 They want to hear it all. OK. It's not going to get loud. I'm done. Wait. Oh, OK. Fill it up. I got to eat some, but I got to eat some. Who knows how old it is from up here? I don't know. I don't know how reliable that is. I don't know how it's packaged in here. Joe, you need to. You need to act there. I didn't get it. Have you ever seen this picture? I don't know. I don't know. I didn't get it. Oh, you went to the city website. Yeah, that's the best way to go. That's because he didn't like what I said about not contacting the police. In my opinion. It's weird. Some of them are through the e-mail and some of them like finance isn't on board. You know, whatever they want. So then he figured he ought to have some of them. I don't know their e-mail. The last e-mail. I don't want to be short of it. Let's start. Good evening, everyone. Thanks for attending our second college course of fund balances. I'll entertain any questions as we go along. So if you have one, just raise your hand. Fund accounting. Why do we do this? It's an accounting system that really emphasizes on accountability rather than profitability. As you know, public entities aren't for profit. Why fund accounting? It actually segregates the resources that we use. It categorizes them for specific purposes. And it requires unique identification and reporting. As you'll see as we go on with all the funds that we do have. Types of funds we have in the city of the general fund, which we're all familiar with. Special revenue funds, capital project funds, debt service. Permanent funds, proprietary funds, which consist of enterprise funds and internal service funds. There's nothing on here on permanent funds, but permanent funds. There are two in the city. One is the Cemetery Care Fund and the other is the Library Trust Fund. The Cemetery Care Fund really is for people that buy cemetery plots. The money goes in there and they pay a stipend to public works for the care and maintenance of the cemetery. And the Library Trust Fund basically takes donations or contributions for the sake of the library that can be designated for certain purposes within the library. The general fund is our primary operating fund, as you all know. Resources we expended in the current year will also be used for operating purposes to run the city. The next slide graphically shows where the revenue comes from the general fund. As you can see our tax base from the levy is 46%. Intergovernmental is 42.5%. Public charges for services is 6.3 licenses and permits, fines and forfeitures. And there's a small percentage of miscellaneous. Jim? Yes? On the Intergovernmental, is that just state funding? Yes. Okay. So you can see that roughly 49% of our revenue comes from two sources, our local taxes and all of the intergovernmental payments that we get. Taxes are roughly $15.6 million. And again, this is based on 2012 numbers just to put some numbers to these percentages. Intergovernmental is $14,400,000. License and permits are about $900,000. Fines and forfeitures, roughly $300. Public charges for services are about $2.1. And there's about a half million dollars, excuse me, of miscellaneous. General fund expenses. Again, we've gone through all of these through the budget process. All of you are on committees, sat through these individually. Fires, 22%. Public works is 28% of our budget. Police is 36%. Admin is 12%. And development and building inspection is 2%. I'm sorry, I just had a question on the other slide. Intergovernmental, is that, does the city ever receive direct funding from the federal government or is it always through the state? It's always through the state. The only, I think, Nancy, correct me if I'm wrong, federal money we get is for transit. CDBG? CDBG. And Jim, what was the, I'm sorry, I was writing. The actual dollars in the tax line, the 46.1%. Local taxes are 15.6 million. 15.6, thank you. In general fund expenses, police is about 11.6 million. Fires 7.2. Public works is 9.2. And administrations 3.8. Special revenue funds. You can see we have a number of them. Development block grants all the way down to stormwater. Special revenue funds allow for the ability to segregate revenues and expenses for specific purposes other than debt service or capital projects. And these are all internal to the city, these types of funds. Sources of revenue for special revenue funds. Intergovernmental are 20%. Taxes are 34. Public charges for services are 21. Fines and forfeitures are 10. Licenses and permits are 5. And we have special assessments that represent 3% of those. From a tax perspective, what's all included in that is really mead library which we pay about $2.4 million to a year out of tax levy. And also tourism, which is about $1.2 million. Special revenue fund expense. We've got the library which represents 40% of special revenue funds. City development 25%. Debt service is 1%. Public works 11. Cable TV is 2. Admin is 7. Police is 1. And fire is 6. For city development, there's roughly about... I'm sorry. Just to slow you down for a sec. So the... When we look at all these special revenue funds, what you're saying then is the largest fund far as the library. Does the library get any general fund money? Yes. Or it all comes from the special? They get it through tax levy. They get $2.4 million. The special revenue fund in the library is 40% of it. They have a budget of 3... In 2012, they had a budget of roughly $3.2 million. And that's what that 40% represents. Now, that's not only the city's piece, but it's also the county and some of the other municipalities that share. So if it's part of the regular tax levy, why isn't it a special revenue fund? Because the money comes from the tax levy to the special revenue fund, which the library sits