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A YEAR, WE'RE IN OUR FIFTH MONTH, WE'RE REPORTING AT, UM, COMPLETION[1. Pre-Budget Discussion: ]
OF THE FIFTH MONTH.SO THAT WOULD BE APPROXIMATELY 42%.
THIS IS, UM, THE BUDGET TO ACTUAL, FOR THE GENERAL FUND THAT YOU'RE LOOKING AT RIGHT HERE.
UM, THE REVENUES, THIS IS REVENUES SPECIFICALLY, AND AS YOU CAN SEE, THERE ARE SOME INCONSISTENCIES BECAUSE REVENUES ARE DEPENDENT ON OTHER SOURCES IN THE TIMING OF PAYMENTS BEING RECEIVED.
THE CITY IS TRENDING AS EXPECTED AND COMPARABLE TO PRIOR YEAR AT THIS TIME.
UM, AS YOU CAN ALSO SEE ON THIS, THIS IS HOW, UM, IT IMPACTS, YOU CAN SEE HOW IT WOULD IMPACT OUR CASH FLOWS AND THE AVAIL AVAILABILITY OF CASH AT CERTAIN TIMES OF THE YEAR.
I'M SORRY, DO YOU HAVE ANY QUESTIONS? UM, SO FAR, I'M GONNA GIVE A MORE DETAILED, SORRY I BUTTON.
SO, ON THE EXPLANATION OF REVENUES TO DATE, UM, WE HAVE, UM, AVAL ALARM TAXES.
IT'S ABOUT 8.8 MILLION RECEIVED, WHICH IS ABOUT 52% OF THE BUDGET.
WE, AT THIS TIME, WE HAD 50% OF THE BUDGET SALES, TAX REVENUE.
THERE'S TWO MONTHS COLLECTED AT THIS TIME, AND THAT'S ABOUT 1.9 MILLION, WHICH IS ABOUT 17% OF THE BUDGET.
SALES TAX REVENUES ARE ABOUT THREE MONTHS DELAYED, AND OUR GOVERNMENTAL IS THE, UM, FIRST HALF OF THE POWELL BILL.
THAT ONE HAS BEEN RECEIVED, BUT STATE DISTRIBUTIONS ARE ABOUT SIX.
THERE'S ABOUT A SIX MONTH DELAY.
YOU'LL SEE THAT WE'RE OVER BUDGET ACTUALLY FOR INVESTMENTS, AND THAT'S BECAUSE WE'RE PRETTY CONSERVATIVE, UM, WHEN WE BUDGETED UNDER THAT LINE ITEM.
BUT WE'VE MADE ADJUSTMENTS TO, UM, INVESTMENT STRATEGIES AND, UH, WITH THE INCREASED RATE, UM, I, IT WAS 5.5600000000000005% YIELD OVER THE LAST COUPLE OF REPORTS THAT HELPED US, UH, YOU KNOW, BRING IN A LITTLE BIT MORE REVENUE THERE.
AND THEN THE FUND BALANCE APPROPRIATED, THAT'S AN APPROPRIATION, UM, CONSISTING OF THE ORIGINAL BUDGET.
WE APPROPRIATED 1.4 MILLION FOR THE ORIGINAL BUDGET TO COVER THE, UM, TO BALANCE THE BUDGET.
WE HAVE, UH, THE REVISED BUDGET CONSISTS OF ROLLOVER PURCHASE ORDERS, AR ABLE PROJECTS, STREET RESURFACING AND SIDEWALK PROJECTS, AND THEN INCREASED INSURANCE, UM, COSTS, AND ADDITIONAL FIRE DEPARTMENT OVER TIME.
THAT'S WHAT'S BEEN BROUGHT TO YOU FOR THAT SINCE JULY 1ST.
NOW, DO YOU HAVE QUESTIONS ON GENERAL FUND REVENUE?
SO WE'RE ORIGINAL BUDGET, WE WERE EXPECTING TO RECEIVE 48 9.
WE'VE ADJUSTED THAT TO 56 9, AND SO FAR WE'VE RECEIVED 19 NINE.
KIM, THAT'S LESS EXPENSES, RIGHT? IS THAT, WHAT, ARE YOU ON THE REVENUE OR THE EXPENSE? PAGE SIX.
I'M SAY THREE OF YOUR PRINTOUT HERE.
SORRY, WE HAVE, SO I THOUGHT YOU WERE TALKING ABOUT REVENUE.
SO KIM, OKAY, SO NOW YOU MOVE INTO EXPENSES.
I KNOW WE, UH, THE SALES TAX REVENUE IS A NORMAL THREE MONTH DELAY.
IS THE, UH, STATE DISTRIBUTIONS THAT NORMALLY SIX MONTHS DELAYED OR JUST MM-HMM,
BACK STATE, JUST FROM MY UNDERSTANDING, WHAT PRODUCES A DELAY? WHAT CAUSED A DELAY? UM, SO IT COULD BE THAT THEY ARE REPORTING OR THEY DON'T SUBMIT IT FOR THREE, YOU KNOW, QUARTERLY.
SO THEN THE FIRST QUARTER IS SUBMITTED IN DECEMBER FOR, UM, SALES TAX AND THEN, OR STATE DISTRIBUTIONS.
AND THEN SOME, SOME THINGS ARE JUST, THEY DON'T SEND IT OUT UNTIL LATER IN THE YEAR.
BUT THE, BUT WE RECORD AT THE END OF THE YEAR, YOU'LL SEE THAT REVENUE BE RECORDED BECAUSE IT, WE HAVE TO RECORD, UM, THE ANTICIPATED REVENUES THROUGH JUNE 30TH AS WELL.
SO THE, THE DELAY IS ALL IN HOW THE STATE PROCESSES PAYMENTS TO, TO LOGAN COUNTY GOVERNMENTS.
I'M SORRY, ARE WE GOOD TO MOVE FORWARD?
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OKAY, SO THIS IS THE EXPENSES, UM, FOR THE GENERAL FUND, THE ORIGINAL BUDGET AT 48.9 MILLION, 56.8, ALMOST 9 MILLION IN THE REVISED BUDGET.AND WE'VE SPENT ABOUT NINE, ALMOST $20 MILLION.
SO THAT LEAVES US AT ABOUT 35%.
WHEN YOU LOOK DOWN THE COLUMN ON THE RIGHT, YOU'LL SEE THAT THE PERCENTAGES, THE YEAR TO DATE PERCENTAGES, UM, ARE PRETTY GOOD.
WHEN YOU'RE LOOKING AT THIS TIME OF YEAR, WE'D BE REFERENC THINKING ABOUT 35 TO 40% IS WHAT I WOULD SEE, OR 42%.
UM, THE ONLY THING THAT WOULD BE CONSISTENT REALLY WITH WITHIN THE EXPENSES ARE YOUR SALARIES AND YOUR BENEFITS, AND THAT'S ASSUMING ALL POSITIONS WERE FILLED OVER TIME, YOU KNOW, WASN'T EXCESSIVE.
AND, UM, SO YOU WOULD SEE THAT 42% THERE.
OTHER THINGS THAT IMPACT THAT, LIKE ALL THE OTHER EXPENSES, IT'S REALLY DUE TO THE TIMING.
SO IS IT A SEASONAL COST? IS IT, YOU KNOW, CONTRACT AGREEMENTS? UM, AND WE HAVE THE SUPPLY SHORT SHORTAGES WITH, UH, CAPITAL EQUIPMENT AND STUFF TOO.
SO YOU WON'T NECESSARILY SEE THOSE EXPENSES UNTIL WE START RECEIVING THAT CAPITAL LATER IN THE YEAR.
KIM, WHAT ARE THE INNER FUND TRANSFERS? THAT'S AN EXPENSE.
SO THE, THIS ONE SPECIFICALLY IS, UM, RELATED TO THIS.
UM, SO WAS IT THE SOLID WASTE TRANSFER? THE SOLID WASTE TRANSFER THAT WE BROUGHT TO THIS LAST BOARD MEETING? THAT WAS THE, OKAY.
HERE WE HAVE THE REVENUES ALONG THE TOP AND THEN THE EXPENSES JUST UNDER THAT.
UM, FOR THE MSD FUND, AGAIN, YOU'LL SEE THAT THE INVESTMENT EARNINGS WERE, YOU KNOW, BUDGETED CONSERVATIVELY AND, AND WERE, WE'VE KIND OF BLOWN THAT OUTTA THE WATER AT 312%.
AND THEN, UM, I'LL MOVE ON TO THE NEXT SLIDE IF YOU'RE GOOD.
SO REVENUES, UM, CAN BE MEASURED DIFFERENTLY WITH THE ENTERPRISE FUNDS BECAUSE IT'S MOSTLY CHARGES FOR FEE AND FEES FOR SERVICES.
AS YOU SEE, IT'S ABOUT 40%, WHICH IS PRETTY MUCH ON TARGET.
THE, UM, MISCELLANEOUS REVENUE ON THIS LINE ITEM CONSISTS OF THE COMMUNICATION TOWER RENTALS AND SALE OF ASSETS.
THAT'S WHAT YOU WOULD END UP SEEING IN THAT LINE ITEM.
UM, AND THEN THE EXPENSES ARE ON TARGET AS WELL.
THE DEBT SERVICE PAYMENTS, YOU'LL SEE IT'S MAYBE 14%, BUT THAT'S BECAUSE THE BIGGER PART OF THE PAYMENT WILL BE DUE LATER IN THIS YEAR.
AND SHARED SERVICES CONSIST OF THE, UM, THE FUND'S POR PROPORTIONATE SHARE OF, UM, EXPENSES FOR SERVICES PROVIDED BY THE GENERAL FUND, AND THAT'S BASED ON THE COST ALLOCATION PLAN.
AND THEN THE INTER FUND TRANSFERS AND TRANSFER SUPPORTS IS CONSISTS OF THE PILOT, THE PAYMENT AND LOAD TAXES.
MOVING ON TO THE SEWER FUND, IT'S, YOU'LL SEE THE SAME THING WHERE OUR, UM, CHARGES FOR SALES AND SERVICE IS AT 42%.
AND, UM, EXPENSES ARE LOOKING LIKE THEY'RE FALLING IN PLACE TOO.
WE'RE OF COURSE, IT'S, UM, CHART THE SALES OF SERVICE IS, IS PRETTY MUCH ON TARGET.
IT'S ALL IN THE TIMING OF WHEN THE, UM, THE CYCLE OF THE BILLS, YOU KNOW, COME THROUGH.
SO THAT COULD JUST FLUCTUATE A LITTLE BIT.
UM, THE, THE MISCELLANEOUS REVENUE FOR THIS, UH, FOR THE ELECTRIC FUND IS, UH, CONSISTS OF POLE RENTAL FEES, THE KIL ROAD PROPERTY RENTAL FROM THE, UM, GENERAL FUND W FOR THE GENERAL, GENERAL FUND WAREHOUSE.
