[00:00:01]
UM, I'M GONNA CALL THIS MEETING TO ORDER.
UH, THIS IS THE, UM, ORGANIZATIONAL MEETING OF THE AUDIT AND FINANCE COMMITTEE OF, UH, GUCCI COUNTY BOARD OF SUPERVISORS.
UH, FIRST QUARTER BUSINESS WILL BE ELECTION OF OFFICERS FOR THE, UH, 20, UH, FIVE CALENDAR YEAR.
UH, DO I HAVE A NOMINATION FOR THE POSITION OF CHAIRMAN OF THIS BOARD? OF THIS, OF THIS, UM, OF THIS COMMISSION NOMINATED MR. CHARLIE WATERS, THE CHAIRMAN OF THE FINANCE AND AUDIT COMMITTEE.
DO I HAVE A NOMINATION FOR VICE CHAIRMAN, VICE FOR THIS COMMITTEE? I NOMINATE, UH, VICE CHAIRMAN.
AND WE MOVE INTO OUR, THE NEXT ROLE.
UH, THE NEXT MOVE, WHICH APPROVAL OF MINUTES I TURN OVER TO.
ARE THERE, ARE THERE ANY COMMENTS TO THE DECEMBER, UH, THIRD 2024 MEETING MINUTES? UH, IF NOT, I'D ATTAIN A MOTION TO APPROVE THOSE VOTES.
UM, NOW WE'LL MOVE ON TO DISCUSSION OF THE AMENDMENT TO FINANCIAL POLICY, FINANCIAL MANAGEMENT POLICY.
UM, SO THIS IS PLACED ON, ON THIS FOR, UH, FURTHER DISCUSSION BY THE BOARD.
WE FIRST PUT IT IN FRONT OF THE BOARD OF SUPERVISORS, UM, WITH A RECOMMENDATION TO STAFF THAT WE LOOK AT THE POLICY, UH, THAT WAS SET LAST YEAR IN DECEMBER THE PREVIOUS YEAR IN 23, UH, DECEMBER 23, UH, WHICH SET A THRESHOLD OF 60% FOR, UH, THE RESERVES, UH, DISCUSSION WAS HELD, UM, WITH BOARD MEMBERS.
UH, THE REASONING, UH, THAT STAFF WAS LOOKING AT IT THAT WAS, UM, SUPPORTIVE OF IT WAS THAT, UH, IT WAS A POLICY THAT WE DID NOT SEE THAT WE WERE GOING TO EASILY BE ABLE TO MAKE WITH SORT OF THE CURRENT BUDGET AND PERHAPS FUTURE BUDGETS.
UH, IT WAS NOT VIEWED BY OUR FINANCIAL AND PROFESSIONAL ADVISORS AS BEING A NECESSARY REQUIREMENT TO MAINTAIN AAA, UH, CREDIT RATING.
AND, UH, WE WERE, UH, BEING GUIDED TO TRY TO FIND WAYS THAT WE COULD MAKE SOME THINGS HAPPEN IN THE COUNTY IN CAPITAL PROJECTS THAT WOULD MOVE UP BY A NUMBER OF YEARS.
SOME OF THE PROJECTS WE ARE LOOKING AT WITH IDEALLY THE ABILITY TO, UH, PUT SOME PROFESS UH, SOME, UH, SOME PHYSICAL PRESENCE IN THE EAST SIDE OF THE COUNTY.
UH, PERHAPS A WAY TO FUND FIRE STATION SEVEN AS WELL AS OTHER PROJECTS.
SO BY, BY LOOKING AT THE THRESHOLD AND LOWERING THE THRESHOLD, THAT WOULD OPEN UP OPTIONS THAT THE COUNTY COULD THEN CONSIDER USING SOME OF THE FUND BALANCE THAT WE HAD IN ADDRESSING THOSE NEEDS, OR MOVING IN A DIRECTION WITH SOME BONDED INDEBTEDNESS, USING SOME OF THOSE FUNDS TO SMOOTH THOSE PAYMENTS OUT UNTIL RECURRING REVENUES GROUP TO THE POINT THAT THEY CAN TAKE OVER.
AND SO AFTER THOSE DISCUSSIONS, THE BOARD WANTED MORE TIME TO THINK ABOUT IT AND WANTED TO HAVE A WORK SESSION TO FURTHER DISCUSS, UM, THOSE THOUGHTS.
AND SO, MR. CHAIRMAN, I'LL TURN IT BACK OVER TO YOU.
UM, DOES EVERYONE HAVE THE, UH, RESPONSES FOR, OKAY, MAYOR, UM, I MEAN, I'VE, IT IS MY BELIEF COMPARABLES HERE DEMONSTRATE THAT WHILE CONSERVATISM ON THESE RATIOS CAN BE VERY ATTRACTIVE, I THINK WE ARE, UH, SIGNIFICANTLY ABOVE OUR, UM, NEIGHBORING COUNTIES AND, UH, MORE RESTRICTIVE THAN WE NECESSARILY NEED TO BE.
YEAH, LET ME, MR. SPOON, I LEAD AVAILABLE THE LINK TO THE MEETING OF THE, UH, FINANCING AUDIT COMMITTEE DURING WHICH THIS WAS DISCUSSED IN THE, I GUESS THE INITIAL THRESHOLD FOR SET.
AND I LOOKED AT IT AND IT GAVE ME A MUCH BETTER UNDERSTANDING OF THIS.
AND SO IF I UNDERSTAND IT AS GABE TELL, TELL ME IF I'M WRONG, WE HAVE, I GUESS, THREE BUCKET BUCKETS, UH, TWO, TWO SEPARATE BUCKETS.
WE HAVE A, UH, AN ASSIGNED AND AMOUNT ASSIGNED.
WE HAVE SEVERAL BUCKETS, BUT THOSE ARE OUR LARGEST FOR SURE.
THE TWO TOGETHER, WE FORMED THIS SUBJECT THRESHOLD THAT WE'RE TALKING ABOUT, WHICH HAS BEEN 70, 60%.
AND WHAT IT'S 60% OF IS THE FOLLOWING YEAR'S BUDGETED EXPENSES.
THE ENTIRE BOTTOM LINE BUDGET PLUS THE NON-LOCAL PORTION OF THE SCHOOL.
SO ALL THEIR STATE AND FEDERAL REVENUE
[00:05:01]
TOO.SO AS THE BUDGET GROWS, THIS, THIS AMOUNT, THIS DOLLAR AMOUNT HAS TO GROW TO YEAH.
AND SO ONE OF THE THINGS I PICKED UP IN THAT, UH, MEETING, UM, WHICH THE TWO OF YOU ALL WERE THERE, MR.
AND HE SAID, YOU KNOW, IT MAY BE ADVISABLE TO BRING DOWN THAT PERCENTAGE IN THE FUTURE, PICK UP ON THAT, BUT THE WHOLE THING IS, WAS TO BE CONSERVATIVE.
AND, UH, WE HAD JUST GONE THROUGH A REALM OF, UH, OF GETTING RATINGS BY THE BOND COMPANIES AND SO FORTH.
AND WE FELT LIKE THAT THAT WAS A, UH, SORT OF A STRENGTHENING THING TO SHOW THEM.
UH, SO WE WOULD RETAIN OUR AAA RATING.
UH, HOWEVER, OUR CONSULTANT HAS INDICATED THAT THAT'S NOT NECESSARILY, UH, A REQUIREMENT, UM, PARTICULARLY AT THAT LEVEL.
AND SO I THINK WE OUGHT TO GIVE CONSIDERATION MAYBE TO NOT ELIMINATE THIS THRESHOLD TO, I BELIEVE IT'S CONSERVATIVE AND I THINK TO BOOST US TO, TO REMAIN CONSERVATIVE.
BUT I WOULD LIKE TO THINK THAT MAYBE WE SHOULD REDUCE IT.
AND, UM, AND IF, YOU KNOW, AT SOME LEVEL, IF IT'S STILL NOT IN COMPLIANCE, MAYBE WE CAN DEVELOP A PLAN OVER THE NEXT COUPLE OF YEARS TO BRING IT INTO COMPLIANCE.
SO THAT'S KIND OF WHAT MY THINKING.
I DUNNO, THAT MAKE SENSE TO YOU ALL OR NOT.
AND IF I CAN ADD A LITTLE TALKING POINT TOO.
SO WHEN MR. PETERSON SUGGESTED THE 60%, IT WAS, UM, IN REVIEW OF THE JUNE 30, 20, 23 FINANCIALS AT THAT POINT.
AND THERE IS A SLIDE ON WHAT HE HAD HANDED OUT.
WE WERE THIS SHORT OF MEETING IT.
IT WAS A GOOD GOAL MADE SINCE, AT THE TIME, IN ALL THE PRIOR YEARS, WE WERE VERY CLOSE TO THAT GOAL.
BUT THEN, SO THAT WAS DURING BUDGET SEASON, THAT WAS DECEMBER.
AND THEN WE WENT RIGHT INTO BUDGET SEASON, UM, FY 24, WHICH IS RIGHT AFTER WE ADOPTED, THIS IS THE FIRST YEAR WE HAD IMPLEMENTED LOWERING THE PERSONAL PROPERTY TAX RATE FROM 3 75 DOWN TO 2 99.
SO WE LOST 3 MILLION IN REVENUE ON THAT SIDE.
WE FUNDED FOUR, FOUR AND A HALF MILLION DOLLARS OF CIP OUT OF RESERVES.