in. Okay. So that's the way it's been developed over time? Correct. Is that the same for many of these special funds? Yes. But not all of them? No. The city development is made up of loans, which are CDBG-led program, as well as fund balance, which collect payments from individuals that have loans. And we replenish the loan balance and we loan out my money out of CDBG. Okay. I don't mean to go farther back, but under the general fund revenues, where would the Phoebe in here, on this portion where you've got public service charges, governmental taxes? It'd be public charges for service. Public charges for service. Any questions on that? So when you're saying expense, that's just where the money goes. Correct. A special revenue fund has a stream of revenue that's either internal or external and expenses in there to run that fund. An example would be, let's take the ambulance fund. The ambulance fund collects revenue for services that goes into the special revenue fund and then we charge expenses to operate the ambulance service. Okay. That go into that fund. Got it. Same thing with municipal court. Mm-hmm. We collect revenues from tickets and we also have expenses for the judge and her staff and the net of that, which is normally revenue left over. It gets into the general fund. Capital project funds are made up of you. Jim. Jim. I'm sorry. I'm just curious if so, I see this as a big chunk for the library. Does, if the library has fines and overdue books and where does that money go? They collect that. They budget it. They get to keep that money? Yes. Okay. Thank you. Yeah, because the total budget's 3.2 million and we give them 2.4. So they've got to generate $800,000 of revenue from other sources. Okay. I think the county contributes about $400,000 of that aid based on people that use the library outside of the city. There are other municipalities that share in some of the cost as well. Does that answer your question? I'll try better. No, that's okay. Did the county and the other areas that use the library, did they have a portion of the library set in their budget? Yes. Thank you. Capital project funds. There's capital projects for TIF districts and there's capital projects that are bonded or referred to in council meetings as go debt, which is general obligation. General what? I'm sorry? General obligation debt. Capital projects funds account for financial resources used to acquire construct assets or infrastructure and we go through that all the time when we're looking at buying stuff or building stuff. It comes before the council. Council blesses it. We go out and spend capital. We're in the process of borrowing $2.5 million for next year for capital projects. There are probably $30 million worth of projects that the city would like to do and we're borrowing $2.5 million. So we go through the process of narrowing it down and depending on what projects offer the most benefit to the city and the citizens are the ones that we do. And those are really fall into this category, which are capital projects. So as they start, we expend funds when they're closed. We put it into debt service and we start paying the principal an interest on it as well. I'm sorry Jim. The way that statement was due in department heads or who makes the decision of what? The capital appropriations committee. Okay. Thanks. Capital project fund revenue. It's either we're out borrowing money or we're receiving grants for certain projects. And the expense side is really the infrastructure or things that we are building or the capital assets that we are buying. Again on the debt service fund side, we have the general obligation debt. And the debt service fund is really used to account for repaying principal and interest on the money that we borrow throughout the years. Historically, we have some loans that stretched out to 20 years. Our current line of thinking is 10 years or less on debt. And again, that's a function of what our debt service fund has for allocation of the tax levy. Because if you recall, when we go through the tax levy of the $15 million, we allocate so much to the general fund, so much to debt service, so much to the library, and so much to transit. And we try to keep that debt service fund neutral each year so that as debt gets retired or payments diminish, we go out and borrow new debt to keep it at that same level. We have the ability under the Walker Act that if we do incur more debt, we can pass it on the form of a tax increase. That's one of the things that is bill allows. So we could borrow more money if we had to and pass it on in the form of a tax increase, rather than burden the general fund with coming up with cost reductions to make up the difference. If the council so chooses to do that. Is there a cap on that? Not on debt. Okay. There is an increasing of levy for operational costs. Okay. So the normal percentage on the debt, that 1%, is that common? Is it always, other communities are sized, 1% of their money is to the debt service, or is it to the other communities are sized that have more than that? Well, we're really, from a debt service standpoint, we really paid about 10% in advance. I think our debt service is about $3 million thereabouts from the levy. And our, you know, so it's not 1%. Oh, okay. And that's just for the principal piece, correct? Is that principal and interest? The next page shows you, and again, here's the number, I said roughly $3 million, it's $2.9 million, which comes out of the debt service levy to pay the debt service fund. The TIF pays $4.3 million, or actually collects $4.3 million in TIF revenues. There's miscellaneous transfers, there's miscellaneous and transfers that go into debt service fund revenues. And again, those are things that come