AND THEN SALES ASSETS AND SCRAP METAL EXPENSES SEEM TO BE PRETTY MUCH ON TARGET AND THE SOLID WASTE FUND TRENDING THE SAME WAY.
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DO YOU HAVE ANY QUESTIONS SO FAR ON THE BUDGET TO ACTUAL REPORTS? I, I KNOW THAT, UM, WATER AND THEN OF COURSE SEWER IN CONJUNCTION WITH THAT AND ELECTRIC IS SOMEWHAT SEASONAL.IT, IT SHOULD BE PRETTY FLAT THROUGHOUT THE YEAR, CORRECT? I MEAN, I DON'T KNOW THAT WE DON'T, I MEAN, THERE'S NOTHING SEASONAL ABOUT PICKING UP THE TRASH.
ALL OUR, OUR FEES THAT WE PAY ARE CONSISTENT YEAR ROUND.
SO JUST LOOKING AHEAD, WE'RE WE'RE 9% TO THE GOOD IN OUR REVENUES VERSUS OUR EXPENSES.
SO IF THAT WERE TO CONTINUE, WE PROBABLY NEED TO REVISIT THE INCREASE THAT WE INSTITUTED THIS YEAR IN THE BUDGET.
'CAUSE IT LOOKS LIKE WE MAY HAVE OVERSHOT THAT JUST A LITTLE BIT, BUT AGAIN, WE'RE ONLY, WHAT, FOUR OR FIVE MONTHS INTO THE YEAR, SO, WELL THAT'S, UM, WE'RE TAKING A LOOK AT A COUPLE OF THE THINGS THAT WE'VE BEEN ABLE TO IDENTIFY THAT ARE STILL BEING COVERED UNDER THE GENERAL FUND.
AND SO IN JANUARY WHAT WE'LL BE BRINGING TO YOU IS, UM, MOVING SOME OF THE COSTS FOR LEAF AND LIMB, LEAF AND LIMB OVER TO, UM, SOLID WASTE WHERE IT BELONGS.
GENERAL FLYNN HAS BEEN COVERING THOSE COSTS AND I BELIEVE SOME OF THE, UM, UTILITY COSTS AS WELL.
SO, UM, GOING, TAKING A LOOK AT OUR DEBT, AS YOU KNOW, WE, UM, FINISHED A, UH, ABOUT 20, WE ADDED 21 MILLION TO, UM, OUR DEBT THIS YEAR.
UM, RIGHT NOW WHERE WE'RE STANDING IS 55 POINT $0.5 MILLION IN OUTSTANDING DEBT FOR FY 23.
AS OF RIGHT NOW, THE GENERAL FUND CONSISTS OF 29.3 MILLION WITH THE WATER FUND HAVING JUST OVER 14 MILLION.
THE SEWER FUND, THAT 8.8 MILLION CONSISTS OF THEIR, UM, REVENUE BOND THAT THEY ADDED AS WELL.
TAKING A LOOK AT THE FIVE-YEAR, UM, HISTORY, THESE, UH, IN THE LAST FIVE YEARS, UM, THIS WAS THE, UM, FINANCINGS THAT WE DID.
I HAVE A NOTE THERE ON THE SAILING WHITE CENTER COMPONENT B THAT'S THE ONE THAT WE MAY PAY OFF EARLY WHEN WE START GETTING THOSE REIMBURSEMENTS IN FROM FEMA.
SO THAT SHOULD, UM, THERE'S NO PREPAYMENT PENALTY ON THAT.
SO THAT ONE WOULD HOPEFULLY, UM, REDUCE OUR AMOUNT OF DEBT THERE IN THE GENERAL FUND SOONER THAN 2039.
BUT WE'LL HAVE, WE'LL HAVE THAT DISCUSSION RIGHT BEFORE THAT DECISION IS MADE.
'CAUSE WE NEED TO EVALUATE ALL OF OUR DEBT SERVICE AND INTEREST RATES AND THINGS LIKE THAT.
THIS CHART IS THE DEBT PAYMENTS BY FISCAL YEAR.
YOU CAN SEE THAT IT JUMPS UP IN TWO TH 20 2025 BECAUSE THAT CONSISTS OF THE THREE FINANCINGS THAT WE DID THIS YEAR.
AND SO, JUST TO GIVE YOU A BETTER IDEA AND WE'LL, WE'LL TALK ABOUT GENERAL FUND, UM, FFY 24, WE ANTICIPATE PAYING JUST UNDER $2 MILLION IN DEBT SERVICE AND 25 IT WILL BE APPROXIMATELY APPROXIMATELY $3.2 MILLION.
AND THEN BASED ON WHAT WE'VE CURRENTLY FINANCED, THAT THAT PAYMENT WILL SLOWLY START DROPPING DOWN OVER 70 YEARS.
SO IT'S GOING INTO THE NEXT SLIDE THERE THAT THE DEBT PAYMENTS OVER THE NEXT 10 YEARS.
UM, THE FIRST COLUMN IS THE FISCAL YEAR, THE GENERAL FUND MSD AND THE ENTERPRISE FUNDS COMBINED THE PAYMENTS FOR STANLEY WHITE ROCK, THE VEHICLES AND EQUIPMENT AND THE SEWER REVENUE BOND.
THE, UM, LOAN PAYOFFS FOR ELECTRIC WILL BE 2026 IN SEWER AND SOLID WASTE IS 2024 AND WATERS 2030.
SO ON THE GENERAL, ON THE GENERAL FUND ON THIS SLIDE, MM-HMM.
BUT THIS DOESN'T FACTOR IN ANY REIMBURSEMENTS FROM FEMA, CORRECT? CORRECT.
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JUST THE PRINCIPAL AND THEN JUST PAYMENTS.SO IF WE'VE BEEN ACCUSTOMED TO PAYING, SAY $2 MILLION IN DEBT SERVICE, THEN FOR THE NEXT FIVE YEARS WHERE THAT NUMBER GOES UP, WE COULD TAKE OUR REIMBURSEMENTS FROM FEMA, PAY THAT DELTA, AND WE WOULD ESSENTIALLY BE PAYING THE SAME AMOUNT IN CAPITAL THAT WE ARE THIS YEAR.
IS THAT FAIR? IF I'M FOLLOWING WHAT YOU SAID? YES.
SO WE DO HAVE A REQUIREMENT TO TAKE THOSE REIMBURSEMENTS AND PAY RIGHT OFF THE DEBT.
SO LOOKING AHEAD, UM, WHAT WE REALLY NEED TO TAKE A LOOK AT, CAREFULLY TAKE A LOOK AT THE CAPITAL PLAN AND, AND IT SHOULD REALLY ENCOMPASS ALL OF THE CITY'S ENTIRE CAPITAL NEEDS, BUILDINGS, GROWTH INFRASTRUCTURE.
AS THE CITY'S GROWING, WE NEED TO LOOK AT, UH, THE NEEDS, NOT JUST THE VEHICLES AND THE EQUIPMENT, WHICH I, WHICH TYPICALLY IS WHAT WE'VE BEEN SEEING WHEN THEY DO THEIR BUDGET, UM, THE CAPITAL IMPROVEMENTS FOR THEIR BUDGET.
UM, WITH THAT, UM, THEN IT HELPS US PLAN FOR THE FUTURE SO THAT WE CAN ALIGN THAT FUNDING APPROPRIATELY AS WELL WITH THE CASH FLOW AND SUCH AS, AS THINGS ARE, UM, YOU KNOW, BEING PAID OFF, I'D LIKE TO SEE, UM, A FIVE TO 10 YEAR PLAN AND BE ABLE TO EVALUATE THAT AND PRIORITIZE IT.
SO THAT GIVES US DIRECTION AS TO WHERE WE'RE GOING AS WELL.
UM, THERE'S DIFFERENT WAYS TO FUND THIS, THESE PLANS.
AND FIRST OF ALL IS PAY AS YOU GO CASH, WHICH WE DID LAST YEAR WITH A LOT OF THE, UM, VEHICLES AND THE EQUIPMENT, A LITTLE BIT OF VEHICLES AND EQUIPMENT THAT WE DID RECEIVE LAST YEAR.
UM, AND THEN OTHER OPTIONS ARE GENERAL OBLIGATION BONDS, THE SPECIAL OBLIGATION BONDS, REVENUE BONDS, AND THEN OF COURSE INSTALLMENT FINANCINGS.
THE GOAL WOULD BE TO, UM, SET ASIDE SOME FUNDING UTILIZING OUR RESERVES AND UM, MAYBE ADOPTING A POLICY THAT PUTS A CERTAIN PERCENTAGE ASIDE OF OUR AVAILABLE FUND BALANCE THAT WE, YOU KNOW, AT THE END OF THE YEAR, WE'RE ABLE TO START FUNDING SOME OF THESE CAPITAL PROJECTS DOWN THE ROAD SO IT REDUCES THE AMOUNT OF BORROWING IN THE FUTURE.
DO YOU HAVE ANY QUESTIONS SO FAR ON THE FINANCIAL REPORTS AND THE DEBT, KIM? JUST KIND OF A BROADER BASE QUESTION.
UM, LOOKING AT, UM, THE BUDGET WHERE IT STANDS CURRENTLY, KIND OF LOOKING AT IT FROM A GLOBAL VIEW, UM, GENERAL FUND AS WELL AS THE ENTERPRISE FUNDS, IS THERE ANYTHING THAT IS UNEXPECTEDLY OUT OF WHACK IN ANY OF THE BUDGETS? NOT AT THIS TIME, BUT I MEAN, EVERYTHING LOOKS TO BE RELATIVELY CLOSE TO WHERE YOU WOULD EXPECT THAT IT WOULD BE.
I MEAN, IS THAT AN ACCURATE STATEMENT? I WOULD SAY SO.
UM, IT'S REVENUES YOU'RE REALLY NOT GOING TO HAVE, YOU CAN JUST, YOU KNOW, SEE WHERE YOU'RE AT RIGHT NOW, COMPARE IT TO PRIOR YEARS WHERE, YOU KNOW, AT THIS TIME.
BUT BECAUSE THERE'S SUCH A LAG IN SOME OF THOSE, SUCH AS THE SALES TAX, UM, YOU REALLY DON'T KNOW WHERE YOU'RE TRENDING.
YOU CAN'T REALLY GET A GOOD IDEA FOR THAT RIGHT NOW.
SO I MEAN, NOTHING IS BEING HIGHLIGHTED AS JUST BEING UNEXPECTED AND AND OF CONCERN TO YOU? NO.
SO, UM, TONIGHT THE, THE AUDITOR WILL BE PRESENTING THE FINANCIAL REPORT AND I JUST WANTED TO TAKE A A MOMENT AND HIGHLIGHT A COUPLE THINGS FROM THE AUDIT.
UM, WE HAVE THE, UM, FUND BALANCE.