AND THEY WERE ALL GOOD PROJECTS, BUT WE HADN'T BUDGETED FOR THEM.
SO THEY WERE COMING FROM GENERAL FUND RESERVES.
WE GAVE PUBLIC SAFETY ADDITIONAL PAY INCREASES, SO A 7% AND 11%, UM, WHICH ALL ADDED UP TO $530,000 THERE.
SO I MEAN, BETWEEN THE FOUR AND A HALF MILLION, THE 3 MILLION LOSS IN REVENUE, THE EXTRA HALF A MILLION HERE, THAT TOOK US A VERY FAR AWAY FROM THIS GOAL.
SO NOW THAT A YEAR HAS GONE BY, NOW WE'RE LOOKING AT THE FY 24 FINANCIALS AND REALIZING HOW FAR OFF WE ARE THAT'S CAUSING US TO REEVALUATE THIS.
THAT'S WHY, THAT'S WHY WE'RE HERE.
BECAUSE I DIDN'T WANT ANYONE TO THINK, WELL, WHY DID WE EVER PUT THIS IN PLACE IF WE'RE SO FAR FROM MEETING IT? BUT AT THE TIME WE WERE MEETING IT, BASICALLY WE WERE HAVING IT OFF.
I THINK YOUR THOUGHTS ARE, ARE GOOD TO KEEP IN MIND BECAUSE I DON'T VIEW THIS AS SOMETHING THAT'S SET IN CONCRETE.
AND UH, AND I THINK, AND I'M NOT SURE IF IT WAS A CONSCIOUS DECISION, UH, I MEAN, I KNOW IT'S A CONSCIOUS DECISION BY THE BOARD TO FUND THESE, THESE CIP PROJECTS SUCH AS A NEW ROOF ON ONE OF OUR SCHOOLS AND, AND ON ON MM-HMM
UM, BUT DID WE, WERE WE AWARE THAT WE WERE GONNA VIOLATE THAT THRESHOLD? AND THEN DID WE HAVE A PLAN TO, TO BRING IT BACK INTO COMPLIANCE? AND I THINK IN THE FUTURE, GOING FORWARD, IF WE DO SET A THRESHOLD, EVEN IF IT'S A LITTLE BIT LOWER, AND I'M KIND OF AN ADVOCATE FOR LOWERING IT, UH, AND IF WE DO DIVERT FROM THAT, THAT WE HAVE A PLAN TO BRING US, YOU KNOW, WE HAVE A REASON TO DO THIS, A CONSCIOUS DECISION BY THE BOARD.
WE NEED THE CIP FUNDING 'CAUSE WE'VE GOT A LEAKY ROOF OR WHATEVER IT IS, OR, YOU KNOW, WE'VE GOT TO FIX SOMETHING AND, UH, OR SPEED UP.
THERE'S A GOOD JUSTIFICATION FOR, FOR SPENDING THIS MONEY GETTING US A LITTLE BIT OUTTA COMPLIANCE ON AN AWARENESS THAT WE ARE AWARE OF THE FACT WE'RE DOING THAT, BUT THEN WE HAVE A PLAN TO BRING IT BACK.
WELL, WHEN YOU SAY BRING IT BACK, DO YOU MEAN BRING IT BACK TO THE 60%? NO, THAT I'M THINKING, AND I, THIS IS MY THOUGHT.
I MEAN, I'M THINKING MAYBE A 45% THRESHOLD WOULD BE MORE REALISTIC, UH, DOABLE AND MORE COMFORTABLE FOR US TO STILL SEND THE MESSAGE THAT IT IS CONSERVATIVE AND THAT WE ARE STILL STRONG AND WE CAN EVALUATE THIS DOWN THE ROAD TOO, YOU KNOW, AS WE BONDING COMPANIES OR WHATEVER.
AND IF THEY CHANGE MONEY, I MEAN, WE'VE BEEN ADVISED THAT WE'LL STAY IN AAA EVEN IN THE 30, 40% RANGE.
I MEAN, THAT'S THE THING IS WE, I FEEL LIKE WE SHOULD RELY
[00:10:01]
ON THE EXPERTISE THAT WE'RE NOT DOING ANYTHING TO RISK OUR AAA RATING AND GIVE OUR OURSELF AS COUNTY MOST FLEXIBILITY.WE CAN HAVE, AND THIS CLEARLY IN LIGHT OF SOME, YOU KNOW, NEEDS IN THE COUNTY, I DON'T, WE, WE HAVE SOME BOND FUNDING FOR ANOTHER ISSUANCE FOR THE COURTHOUSE, BUT WE DO HAVE STATION SEVEN.
WE DO HAVE SOME OTHER THINGS THAT ARE ON THE FRONT BURNER, SO TO SPEAK.
AND THAT FLEXIBILITY WILL BE VERY IMPORTANT IN THE NEAR TERM.
SO LEMME ASK YOU THIS, HOW, HOW DIFFICULT WOULD IT BE FOR US TO BRING IT IN COMPLIANCE? UH, AT 45%? WE COULD DO THAT.
WE PROB WE MIGHT ALREADY BE MEETING IT.
SO, BUT I GUESS MY MESSAGE IS WE'D BE IN COMPLIANCE AT 45%, BUT WE'D STILL HAVE MONEY THAT IS FAR ABOVE WHAT WE NEED TO, YOU KNOW, WE'D BE SETTING COMPLIANCE AT A RATE THAT LOCKS, THAT PUTS MONEY ASIDE, THAT KEEPS US FROM USING IT FOR OTHER, FOR NEEDED PROJECTS.
SO WHAT HE'S GETTING AT IS, EVEN WHEN WE'RE WELL ABOVE WHATA RATINGS IS IT IS AN EMERGENCY FUND, IT'S A, IT'S A STRENGTHENING, YOU KNOW, IT'S, IT'S FUN, BUT WE'RE NOT ABANDONING THE EMERGENCY FUND.
WE'RE JUST SAYING, AND WE DON'T WANNA USE THAT.
IS THAT THE APPROPRIATE LEVEL? AND WE DON'T WANT TO KEEP THIS IN PLACE IF OUR WHOLE POINT IS TO KEEP THE AAA RATING.
SO HERE'S A BULLET POINT THAT KEVIN RODDY HAD PRESENTED WHEN HE DID THIS ORIGINALLY.
UM, AND IT'S ON PAGE NINE OF THE HANDOUT, BUT I'LL JUST READ THIS ONE BULLET POINT.
IT SAYS, OUR REVIEW INDICATES THAT BY MAINTAINING THE CURRENT FUNDING LEVELS FOR UNASSIGNED FUND BALANCE, WHICH IS NOT WHAT WE'RE TALKING ABOUT, BUT JUST THE UNASSIGNED AND THE REVENUE STABILIZATION FUND, WHICH IS A SEPARATE LIKE SAFE HOUSE RADY DAY FUND THAT WE HAVE, THE COUNTY WILL CONTINUE TO HAVE SUFFICIENT RESERVES TO ACHIEVE THE MAXIMUM CREDIT FROM THE RATING AGENCIES.
SO HE'S SAYING EVEN IF WE COMPLETELY DID AWAY WITH OUR UN OUR AVAILABLE FUND BALANCE POLICY, WE WOULD STILL CONTINUE TO HAVE SUFFICIENT RESERVES BECAUSE ALL OF OUR POLICIES ARE VERY CONSERVATIVE AND THAT'S WHY WE'VE BEEN ABLE TO SIT ON THIS AMOUNT OF MONEY.
YOU KNOW, I'M NOT SAYING WE COULDN'T VIOLATE THAT 45% THRESHOLD.
I'M SAYING WE WOULD DO IT ON PURPOSE.
IT WOULD BE A VERY DE DELIBERATE, UH, DECISION TO DO THAT.
UM, YOU KNOW, AND I GO BACK TO THAT, THAT MEETING THAT I REFERRED TO, I MEAN, YOU KNOW, THERE WAS A LOT OF GOOD JUDGMENT REASONING BEING CONSERVATIVE FROM MR. PETERSON.
AND I GUESS I'M SORT OF ERR ON THE SIDE OF THE CONSERVATIVE, MR. CHRISTIE.
I THINK THAT, I MEAN, WE'RE TALKING OUT OF A HUNDRED MILLION BUDGET, RIGHT? SO 45% IS 45 MILLION.
UM, I MEAN IT SEEMS A BIT HIGH TO ME, BUT I MEAN, LOOKING AT THE CHART, YOU KNOW, THE FLOOR OF 20%, THAT SEEMS EXTREMELY LOW.
I WOULDN'T FEEL COMFORTABLE WITH ANY A FOUR LOWER THAN 25% AND THEN MAYBE THE TARGET IN THIRD.
BUT I MEAN, I WOULD HOPE THAT WE WOULD EXCEED THAT, THAT TARGET NATURALLY, NATURALLY, MM-HMM
YOU KNOW, LIKE YEAR OVER YEAR.
AND I WOULD HATE TO SEE US DECIDE AS A COUNTY TO JUST CONTINUALLY GO AND MEET THAT TARGET BECAUSE THEN I, I DON'T FEEL LIKE WE'RE BEING FISCALLY RESPONSIBLE WITH OUR SPENDING AND OUR BUDGET IF WE DIDN'T DO THAT.
UM, BUT THEN AGAIN, YOU KNOW, I SEE THE ADVANTAGE OF, YOU KNOW, SOMETHING COMES UP THAT'S, UH, NOT AN EMERGENCY, BUT UNFORESEEN LIKE A CAPITAL EXPENDITURE THAT WE NEED TO TAKE ADVANTAGE OF.