from special assessment funds. We also last year closed out TID 3, which actually got some money into the debt service fund because there was a payout at the end because we had excess revenues in that fund. And there's about $600,000 of other debt for convention center that gets, that's included in there as well. From an expense side, interest and principal payments total about $9 million. Interest is 2.6, principal is about 6.5. There's small state administrative expenses that we have, not worth mentioning. There's TIF incentives that we've paid. As you know, in our TIFs, we've gone to a pay as you go rather than borrowing money upfront to incent developers to put up buildings so that on a pay as you go, we've been paying about, we've got two that we put in place in the last couple of years. One was for pick and save and the other one was for festival foods so that every year based on the tax increment that's developed in that TIF district, we pay roughly 95% of that back to the developer as his incentive. We guarantee a certain amount and that certain amount is based on the increment he is going to put into that investment and based on that we pay it out over 10 or 11 years. Enterprise funds, we've got wastewater, the water utility transit parking in the boat facility. The difference between special revenue funds and enterprise funds, enterprise funds are really where there's a fee charge that their primary customers are outside of the general government such as wastewater or the water utility. You all receive bills for them and that's really a third party bill. It's not a bill that's inside the city. You can see the revenues, 81% are charges for services. I'll get your water and utility bills and that's the primary driver there. There's a small piece of intergovernmental, small piece of property taxes, investment income which in the past four or five years has been negligible in a small amount of miscellaneous. Enterprise fund expense. Again, we've got administrative services, contracted services which both utilities use, supplies, depreciation, interest expense and insurance. Internal service funds. Jim, could you just back up for a sec on administrative services? The city pays those expenses from the enterprise fund? Yes. Okay. And that would- The people that are employed in wastewater or the people that are- So we'll just kind of charge that back. They develop rates that need to be blessed by council and based on those rates, it funds themselves for their operational costs. And then the contracted services would be- Third party services to support that. Okay. Right. And the depreciation is, I would say not a real number. I know that's not true, but- Well, it's based on their assets. Okay. We depreciate assets over a life. Again, these are really entities that are for profit, if you will, not like the city. So depreciation's taken to and to account in this, just as any other normal private business would. It's a non-cash item. So there's not a cash outlay for it. Internal service funds. We've talked about this in council meetings, whether it be motor vehicle, data processing, health, workers' comp, and general liability, self-insurance. These are activities for which a fee is charged and the primary customers are, again, are internal divisions or offices of the government. And you can see here that 98% of the revenue is generated from charges for services. So, for example, health fund. We estimate the cost of health insurance on a single person to be $737 a month. The general fund pays to the health fund $737 a month for each single employee. That comes in as revenue for the internal service fund. It's an expense to the general fund. And then out of the internal service fund, we pay all of the claims for health insurance. So that's the other side of it. If you look at the expenses, you can see insurance payout is basically 64% of that fund. Administrative services are 13. Contracted services are 10. Most depreciation is supplies. Contracted services. Administrative services are fees that we pay to third-party administrators for our claims, whether it be health or for workers' compensation. Insurance, you know, to put a dollar value on it is about $6.2 million a year. The administrative services are about $1.3 million. And contracted services are about $1 million. It's internal service funds. Fund balance. Definition between, is the difference between revenues and expenses is the fund balance. So, the more revenue you have, the less expense you have. Fund balance is there to be used for specific purposes. The general fund, we've designated a piece to be undesignated minimum balance. When we look at city, when it comes to things that we can't foresee, we have fund balance in order to cover some of those things that the council so chooses, whether it's a natural catastrophe or whatever it might be. The minimum general fund balance was put into effect last year under resolution 46-12-13. We basically stated that 25% of the ensuing years expenditures would be set aside for a minimum fund balance in the general fund. The next page goes through a calculation on where we ended up, 2012, I'm sorry, 2014. We have budgeted expenditures of $35.5 million. 