THE FUND BALANCE IS THE TOTAL ACCUMULATION OF OPERATING EXPENSES OR OPERATING SURPLUSES AND DEFICITS SINCE THE INCEPTION.
IT IS A DIFFERENCE BETWEEN THE FUND'S ASSETS AND LIABILITIES AS A WHOLE FOR A FISCAL YEAR.
AND IT'S CALCULATED AT THE END OF EVERY FISCAL YEAR.
I HIGHLIGHT THAT BECAUSE WE TRY TO GUESS THIS EVERY MONTH THE BEST THAT WE CAN BY RUNNING THIS CALCULATION, BUT KNOWING THAT THERE'S SOME BIG SWINGS IN THAT BECAUSE OF THE TIMING OF REVENUES AND EXPENSES AND, UM, SO IT'S NOT IDEAL SOMETIMES TO DO THAT MONTHLY.
I JUST DON'T KNOW THAT IT GIVES THE RIGHT PICTURE, ESPECIALLY BECAUSE IT'S HARD TO SEPARATE OUT WHAT'S REALLY AN AVAILABLE FUND BALANCE VERSUS THE TOTAL, YOU KNOW, TOTAL FUND BALANCE.
SO THE TOTAL FUND BALANCE ENDED
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WITH 35.6 MILLION, WHICH IS ABOUT 61% OF THE EXPENDITURES OF THAT TOTAL FUND BALANCE.WE HAVE 14.2 MILLION RESTRICTED, WHICH IS NOT A NONS SPENDABLE.
THEN WE HAVE ANOTHER 6.1 MILLION THAT'S COMMITTED OR SET ASIDE FOR THE ARPA FUNDS.
SO THAT TAKES OUR AVAILABLE FUND BALANCE DOWN TO 15.3 MILLION, WHICH IS ABOUT 40% OF EXPENDITURES.
HOWEVER, THAT IS AN INCREASE OF 1.8 MILLION FROM 2022 THAT WE ADDED BACK INTO THE AVAILABLE FUND BALANCE.
BUT WHEN WE TALK ABOUT FUND BALANCE, IT'S REALLY IMPORTANT TO KNOW THE DIFFERENCE BETWEEN THE TOTAL FUND BALANCE VERSUS BALANCE VERSUS THE, UM, AVAILABLE SUN BALANCE.
THIS IS, I'M SURE A LOADED QUESTION, BUT WHAT ROUGHLY OR WHAT ARE THE BIG ITEMS THAT MAKE UP THE 14.2 THAT'S RESTRICTED? UM, IT'S RESTRICTED BY STATE.
IT, THE, IT'S A CALCULATION BY STATE STATUTE AND WHAT'S IN THEIR ENCUMBRANCES.
SO POS THAT WERE ROLLED OVER OUTSTANDING ENC CONFERENCES.
THERE'S THE, UM, THE POWER BILL FUNDS THERE IS ANY OF THE, UM, LIKE, UH, PREPAID EXPENSES AND IS THE, IS THE 8% LGC REQUIREMENT BUILT INTO THAT? YES OR NO? NO, IT'S NOT, NOT, NOT THE, SO THAT IS, THAT IS NOT NECESSARILY A REQUIREMENT.
IT WAS, UM, A STATEMENT THAT THEY MADE, BUT IT TYPICALLY ISN'T ENOUGH.
8% ISN'T ENOUGH FOR MOST MUNICIPALITIES.
SO, SO MAYBE, MAYBE IF YOU COULD SEND IT TO US LATER WHENEVER YOU HAVE THE OPPORTUNITY, I WOULD LIKE TO JUST SEE WHAT MAKES UP THE 14.2.
SO WE'LL, YOU'LL SEE THAT TONIGHT ACTUALLY.
'CAUSE HE GOES THROUGH THAT THROUGH THE AUDIT REPORT.
I KNOW INVENTORIES IS ALSO IN THERE AS WELL.
YOU'RE TALKING ABOUT AVAILABLE FUND BALANCE.
I REALIZE, UH, THE AUDIT, THIS IS AS OF JUNE 30TH, CORRECT? UM, INCREASE OF 1.8, BUT WE ALSO, I THOUGHT ARE TAKING 1.5 OUT OF FUND BALANCE TO FUND THE, UH, REST OF THE SALARY STUDY, CORRECT? YEP.
SO LOOKING FORWARD, I GUESS YOU KNOW, IT, IT'S MORE LIKE 300,000 IF YOU LOOK, I, I, I GUESS I'M COMPARING APPLES, ORANGES.
SO YES, THIS IS AS OF JUNE 30TH.
THEN YOU SUBTRACT OUT WHAT WE MM-HMM.
IS THAT, IS THAT WHAT WE'RE SEEING BETWEEN SLIDE FOUR AND SIX FOR THE GENERAL FUND YEAR TO DATE, WE'VE RECEIVED 29% OF THE REVENUE BUDGET AND WE'VE SPENT 35%.
COULD THAT BE SALARIES THAT'S IN THAT? UM, I THINK YOU'RE LOOKING AT APPLES TO ORANGES ON THIS.
SO THE GENERAL FUND REVENUES, WE'VE BROUGHT IN 29% MM-HMM.
SO WE'VE SPENT, WHAT IS THAT 6% MORE THAN WE BROUGHT IN? COULD THAT 6% BE SALARIES? I WOULD'VE TO GO, I WOULD THINK IT WOULD PROBABLY HAVE TO BE RIGHT.
YOU COULD HAVE, WELL WE COULD HAVE RECEIVED SOME BIG CAPITAL ITEMS THAT WE WERE WAITING ON IN THE PRIOR YEAR.
I, I GUESS MY POINT WAS A LITTLE MORE OF, HEY, WE DON'T EXACTLY HAVE 1.8 AS OF TODAY.
WE CAN GO OUT AND SPEND 'CAUSE WE ESSENTIALLY ALREADY SPENT IT.
AND THEN YOU HAVE YOUR ADDITIONAL REVENUES THAT WE HAVE THIS YEAR AS WELL TOO.
SO IF YOU TAKE A LOOK AT THE, THE CITY'S, UM, FUND BALANCE POLICY OF A MINIMUM OF 20, THEY'D LIKE THE GOAL TO STAY BETWEEN 25 AND 35%.
UM, IF WE ALLOW THE FUND BALANCE TO DIP DOWN TO 35%, THAT LEAVES US, WE'RE, LEAVES US WITH A FUND BALANCE OF APPROXIMATELY 13.4 MILLION.
AND THEN THAT WOULD BE AT ABOUT 1.9 MILLION THAT YOU WERE ABLE TO APPROPRIATE.
SO THE, MOVING ON TO THE ENTERPRISE FUNDS NET
[00:25:01]
POSITION AND THE NEXT SLIDE, THIS IS JUST A SNAPSHOT OF WHERE THEY ENDED, WHERE THEY WERE AT THE BEGINNING OF THE YEAR, THE CHANGE IN THEIR NET POSITION, AND WHERE THEY LANDED FOR EACH ENTERPRISE, EACH, UM, ENTERPRISE FUND WITH ELECTRIC BEING AT 52.8, WATER 48.4, SEWER, 66.8 IN SOLID WASTE, 1.9 MILLION.DO YOU HAVE ANY QUESTIONS ON THAT SO FAR? OKAY, SO TOUCH BASE ON THE AUDIT RESULTS.
UM, I SENT OUT AN EMAIL, GOSH, I THINK IT'S BEEN A COUPLE WEEKS, THAT IDENTIFIED, UM, THE FUND BALANCE OR OR DESCRIPTION OF THE FUND BALANCE AND THEN SOME OF THESE OTHER ITEMS THAT ARE, THAT HE'LL GO OVER TONIGHT.
THE UM, THE GOOD NEWS IS THAT THERE ARE NO FINDINGS OR MATERIAL WEAKNESSES OR SIGNIFICANT DEFICIENCIES, WHICH THOSE ARE MORE SERIOUS NATURE AND REQUIRE CORRECTIVE ACTION PLANS.
AND THOSE TYPICALLY ARE DUE TO WEAK INTERNAL CONTROLS CONDITIONS THAT ADVERSELY AFFECT THE UNIT.
THEY COULD BE A RESULT OF, UM, SIGNAL POOR MANAGEMENT, MATERIAL MISSTATEMENT, MISMANAGEMENT FUNDS AND BUDGET VIOLATIONS.
UM, WE DID HAVE, UM, A FINANCIAL PERFORMANCE INDICATOR OF CONCERN.
THIS IS A, UM, TOOL OF MEASUREMENT USED FOR TRACKING.
OH, TOOL OF MEASUREMENT USED FOR TRACKING, UM, REVENUES, EXPENSES, CASH FLOW, AND OTHER FINANCIAL OUTCOMES.
AND IT'S USEFUL WITH PLANNING AND DECISION MAKING.
SO THE F PICK, WHICH IS, UM, FOR US WAS THE CASHFLOW INDICATOR.
AND IT RESULTED, UM, WITH INDICATING THAT THE RATES ARE NOT COVERING THE OPERATING AND DEBT SERVICE PAYMENTS FOR THE WATER AND SEWER FUNDS FOR FYE UM, 2023.
UM, WITH THAT, WE JUST HAVE TO PROVIDE A, A RESPONSE TO YOU, WHICH WILL BE SUBMITTED TO YOU, UM, IN JANUARY.
AND, UM, BASICALLY BE THE RESULT OF THAT
A WATER FUND WAS 1.2 MILLION THAT THEY, UM, TRANSFERRED OVER TO THOSE CAPITAL PROJECT FUNDS.
AND SEWER FUND WAS 2.2 MILLION.
FINANCING WAS COMPLETE IN SEPTEMBER, 2023.
SO THE CASH WILL BE RESTORED AS WE GET THAT REIMBURSEMENT, BUT IT WAS JUST A, A TIMING ISSUE THERE.
UM, ADDITIONALLY, THE SEWER FUND RECOGNIZES, UH, DEBT REDUCTION EVEN WITH THE REVENUE BOND COMING ON THE DEBT PAYOFF OF TWO POINT, ALMOST 2.4 MILLION IN 2023 AND A HUNDRED THOUSAND DOLLARS IN FY 24.
THE REVENUE BOND PAYMENTS BEGIN IN FFY 25 AND THOSE PAYMENTS WILL BE $566,850.
THE FY 2324 WATER AND SEWER RATES WERE INCREASED AS WELL.
SEWER RATES INCREASED BY FOUR AND A 5%, AND THEN WATER, UH, READINESS TO SERVE CHARGE INCREASED BY DOLLAR 67 PER METER PER MONTH.
AND THEN THE CITY, UH, PLANS TO CONDUCT A RATE STUDY AND ADDRESS ANY RATE ADJUSTMENTS IN THE NEXT FISCAL YEAR OR SO.
DO YOU HAVE ANY QUESTIONS ON THE, OKAY.