IT'D BE NICE TO HAVE THOSE FUNDS AVAILABLE.
SO I MEAN, THAT'S JUST, SO WHEN THERE'S A DELIBERATE DECISION MADE SOME NEED, IT'S MUCH BETTER TO HAVE THAT LEVEL AT A HIGHER LEVEL THAN THIS IS A LOWER LEVEL, YOU KNOW, YOU CAN FIND MORE.
BUT, UH, I, I WOULD GO ALONG WITH, UH, MAYBE SETTING A THRESHOLD NOW AND THEN ON PURPOSE REVISITING JUST BETWEEN SOME COMMENTS.
CAN I JUST TRY TO LISTEN? SO I GUESS FIRST OFF, I APPRECIATE THAT WE'RE HAVING A WORK SESSION BECAUSE WHEN I WAS SITTING BACK THERE AND WASN'T WANTING TO TALK, I HAD LOT QUESTIONS BECAUSE I KIND OF FEEL LIKE WE WE'RE NOT REALLY CONFIDENT IN WHAT WE'RE DOING JUST TO SAY THAT WE'RE GONNA BE WELL MANAGED BY THROWING OUT A RANDOM NUMBER OF 45% OR 30%, GIMME SOME DEBT.
WHAT IS THAT BASED ON? IS IT JUST A GUT FEELING? WHEN I LISTENED TO MR. PETERSON,
[00:15:02]
UM, IT WAS EASY WHEN I WAS SITTING IN WHERE CHARLIE WAS AND KEN WAS THERE, AND IT JUST MADE COMMON SENSE WHEN WE WENT TO THE BOND RATING AGENCIES.THIS, WE, WE DIDN'T GET APPROVED BY FINCH ONE TIME, BUT UH, WAS THAT TRUE? WE HAD TO GO TO FINCH TWICE? OR DID WE ONLY GO TO TWO MONTHS? I DON'T KNOW HONESTLY.
SO WE WENT TO BOND RATING AGENCY.
THIS IS WHERE WE WERE, WE'RE, I THINK WE WERE AT 65.
WHAT I HEARD IN THE LAST MEETING WAS WE DIDN'T MAKE IT, WE DIDN'T DO ANYTHING TO TRY TO MAKE IT.
BUT YET THE FIRST YEAR, SO THE DECEM, LOOK AT THE DATE ON THIS, THIS IS THE LAST THING THAT, THAT FINANCE, THAT LAST BOARD DID.
AND NOW WE'RE GONNA GO IN AND WE'RE GONNA SAY WE'RE GONNA CHANGE IT.
I JUST REALLY WANNA UNDERSTAND WHAT WE'RE CHANGING.
BECAUSE IF I'M THINKING RESERVES, I'M THINKING, YOU KNOW, WE'VE GOT PROJECTS.
WE DON'T HAVE OUR, OUR, WE, WE FUND A FIVE YEAR CIP.
UH, WE DO HAVE TO SAY WITHIN THOSE FIVE YEARS WHERE THOSE REVENUES ARE COMING FROM.
BUT TO ME, THIS JUST SAYS, HEY, I'M PLANNING ON DOING THIS.
I NEED TO BE HOLDING SOME MONEY ASIDE THAT I COULD POTENTIALLY TAP INTO IF I NEED TO.
THERE'S NOTHING TO SAY THAT WE COULDN'T EVER TOUCH THIS MONEY FOR NO REASON.
BUT IT DOES KEEP US CONSERVATIVE.
BUT IF I'M WRONG IN THAT, BECAUSE THERE'S SOMETHING THAT WE COULD DO TO SAY, HEY, EMERGENCY HAPPENS, WE COULD STILL TAP INTO THIS MONEY.
IT'S JUST SAYING ON THE BOOKS, WE ARE TRYING TO BE FINANCIALLY RESPECTFUL.
I DON'T UNDERSTAND, YOU KNOW, THE, WHEN YOU PUT METRICS IN PLACE LIKE THIS, IT'S TO BE INDICATORS OF, OH, WE NEED TO START LOOKING AT THIS.
AND IF WE'RE NOT, LOOK, IF WE DIDN'T MAKE IT, DID WE OVERSPEND? DID WE OVERSHOOT THAT 2 99? DID WE, SO IT SHOULD BE CAUTIONARY.
AND I JUST HOPE WE CAN HAVE THE DISCUSSION OF WHAT IS THIS REALLY LIKE IN THE REAL WORLD? WHAT DOES THIS MEAN TO US? SO I DON'T KNOW IF YOU COULD WALK US THROUGH THAT BECAUSE MM-HMM
TO ME, UM, IT'S A GOOD FINANCIAL POLICY.
I DON'T KNOW, I JUST DON'T, I WANNA AVOID THE UNINTENDED CONSEQUENCES THAT I'M JUST NOT AWARE OF.
SO I THINK I CAN SUMMARIZE IT BY SAYING IT ALL COMES DOWN TO AN OPINION VOTE OF WHETHER YOU WANT TO HAVE A HIGH AMOUNT OF RESERVES JUST SITTING IN THE BANK.
UNTOUCHABLE IN THE SENSE OF, NO, WE, OUR POLICY HAS SET AT 60%.
WE DON'T WANNA TOUCH THOSE OR ELSE, 'CAUSE IT'S ONE OR THE OTHER.
YOU USE THOSE IN AN EMERGENCY SITUATION AND THEN WE DON'T MEET OUR POLICY OR YOU DON'T USE THEM IN AN EMERGENCY SITUATION.
BUT WHEN I HEARD IT DESCRIBED AND CORRECT ME PLEASE.
UM, IT WAS, WE WERE JUST LOOKING AT THE APPROPRIATED MONEY, WHICH WE'VE ALREADY APPROPRIATED.
WE'VE ALREADY SAID, OKAY, WE MOVE IT FROM A SITE TO APPROPRIATE IT.
AND THEN WHAT WE HAVE ALREADY ASSIGNED, WE'RE PUTTING THAT AS UNAVAILABLE.
SO APPROPRIATION HAPPENS WHEN WE PUT MONEY INTO THE BUDGET AND WE SAY, HERE'S YOUR BUDGET.
ALL OF THESE FUNDS ARE APPROPRIATED AT JUNE 30.
AND WE HAVE A FUND BALANCE, WHICH IS BASICALLY WE'RE GONNA, WE'RE GONNA THINK OF IT AS MONEY SITTING IN THE BANK.
IT'S OUR, IT'S OUR REVENUES MINUS OUR EXPENSES.
THAT'S OUR LEFTOVER MONEY THAT GETS PUT INTO OUR FUND BALANCE.
SO FUND BALANCE IS JUST A POT OF MONEY.
AND AT JUNE 30, WE HAVE TO GIVE THE AUDITORS A SUMMARY OF WHAT WE PLAN TO DO WITH THIS FUND BALANCE.
WE CAN PUT IT IN SEVERAL POTS.
THERE'S RESTRICTED, WHICH IS A LEGAL RESTRICTION.
IT'S ONLY A FEW, THERE'S A FEW BANK ACCOUNTS THAT WE HOLD THAT WE HAVE TO ONLY SPEND ON CERTAIN THINGS.
UM, THERE IS, IS THAT IN HERE? IS THIS IN HERE? WHAT YOU'RE TALKING ABOUT ANYWHERE? I DON'T THINK THAT LEVEL OF BREAKDOWN IS OKAY.
BUT, UM, AND THEN THERE'S ANOTHER, THERE'S ANOTHER COUPLE ONES THAT WE CAN'T TOUCH.
UM, BUT THE TWO BIGGEST ONES ARE UNASSIGNED, WHICH WE HAVE OUR POLICY AT 25%.
THAT'S WHAT MOST COUNTIES SET THEIRS BETWEEN LIKE 15 AND 25%.
SO WE'RE AT A CONSERVATIVE AMOUNT ON THAT.
WE HAVE OUR, UH, REVENUE STABILIZATION FUNDS SET AT 3%, WHICH EQUALS ABOUT THREE AND A HALF MILLION DOLLARS RIGHT NOW.
UM, SO THOSE ARE OUR RAINY DAY FUNDS THAT MOST COUNTIES HAVE, AT LEAST THE UNASSIGNED FUND BALANCE.
WE ALSO HAVE A, UM, REVENUE STABILIZATION.
NOW WHAT THIS DOES IS ADD AN ADDITIONAL AMOUNT THAT WE ARE REQUIRED TO HAVE SITTING THERE AS ASSIGNED, WHERE, YOU KNOW, WE BRING AN ASSIGNED LIST TO YOU IN OCTOBER AND THEN YOU OFFICIALLY ADOPT IT OR APPROVE IT TO GO TO IN THE ORDER REPORT IN DECEMBER.
AND THAT'S BASICALLY SAYING, OKAY, WE'RE GONNA KEEP 25% IN UNASSIGNED.
AND THEN WITH THE EXTRA MONEY THAT WE HAVE, WE'RE GONNA SAY WE'RE ASSIGNING THIS AMOUNT.
DOESN'T MEAN APPROPRIATING 'CAUSE WE'RE NOT GIVING IT TO THE DEPARTMENT TO SPEND, BUT WE'RE OUR PLAN, OUR FUTURE PLAN IS FOR TO ASSIGN THIS TO CIP ASSIGN THIS AMOUNT TO TRANSPORTATION.