25% of the policy balance would be $8.879 million. That is what we would look to have as a minimum fund balance in the general fund. Anything above that, the council at its discretion can allocate to several different types of activities. Anything below that, there wouldn't be any allocation for the council to consider. I just wanted to make a comment on this because some people will look at this number and say, well, that's a pretty big number. One of the things to keep in mind is when we bond, our bond rating is reliant upon that fund balance. There's a lot of the factors that go into our Moody's rating or AM Besta or S&P, whichever one we're using today. We don't have a lot of those factors like median household income and a lot of those other great factors that they want to see. Our minimum fund balance really helps us keep our A rating with the rating agency. You're looking at that and say, wow, that seems pretty high. It's almost out of necessity because the other factors that go into that bond rating just aren't there. The difference between an AM and a triple B rating, what would be A plus now? Double A2. Double A2. The difference between dropping down on interest expense is pretty significant. 10%, I think, is what you were told. That's a pretty significant dollar amount. Jim, how much trouble in a generally normal year would we have in terms of, this is not 8.8 million that we have to come up with every year. There's a fund balance that's there. It keeps going. Generally, saying the last two or three years, have we kind of met this target? The target before last year was 18%. I think the four or five prior years never met the 18% rule. In the last three years, we've added to the general fund balance. In past years, we've had trouble even at 18%. Now we're shooting for 25. We met 25 in 2012 at the end of the year. We exceeded it by $1.2 million, which the council has had its discretion to spend on certain types of activities. That was in the ordinances. I remember how the extra could be expended. Correct. Okay. Thank you. Was our bond rating negatively affected in those years? Because we weren't at the 18, and then we certainly weren't near the 25. I'm going to get into what affects the bond rating that's next. I can point out some things that were then and what's happened as of today. Largest factors that affect bond rating are really demographics. When you look at the economy. The median family income market value per capita unemployment rate and the growth rate within the city. They also look at population of population increases or decreases as well as a major factor. From a financing standpoint, they look at fund balance as a percent of expenditures. And these are new. They've been revised this year by Moody's and S&P. When they look at fund balance now, fund balance represents 25% of the total weighting. A significant portion of the weighting is really on the economy finances as well as management of the city. So when they look at finances, they're looking at fund balance as a percent of expenditures. Actual to budget fund performance. Did we do better or worse and why? Cash balances as a percent of expenditures and as a percent of debt service. From a management side, there's operating history. What we've done in the past. Revenue and expense assumptions for the city. Budget amendments and updates. Long-term financial planning and long-term capital planning. Which are really significant in how rating agencies look at the city and give us a bond rating. They also look at debt and contingent liabilities. You'll hear some terms that get thrown around like direct debt as a percent of governmental funds. And I've got a slide. It's the last slide that'll show our direct debt and our overlapping debt. And I'll explain what those both are. You can see here that we take our full value of debt, which is 44 million divided by our equalized value. And that's one calculation for direct debt. And our equalized value, that's $2.476 billion of equalized or market value for our city. So it says our direct debt is 1.8% or 1.8 to 1. Which is okay. It's not great. I'd like to see it under 1.2. But we're not bad at 1.8. Bond ratings play a major role in the marketing of a bond issue. And that's pretty self-explanatory because the better our rating, the better it is and easier it is to market. And the more favorable rates we get. It affects overall interest rates that we ultimately pay over the life of the bond. And creditors and potential investors of governments seek information about the ability and willingness of a government to levy taxes and generate revenues to cover that principal and interest on those bonds. Yeah. Just going back to the previous slide real quick. Sure. So the 1.8%, you said you'd prefer to have it closer to 1.2. If I had my druthers, yeah. Yeah, we're going to be borrowing another $2 million for capital improvement. So what is that going to do to that 1.8% then? It'll ultimately drop. Because theoretically we're going to borrow $2.5 million, but really our debt service will come down further than that. Okay. This last slide is pretty telling. You can't see it up there because it's pretty small, but you've got copies of it. We just took a sample of cities close to our size and looked at their ratings from a double A, which is Wauwatosa. There's an A1, which is Eau Claire, and then we've got a bunch of A2s, which are Fond du Lac Lacrosse, Eau Creek, Sheboygan, Wassau, and West Dallas. It's got the population size of each municipality. Now you look at direct debt outstanding. If you look at Sheboygan, that's our 44 million, but you can see others have a little more or considerably more. And there's only one that has less, which is Eau Creek, at about $23 million of direct debt. Overall debt, you can see that Sheboygan has 87 or close to $88 million. And that takes all of the taxing entities in our jurisdiction, which is the county and the school systems. So it takes their debt as well. And there's a calculation that's done for the direct debt, which in our case was 1.8. And if you go over a column, our overlapping debt or debt burden on full value is 3.6. So you can see that the city on its own is 1.8, and the overlapping debt from other taxing entities, which are the school systems in