SO, UM, JUST WANNA TALK ABOUT HOW WE, UM, CONTINUE TO PROVIDE SOME REPORTS TO YOU ON A REGULAR BASIS TO HELP MONITOR THIS.
UM, THE MONTHLY REPORT MONITORS THE CASH ON HAND FOR THE GENERAL FUND AND ENTERPRISE FUNDS, AND THAT'S GIVEN TO YOU EACH MONTH.
UM, IT ALSO REPORTS THE ESTIMATED FUND BALANCE MONTHLY.
UH, IT ALSO HAS THE FEMA RECONCILIATION REPORT.
SO YOU CAN SEE WHAT'S STILL OUTSTANDING FROM FEMA AND WHAT'S BEEN, WHAT'S BEEN BILLED AND WHAT'S BEEN DUE OR WHAT'S DUE.
THE QUARTERLY REPORTS, UH, YOU RECEIVED ONE IN OCTOBER AND THAT IS THE YEAR TO DATE BUDGET TO ACTUAL REPORTS AND IT MONITORS, UM, THE BUDGET VERSUS THE ACTUAL REVENUES AND EXPENSES.
THE SECOND REPORT YOU'LL RECEIVE IS IN JANUARY, AND THAT WILL COVER THE PERIOD OF OCTOBER THROUGH DECEMBER.
AND THEN THE ANNUAL COMPREHENSIVE FINANCIAL REPORT BRINGS THE FULL YEAR TO A CLOSE.
AND THEN YOU'LL RECEIVE THAT REPORT OF COURSE, ANNUALLY, WHICH YOU'LL HEAR TONIGHT FOR
[00:30:01]
FY 23.SO MOVING INTO, UM, BUDGET, WE'RE GETTING READY FOR THE FY 25 BUDGET, UM, DEVELOPMENT.
AND I JUST WANTED TO GO OVER A COUPLE THINGS.
GENERAL STATUTE REALLY, UM, PROVIDES THE DIRECTION FOR THIS WHERE IT'S, AND IT STATES THAT THE CITY MANAGER IS THE BUDGET OFFICER.
UM, BUDGET REQUESTS ARE DUE BY APRIL 30TH, AND THAT IS BY STATUTE, UM, PREPARATION AND SUBMISSION OF THE BUDGET AND BUDGET.
BUDGET MESSAGE IS DUE NO LATER THAN JUNE 1ST FILING IN PUBLICATION OF THE BUDGET AND BUDGET HEARINGS.
THERE'S STATUTE THAT DISCUSSES THAT AND THE TIMING OF THAT.
AND THEN THE BUDGET ORDINANCE FORM ADOPTION LIMITATIONS, TAX LOBBYING, FILING, UM, AND IT NEEDS TO BE ADOPTED NO LATER THAN JULY 1ST.
WE HAVE THE, UM, BUDGET CALENDAR HERE.
UM, THE, TODAY WE'RE DISCUSSING AND, UM, WE HAVE OUR DISCUSSION PLANNING MEETING TOMORROW IS OUR DEPARTMENT HEAD MEETING WHERE WE'LL KICK OFF THE BUDGET PROCESS.
AND THEN NEXT, UM, OVER THE NEXT MONTH OR SO, THEY, THE DEPARTMENT HEADS WILL BE PREPARING DIFFERENT, UM, REQUESTS.
AND THEN WE'LL ALSO HAVE ON FEBRUARY 6TH, THE, UH, BOARD OF ALDERMAN RETREAT.
THAT'S WHERE WE'LL BRING TO YOU THOSE PERSONNEL AND, AND CAPITAL REQUESTS.
ANY RECOMMENDED CHANGES THAT THEY'VE MADE TO THE SCHEDULE OF FEES AND CHARGES AND ALSO THEIR PROJECTS AND INITIATIVES.
UM, THE BUDGET IS THEN TAKEN BACK AND BALANCED BY APRIL 3RD, AND WE WILL HAVE THE RECOMMENDED BUDGET SUBMITTED TO THE CITY CLERK FOR DISTRIBUTION BY MAY 3RD, UM, FOR THE BOARD OF ALDERMAN MEETING ON MAY 14TH, ON MAY 21ST AND 22ND, WE'LL HAVE THE BUDGET WORKSHOPS AND MAY 28TH, WE'LL CONDUCT A PUBLIC HEARING AT THE BOARD OF ALDERMAN MEETING IN JUNE 11TH.
THAT'S WHEN WE'LL REQUEST FOR YOU TO ADOPT THE BUDGET AND THE NEW FEE SCHEDULE.
AS YOU CAN SEE, IT'S A TIGHT TIMELINE.
THERE'S A LOT HAPPENING IN BETWEEN.
DO YOU HAVE ANY QUESTIONS ON THAT? SO, NEW THIS YEAR, WE'RE, UM, DO YOU'VE, WE'VE HAD A LOT OF DISCUSSION ABOUT THE STRATEGIC PLANNING PROCESS AND IT REALLY IS A, UM, PROCESS IN WHICH THE CITY'S VISION IS DEFINED AND THE GOALS AND OBJECTIVES THAT ARE IDENTIFIED.
IT HELPS PROVIDE DIRECTION, INVOLVES COMMUNITY AND STAFF ENGAGEMENT, ASSISTS WITH DECISION MAKING PROCESSES AND ASSISTS DEPARTMENTS IN ESTABLISHING GOALS AND OBJECTIVES THAT SUPPORT THE CITY'S VISION.
AND THEN IT FOLLOWS WITH ALIGNING THE BUDGET TO SUPPORT THAT PLAN AS WELL.
SO IT'S REALLY ESSENTIAL FOR US TO GET BOARD FEEDBACK.
WE STARTED THAT WITH, UM, THIS, THE SURVEY TO HELP INCREASE THE ENGAGEMENT WITH THE BOARD AND ASSIST WITH THE DECISION MAKING PROCESS, HOPEFULLY TO BE MORE EFFICIENT WITH THE PROCESS THIS YEAR.
SO WE, UM, YOU RECEIVED THAT, UH, SURVEY.
UM, WE ALSO HAVE, UM, OKAY, SO WITH THAT SURVEY, THE, THE DEPARTMENTS WILL GET THOSE RESPONSES AS WELL.
AND THEN, UM, THIS FORM HERE IS WHERE THE DEPARTMENTS WILL HELP ALIGN THEIR, UM, PROJECTS AND THEIR CAPITAL WITH THE BOARD'S GOALS.
AND IN OBJECTIVES, IF THE FEBRUARY WORKSHOP, YOU'LL RECEIVE THIS, UM, PLANNING WORKSHEET TO HELP, TO HELP US KINDA GET A, A IDEA OF WHAT YOU'RE, SUP YOU'RE WILLING TO SUPPORT AND WHAT YOU DON'T SUPPORT.
UM, YOU'LL ALSO RECEIVE THAT TODAY AND SHOULD HAVE IT WITH YOUR PACKET FOR THE, UM, TO GET FEEDBACK BASED ON THE, UM, THE SURVEY THAT WE HAD EARLIER.
I WOULD, I WOULD MAYBE MAKE ONE SUGGESTION ON THAT LIST OF PROJECTS IS TO HAVE A WAY TO RANK 'EM OR RATE 'EM.
UM, IF YOU PUT 20 PROJECTS IN FRONT OF US RIGHT.
[00:35:01]
'EM, BUT WE MAY SUPPORT ONE A WHOLE LOT MORE THAN WE DO ANOTHER.SO IT MIGHT BE A, A HELP TO YOU ALL WHEN YOU'RE TRYING TO PRIORITIZE.
PARTICULARLY WHEN ONE'S A HUNDRED K AND ONE'S A MILLION.
I MEAN, YEAH, YOU CAN FIND, GOTTA GO SOMEWHERE, RIGHT? EXACTLY.
SO AS I STATED EARLIER, WE, KIM SENT OUT A SURVEY TO THE ALL SEVERAL WEEKS AGO.
UM, WE RECEIVED ALL OF THEM BACK, UH, FROM ALL OF YOU.
SO DON'T TAKE LITTLE TIME TO, TO GO OVER THAT INFORMATION.
UM, JUST SOME ADDITIONAL, SOME COMMENTS THAT WE RECEIVED.
UH, ONE WAS MORE INVOLVEMENT FROM THE BOARD ON BUDGET REQUEST FROM THE DEPARTMENT.
SO, UM, AS WE GO THROUGH THIS BUDGET PROCESS, UM, WE, I'VE HAD SOME ARGUMENT SAY, WELL, CAN, CAN WE TAKE A TOUR OF, OF VARIOUS DEPARTMENTS TO SEE WHAT, WHAT THEIR NEEDS ARE? IF ANY OF Y'ALL ARE GONNA LIKE TO TAKE A TOUR, VIDEO DEPARTMENTS, ALL THEY HAVE TO DO IT, JUST LET US KNOW.
IF YOU'D LIKE TO VISIT ANY DEPARTMENTS, WE CAN LINE THAT UP.
BUT AS WE DO THE BUDGET WORKSHOP IN FEBRUARY, THE DEPARTMENT HEADS ARE GONNA HAVE AN OPPORTUNITY TO TALK ABOUT, UM, THE CAPITAL REQUESTS AND ALSO ANY PERSONNEL REQUESTS.
AND AT THAT TIME, YOU'LL HAVE THE OPPORTUNITY TO ASK ANY QUESTIONS YOU MAY HAVE.
AND YES, I, I AGREE WITH Y'ALL.
UH, MAYOR ODOM, WE, WE CAN LOOK AT A RANKING TO HELP HELP, ESPECIALLY WITH THESE DEPARTMENT.
THERE ARE SOME DEPARTMENTS THAT ARE GONNA HAVE MORE NEEDS THAN OTHERS AS USUAL.
AND SO THAT WILL HELP WITH THAT.
BUT ALSO, WE ALSO NEED TO REMEMBER, WE'RE NOT GONNA REALLY HAVE A GOOD IDEA ON ANTICIPATED REVENUES, UH, FOR SEVERAL MONTHS, BUT WE KNOW THAT THERE'S A FINITE AMOUNT OF MONEY THAT WE CAN, THAT WE CAN WORK WITH EACH YEAR.
AND SO WHEN WE START ADDING, UH, UH, THAT PERSONNEL, THOSE COSTS INCREASED WHEN WE START TALKING ABOUT ANY COALS OR MERIT INCREASES THAT, THAT, THAT, THAT'S COST.
THERE'S COST FOR EVERYTHING WE DO.
UM, SO WE'LL JUST COME GO THROUGH A FEW OF THESE THINGS.
SO ANY MORE BUDGET PACKET THAT YOU'RE GOING TO GET, UH, WHICH WILL BE, YOU'LL, YOU'LL ACTUALLY RECEIVE THAT THIS YEAR ABOUT TWO AND A HALF WEEKS BEFORE OUR THE BUDGET PRESENTATION.