THESE ARE JUST FUTURE PLANS THAT YOU HAVE IN YOUR HEAD.
SO THAT'S WHERE THE FUND BALANCE DESIGNATIONS COME IN.
WE'RE NOT ACTUALLY, THESE WORDS ARE KIND OF ALL SOUND LIKE THEY MEAN THE SAME.
WE'RE NOT APPROPRIATING THEM, WE'RE JUST ASSIGNING THEM TO LET THE PUBLIC OR THE TWO PEOPLE THAT LOOK AT THE AUDIT REPORT IN THAT LEVEL OF DETAIL.
NO, WE HAVE ALL THIS FUNDING AND
[00:20:01]
WE HAVE PLANS TO USE IT.AND I DON'T SEE, I GUESS MY QUESTION IS, IF IT'S PLANNED TO USE, THEN WHY HAVING A HIGHER NUMBER VERSUS A LOW NUMBER IS BETTER.
SO IF YOU LOOK AT THE FY 24, TURN TO PAGE EIGHT, EVERYBODY TURN TO PAGE EIGHT AND THAT'LL EXPLAIN WHY THERE'S A PROBLEM.
SO LIKE I SAID, WHEN WE PUT THIS, UH, POLICY IN PLACE, MY PAGE EIGHT IS THIS.
I KNOW I GAVE NO, SO I GAVE YOU A SEPARATE SECTION.
I MEAN I GAVE YOU A SEPARATE PACKET OF STUFF.
IT MIGHT BE UNDER YOUR COMPOSITION NOTEBOOK.
UH, THAT WOULD BE, NO, NOT EMAILS FROM MR. GILLES.
HERE'S SOMEWHERE MR. CHRISTIE HAD, ALRIGHT, SO EVERYBODY TURN TO PAGE EIGHT.
YOU WANTED, WANTED EXTRA COPIES.
AND WHEN WE PUT THIS POLICY IN PLACE, THAT NUMBER, UM, IN THE 60% COLUMN AT THE BOTTOM, THE AMOUNT THAT WE WERE SHORT WAS LESS THAN HALF A MILLION DOLLARS.
'CAUSE WE SET THE TARGET BETWEEN 55 AND 65.
SO THESE ARE NUMBERS OR F**K WHERES THEY ARE NUMBERS, OKAY, HE'S JUST SAYING THAT FAKI COUNTY IS THE ONLY COUNTY HE COULD EVEN FIND THAT MAINTAINS AN AVAILABLE FUND BALANCE POLICY.
SO HE'S JUST MAKING A POINT THERE SAYING WE'RE CRAZY CONSERVATIVE, NOT CRAZY IN A BAD WAY, BUT IT'S WAY MORE CONSERVATIVE THAN ANYBODY ELSE.
IT'S A RISK OF MODEL INABILITY TO UNDERSTAND PROBLEM IF WE, ONE OF, ONE OF THE SCENARIOS WAS TO ELIMINATE IT ALL TOGETHER, RIGHT? AND SO LET'S SAY WE DIDN'T HAVE IT MM-HMM
WE NEED A NEW ROOF ON THE SCHOOL.
WHERE IS THAT MONEY COMING FROM? WE HAVE UNASSIGNED FUND BALANCE AND THAT'S WHAT IT IS.
WELL, YEAH, BUT THAT OKAY, THEN DATES INTO THAT.
SO WHAT IF WE DUG INTO THAT? SO HERE'S THE THING, IF, IF, JUST BECAUSE WE DON'T HAVE A POLICY, IT DOESN'T MEAN WE DON'T HAVE MONEY SITTING IN THE BANK.
WE DIDN'T HAVE THIS POLICY AT ALL UNTIL LAST DECEMBER, DECEMBER OF 23.
AND WE STILL HAD A VERY HIGH AMOUNT OF RESOURCE AND WE COULD HAVE THE POLICY AND STILL NOT HAVE ANY MONEY IN THE BANK IF THE BOARD IS ALREADY ELECTED TO SPEND THAT ON PROJECTS LIKE NEW ROOFS AND THINGS LIKE THAT.
THE POLICY DOES ENFORCE US TO KEEP THE MONEY IN THE BANK.
THE BOARD WILL ALWAYS HAVE THAT ABILITY TO DETERMINE WHERE THAT MONEY NEEDS TO GO.
BUT TO YOUR POINT, THEREFORE THE MONEY WILL BE IN THE BANK IF THE BOARD HASN'T ALREADY LIKE YOU TO SPEND IT, WHICH YOU CAN DO NOW WITH POLICY, NO POLICY THAT'S ALWAYS IN FRONT OF THE BOARD, THE ABILITY TO SPEND THAT MONEY.
SO RIGHT NOW, BASICALLY IT'S JUST A METRIC THAT WE'RE TALKING, WE'VE SAID BY OURSELVES AND IT'S SOMEWHAT ARBITRARY, I GUESS.
WELL IT WASN'T ARBITRARY IN THE BEGINNING.
ANSWER MR. SWO I'S QUESTION TO EXPLAIN IT TO YOU.
SO IF THESE, OKAY, THESE ARE FUNDS THAT WE'RE SUPPOSED TO GO.
SO WHAT, CAN YOU MAYBE EXPLAIN THIS CHART? WHAT, WHAT'S THE YEAH, SO THAT'S WHAT I WAS GETTING AT.
SO IN THE 60% COLUMN, THE AMOUNT, LET'S GO FROM THE TOP ROW.
THE AMOUNT OF AVAILABLE FUND BALANCE REQUIRED, WHICH IS THE 60% UNASSIGNED PLUS ASSIGNED WOULD BE $66 MILLION.
SO WHAT THAT NUMBER IS, IS 60% OF THE FY 25 BUDGET, RIGHT? BECAUSE OUR POLICY SAYS LET'S HAVE 60% OF THE SUBSEQUENT YEARS BUDGET.
WHEN LOOKING AT FY 24, WHERE WE CAME IN ON OUR FINANCIALS, WHICH IS AFTER, YOU KNOW, THE PERSONAL PROPERTY RATE DROP OFF AFTER FUNDING ALL THAT CIP ET CETERA, UM, WHAT WOULD BE REQUIRED FOR UNASSIGNED FUND BALANCE, THAT'S THE 25% IS $28 MILLION.
WE COULD STOP THERE AND WE'VE GOT SO MUCH, YOU KNOW, SO MUCH MORE MONEY IN THE BANK.
BUT NOW REQUIRED ASSIGNED FUND BALANCE WOULD BE $37.7 MILLION TO MAKE UP THE 66 TO MAKE UP.
UM, AND SO THE FY 24 ASSIGNED FUND BALANCE THAT WE ENDED UP WITH IS 25 MILLION.
SO WE WERE $12 MILLION SHORT, WHICH ME, WELL, 12.7 MILLION, WHICH MEANS WE WERE THAT AMOUNT SHORT OF MONEY IN THE BANK AT ALL BECAUSE BASED ON THE POLICY POLICY, BASED ON THE POLICY TO MEET ON POLICY, WE NEED 13 MILLION MORE DOLLARS.
AND THAT IT'S DOABLE, BUT IT REQUIRES MASSIVE CHANGES TO OUR BUDGET.
SO IS IT, IT'S LIKE I SAID, IT'S A DECISION OF THE BOARD OF WHAT YOU WANNA DO.
DO YOU WANNA SIT ON THAT MONEY IN CASE OF AN EMERGENCY OR DO YOU WANNA HAVE IT MORE AVAILABLE FOR CIP PROJECTS? I MEAN, IT WOULD MAKE SENSE TO SEND 'EM ALL ONE TIME.
IT MAKES OR GAIN INTEREST, RIGHT? IT DOES GAIN INTEREST.
YEAH, IT DOES GAIN AN INTEREST, BUT ISN'T ANOTHER WAY TO DO THIS.
SO I THINK WE'RE, IT SOUNDS LIKE WE'RE PLAYING A SHELL GAME BECAUSE IF YOU MOVE IT FROM THE UNASSIGNED AND WE'RE GONNA ASSIGN IT TO CIP PROJECTS, THEN THE C THEN THE UNASSIGNED DROPS AND THE ASSIGNED GOES UP.
SO YOU'RE GETTING, IT'S THE SAME PLACE IT IS.
I SAID THAT FROM THE DAY I STARTED
[00:25:01]
WORKING HERE AND I LEARNED THAT WE EVEN HAVE AN ASSIGNED FUND BALANCE AND AMELIA AND I THINK A LOT OF COUNTIES, JUST WHATEVER MONEY THEY HAVE SITTING IN THE BANK, THAT'S THEIR ASSIGNED FUND BALANCE.THE REQUIREMENT COULD BE 25%, BUT YOU COULD HAVE 55% SITTING IN THE BANK.
TO ME, WHAT THIS DOES TO ME, THIS SHOWS, TO ME THIS SHOWS THE BALANCE BETWEEN THE NEED FOR THE CIP PROJECTS.
WE, WHICH WE TYPICALLY DON'T HAVE A WAY TO FUND.
AND WE DO HAVE SOME WITH SOME OF THE BONDING AND IT HELPS US KEEP CONTROL OVER OUR, UM, OUR, UH, OPERATING EXPENSES.
BECAUSE IF YOU'RE LOOKING AT, LIKE, DEPENDING ON WHAT YOU'RE SAYING, OH, WE ONLY NEED THAT.
WELL, WE CAN CONTINUE TO GROW OUR OPERATING, THIS MAKES US PAUSE AND GO, WELL WE GOT $120 MILLION WORTH OF PROJECTS WITH NO FUNDING SOURCE IN THE NEXT 20 YEARS.
