that we need to provide as as an entity It typically works up better and saves a lot more cost in the long run Versus having more lumps or longer durations of no increases Then then having to catch up and and I'm saying that to say There will be a need. There could be a need. There is a need There's an increase. It's not just saying it should be an increase increase increase I think at the same time Robert as we get to that discussion, you know I think it's time for us to evaluate the system as well Because we're you know For some of the wastewater that we do outside the city ends up costing us a lot more than There any value and that's our most expensive investments if you look at Future so the future do we want to grow that or do we want to just make sure that we maintain And focus on growth internally in the limits and not get out But then on the water side we have an opportunity to grow the system because that is a true revenue generator And so should we be looking at that? What are the increases that we know we're coming? With future growth and where are there opportunities for us to grow? And I don't know that we've ever looked at it from that standpoint And I think we're at that juncture where we should look at that. Where should we maybe Levelized we're not going to do any more wastewater outside of the city because the travel cost is so much per square cubic foot are we better off taking an opportunity to grow Our water customers where we know we can deliver Service effectively efficiently without the added cost that we do with wastewater So I think it'd be it'd be interesting for us to have a little more discussion about that Where are opportunities that we could take advantage of that create more revenue without always having to Go to the rate payers. Okay Just a balancing act because it may be a combination of both You know, especially, I mean, you know costs have just Really significantly increased And we're seeing it a lot of suppliers Are reaching out and talking about the the massive increase, you know, obviously as you know the gas Volatility lately. I mean it's been all over the board. It's been very hard to forecast when it comes to natural gas And and then obviously, you know, we've seen when every chemical and everything we use has gone up significantly and supplies down So it's it's we're still not stabilized yet understand Okay, so just to set the groundwork as we do You know, this is the financial plan that was was presented last presented last year It was presented With no increase in 2023 Uh, but at the time we anticipated somewhere in the range of about a 7.7 percent for 24 With a few other 7 percent in 25 and 26 and then it dropped below 7 in 27 Uh, you know, we met all our financial metrics or we achieved our financial metrics over the plan You know, the reason why we're presenting this is, you know, this becomes somewhat of a starting point To go back and look at, you know, how did revenues change? you know based on What we're currently seeing today with billing determinants How did on m Change for example operating and maintenance expenses based on current Happening let's say inflation and other requirements And for example based on those two adjustments or those changes How is that affecting the financial plan and how is it adjusting the financial plan? so for example If you have something like AMI that may Have some impacts on revenues Because now you have more a few more changeouts, you know, you have some better readings, for example And then, you know, you have Onm that's going up, you know, there's some balancing that happens there, right So those are the things we're working through currently with staff and you know We go back and forth as it relates to looking and diligence and and making sure everything reconciles But we'll bring that back to you And and discuss it all with you to to look at and understand the impacts But this is what we were seeing last year as a starting point on the baseline Clint this robert have all the projections of future growth that we see Just want to make sure that we're we're concluding every scenario as we have to make some decisions so Going forward You know this slide is just talking about the the value of water and you know You know, what I'll highlight. I know we've seen this before but I like this slide And what I'll what I'll highlight is the fact and the reality that you know the daily cost the daily costs of water Daily costs of water usage, for example, is about 76 cents Waste water is, you know, a little less than double. Let's say almost double right a dollar 41 you know if if you compare What the value of water is on a per unit basis as compared to You know paying a dollar for a gallon of bottled water, right There's a significant difference as it relates to what you're what you're paying And that's the biggest thing we always try to highlight and Let's say for that 76 cents or that dollar 41 You know you turn on the spigot And service is available You go to shower and do what you do in your homes and as a part of you know daily life And service is available So it's a value added service All right, well, you got to get a marketing team to put together a better pitch on that Because it's important to know, you know, but but you know Just looking at the numbers, you know the average customer You know doesn't it doesn't register the importance of of this, but Yeah, thank you. I know you all have seen it before but I didn't want to over So I just Pay less than a penny Pay less than a penny to drink it, but it cost you a dollar 40 to get rid of it you know, so so every every few years black and beach publishes a top 50 survey of water and And waste water systems of their current rates And what we wanted to highlight is for the utilities that were observed over the period 2008 through 2020 You know their adjustment for water and sewer respectively were about 6 and 5.8 That all municipal or is that private and all all municipal top 50 municipal And you know columbia water over the period was 4.7 a little less um You know over that over that same period You know the focus here is not so much on on the numbers Is more on the gradual progress And the increase in the bills, you know, let's say over two decades Right, you know over two decades the bills Almost doubled or just over doubled And that's that's that's to that point earlier with regard to increasing rates or not And the impact that's national average. Yeah, that's for the top 50 Largest that we survey and the message here is The bills have been going up you know for for You know obvious reasons the cost of living and everything is going up And just looking at the the impact and the change over time Is what we're highlighting here So This slide is just highlighting From a on a typical utility bill basis You know from let's say 2001 through 2020 What are the typical utility bills looking like and how they're increasing increasing over time You know that that that orange Bar represents a combined water and sewer bill The black represents bundled cable The blue