IT WILL HAVE A LIST OF, OF ALL THE CAPITAL PROJECTS, IT WILL HAVE A LIST OF ALL OF THE PERSONNEL REQUESTS AND FROM THE DEPARTMENTS.
AND IF IS WHAT I'M PRESENTED, IF I, UH, DID NOT AGREE WITH IT, THERE WILL BE A RED LINE THROUGH THAT.
UH, IF I DIDN'T SUPPORT IT FOR WHATEVER REASON, THAT DOESN'T MEAN THAT, THAT IT'S, IT'S THE END OF THAT REQUEST.
THE DERMAN CAN STILL COME BACK AND SAY, HEY, WE'D REALLY LIKE TO SEE THIS PROJECT, WHAT CAN WE DO TO WORK THIS OUT? AND THEN WE, THAT'S WHEN THE BUDGET WORK JOBS, UH, WE HAVE THAT DISCUSSION BACK AND FORTH ON HOW WE'RE GONNA PAY FOR WHATEVER.
SO WE'LL HAVE A CONTINUED CONVERSATION ON THAT.
ONE OF THE COMMENTS IS EVERYONE IN THE CITY NEEDS TO BE CROSS-TRAINED.
AND I THINK I CAN SAFELY SAY IN MOST DEPARTMENTS, ALL THE DEPARTMENTS ARE DOING A PRETTY GOOD JOB ON CROSS CROSS-TRAINING THINGS.
THERE ARE A FEW THINGS THAT THAT, THAT WE, UH, DO NEED TO LOOK AT CROSS-TRAINING.
THE BIGGEST EXAMPLE I CAN GIVE YOU RIGHT NOW IS OUR CLERK DOES NOT HAVE, HAVE A BACKUP AT THIS TIME.
AND SO THAT'S VERY IMPORTANT THAT THE CLERK HAS SOMEONE THAT THAT, THAT WE CAN RELY ON IF ANYTHING HAPPENS, IF SHE'S ON VACATION OR WHATNOT, UH, TO, TO HELP TAKE HER RESPONSIBILITIES.
UM, AND THEN THERE WERE PROBABLY SOME OTHER THINGS LIKE INSPECTIONS WITH DEVELOPMENT SERVICES.
WE'VE SEEN WITH THE NEW STAFF COME IN, UH, THEY WERE REALLY TAKING MORE OF A PROACTIVE APPROACH OVER PREVIOUS YEARS AND, AND, UH, NU SOME STATEMENT ENFORCEMENT.
UH, AND THEN WE FOUND THAT, UM, UH, THERE'S NOT ENOUGH TIME IN THE DAY FOR THEM TO GET TO ALL OF THOSE, UH, ISSUES THEY'RE DEALING WITH.
AND SO SOME OF THOSE THINGS WILL BE COMING UP, UM, DURING THESE BUDGET DISCUSSIONS.
INFRASTRUCTURE OF OUR CITY STREETS, YOU'RE GONNA SEE THIS MULTIPLE TIMES THROUGHOUT THIS.
ON THE NEXT SLIDE, ECONOMIC DEVELOPMENT.
WE HAD SEVERAL COMMENTS ON ECONOMIC DEVELOPMENT, BE OPEN AND WILLING TO PROVIDE ECONOMIC INCENTIVES TO GROW OUR TAX BASE.
RENEW DEVELOPMENT, APPLY FOR MORE EDA GRANTS TO AID THE REDEVELOPING OF THE GREATERFORD DUNFIELD AND FIVE POINTS CORRIDORS, WHICH ARE A GATEWAY TO DOWNTOWN AND CONTINUE DISCUSSING AND HOPEFULLY CATCH AN AGREEMENT ON MOVING FORWARD WITH PROPOSALS FOR THE DEVELOPMENT OF CITY OWNED PROPERTY.
UH, AND SPECIFICALLY THE OLD DAYS END PROPERTY OF THE, THE PROPERTY AT HANCOCK AND SOUTH FRONT STREET ON THE CORNER, THE OLD FIREMANS MUSEUM PROPERTY, UH, PROPERTY, UH, ADJACENT TO THE TRAFFIC CIRCLE, THE OLD STRIP OF LAND BETWEEN THE, UH, COUNTY PROPERTY AND, UH, AND, UH, THE GALLEY SHOPS LOCATION, AND ALSO THE HANCOCK STREET PARKING LOT, WHICH IS BESIDE THE FIRES MUSEUM.
ALSO ON ECONOMIC DEVELOPMENT, WE RECEIVED COMMENTS
[00:40:01]
ON BUDGET FOR DEVELOPMENT SERVICES TO TRAVEL TO APPROPRIATE TRADE INDUSTRY CONFERENCES TO SELL OUR CITY MORE FOCUS ON BRINGING RESTAURANTS, FAMILY ACTIVITIES AND RETAIL SHOPPING ESTABLISHMENTS TO NEWBURN.AND AGAIN, THE DAY'S END PROPERTY COMES BACK UP AGAIN.
SO ONE OF THE THINGS THAT WE HAVE DONE IN THIS BUDGET OF YEARS IS WE HAVE COMPLETED THE RETAIL MARKET ANALYSIS DEVELOPMENT SERVICES STAFF HAS, HAS, UH, BEEN FOR THE LAST SEVERAL MONTHS REACHING OUT TO BUSINESSES, WHETHER IT BE RESTAURANTS OR WHATNOT, TO, TO TALK ABOUT, UH, THE NUMBERS HERE IN NEW BERN.
WHAT, WHAT WE'RE NEEDING, WHAT WE HOPE WE CAN DRAW.
ONE OF THE BIGGEST INTERESTS WE'VE SEEN SO FAR ARE GAS STATIONS.
THEY, THEY'VE HAD AN INTEREST HERE, BUT WE'RE REALLY TRYING TO GET SOME RESTAURANTS AND SOME OTHER RETAIL ESTABLISHMENTS AS WELL, UH, COMING TO NEW.
SO STAFF CONTINUES TO WORK ON, ON THAT.
AND WE'LL BE ATTENDING VARIOUS TRADE SHOWS AS WELL, WHERE THOSE BUSINESSES GATHER.
UM, AND REALLY THE, THESE SHOWS TAKE PLACE ON A MONTHLY BASIS ALL OVER THE COUNTRY.
SO WE'RE GONNA BE MAKING AN EFFORT TO GET NEW'S NAME OUT FOR THOSE THINGS.
UNDER PROJECTS SPECIFICALLY, IT WAS BROUGHT UP PENAL PIER AT THE BROAD STREET EXTENSION, PUBLIC FISHING AT THE END OF BROAD STREET, REPLACEMENT OF THE FENCING.
UH, BASICALLY IN THAT SAME GENERAL AREA.
AND THIS IS AT THE, UM, THE AREA WE'RE TALKING ABOUT IS WHERE THE SUDAN PROPERTY WAS.
THE COUNTY STILL OWNS THAT PROPERTY NOW AND POSSIBLY ENCOURAGING THE COUNTY COMMISSIONERS CO TO COMMIT TO DEVELOPING THEIR WATERFRONT LOT IS POSSIBLY AN OPEN SPACE.
SO, UH, WE HAVEN'T TALKED TO THE COUNTY ABOUT WHAT THEIR PLANS ARE, DON'T KNOW WHAT THEIR CURRENT PLANS ARE, BUT THE BOARD SUPPORT, WE'RE HAPPY TO, UH, SPEAK TO THEM ABOUT THAT.
STREETS WITH 21 MILLION WE ADDED, UH, TO OUR DEBT LAST YEAR.
NO BIG PROJECTS THIS FISCAL YEAR INCREASED THE FUNDING FOR STREET REPAVING AND SIDEWALKS INSTEAD, RESURFACING OF CITY MAINTAIN STREETS AND INCREASE THE PAVING PROJECT.
SO, AND ALSO RESURFACE STREETS IN PEMBROKE.
SO I THINK WE'RE HEARING LOUD AND CLEAR, UH, FROM A, A MAJORITY OF THE ARGUMENT THAT PGAN IS, IS A, IS A BIG ISSUE AND BIG CONCERN THAT YOU WOULD LIKE TO ADDRESS ALSO ON PROJECTS FIRE STATION.
UM, THE FIRE STATION WENT OF TOWN, UM, WE SHOULD DISCUSS THE MEANING OF A POTENTIAL NEW STATION BY CONSIDERING IF WE STILL NEED, UH, THE ELIZABETH AVENUE STATION AND WE CAN CERTAINLY ANALYZE THAT.
WE LOOK AT ALL, ALL KINDS OF THINGS DURING ANY FIRE RESCUE.
UM, I SENTENCED SOME INFORMATION OUT TO ALL OF YOU EARLIER TODAY.
WE, WE DO HAVE A NEW FIRE CHIEF THAT IS GONNA BE STARTING ON JANUARY 8TH.
AND SO THAT'S, THEY'RE GONNA BE TASKED WITH, UH, A LOT OF ANALYSIS OF HOW WE'RE MOVING FORWARD IN FIRE RESCUE FOR THE BOARD, HEARING THEIR COMMENTS WHEN THEY GET ON BOARD.
ALSO, A GENERAL COMMENT ON POTENTIAL RIGHT OF WAY PURCHASE AND EXTENSION OF ELIZABETH AVENUE TO HIGHWAY 43 TO, TO HELP RELIEVE TRAFFIC IN AROUND HJ MCDONALD AREA.
SO THAT WILL TAKE SOME ANALYSIS BY, UM, OUR, OUR, UH, OUR STAFF TO LOOK AT THAT.
ADDITIONAL PROJECTS WITH EAST GROVE STREET FLOODGATES, CULVERS PROJECT UNDER THE RAILROAD, STARTING AS SOON AS POSSIBLE WITH COMPLETION BY JUNE, 2025.
SIMMONS STREET CULVERTS RAILROAD PROJECT.
AS SOON AS POSSIBLE COMPLETION BY JUNE OF 2025, WE'VE SEEN SEVERAL, SEVERAL PROJECT RECOMMENDATIONS WITH A DEFINITE TARGET DATE TO HAVE COMPLETION BY.
AND SO WE REALLY WANTED TO EMPHASIZE WITH, WITH THE DEPARTMENTS THAT ARE, THAT ARE RESPONSIBLE FOR THESE PROJECTS.
WHILE WE KNOW THAT THE PLANNING PART AND, AND THE DESIGN AND, AND STATE FEDERAL APPROVALS TAKES TIME, WE DON'T LIKE PROJECTS THAT SIT OUT THERE FOR MULTIPLE YEARS.
AND SO WE'RE VERY COGNITIVE OF THAT.
WE'D LOVE TO BE ABLE TO GET PROJECTS, UH, ADDRESSED AND COMPLETED IN A MUCH MORE TIMELY MANNER.
SO WE'RE GONNA BE WORKING WITH STAFF ON THAT.