the county, were at 3.6 percent. Now, when you look at some of the other entities like Wauwatosa, a double A rating, you can see that their direct debt is 1.1 percent, and that's really a large driver. When you get into the overlapping debt, there are things that really are out of your control as a municipality. You have school systems to drive it, county that drives it as well. From a direct debt per capita, we're at $914, which isn't bad. It's probably third lowest on that group. Oak Creek and West Alice are slightly ahead of us, but we're not in bad shape. Unrestricted spendable fund balance. And again, this is different than the 25 percent only because it takes the entire general fund balance. And some of that, as we know, is restricted for working capital and other things for the upcoming year. So we're at 42.4 percent, which is pretty good compared to some. The only one that's better than us is West Alice at 47 percent. Jim? Yes. Well, I just didn't get that. Okay. So just to back up, unrestricted spendable fund balance is what? It's our total general fund balance that we have. Total. Not what we call undesignated, the 25 percent piece. That makes up 25 of the 42 percent. We have other categories of funds in the general fund that enter into this calculation. Okay. And that would be like the motor vehicle fund? No, no, no. It's other things like we have working capital, which is roughly $4 million that we set aside so that we can fund ourselves in between tax cycles. Okay. And we have a few other things on the balance sheet as well. Okay. And so in this column percentage, so higher is better. To a certain point, I mean, if you look at Wauwatosa, again, they've got 40 percent, not 42. If you look at Wausau, they've got 24 percent, not 42. So again, it's really not as heavily weighted as it used to be on unrestricted spendable funds from a rating agency standpoint. What really tells the story here is the full value of these taxing entities. So if you look at Wauwatosa, they've got close to $5 billion of market value in the community, where Sheboygan has $2.5 million in their community. You can see that we've shrunk again year over year. We've shrunk 2.6 percent on market value. Wauwatosa has taken a hit of 3 percent. You can see some other communities have had small growth. But it's really the tax base that you have in your municipality that really drives this so that you could have a little more debt. You could have a little less capital and reserve. But as long as you've got the tax base, when they look at it, they feel safe because there's enough tax base to generate taxes to run that municipality. And that's the equalized value. And that's when we talk about our equalized value compared to assessed value. Our assessed value has stayed pretty constant, but our equalized has in the last seven years dropped to 14 percent. So that's basically said, okay, we've got to revalue the city to put both of those back in line. Any other questions? I know that we've had some controversy about fund balances and some of the, excuse me, those included things like, I remember we, and it would seem now that that's part of the general fund balance, but we talked about the motor vehicle fund balance and the health. That's a separate fund with a separate balance. Okay. And the workers comp fund balance? Health fund. And the health fund balance. Could you just comment on, first of all, what those are? And then second, how they get funded? And third, what you see in terms of trends or problems? Sure. Well, the health fund and the workers comp fund get funded from the general fund. It's an expense in the general fund that gets transferred to the internal service funds. And those internal service funds, depending on where claims come out, whether it be workers comp or whether it be health-related claims, with the amount of money that's transferred from the general fund and other funds that have people in it as well, either has a surplus or a deficit. Historically, other than the last four years, we had deficits in the health fund and deficits in the workers comp fund. And even through last year, we had a deficit in the workers comp fund. We have since brought both of those in line based on recommendations from our insurance carriers that we should carry roughly a $3 million balance in our health fund as reserved and a $1.5 million balance in our workers comp fund. I think we ended up $12, roughly $2.9 million in health fund, about $100,000 off, and roughly a million and a half dollars in workers comp. So we're good there. When we look at motor vehicle fund, motor vehicle fund again gets funded from the general fund. An expense to the general fund for the vehicles that it uses from the motor vehicle fund. Motor vehicle fund, we've talked about this, has had significant reserve balances and they've been dwindled over the years. We currently have roughly a $2 million fund balance in that fund going into 2013. I've just gone through some expenditures that Public Works wants to make for I think it's three triple axle dump trucks and a couple other vehicles. That'll probably eat $600,000, $700,000 of that $2 million. The fund itself, other than that, has enough money to cover the operating expenses which is basically repair and maintenance on the vehicles, the cost of parts and gas. So that fund will never be able to build a surplus to replace vehicles other than now going out and having to borrow debt. So that's when I said through the budget process that it looks like in 15 based on the minimum commitments we need for the motor vehicle fund to buy equipment that we'll probably have to fund for the first time in a long time vehicles to support Public Works through general obligation debt that we would