WE NEED TO START THINKING ABOUT THIS.
AND AGAIN, IF YOU WANT THAT NUMBER TO BE DIFFERENT, YOU JUST MOVE THE, WE DO A BETTER JOB OF ASSIGNING THINGS.
I WAS WALKING OUT OF FOOD LION BEFORE I GOT HERE AND CENTRAL VIRGINIAN WAS COUNTING EXPECTS REVENUES AND EXPENSES TO GROW AND IS IS REDUCING THEIR CIP AND THAT'S OUR, OUR NEIGHBORS TO THE NORTH.
SO, UH, SO YOU THEY'RE NOT ABLE TO DO THE PRO NO, I DIDN'T GET, I WAS WALKING OUT, SO I DON'T, I DIDN'T KNOW IF IT'S A TIMING THING, BUT WE'VE GOT A LOT TO DO IN THE NEXT 10 YEARS IN THIS COUNTY, UH, TO TO, TO MEET OUR, OUR CONSTITUENTS EXPECTATIONS.
SO, UM, I, AT THE END OF THE DAY, THIS MAY BE NON ISSUE, BUT I, I DO, I DO QUESTION WHAT, WHAT MANAGEMENT DECISIONS ARE WE MAKING BASED ON, SO THAT'S, THAT'S REALLY, WELL I THINK THE STAFF IS MAKING BUDGET DECISIONS MM-HMM
THAT'S WHAT COMES TO A POLICY HANDED DOWN.
SO WHAT BUDGET DECISIONS ARE THEY MAKING? ARE, ARE WE MAKING, SO VIC AND I HAVE PUT TOGETHER A PROPOSED BUDGET, A 1 CENT TAX INCREASE BUDGET, A 1 CENT TAX DECREASE BUDGET, AND A BUDGET THAT WOULD GET US IN COMPLIANCE WITH THE 60% OR MAKE A GOOD FAITH EFFORT, A GOOD FAITH EFFORT.
IT WOULD REQUIRE A LOT OF HUGE CUTS.
MOSTLY PERSONNEL, PROBABLY MAYBE SOME CIP FUND FUNDING THAT WE TRANSFER OVER.
IT COULD ALSO BE COMPENSATED WITH BY A RAISE IN THE TAX, THE TAX INCREASE.
BUT WE'D HAVE TO COME UP WITH THE NUMBER IS NOT $13 MILLION ANYMORE.
BECAUSE WHEN I GET TO MY SECOND QUARTER PROJECTIONS, I'M LOOKING AT IT, WE'RE GONNA DUMP A LOT INTO OUR FUND BALANCE AT THE END OF FY 24, BUT IT'LL STILL BE $5.8 MILLION SHORT.
SO WE'D STILL HAVE SOME CUTS TO DO.
I MEAN, WE, I MEAN IT'S RIGHT HERE.
WE, WE DID HAVE A FIRM ANALYZE THIS BASED ON, YOU KNOW, WE TAKEN THEIR ADVICE ON BOND BONDS AND OTHER THINGS BECAUSE GLAND IS THE SMALLEST TRIPLE, TRIPLE COUNTY IN THE NATION.
PFM BELIEVES IT IS IMPORTANT FOR THE COUNTY TO MAINTAIN UNASSIGNED FUND BALANCE POLICY HIGHER THAN IT'S VIRGINIA PEERS.
AND THAT 2020 5% RANGE IS APPROPRIATE.
I WOULD RECOMMEND WAIT IN THE, YOU KNOW, TO SHOW CONSERVATISM 30 TO 35% IS EVEN ABOVE THAT.
I JUST DON'T THINK IT NEEDS TO BE AT 60%.
I, I, I, I'M WILLING TO THAT ON, LEMME ASK YOU THIS.
I I DON'T WANNA MAKE A DECISION TODAY.
IT'S SUPPOSED TO MAKE A DECISION THAT WOULD AFFECT THE BUDGET IN A MASSIVE WAY.
I MEAN A VERY SIGNIFICANT WAY BECAUSE WE CERTAINLY DON'T WANNA CUT THE SCHOOL BUDGET.
YOU KNOW, AND, AND PUBLIC SAFETY IS PRIMARY AND EDUCATION PRIMARY TO OUR GOAL, OUR PURPOSE.
SO AT WHAT LEVEL CAN THIS BE AND, AND COME UP WITH A SUITABLE, UH, BUDGET THAT DOESN'T, YOU KNOW, THAT ALLOWS FOR COST OF LIVING INCREASE.
WE WOULD DEFINITELY BE IN GOOD SHAPE AT 35% WHAT CHARLIE JUST RECOMMENDED.
OBVIOUSLY ANYTHING BELOW THAT.
UM, I THINK 40 AND 45% IS WHERE WE'D BE PUSHING IT AND WE'D HAVE TO REALLY LOOK AT IT CLOSELY EVERY SINGLE YEAR AND REALLY PAUSE BEFORE WE MAKE LAST MINUTE.
LIKE, OH, CAN WE GIVE THE SCHOOLS 400,000 FOR A LEAKING ROOF? OR DO WE WANNA ABIDE BY OUR POLICY? IT'S GONNA BE, IF WE TIE THESE FUNDS UP TO MEET OUR POLICY, THEN IT'S JUST LESS FLEXIBILITY FOR THINGS LIKE THAT.
AND I THINK THAT'S CHARLIE'S POINT IS IF WE HAVE CIP THAT WE KNOW WE'RE GONNA SPEND, THAT WE NEED TO DO, DO WE WANNA TIE THESE FUNDS UP AND HAVE TO MEET OUR POLICY OR DO WE WANT MORE FLEXIBILITY? UH, ALRIGHT, WOULD IT MAKE ANY SENSE? PLUS US TO SAY, ALL RIGHT, LET'S STICK IT, LET'S STICK, STICK IT 45% REALIZING WE DON'T MAKE IT NOW, BUT WE COULD DEVELOP A PLAN OVER THE NEXT TWO YEARS TO BRING IT IN COMPLIANCE OR THREE YEARS.
IT'S COMPLETELY UP TO YOU GUYS.
WHY WOULD WE, WHY WOULD WE PUT A POLICY IN PLACE WHERE WE'RE OUT OF COMPLIANCE WHEN WE'RE BEING ADVISED THAT WE ARE SO
[00:30:01]
FAR ABOVE WHERE PEERS ARE AND WHERE WE NEED, WE ARE STILL DOING OUR DUTY TO OUR CONSTITUENTS BY SAYING WE ARE GOING TO MAINTAIN OUR AAA RATING.AND, AND THEN WE, AND THEN WHEN WE SET THAT POLICY THERE, THEN YOU'VE GOT A LOT OF, YOU WANNA TALK ABOUT WASTE OF STAFF RESOURCES.
YOU'VE GOT STAFF GOING THROUGH A LOT OF MANEUVERS ON A POLICY THAT WE'VE SHOWN IS NOT THE MOST APPLICABLE POLICY, SO WHY DO IT OTHER THAN, UH, CONSERVATIVE.
THAT WOULD BE MY REASON FOR THAT.
BUT YOU'D STILL BE CONSERVATIVE AT 30 TO 35%.
SO I, I THINK THE CHAIR'S POINT OF, AND READING THIS, THE OBSERVATIONS IS HELPFUL.
WHAT I WANT US TO WALK AWAY FROM THIS CONVERSATION WITH WHETHER WE'RE AT ZERO OR 60, IS TO BE ABLE TO ANSWER YOUR QUESTION, WHICH I DON'T, I DON'T BELIEVE WE ARE NOW TO SAY, SCHOOL COMES TO US, TO US WITH A ROOF.
HERE'S THE LIST OF ALL THE PROJECTS THAT YOU HAVE DECIDE THAT AREN'T GETTING DONE.
BECAUSE HOW WE GOT HERE WAS A, HEY, WE DIDN'T MAKE IT.
WE'RE NOT SURE HOW OUR REVENUES CAME IN, OR WE PAID FOR CAP PROJECTS JUST SO THAT WE CAN MAKE INFORMED DECISIONS THAT PRIORITIZE APPROPRIATELY.
THAT'S REALLY, AT THE END OF THE DAY, THAT'S WHERE I SEE THIS AS A TOOL.
BECAUSE LOOKING AT THESE SIGNS AND I, I THINK WE'RE, WE'RE FINE, BUT I DON'T WANNA LOSE THE TOOL ITSELF THAT FORCES US INTO CONVERSATIONS LIKE THIS.
CARLA, IS IS THIS SOMETHING THAT, I MEAN THIS IS, A LOT OF THIS IS BASED OFF THE PROJECTIONS AND EVERYTHING ELSE.
DO YOU THINK THIS IS SOMETHING THAT SHOULD FLOAT, BUT MAYBE THAT THE BOARD VOTES ON THAT SAY JULY 1ST? YOU KNOW, AFTER THE BUDGET'S APPROVED, WE'VE GOT THE REVENUES FROM FROM, UH, WE COULD, IF WE, UM, I THINK IF WE WERE TO LOWER IT TO SOMETHING THAT GLAND HAS ALWAYS STAYED ABOVE, LIKE I KEEP SAYING 35%, BUT SOME 25, 30 5%, WE WOULD HAVE NO REASON TO FLOAT IT EVER.
WE COULD DEFINITELY REVIEW IT, BUT WE'VE NEVER COME.