WE'VE ALSO SEEN A CONSISTENT MESSAGE, UH, UH, WITH, UH, WITH PARKS, WHICH WE TALKED ABOUT, THE SKATE PARK.
WE TALKED ABOUT POSSIBLY DOING THE AMPHITHEATER IN PHASES, ADDITIONAL SUBSTATIONS, PUBLIC UTILITIES RECENTLY APPLIED FOR A GROUP GRANT.
WE DID NOT RECEIVE THAT CHARLIE'S CURRENTLY WORKING, UM, ON THE NEXT ROUND OF THAT.
UM, SO HOPEFULLY WE'LL, WE'LL HAVE SOME, UM, A GOOD OUTCOME OF THAT AS THIS YEAR AND THIS UPCOMING YEAR UNFOLDS COMING ABOUT BRINGING ALL CITY EMPLOYEES TOGETHER UNDER ONE ROOF IN TERMS OF HAVING A, A, UM, A MASSIVE ADMINISTRATION FACILITY WHERE A VARIETY OF DEPARTMENTS ARE TOGETHER.
A POLICE SUBSTATION IN WARD THREE, UH, WHETHER IT BE A SMALL FACILITY OR OR JOINT USE WITH THE CURRENT
[00:45:01]
FIRE STATION IN WARD, IN WARD THREE IS NOT OUT THE QUESTION.INSTALLATION OF THE SECOND BUILDING ALONG THE REAR PROPERTY LINE OF THE FARMER'S MARKET, INCREASING THE AVAILABLE SPACE FOR USE BY THE MARKET.
A DAY CENTER FOR THE HOMELESS POPULATION COMPLETING SIDEWALK PROJECT ON COUNTRY CLUB ROAD CONNECTED TO TRENT WOODS BUILDING.
IT'S BEEN A COMMON THEME OF, UH, NEW PARKS AND RECREATION GROUNDS MAINTENANCE FACILITY MOVING, UH, A NEW, PUTTING A NEW PUBLIC WORKS FACILITY, UH, IN PLACE AND MOVING PARKS AND RECREATION GROUNDS MAINTENANCE INTO THE FORM PUBLIC WORKS FACILITY.
AND WE DO KNOW THAT THERE'S A NEED FOR PARKS AND RECREATION GROUNDS MAINTENANCE TO HAVE A, A, A LARGER AREA LOOK AT OPTIONS FOR THE OLD WATER PLANT PROPERTY ON MR. BOULEVARD ONCE OPTIONS ARE KNOWN.
RENOVATE THE BUILDING FOR THE DAY, CENTER FOR HOMELESS UNDER VEHICLES, POLICE VEHICLES TO SUPPORT THE NEW TAKE HOME CAR POLICY PURCHASE OF THE FIRETRUCK OR REFURBISHING OF THE EXISTING FIRETRUCK.
THREE QUICK RESPONSE VEHICLES FOR FIRE RESCUE TO RESPOND TO NON-FIRE CALLS.
AND ANOTHER SIMILAR ONE FOR PASSENGER TRUCKS FOR OUR FIRE DEPARTMENTS SO THEY CAN RESPOND TO INSIST MEDICAL CALLS WITHOUT TAKING OFF THE FIRE APP RATS, THE ENTIRE CREW.
THIS IS SOMETHING THAT THE NEW FIRE CHIEF WILL ANALYZE WHEN THEY COME INTO PLAY.
SO ANY COMMENTS ON SOME OF THOSE PROJECTS THAT, THAT YOU ALL HAVE RECOMMENDED? OR ARE THERE, ARE THERE ANY PRIORITIES OVER ONE, OVER ANOTHER THAT YOU WOULD LIKE FOR US TO FOCUS ON? AREN'T YOU GONNA TAKE OUR RE THE RESULTS FROM THIS? MM-HMM.
BUT IF YOU'VE GOT ANY COMMENTS ALONG THE WAY, WE'D LOVE TO HEAR, HEAR THAT.
SO ON THE, ON THE PERSONNEL, WE ASKED YOU ALL WHAT YOUR APPETITE WAS FOR, FOR A COOP AND IN THE MOST RECENT CPI IN THE NOVEMBER OF 2023 OF THE SOUTH REGION, THAT THAT, UH, THAT IS 3.2%.
AND SO THE MAJORITY OF THE BOARD SAID THAT THEY COULD SUPPORT A 3% COLEY INCREASE AND, UM, THE MAJORITY OF THE BOARD ALSO, UH, COULD SUPPORT A 3% MERIT INCREASE IF THE BUDGET ALLOWS.
UH, ALSO, IF THERE ARE NO OBJECTIONS AT THIS TIME, WE CAN INCLUDE COA IN THE ALDERMAN ALLOCATION.
IT CAN ALWAYS BE ADJUSTED DURING THE BUDGET PROCESS.
SO I'M, ANY THAT YOU MAY HAVE ON IN TERMS OF BALANCING THE BUDGET, WE ASKED YOU SEVERAL QUESTIONS.
ONE, IF THERE WAS, IF THERE WAS ANY INTEREST IN, UM, IN, UH, ADJUSTING THE TAX RATE TO BALANCE THE BUDGET AND THE MAJORITY WERE SOMEWHAT OR ABSOLUTELY IN FAVOR OF THAT, IF NEED BE, WE'VE ALLOCATED IT TO 500,000 TO BALANCE THE BUDGET.
UH, 100% OF YOU AGREED ON THAT WHEN WE ASKED, UH, TO BALANCE THE BUDGET, UH, TO A MILLION DOLLARS FROM THE FUND BALANCE.
UM, 50% OF YOU, UH, AGREE WITH THAT 50%, NOT AT ALL.
SO KIM, WHAT, WHAT DID WE PULL FROM FUND BALANCE THIS YEAR TO BALANCE THE BUDGET? WAS IT 1.4 MILLION? YEAH, JUST, JUST A WRONG REPORT.
SO, SO THAT, THAT GIVES YOU AN IDEA.
AND THEN WE ASK THE QUESTION OF UTILITY RATE INCREASE IF, IF RECOMMENDED BY A RATE STUDY.
AND, UH, THE MAJORITY OF YOU SUPPORT THAT.
AND JUST WANNA REMIND YOU FOR ENTERPRISE FUNDS, THEY'VE GOTTA BE SELF-SUPPORTED.
AND SO WE, WE ALWAYS NEED TO LOOK AT, AT RATES, UH, TO MAKE SURE NOT ONLY ARE WE COMPETITIVE, BUT ARE WE COVERING OUR COSTS FOR THINGS.
SO ANY ANY QUESTIONS OR CONCERNS FOR THAT? KIND OF A, A NUMBERS QUESTION, HOW DO WE GET 50 50 WHEN THERE'S SEVEN OF US? THAT WAS ONE THAN 50.
SOME OTHER COMMENTS THAT WE RECEIVED ARE, NEWIN HAS ONE OF THE LOWEST TAX RATES, AND IT'S NOT INCREASED TO KEEP UP WITH DEMANDS.
WE CAN'T KEEP ON LOWERING OUR SERVICES.
CITIZENS UNDERSTAND INFLATION, THEY PAY INCREASED PRICES AT THE GAS PUMP AND KEEP GOING AND UP PAYING INCREASED TAX RATE TO KEEP THE SERVICES THEY WANT AND TO SEE IMPROVEMENTS IN INFRASTRUCTURE, ET CETERA.
WE CAN'T KEEP A MINDSET THAT TAXES AND NEVER BE RAISED.
THEN ANOTHER COMMENT IS, I BELIEVE THAT ANY PROJECTS OR CAPITAL EXPENDITURES FOR THE FIRE DEPARTMENT SHOULD WAIT TILL A NEW CHIEF HAS A CHANCE TO CONDUCT AN EVALUATION, MAKE A PRESENTATION TO THE BOARD, WHICH THEY'LL
[00:50:02]
OTHER COMMENTS WE'VE GOTTEN AWAY FROM THE LEAN AND EFFICIENT MINDSET OF THE CITY, WHICH WAS ADOPTED IN 2014.WHILE I SUPPORT OUR EMPLOYEES, THERE'S ALWAYS ROOM FOR IMPROVEMENT.
IF EVERYONE GAVE HUNDRED PERCENT, WE WOULDN'T NEED THE AMOUNT OF STAFF WE HAVE.
NOW, WHY SHOULD THOSE, UH, THAT IF THEY'RE, WHY SHOULD THOSE THAT IT, UM, GABE, THEY'RE ALL, UM, HELD BACK FINANCIALLY AND PROFESSIONALLY BECAUSE OF OTHERS WHO DO NOT.
ALL INCREASES SHOULD BE BASED OFF OF MERIT PERFORMANCE.
WE SHOULD NEVER REWARD MEDIA FOR EMPLOYEES FOR SIMPLY DOING THEIR JOBS.
ANOTHER WAS FOR RAISE, UH, FOR THE BOARD OF HONOR.
SO THOSE ARE THE COMMENTS WE RECEIVED FROM THAT.
AND, UH, IT WAS GREAT INFORMATION FOR US TO HELP US AS WE, UH, START WORKING ON, UH, THE BUDGET PROCESS.
AS A WRAP UP TO SOME OF THESE THINGS, UH, THERE ARE THREE THINGS THAT, THAT WE DEFINITELY WANNA ADDRESS.
ONE IS A CAPITAL PROJECT FUND.
SO WE DO RECOMMEND MOVING FORWARD, ESTABLISHING A CAPITAL PROJECT FUND.
THIS IS WHERE WE WOULD LIKE TO RECOMMEND, UH, UH, BOARD SUPPORT A CERTAIN PERCENTAGE OF ANY FUNDS THAT ARE, THAT ARE RETURNED FUND BALANCE, UM, TO GO INTO A CAPITAL FUND MOVING FORWARD FOR ANY BUILDING CAPITAL THAT WE CAN, UM, THAT WE CAN BUILD THAT OVER TIME AND NOT HAVE TO CONTINUE TO GO OUT FOR LOANS FOR CERTAIN THINGS.
AND SO I'D LIKE TO HEAR YOUR COMMENTS ON IF, IF YOU WOULD SUPPORT THAT.
WOULD YOU REPEAT THAT AGAIN, MR. HUGHES? UH, SO, SO CREATING A CAPITAL PROJECT FUND WHERE, UH, AT THE END OF THE YEAR WE HAVE A, A RESERVE, UH, UH, UH, AMOUNT, UH, LEFTOVER FROM THE GENERAL FUND THAT'S GONNA BE TURNED BACK INTO FUND BALANCE, ALLOCATING A CERTAIN PERCENTAGE OF WHATEVER THAT IS TO GO INTO A SPECIAL RESERVE FUND AND, AND FUND BALANCE SPECIFICALLY FOR CAPITAL, UH, EXPENDITURES.
SO WHETHER THAT BE TO ACQUIRE PROPERTY OR TO BUILD NEW BUILDINGS FOR THE CITY, THAT WOULD JUST BE A WAY TO START SAVING MONEY FOR THAT YEAR AFTER YEAR.