represents cell phone bills And the gray represents energy bills And yes, mr. Mayor as you see the bundled cable Is significantly increasing So so is if you look at the the cell phones Over time, you know, it kind of jumped in the 2010s 11s And it's coming down now for maybe that's just competition and more providers providing more services or more goods chasing dollars But if you look at if you look at combined water and sewer As compared to You know the other industries it's been increasing at a slower and more gradual level And in comparison to the other industries You know All the services here are valuable, you know, I mean, but it's an essential service for for life for living for everything So we just wanted to show it as a as a comparison You know to say Compared to the other utility services You know It's relative Robert wastewater utility Only a wastewater utility it would be under a guide of the public service commission, correct Or As far as rates and everything No, okay So with the public service commission typically and clinty can come if you wish it it's the if you wish it's in investor It's the investor owned for The investor on utilities typically would have to file under the psc For wastewater utility it would be treated Just as the water sewer utility You know within the city of columbia and you have even utilities in south carolina that just operates wastewater Spot on robert. I think um east richland public service district They're not regulated by public service commission. They've got it up. They're they're public and they've got an appointed board And um, and so there are quite a few sewer providers wastewater providers in the state that are public entities boards commissions those sorts of things Um, the upstate has quite a few of those that's separate from the water provision, but they're not regulated by the psc It's only that that private ownership piece that puts you in the psc But who would who would be mindful of the rate increases at So it's it's there either elected or appointed board. So for east richland, for example, I think it's an appointed board And county council members usually make make those appointments. So that's how it's tied in private sector waste management utilities are public service. Yes, sir so You know, this is the approach that that we will we will take Uh, to answer the three questions how much money is needed from whom should it be collected And how should it be priced? You know, one thing I'd like to highlight You know, we're looking at revenues and taking a deep look at revenues just to make sure we understand Given the time what the impacts will be We're also looking at costs around all the the items and variables we've highlighted to make sure we understand variables being inflation You know and other costs and the impacts whether it be energy chemicals You know and what those may look like as it relates to them escalating Over the next three to five years and how it will impact operations So we're looking at those items to get a good baseline estimate Of what revenues and costs will be to come back to you and say You know, this is what we're seeing So this is the approach we're using To answer these three questions So the next steps is to complete that base base case financial plan Thereafter go through the cost of service analysis Upon completing the base case financial plan through staff We'll come back and discuss What the impacts are as it relates to revenue increases and just the impacts on your operations And collectively we'll have a recommendation as it relates to the proposed revenue increase Any questions? Jeff Is Thank you all very much. Thank you Robert. Always a pleasure to have you Yes, sir. We will be bringing that back as we progress through the budget workshops One of the items that I just wanted to share because I know you all are interested in our ARPA funding and things we've allocated so far and Discussions potentially about additional allocations. So We're going to hand that out to you now just for your reference We don't have to really get into it in any depth, but If there are any questions about what you see as far as things that are committed Please ask I know there's potentially I know mayor some other um Housing related Partnerships if state funding might be available. So we want to um Keep that in mind As well. I was trying to see Um Missy did we al I know at one point we had a line item, but I think as council made Commitments, maybe that one isn't on here for um Housing related have been committed. Okay Yeah Rapport shelter, weren't we able to you know not yet and that has to go towards um, maybe Potentially some of the things you all are talking about like the bigger Ampus or if you had a um, but it's No Go to the Okay, okay I do think Um We we can't we will I mean I think we would we're working through the Structure of the program if it's similar to what we've already done then we'll use that as a guide I don't know if it's a qualified extent right So we we have we have we have toyed with those um Of course, it's always subject to interpretation But pathways and and healthy lifestyles is a loose Um sort of interpretation in terms of how that can make it eligible Programmatically if it's not eligible under one of one of the American rescue plan programmatic areas Then it would come from our allotment of loss revenue, which We're we're trying we're trying to conserve that for other activities that may or might may have been committed but It's all some of the capital. Um, but also, you know, I would hope that we don't I mean we got what two more years left Airbags we may want to hold on to some for something else that pops up that may qualify Technically we have until december 20 year december of 2024 to get the funds committed and at Today and i'm looking at christine as well. Um, our latest news or instruction is that we have until the 2026 to actually expend it treasury is So sort of bouncing around Definitions of what that means, but that's that's that's today's instructions Thank you So we'll keep we make note of those items mayor And um, we'll double check eligibility of course anything else you all want us to look at What's available? Yes, if you don't mind and get some lunch and I think there's one item if you could add it for me. Thank you Mr. May I move we'll go into executive session for discussion of matters related to the proposed location expansion and provision of services Encouraging location or expansion of industries or other businesses in the area served by the public body pursuant to scco 30-4 s 70 a 5 project royal capital city stadium Discussion of the employment of employee pursuant to 30-4 That's 70 a 1 city manager in the city attorney evaluations columbia richland 9-1-1 communication center Receipt of legal advice relating to a pending threat and a potential claim pursuant to 30-4 s 70 a 2 peak versus city of columbia Receipt of legal advice related to matter covered by attorney client privilege pursuant to 30-4 s 70 a 2 meal sharing ordinance Yeah Second motion. Yes Yes, yes