I MEAN, AS FAR BACK AS KEVIN LOOKED RIGHT, WE'VE ALWAYS BEEN WELL ABOVE EVEN THAT LEVEL.
EVEN WHEN A POLICY DIDN'T EXIST FOR THIS.
WE'VE ALWAYS BEEN IN THAT SAFE RANGE, SO.
I I GUESS I, I WAS THINKING, YOU KNOW, THERE'S DOOM AND GLOOM ON THE HORIZON, RIGHT? MAYBE IT'S SOMETHING THAT NEEDS TO BE REVISITED.
WE NEED TO, YOU KNOW, BUMP IT UP.
AND I THINK ACTUALLY THIS COMMITTEE REVIEWS THESE POLICIES EVERY YEAR.
SO OKAY, WE SHOULD CONTINUE DOING THAT AND REVIEW.
WE PROBABLY DON'T NEED TO CHANGE, KEEP CHANGING THE RATE RATE IF WE SAID IT LOW ENOUGH, BUT SO, SO WHAT I WOULD REQUEST, AND I'M ONE OF FIVE, BUT IF WE'RE GONNA SAY, HEY, WE'RE CALL THIS 12 MILLION, 8 MILLION NOW.
I WANNA KNOW WHERE THAT MILLION WENT.
SO IF WE'RE SAYING, OKAY, WE'RE NOT GONNA PUT IT HERE, WHERE DID THAT, WHERE DID THAT FILL IN THE HOLES? AND THAT'S WHY, SO I ALSO HANDED THIS OUT.
UM, THIS IS, THIS IS JUST SHOWING HOW WE WERE AT 60% MEREDITH AT 60% WHEN THIS CAME IN FORM BOARD.
AND THEN HERE'S WHERE IT WENT.
FOUR AND A HALF WENT TO UN UNBUDGETED CIP PROJECT, WE HAVE MY COPY ALSO.
3 MILLION WENT TO PERSONAL PROPERTY TAXES LESS AND THEN HALF A MILLION WENT TO SORRY, TOO MUCH DISTRACTIONS.
SO WHERE DID THE 8 MILLION GO? FOUR AND A HALF MILLION WENT TO CIP PROJECTS THAT CAME UP THROUGHOUT THE YEAR THAT WERE UNBUDGETED FOR.
SO WE HADN'T BUDGETED THAT TRANSFER.
SO WE HAD TO GIVE THAT TO THE CIP THAT CAME FROM RESERVES.
AND LIKE I SAID, THEY'RE ALL GOOD PROJECTS.
SECURITY CAMERAS ARE ON THE COURTHOUSE SQUARE, STRATEGIC PLAN STUDIES, STOCK, TANKER TRUCK FAIRGROUNDS, ROAD EXTENSION PROJECTS, SITE IMPROVEMENTS FOR SANDY HOOK FIRE STATION, UM, OUR ELEMENTARY SCHOOL ROOF REPLACEMENT, SCHOOL BOARD, LEGAL FEES, OILVILLE ROAD INTERCHANGE PROJECTS, THOSE ARE PROJECTS THAT CAME TO YOU AT THE BOARD MEETING AND THERE WAS A NEED TO FUND THEM.
SO THAT COMES FROM RESERVES AND THOSE WERE INDIVIDUAL DECISIONS, YOU KNOW, AND HERE'S THE DATES THEY WERE APPROVED.
SO I MEAN, SOME OF THEM, 1, 2, 4 OF THEM WERE APPROVED TO BE FOUR OR FIVE OF THEM, MAJORITY OF THEM WERE APPROVED BEFORE THIS POLICY EVEN WENT INTO PLACE.
SO IF WE MAKE A DECISION, ANOTHER 3 MILLION, DROPPING THE PERSON PROPERTY RATE TO GO AT 35%, CAN WE ALSO SAY THAT IT'S OUR INTENT THAT IF WE EVER VIOLATE THAT, THAT WE ARE ALSO ACCOMPANY THAT VIOLATION WITH A PLAN TO BRING IT BACK IN INTO OH, DEFINITELY.
DOES THAT MAKE ANY SENSE? I THINK IT'S GREAT IN THEORY.
I DON'T THINK IT'S, I DON'T SEE THE FEASIBLE IN EXECUTION.
I IT'S PROBABLY, WE, IT'S KICKING THE CAN DOWN THE ROAD AND YOU KNOW, WE'RE SEEING NOW WE'RE TRYING TO BE BUDGET CONSERVATIVE AND WE'RE GETTING EMAILS, YOU KNOW, WE'RE SHOWING THE CHILDREN AGAIN AND WE NEED PUPPIES.
[00:35:02]
I WANNA MAKE SURE, SO I JUST, I SAY IN THEORY, YES, BUT I, IN, IN PRACTICALITY, NO, WE'LL WE'LL NEVER GET BACK TO THIS BECAUSE WE, WE JUST KEEP SPENDING NO, WE'LL GET BACK TO 60%.AND WE MAY NOT WANT TO, THAT'S WE, IF WE DO, SEE, I'M NOT SURE WE CONSCIOUSLY WERE AWARE WHEN WE APPROVE THE ROOF AND THE STUFF STOP THIS LITTLE VIOLATING MAN.
WELL, SO WHEN, WHEN THAT WAS APPROVED, THIS POLICY WASN'T EVEN IN PLACE.
WE PUT THIS POLICY IN PLACE DECEMBER OF 23 AND WE HAD ALREADY COMMITTED TO, AND WE HAD ALREADY SPENT 750,000, A HUNDRED FIFTY THOUSAND FIVE HUNDRED FIFTY TWO THOUSAND FIVE HUNDRED EIGHTY NINE THOUSAND ONE MILLION DOLLARS.
ALL OF THAT WAS ALREADY SPENT BY THE TIME WE ADOPTED THIS POLICY.
SO, SO IT'S NOT LIKE WE NEED, I'M, LET'S MAKE SURE IF WE DO VIOLATE IT, IT'S A CONSCIOUS DECISION AND THEN WE WORK ON A PLAN TO BRING IT BACK IN COMPLIANCE.
WE HAVE THAT WORDING IN PLACE FOR OUR, UM, THE 3%, THE REVENUE STABILIZATION FUND WHERE IF, IF WE HAVE TO USE IT, THEN WE HAVE TO REPLENISH IT.
SO I THINK THAT'S A GOOD, I GUESS ABSOLUTELY.
WELL, AND I'M JUST THINKING OF RANGE TOO.
I THINK 30 TO 40% IS A GOOD RANGE.
IT, IT SAYS, HEY, WE'RE WE WANNA STAY IN THIS BAND SOME YEARS IT'LL GO OFF, YOU KNOW, SOME YEARS IT'LL BE ON THE UPPER END.
SOME YEARS WE GO ON LOWER END, BUT YOU KNOW, WE'RE NOT, UH, WE THINK THAT'S APPROVED BAN FEE.
CAN YOU EXPLAIN, I GUESS I'M CONFUSED HOW THE THREE 3.1 MILLION FOR LOST REVENUE.
WE KNEW IT, WE CALCULATED, 'CAUSE THE THE PERSONAL PROPERTY TAX RATE, WE APPROVED THE PREVIOUS BUDGET.
SO HOW DID WE NOT KNOW? LIKE WHY ARE WE SAYING THAT THAT WAS A SHOCK TO US? OR WHY THAT WASN'T ACCOUNTED FOR? WELL, BECAUSE WHEN YOU'RE LOOKING AT WHAT PERCENTAGE OF FUND BALANCE YOU'RE AT, YOU'RE LOOKING AT WHERE WE WERE AT JUNE 30, 20, 24.
AND SO THAT DIDN'T GO INTO EFFECT UNTIL JULY 1ST, 2024.
'CAUSE IT WAS EFFECTIVE FOR THE JUNE FY 25 BUDGET.
NO, THAT'S, IIII THAT NUMBER WE SHOULD HAVE BEEN AWARE OF.
OH, WE, YEAH, WE WERE AWARE OF IT BUT WE DIDN'T COST MONEY.
AND WHEN WE DIDN'T KNOW HOW MUCH IS GONNA COST US, BECAUSE REMEMBER THAT'S DIVIDED UP IN DECEMBER AND JUNE, RIGHT? SO WE WERE IN DECEMBER, WE HADN'T REALLY RECEIVED A LOT OF THOSE REVENUES EVEN YET.
SO WE KNEW THERE WAS GONNA BE A DECREASE IN REVENUE THAT WAS ALWAYS UNDERSTOOD.
AND REMEMBER YOU START FORMULATING THE FY 24 BUDGET IN DECEMBER OF 22.
WE DIDN'T PUT THIS POLICY INTO PLACE UNTIL DECEMBER OF 23.
SO THERE WAS A LOT OF CHANGING GOING.
WANNA MAKE SURE I'M NOT OVERSTEPPING IN PARTICIPATING IF IT'S NOT, IF IT'S A COMMITTEE, IT'S A BOARD WORKSHOP.
YOU'RE ALLOWED NO, YOU'RE BOARD.
MY BAD, UH, PERCENTAGES ARE, ARE DEVILISH.
UH, RAW NUMBERS ARE REALLY WHAT WE'RE GONNA DO.
WE'RE NOT GONNA SEND A PERCENTAGE RIGHT.
WE'RE GONNA SPEND RAW DOLLARS.
AND THE COUNCIL RESEARCH I'VE GOTTEN IS, IS IF YOU WANT JUST A RULE OF THUMB, WE SHOULD BE ABLE TO BUILD A SCHOOL BASED ON OUR RESERVES WITHOUT GOING INTO A DEFICIT MODE.