AND SO WE'LL COME BACK TO YOU WITH, WITH RECOMMENDED PERCENTAGES AS WE GO THROUGH THIS BUDGET PROCESS, BUT I THINK WE WOULD DEFINITELY LIKE TO THE BOARD TO ADOPT THIS THIS YEAR.
SO AT THE END OF THE DAY, THE PERCENTAGE WOULD BE BASED ON, AS YOU JUST SAID, EXPENDITURES AND ALL OF THAT STUFF WITH THE BALANCE BASED ON, BASED ON UNUSED FUNDS AT THE END OF EACH BUDGET YEAR, THAT WOULD GO BACK INTO FUND BALANCE, A PERCENTAGE OF THAT OKAY.
OF THE AVAILABLE FUND BALANCE.
JUST AS A, AS A GENERAL QUESTION OF HOW THAT WOULD WORK, UM, ESSENTIALLY WE'RE GETTING OUR AUDIT REPORT TONIGHT.
THAT WOULD ESSENTIALLY BE THE DECISION OF RIGHT, THAT'S RIGHT.
SO IT'D BE A DECEMBER DECISION, NOT A JULY.
AND SO JUST ON THE BOARD OF AUTO ENGAGEMENT COURSE, WE ENCOURAGE YOU TO ASK ANY QUESTIONS YOU MAY HAVE.
YOU'LL HAVE AN OPPORTUNITY TO ASK DEPARTMENT HEADS QUESTIONS AS WE HAVE OUR BUDGET WORKSHOPS.
UM, SO REQUESTS THAT ARE NOT RECOMMENDED BY MYSELF AND THE BUDGET COMMITTEE, THEY WILL BE REDLINED.
SO YOU WILL SEE THAT IF YOU HAVE QUESTIONS ON WHY WE DID NOT RECOMMEND THOSE, WE'RE HAPPY TO RESPOND TO THOSE AS WE GO THROUGH THIS IN THE NEXT SEVERAL MONTHS.
UM, AND WE'RE GONNA CONTINUE THE DEVELOPMENT OF THE STRATEGIC PLAN.
SO WE MUST RECENTLY HAD CONVERSATIONS WITH THE SCHOOL OF GOVERNMENT FOLKS.
UH, WE'RE READY TO START ENGAGING OUR CITY EMPLOYEES AS WELL BY DOING A SURVEY.
AND MOST LIKELY RIGHT AFTER THE FIRST OF THE YEAR, BASED ON THE INFORMATION WE HAVE, WE'RE GONNA START GETTING SOME PUBLIC FEEDBACK, UH, FROM THE PUBLIC ON, ON THE, THE OVERARCHING GOALS THAT, THAT THE BOARD OF ALDERMAN HELPED TO ESTABLISH, UH, IN THE MEETING SEVERAL, UM, ABOUT SIX WEEKS AGO, LAST TIME WE HAD THE WORKSHOP.
ARE THERE ANY QUESTIONS THAT YOU ALL HAVE, ANYTHING ELSE THAT YOU WOULD LIKE US TO, UH, THINK ABOUT FOCUSING ON FOR THIS, THIS MATCHING PROCESS THIS YEAR? I DON'T HAVE A QUESTION OR NECESSARILY ABOUT THE BUDGET PROCESS.
WHAT I WOULD LIKE TO SEE DONE IS THAT WHEN THE PRESENTATION IS MADE FOR THE BUDGET THAT WE HAVE, THE EXPLANATIONS THAT MS. KIM GAVE, IF WE COULD HAVE SOME OF THOSE INTEGRATED INTO OUR REPORT, YOU GAVE SOME VERY GOOD EXPLANATIONS ABOUT DIFFERENT ITEMS, UH, WHAT WE OWE.
YOU ALSO TALKED ABOUT THE BUDGET CALENDAR AND YOU OFFERED EXPLANATION.
[00:55:01]
SOME OF THE REPORTS, JUST PERSONALLY FOR ME, THAT YOU DON'T HAVE TO DO ALL THAT READING TO EXPLAIN IT.AND THAT AS WE VIEW THE BUDGET AND THE INFORMATION THAT'S PROVIDED, WE CAN READ ALONG WITH YOU.
YEAH, I, I'D LIKE TO SEE THAT INCLUDED IN WHAT YOU PRESENT, PLEASE.
AND LIKE I SAID, YOU'RE GONNA RECEIVE YOUR BUDGET BOOK SEVERAL WEEKS IN ADVANCE.
UH, WHEN WE GO OVER THAT, IF YOU HAVE QUESTIONS, ONCE YOU GET IT, PLEASE DON'T HESITATE TO REACH OUT TO MYSELF OR KIM.
WE'LL ANSWER ANY QUESTIONS YOU HAVE AS, AS WE WORK THROUGH THIS, THIS PROCESS.
UM, IT, IT'S ALWAYS A A, A TEDIOUS TIME GOING THROUGH THIS.
PUTTING $150 MILLION BUDGET, UH, TOGETHER IS, IT TAKES A LOT OF TIME, UH, AND A LOT OF ENERGY AND EFFORT FROM, FROM ALL OF THE DEPARTMENTS.
AND SO, UM, WE APPRECIATE YOUR, YOUR, YOUR PATIENCE AND SUPPORT AS WE GO THROUGH THAT.
OH, I HAVE A QUESTION FOR THE MERIT INCREASE, KIM, DO YOU HAVE THE DOLLAR AMOUNT THAT 2% WOULD BE AND THE 3% WOULD BE? I I DO NOT RIGHT NOW.
I'M NOT, I DIDN'T RUN ANY OF THESE NUMBERS AT THIS POINT.
WE'LL PROBABLY START SHOWING THAT, UM, IN THE, THE FEBRUARY MEETING.
I THINK WE COULD SHOW THAT TO GIVE YOU AN IDEA.
AND THEN JUST AS A RECAP, THESE WILL BE DUE AT THE RETREAT, NOT, THIS IS JUST GIVEN TO US FOR REFERENCE RIGHT NOW.
THAT, THAT, THAT'S FOR YOUR REFERENCE.
UH, WE, WE'D LOVE TO, UH, GET YOUR COMMENT.
YOU DON'T HAVE TO GIVE IT TO US RIGHT NOW, UM, BUT WE CAN GIVE YOU A COPY OF ANYTHING THAT YOU, THAT YOU FILLED OUT.
UH, ANYTHING ELSE YOU WANNA ADD ON THAT? YEAH, I THINK I WOULD HAVE TO SAY WE'D LIKE IT BEFORE THE RETREAT.
BECAUSE THAT HELPS US WITH, SO IF WE COULD GET THAT WITHIN THE NEXT WEEK OR TWO, WHAT, WHAT DO YOU GUYS FEEL IS REASONABLE TO GET THESE BACK TO THE, UH, STAFF? WHAT IS THE DATE OF THE RETREAT AGAIN, PLEASE? FEBRUARY 19TH.
AND YOU SAID A WEEK OR AT LEAST A WEEK OR TWO PRIOR TO THAT RETREAT? MM-HMM.
SO, UH, SO STAFF REQUESTS, WE GET THE, UH, BUDGET PLANNING WORKSHEETS BACK TO THEM BY THE JANUARY MEETING, AND IF YOU HAVE IT DONE SOONER, YOU CAN EMAIL.
BUT JUST TO GIVE US A DEADLINE, THAT'S HELPFUL.
UM, FOSTER, DO HAVE A QUESTION? YES.
SO, UM, ARE YOU, AM I AM UM, ARE YOU SAYING TO US HERE IN THIS PLANNING INPUT FOR THE PROJECTS FOR FIRE STATIONS, RIGHT? SO IF A LARGER FIRE STATION IS BUILT ON THE WEST END, THEN YOU WOULDN'T HAVE A NEED FOR THE ELIZABETH AVENUE FIRE STATION? NO.
THAT IS JUST SOMETHING THAT ONE OF THE ALDERMAN MADE A COMMENT ON.
WE'D HAVE TO ANALYZE ALL OF THAT.
SO WE, WE'VE NOT ANALYZED ANYTHING YET.
BUT THAT WAS JUST SOMETHING THAT EVERYTHING I READ WAS BASICALLY COMMENTS THAT EACH OF THE ALDERMAN BROUGHT UP.
SO WE WANTED TO JUST PROVIDE ALL THAT, THAT CONTEXT FOR EVERYONE.
AND KIM WILL ALSO EMAIL THIS OUT, SO IT MAY BE EASIER FOR YOU TO JUST, JUST LIKE THE SURVEY, THAT'S MOST LIKELY WHAT, WHAT YOU'LL BE ABLE TO FILL OUT AND SUBMIT THAT FORMAT.
ANY, ANY OTHER QUESTIONS SO FAR? OKAY, AT THIS TIME I'D LIKE TO ASK CHARLIE BA GOOD AFTERNOON, MAYOR PRO TEM PRINCETON AND BOARD OF ALDERMAN.
I'M GLAD TO HERE BE HERE BEFORE YOU.
UM, I'D LIKE TO TAKE A FEW MINUTES AND DISCUSS OUR POWER SUPPLY.
MADE A FEW NOTES TO, PRIMARILY FOR MY PURPOSE TO KEEP ME ON TRACK SO I DON'T WIND
[01:00:01]
UP DOWN SOME RABBIT HOLE TALKING ABOUT SOMETHING THAT'S IRRELEVANT OR NOT IMPORTANT.BUT I THOUGHT I'D JUST START OFF WITH A, A REVIEW BASIC UNDERSTANDING OF OUR PURCHASE POWER CONTRACTS FOR THOSE THAT, UH, MAY WANT TO REFRESHER ON IT.
ALL OF OUR POWER SUPPLY FOR THE MAJORITY OF IT IS BOUGHT THROUGH AN AGENCY CALLED THE NORTH CAROLINA EASTERN MUNICIPAL POWER AGENCY.
A LOT OF PEOPLE CALL IT N KEMBA.
THERE'S 31 AGENCIES IN EASTERN NORTH CAROLINA THAT PARTICIPATE IN THAT.
NEW BERN IS ONE OF, IT MAKES IT 32 COMMUNITIES AND EASTERN NORTH CAROLINA.
INSIDE NAMPA, THERE'S TWO CONTRACTS.
THE F-R-P-P-A, WHICH IS THE FULL REQUIREMENT PURCHASE POWER AGREEMENT, AND THAT'S A CONTRACT BETWEEN DUKE AND NAMPA, WHERE NAMPA BUYS POWER.
THERE'S ANOTHER CONTRACT CALLED THE N-F-R-P-S-A AND THAT'S THE FULL REQUIREMENT POWER SALES AGREEMENT.
AND THAT'S AN AGREEMENT BETWEEN THE KEA AND THE MEMBER AGENCIES.