borrow every year. And that would put pressure on that $2.5 million we're going to borrow for next year. That's for things other than motor vehicle pool. So going forward, we either have the opportunity to try to condense that and say, okay, part of that's for vehicles. The other part is for other stuff we want to do in the city or the council can make the decision to say we need to go out and borrow more money not only to cover general fund projects but as well as motor vehicle replacement vehicles. And how about police and fire? My memory, such as it is, there is a line item in the police budget for replacement of at least some squad cars this coming year. Correct. There used to be that same line item in the fire department due to budget constraints that was cut out a few years ago. And what they did is they put in $100,000 to $50,000 to $250,000 a year so that at the end of two or three years they had enough money to set aside to buy a new vehicle, a fire vehicle. Does that go into the motor vehicle? No. So there's a request in now, I think, with some of the surplus funds we have to buy a fire pumper truck, which is roughly $400,000, which we need because of its age. It's 15 years old and should be put out of service. So that's something that the council will have to deal with as well. It's under review for a capital appropriations committee as well as the surplus funds we have left over from $12,000, the $1.2 million. Does that answer your question? It does. So just overall with these other separate fund balances, your estimation is that we're generally in the ballpark in pretty decent shape. Yes. And do those separate fund balances affect the bond rating or is it because they're within the general fund balance? They're outside the general fund balance. They get all of the fund balances, but they primarily are driven on the general fund. Okay. Okay. Got it. Any other questions? Yes. When I'm looking at the enterprise fund, it's done. And a couple of the other ones are saying miscellaneous, like 3%. Can you tell me what the miscellaneous are? You know, there's always one that asks that question. I might have that. No, I don't. Nancy. Yes. Do you know what's made up in the enterprise fund miscellaneous expense categories? I just happened to look at some of the pies. There's always miscellaneous in a percentage. I don't know what the miscellaneous is. That roughly represents about $480,000 of $16 million in the enterprise funds. I can certainly get you a list of all of what they are. I don't have any other questions. Okay. Any other questions? Yeah. That's really loan balances, CDBG and lead that are in there. And lead grant. And there's also a fund balance in there as well, which is people repay their debts. We put it back into the fund so that we can allocate it out in new loans. So at any point in time, that fund balance changes. Does that answer your question? Do you have any opinion as to expenditures for tackle projects? Streets, infrastructure, sewers and that. That tolls limits we place on borrowing to those projects every year. Long term. CDSB in the infrastructure at its current level. Now, where are we sliding? Farther behind every year. At some point, there's going to be need for a much bigger capital infusion. I think the answer to that is yes, we're probably going to have to put a bigger capital infusion in. One of the good things we've done in the last three years, our total debt, which is just the principal piece, was roughly $64 million. As you can see through the end of 12, we're at $44 million. So we've done a great steward's job of reducing the debt burden on the city. We have the capacity to borrow up to $85 million if we so choose. But again, we have to have the ability to pay that. And in order to pay that, we have to put the tax burden on the taxpayers. Or else we have to cut money from general fund, from the library or from transit. Those are the only options we have. So if we don't want to pass that, that debt burden on. But at some point, you know, my goal throughout this was to see the city with a total net debt just for principal of just a little less than $30 million, which gives it a lot of opportunity to do other things and borrow some money. Probably at favorable rates. We're probably two years away from that. But it's still at the council's discretion, if they so choose, to say we wanted to borrow $2 million to do road projects in addition to the $2.5 million. We're going to borrow for other projects next year, or in 2015 and 2016. They can do that. And we do have the capacity as a city. But again, if we believe that the general fund is at a balance that we feel is minimally maintaining services, we feel that we're going to continue support to the library at the current level. And we're going to support transit at that level we do. The only way we can do that is to pass it on to our constituents. Just maybe kind of a final question. It's pretty new, but there's this $111 million in property tax relief. Do you know how that's going to work just from a procedure? I was trying to figure out in my mind, will the state then... I think it's going to work like the lottery credit. You get so much off part of the school credit. There's a school credit and a lottery credit. So it'll be part of the school credit as a deduct from the rate. But the city is not going to lose money as a result of this. Will the school district? No. No, they're just going to fund that through the surplus, the alleged surplus. Jim, thanks very much for that presentation. Mark. I'm not clear on the term here, capital outlay. What does that encompass? We borrow money to fund projects and we lay out the capital to do it. That's what it means. Anything else? Thanks. Thank you.