BUT WE JUST LEARNED TWO YEARS AGO, SCHOOLS COST $55 MILLION.
SO RATHER THAN SETTING ARBITRARY PERCENTAGES, I'M, 'CAUSE I'M A SIMPLE FELLA, MORE COMFORTABLE LOOKING AT REAL DOLLARS AS TO WHAT WE'RE GOING TO THINK.
AND WE HAVE REAL NUMBERS IN THOSE CIPI THINK.
SO RATHER THAN LET THE PERCENTAGE DRIVE HOW MUCH MONEY WE'RE KEEPING, WHY DON'T WE KEEP THE MONEY WE THINK WE'RE GOING TO NEED AND LET THAT PERCENTAGE FALL WHEREVER IT LIES.
BECAUSE WE'RE NOT GONNA SPEND A PERCENTAGE, WE'RE GONNA SPEND DOLLARS.
BUT A PERCENTAGE ALLOWS YOU TO HAVE COMPARABLES TO COUNTIES OF SIMILAR SIZE AND ALSO MAKE A COMPARABLE TO A HENRICO TO A HANOVER.
AND THAT IS THE TYPE OF FLEXIBILITY WE WANT.
ALSO TO SAY IT'S A RAW DOLLAR AMOUNT, I THINK IS TOO SIMPLIFIED.
WE WANT TO BE FOCUSED ON THE, I MEAN WHEN YOU FUND A SCHOOL, YOU DON'T JUST SAY THIS IS THE RAW DOLLAR AMOUNT.
YOU LOOK AT YOUR PAYMENTS FOR THAT.
NO, YOU LOOK AT YOUR PAYMENTS FOR THAT SCHOOL OVER A 30 YEAR PERIOD OVER THE LIFE OF THE SCHOOL, YOU STILL MISSED IT BY 15 MILLION.
THIS WOULD BE FUNDING A SCHOOL EVERY YEAR.
THAT'S, THAT'S A RULE OF THUMB.
OR WE HAVE AN EARTHQUAKE LIKE LOUISE AND WE GOTTA REPLACE IT BECAUSE WE DIDN'T HAVE INSURANCE.
I MEAN, JUST THINGS ALONG THOSE LINES.
[00:40:01]
40 65% TO ME STRIKES AS ARBITRARY.THE 35% IS WE'RE USING SOMEONE ELSE'S STANDARDS THAT WE'RE GONNA BE AT 35 'CAUSE WE'RE STILL ABOVE OTHER PEOPLE.
AND TOM WAS SORT OF SPLITTING THE BABY IN HALF SAYING, ALL RIGHT, WELL HOW ABOUT 45? AND I'M HEARING THAT WE STILL WILL ALWAYS HAVE THE OPPORTUNITY TO COME BACK.
IT IS THE PEOPLE'S MONEY AND IF WE NEED TO SPEND THAT, INVEST THAT MONEY TO BENEFIT THE PEOPLE, THEN BY GOLLY, LET'S DO IT.
AND THAT THROUGH, I I I HEARD STAFF CUTS, WHICH DOESN'T EXCITE ME.
UH, THERE ARE WAYS OF BEING EFFICIENT THAT WOULD ALLOW US TO REBUILD THOSE RESERVES.
BUT THE THE PERCENTAGES, UH, REALLY THEY TRANSLATE INTO RAW DOLLARS.
AND CHARLIE, YOU, YOU'RE SPOT ON THAT YOU USE RAW DOLLARS EVENTUALLY IT'S GONNA BE A PERCENTAGE.
I WANNA KNOW WHERE YOU GOT THIS CONCEPT OF IT BEING THE SIZE OF A SCHOOL, UH, FORMER BOARD MEMBERS.
SO I REMEMBER THAT DISCUSSION.
SO PETERSON'S MAIN POINT WAS WE ALWAYS WANNA HAVE ENOUGH IN RESERVES FOR SOME, AND HE ALWAYS USED US BUILDING A NEW SCHOOL.
AND HIS POINT WAS THAT'S A HUGE AMOUNT FOR GLAND.
'CAUSE WE'RE A TINY COUNTY, WHEREAS LIKE A FAIRFAX, THEY CAN KEEP A 15%.
IF THEY WANTED TO PUT THIS POLICY IN PLACE, THEY COULD KEEP IT AT 15% AND THEY'D STILL HAVE ENOUGH TO BUILD FIVE SCHOOLS.
WE CAN HAVE 60% AND STILL MAYBE NOT HAVE ENOUGH TO BUILD ONE SCHOOL.
AND HE'S JUST USING SCHOOL AS LIKE SOMETHING COMPARABLE.
WHAT THE PERCENTAGE DOLLAR AMOUNT EQUATES TO AND WHAT IT WOULD ALLOW US TO DO.
US AT 60% COULD BARELY BUILD ONE SCHOOL.
WHEREAS YEAH, WE CAN LOOK AT A BIGGER COUNTY WITH A MUCH SMALLER PERCENTAGE, BUT THEY CAN STILL DO A LOT MORE WITH IT.
THAT'S WHY HE, HE WAS, HIS ARGUMENT WAS, OUR PERCENTAGE NEEDS TO BE SO MUCH HIGHER THAN THESE BIGGER PLACES THAT YOU LOOK AT.
HE'S NOT, HE HE IS BASING IT A PERCENTAGE.
HE'S JUST A HIGHER PERCENTAGE.
BECAUSE THAT EQUATES TO A SMALLER DOLLAR FOR US.
MR. CHAIR, I, I'M NO BOND EXPERT
YEAH, I HEARD WHAT I THOUGHT YOU HEARD MR. YOU SHOULD HAVE A PERCENTAGE WHICH EQUALS THE COST OF BUILDING THE SCHOOL MM-HMM
SO THAT IS, AS WE GROW, WHICH WE'RE GROWING, I MEAN YOU CAN LOOK AT THE LAST THREE YEARS HISTORY OF THIS, OF THE REVENUES AND EXPENSES OF THIS COUNTY.
UM, THE COST OF SCHOOL AS A PERCENTAGE RELATIVE TO THE OVERALL BUDGET IS GOING BE LESS PERCENTAGE IF YOU APPLY THAT APPROACH.
SO, AND, AND, AND KEN PETERSON DID SAY, WELL, YOU KNOW, AS WE GROW, IT'S LIKELY THAT YOU JUSTIFY BRINGING THAT PERCENTAGE DOWN.
SO I THINK THAT HIS LOGIC IS FOLLOWS WHAT WE ARE TALKING ABOUT, BRINGING IT DOWN.
SO, AND I I JUST WANNA GET, I JUST WANNA GET IT ON RECORD.
I AM A FIRM BELIEVER THAT WE SHOULD BE SPENDING THE MONEY THAT, OF THE REVENUE THAT WE GAIN.
BUT IF THIS ISN'T, WE'RE NOT TRYING TO BUILD OUR BANK ACCOUNT.
WE'RE CITIZENS TRUST US WITH THIS MONEY TO DO STUFF WITH IT.
AND WHAT GETS US THERE IN A WELL-MANAGED MANNER IS WHERE I'M TRYING TO GET TO SO THAT WE ARE, YOU KNOW, BECAUSE I APPROVED EVERY SINGLE ONE OF THESE ADDITIONS, UH, I KNEW IT WAS COMING FROM A RESERVE.
I'M NOT SURE I UNDERSTOOD THE SCOPE OF WHAT THAT MEANT.
SO HOW DO WE GET THAT TRANSPARENCY SO THAT WE CAN MAKE THOSE INFORMED DECISIONS.
SO WE ARE SPENDING THE MONEY AND HAVE ENOUGH TO COVER IN CASE THERE'S A DOWNTURN OR SOMETHING BAD HAPPENS.
I'M READY TO CALL FOR THE QUESTION AND JUST LET'S NOT ON THE AGENDA FOR THE BOARD MEETING.
SO THIS COMMITTEE CAN MAKE A RECOMMENDATION, BUT IT WOULD NOT BE VOTED ON AT THE BOARD MEETING.
THAT WOULD'VE BE THE NEXT BOARD MEETING.
AND THEN DO WE CALL IT OUT OF THE WORKSHOP OR WE CALL IT OUT OF THE COMMITTEE? WELL, THE COMMITTEE WOULD'VE TO VOTE ON IT, NOT NOT THE WORKSHOP.
SO, SO IT'S STILL IN THE WORKSHOP? YEAH.
HOW, HOW DOES, HOW DOES THIS DECISION OR NON-DECISION IMPACT THE BUDGET IF WE CHOOSE TO KEEP IT AT 60%? WE HAVE A LOT OF EITHER REVENUE RAISING OR EXPENSE DROPPING TO DO.
IF WE KEEP IT AT 30 TO 40%, WE'RE WE ALREADY NEED IT, EVERYTHING IS 30%.
AND ARE THOSE FORMULAS IN SPREADSHEETS? SO LIKE IF YOU JUST PLUG A NUMBER IN, IT CHANGES THEM AND YOU CAN SEE WHAT THOSE LOOK LIKE? PRETTY MUCH I CAN, YEAH.
SO COULD WE SEE THAT? I MEAN THAT THAT, THAT'S QUOTES KIND OF WHAT I MEANT BY MY COMMENT.
AND, AND, AND WHEN WE START MEETING LISA ALREADY SETTING UP MEETINGS WITH US AND Y'ALL THE NEXT WEEK WE'RE GONNA GO OVER THOSE OPTIONS BECAUSE AGAIN, THEY'RE FROM TAX CUTS TO TAX INCREASES.
[00:45:01]
OPTIONS Y'ALL LOOK AT AND CONSIDER THE IMPACTS ON THAT.SO THAT WOULD BE ONE OF THE THINGS MS. HOWARD THAT WE'VE ALREADY LOOKED AT IS IF WE'RE GONNA MAKE A GOOD FAITH EFFORT TO GET TOWARDS, I DON'T THINK WE CAN HIT 60% OF ONE YEAR, BUT WE CAN MAKE A GOOD FAITH EFFORT AND CLOSE THE GAP SIGNIFICANTLY WITH IT.
AND THAT'S ONE OF THE THINGS THAT WE SHARED.
WELL, SO WHY DON'T WE, JUST SO WE CAN GET IT OUT TO A COURT VOTE AS QUICKLY AS COSMIC IN THIS ROOM.
WE SAY WHO IS IN SUPPORT OF A 30 TO 40% BAN? DOES THAT FORM THE MOTION? WELL I GUESS WE COME OUT OF THE WORK MOTION COME OUTTA THE WORK SECTION.
SO WE COULD SAY THE COMMITTEE DO I A MOTION DO HAVE A MOTION FROM THE COMMITTEE? I'LL MAKE A MOTION.
SO, AND, AND I'LL MAKE THE MOTION TO LOWER THE ASSIGNED FUND BALANCE POLICY FROM 60% TO 35% TARGET 30 40% RANGE POINT OF ORDER.
DO WE HAVE TO ACTUALLY COME OUT OF THE SESSION BUT CLOSE IT OR THE ATTORNEY'S NOT HERE AND ANSWER THAT QUESTION? SO I DON'T KNOW THAT WE HAVE TO COME OUT OF IT ON THE RECORD.
WE WOULD BE VOTING AS A COMMITTEE.
SO SO MOTIONS MADE TO COME OUT OF YEAH.
ALL IN FAVOR COMING OUTTA WORK SESSION.
OKAY, NOW MRS. MS. GABE HAS PUT THE MOTION OUT THERE.
DO WE HAVE SECOND FOR THE MOTION? ALL THOSE IN FAVOR OF THE MOTION SAY AYE.
SO THIS COMMITTEE WILL RECOMMEND A 30 TO 40% RANGE WITH A 35% TARGET.
I'LL BRING THAT TO THE MARCH BOARD SUPERVISOR MEETING.
WE CAN DISCUSS IT MORE TWO BY TWOS.
UH, MS. DAVE, DO YOU HAVE, UH, THE PROJECTIONS? I DO.
AND I HANDED THEM ALL OUT TO YOU.
MR. LYLE, DO YOU NEED ONE? UH, I THINK IT'S THE LAST PAGE.
OH YEAH, IT ISN'T, IT'S IN THE PACKET.
UM, THE GOOD NEWS IS THAT $12.7 MILLION DEFICIT YOU WERE LOOKING AT FROM KEVIN RODDY'S PROJECTIONS WERE BASED ON FY 23 FINANCIALS.
UM, I'M LOOKING AT THE FFY 24.
WE SAW WHAT HAPPENED IN 24, 25.
I'M PROJECTING AN $8 MILLION RETURN TO SURPLUS THAT WOULD DUMP INTO OUR FUND BALANCE.
THAT IS MAINLY COMING FROM, UM, I'M PROJECTING $7.7 MILLION HIGHER IN REVENUE THAN WHAT WE BUDGETED.
4 MILLION OF THAT IS BECAUSE OF AMAZON.
WE DID NOT BUILD THAT INTO THE BUDGET BECAUSE AT BUDGET TIME THAT WASN'T A SURE THING AND NOW IT IS.
SO WE SHOULD BE GETTING $4 MILLION.
I THINK THEY'RE EXPECTING IT IN ABOUT MARCH AND BUILDING PERMIT FEES.
OUR OTHER 3 MILLION, THREE-ISH MILLION IS COMING FROM PERSONAL PROPERTY REVENUE.
UM, I THINK WHEN WE WERE BUILDING THIS BUDGET, WE WERE THINKING THAT ASSESSED VALUES WERE GONNA BE LOWER THAN THEY'VE TURNED OUT TO BE.
SO WE BUDGETED 18, A LITTLE OVER 18 MILLION IN PERSONAL PROPERTY.
AND IT'S LOOKING LIKE IT'S GONNA COME IN.
I'M PROJECTING LIKE 2120 21 MILLION ISH.
SO THAT'S ANOTHER 3 MILLION THERE.
SO OUR REVENUES ARE LOOKING GREAT.
OUR EXPENDITURES AT THIS POINT, EVERYTHING LOOKS DEPARTMENT-WISE LIKE IT NORMALLY DOES.
SO I'M PROJECTING ABOUT $2.3 MILLION RETURNING FROM DEPARTMENTS JUST BASED ON VACANCIES.
UM, PROJECTS THEY MAY HAVE BUDGETED FOR AND NOT PLANNED TO CONTINUE WITH WHATEVER THE REASON IS, $2.3 MILLION THERE.
UM, AND SO THAT'S A $15.7 MILLION OPERATING SURPLUS.
AND THEN WE FUND OUR CIP AND OUR CSA PROGRAMS FROM THERE LEAVING 8.2 MILLION TO DUMP INTO FUND BALANCE, WHICH WILL HELP OUR PERCENTAGES GREATLY.
THAT'S WHY WE'RE IN WAY BETTER SHAPE NOW THAN WE WERE.
UM, WITH THAT 8 MILLION DOES AND, AND, AND REALIZING THAT WE'RE GONNA RECOMMEND TO THE BOARD IN MARCH TO DO A 30 TO 40% OR 35% TARGET MM-HMM
UH, HOW MUCH EXTRA? BECAUSE I, I'D LIKE TO KNOW THIS BECAUSE WE'VE WE'RE CONSIDERING THE CURRENT BUDGET, RIGHT? RIGHT.
SO IT SEEMS TO ME THAT IF 35%, THAT 8 MILLION IS GONNA TAKE IT OVER BIT.
SO IT MEANS TO ME THAT WE MAY HAVE SOME WIGGLE ROOM IN THE BUDGET.
SO IS THAT CORRECT? NO, NO, IT'S NOT GONNA, I MEAN, AT THE END OF FY 24 OR F END OF FY 25, IT, WE WILL BE OVER THE 35% TARGET.
BUT IN BUILDING THE FY 26 BUDGET, UM, NO, WE WOULD STILL NEED TO CUT ABOUT 5 MILLION.
WE'RE GOING FROM THE $12.7 MILLION DEFICIT TO NOW WE'VE GOT $8 MILLION OF THAT BACK.
SO WE'RE STILL LEFT WITH A $5 MILLION HOLE AND WE'D HAVE TO MAKE THAT UP IN THE FY 26 BUDGET.
AND PLUS THIS AGAIN, IS ESSENTIALLY ONE TIME MONEY
[00:50:01]
EVERY YEAR.SURPLUS IS ONE TIME MONEY BASED ON HOW THE PREVIOUSLY WENT.
WE KNOW THIS YEAR WE HAD SOME EXTRAORDINARY CIRCUMSTANCES LIKE AMAZON, WHICH WON'T HAPPEN AGAIN NEXT YEAR.
THOSE WERE PERMIT FEES THAT WE JUST PAID ONCE.
SO THAT MONEY, WHAT WE'VE TRADITIONALLY DONE IS THAT WHAT WE HAVE USED FOR CIP PROJECTS AND THAT'S WHAT THE BOARD WOULD HAVE IN FRONT OF THEM IS, YOU KNOW, SO IT WOULD NOT BE TO PUT IT INTO OPERATIONAL REVENUE AND, AND GROW THE BUDGET.
THAT WOULD NOT BE SOMETHING THAT, UM, THIS MIGHT REALLY ENCOURAGES.
UH, ANYTHING ELSE TO KNOW? PRODUCTIONS? NOPE.
YEAH, I WOULD JUST LET THANK YOU GUYS FOR THIS EARLIER SESSION, IN THIS SESSION.
UM, I WOULD JUST THINK, AND MR. CARPENTER TOUCHED ON IT, THAT THE, THE $4 MILLION IN FEES FROM AMAZON IS A ONETIME AND IT SHOULD ONLY GO TOWARDS A ONETIME EXPENSE.
AND I WOULD BE IN FAVOR OF IT GOING TO A PROJECT IN THE AREA OF WHERE AMAZON IS OCCURRING SINCE THEY'RE GONNA SEE THE, THE CHALLENGES OF SOME OF THAT.
UM, BUT I WOULD, I WOULD BE SUPPORTIVE OF THAT, UH, THOSE MONIES STAYING IN THAT, THAT AREA.
DO WE HAVE A PROJECT AS A DISTRICT FOUR SUPERVISOR? I'D APPRECIATE, UH, PLEASE WANT TO STEP
UM, THAT, THANK YOU VERY MUCH FOR THOSE COMMENTS, MR. SPIT.
SEEING NONE, WE'LL ADJOURN TO OUR 3:00 PM UH, BOARD OF SUPERVISORS MEETING.
AND OUR NEXT AUTUMN FINANCE BEYOND THE ON OUR NEXT AUDIT COMMITTEE WILL BE ON MAY 6TH, 2025 AT A TIME TO BE DETERMINED.