SO AN AGREEMENT BETWEEN THE KEA AND NEW BERN ON WHAT THE TERMS OF OUR POWER COSTS ARE, UM, MANAGING THAT CONTRACT.
THERE'S NOBODY, THERE'S NO STAFF AT N KEMPO, IT'S JUST AN AGENCY IN THESE CONTRACTS.
THAT AGENCY IS MANAGED AND THE CONTRACTS ARE MANAGED AND ADMINISTERED BY ELECTRIC, BY STAFF AT ELECTRICITIES.
SO WHEN YOU HEAR, YOU TALK ABOUT ELECTRICITIES, IN THIS CASE, THEY'RE MANAGING THE CONTRACT ON BEHALF OF N KEMPO AND THEY'VE MANAGED BOTH THE F-R-P-S-A AND THE F-R-P-P-A.
THE, THE AMOUNT THAT IS PAID BY EACH OF THE AGENCY MEMBERS TO THE POWER AGENCY ARE, IS IT ALL THE SAME? NO, SIR, IT IS.
UM, IT'S AN ALLOCATION, UM, BASED ON THE AMOUNT OF ENERGY, THE SIZE OF UTILITY YOU ARE, PARTICULARLY IN KILOWATT HOURS.
AND THERE'S, IT'S BEEN UNDER, UM, SOME DEBATE LATELY THAT THOSE ALLOCATIONS WERE SET UP IN THE 1980S.
UM, AND NEW BERN IS NOT THE SAME SIZE.
ELIZABETH CITY'S NOT THE SAME SIZE TAR BOROUGH'S NOT THE SAME SIZE.
SO THERE'S BEEN A BIT OF A, OF A DISCUSSION, UM, OVER PROPER ALLOCATION.
THERE WAS SOME, SOME REALLOCATION DONE RECENTLY IN THAT LAST AGREEMENT THAT WE, I JUST BROUGHT YOU, UM, WHERE GENERATION WAS, WE GOT MORE GENERATION, WE WERE ABLE TO GET, UM, A GENERATION REALLOCATED, BUT IT'S A BLENDED ALLOCATION OF WHAT WAS DONE IN 1980S AND WHAT OUR, WHAT OUR SIZES ARE TODAY.
UM, AS YOU CAN IMAGINE, THERE'S A LOT OF COMMUNITIES THAT GOT SMALLER AND THEY DON'T WANT TO GIVE THINGS UP.
AND WE'VE GOTTEN BIGGER AND WE NEED MORE.
SO, UM, IT MAKES FOR A VERY INTERESTING CONVERSATION AND, AND A TOUGH, UH, CONTRACT TO NEGOTIATE.
DOES THAT ANSWER YOUR QUESTION? I, I THINK SO.
UM, SO THE LARGER THE AGENCY, THE CHEAPER THEY'RE, THEY PURCHASE ELECTRIC FROM, IS THAT CORRECT? NO, THE RATE, I'LL GET INTO SOME OF THIS IN A MINUTE, BUT THE COST OF THE COST OF CAPACITY AND THE COST OF ENERGY, THE RATE THAT THEY CHARGE IS THE SAME REGARDLESS OF YOUR SIZE.
WHEN YOU GET INTO SOME OTHER THINGS, UM, AL ALLOCATION OF GENERATION OF BENEFITS, UM, THEN IT'S BASED ON THE LARGER COMMUNITIES PAY A LARGER SHARE IN THE SMALLER COMMUNITIES.
YOU SAID THAT THERE'S BEEN CONVERSATIONS THAT ARE, WELL CONVERSATIONS ARE TAKING PLACE NOW.
ARE YOU THE ONE AT THE TABLE THAT'S ADVOCATING FOR THE CITY OF NEW BERN OR YES, MA'AM.
SO INSIDE THIS CONTRACT, THERE ARE RATES AND THERE'S RIDERS, UM, AND RATES EXIST AND RIDERS EXIST BOTH IN THE F-R-P-P-A, IN THE F-R-P-S-A AND RATES ARE INTENDED AND IN DESIGNED TO RECOVER THE COST OF PROVIDING THE SERVICE RIDERS ARE INTENDED AND DESIGNED TO BALANCE THE COST OF SERVICE THAT MAY NOT HAVE BEEN RECOVERED THROUGH RATE DESIGN.
DOES THAT MAKE ANY SENSE? SO FOR EXAMPLE, PLUS OR MINUS THE VARIABLE COST OF FUEL, PLUS OR MINUS THE VARIABLE COST OF SHIPPING, I BUY SOMETHING, UM, FROM A SERVICE PROVIDER TODAY, THEY DELIVERED A YEAR FROM NOW, PLUS OR MINUS THOSE SHIPPING CHARGES, TRANSPORTATION COSTS, THOSE ARE RIDERS.
AND THERE'S A DISTINCT DIFFERENCE
[01:05:01]
BETWEEN RIDERS AND RATES.AND I WANT TO, WE'RE GONNA GET INTO THIS IN A LITTLE MORE DETAIL, BUT I WANTED YOU TO UNDERSTAND THAT WHEN I SPEAK UP, RIDERS AND RATES ARE TWO DIFFERENT THINGS SO FAR, SO GOOD.
UM, SO DIVING INTO RIDERS A LITTLE BIT MORE IN THIS CONTRACT, BOTH IN THE F-R-P-S-A AND THE F-R-P-P-A RIDER NUMBER ONE AND RIDER NUMBER EIGHT.
RIDER NUMBER ONE IS A POWER SUPPLY ADJUSTMENT.
UM, COST, WE CALL IT A TRUE UP AND IT'S AN ANNUAL TRUE UP AND IT PASSES ANNUAL EXCESS POWER SUPPLIES, COST OR CREDITS ONTO AGENCY MEMBERS.
UM, AND AGENCY MEMBERS MAY VOTE TO APPROVE, SUSPEND, MODIFY, REINSTATE RIDER ONE.
SO IF RIDER ONE IS APPROVED, THE TRUEUP IS ALLOCATED TO THE AGENCY MEMBER, THE TRUEUP IS ALLOCATED TO NEWBURN EITHER AS A CREDIT OR A DE DEBIT.
IF RIDER ONE IS SUSPENDED, THEN THE TRUEUP IS EITHER CREDITED OR DEBITED TO NMPA.
AND NMPA HAS WORKING CAPITAL SO THEY CAN PAY BILLS JUST LIKE WE PAY BILLS HISTORICALLY, ONE HAS BEEN SUSPENDED FIVE TIMES IN THE EIGHT YEARS OF THIS CONTRACT.
HISTORICALLY THE LARGEST CREDIT, THE LARGEST TRUEUP CREDIT HAS BEEN $9 MILLION.
HISTORICALLY, THE LARGEST DEBT OF CREDIT HAS BEEN $1.6 MILLION.
UM, CHARLIE, IS THAT FOR THE CITY OR, OR, OR THAT'S THE ENTIRE FOR THE AGENCY ON AN ANNUAL BASIS OF THAT POWER SUPPLY COST ADJUSTMENT.
SO AT THE END OF THE YEAR AFTER ALL THE POWER SUPPLY COSTS WERE, WERE PURCHASED BY EMPA, THERE WAS EITHER A CREDIT A MILLION, $9 MILLION IN THE MOST, OR THERE WAS A, A DEBT DUE, A SHORTFALL OF $1.6 MILLION AND FIVE OF THE EIGHT YEARS THAT WAS, UM, ABSORBED BY NICK KETO.
RIDER NUMBER EIGHT IS A DIFFERENT TYPE OF RIDER.
AND THAT ACCOUNTS FOR OUR DEBT OBLIGATION THAT WE INCURRED WHEN WE ENTERED INTO THIS CONTRACT.
AND THAT GOES BACK TO THE HISTORICAL SALE OF SOME ASSETS AND SETTLEMENT OF THIS, THIS CONTRACT AGREEMENT, NEW BERN'S OBLIGATION IS, IS APPROXIMATELY $285,000 A MONTH, ABOUT $3.4 MILLION ANNUALLY.
AND THAT COMES TO END DETERMINE IN JULY OF 2025.
THAT DEBT SERVICE OBLIGATIONS ENDS FOR NEW BERN AS WELL AS NPA.
AND CHARLIE, HOW LONG HAS THAT BEEN? IS THAT 10 YEAR, 15 YEAR, 30 YEARS.
I GOT CARRIED AWAY TALKING TO YOU FOLKS.
I ASKED YOU THIS ONCE BEFORE I THINK, BUT CAN THAT DEBT BE PAID OFF EARLY? YES, IT CAN.
THERE'S A, IT IT'S NOT FINANCIALLY THERE'S A LOT OF LEGAL FEES YOU'LL PAY UP FRONT THAT I DON'T SEE ANY COST BENEFIT IN IT, BUT YES, IT TECHNICALLY IT CAN BE.
AND B OKAY, RIDER ONE, THAT'S THAT ANNUAL POWER COST DREW UP AND THAT, AND I WANT TO TALK ABOUT TRUE UP FOR 2022.
THIS IS POWER THAT WAS PURCHASED BY THE AGENCY, CONSUMED BY NEW BERN, BOUGHT BY NEW BERN IN 2022.
NA KEMBA PAID $53 MILLION IN A TROOP FOR POWER SUPPLY COSTS IN 2022.
UM, LARGELY DUE TO HIGHER CAPACITY AND ENERGY COSTS, WHICH WERE DRIVEN BY FUEL PRICING.
SEPTEMBER OF 2023, AGENCY MEMBERS VOTED TO APPROVE IN MODIFY RIDER NUMBER ONE.
SO THEY PROVE RIDER ONE, NUMBER ONE MEANS THEY'RE PASSING $53 MILLION ON TO ALL THE MEMBERS.
HOW DID, HOW DID THE CITY VOTE FOR THAT? I VOTED NO.
I DON'T KNOW IF EVERYBODY WAS IN ATTENDANCE.
I DON'T HAVE THE TAL IN FRONT OF ME, BUT I, I PROPOSED A DIFFERENT SOLUTION.
[01:10:01]
WITHOUT, UH, DID THEY ABSORB IT? YES, I WANTED 'EM TO ABSORB IT ALL.UM, BUT THAT FELL SHORT OF SUPPORT.
AND THEN THEY APPROVED THIS, WHEN THEY APPROVED IT, THEY MODIFIED IT.
SO IT ALL SHOULD HAVE COME DUE OCTOBER OF 2023.
SO IT'LL COME DUE APRIL 1ST, 2024, WHERE THE MEMBERS HAVE TO PAY THIS $53 MILLION BACK OF THEIR SHARE, AND THEY'RE GONNA SPREAD THAT PAYMENT OVER 24 MONTHS.
WE'RE A COUPLE MONTHS INTO THE NEW YEAR.
ELECTRICITY'S STAFF NOTIFIED US MPA THAT THERE'S POTENTIALLY ANOTHER $53 MILLION TRO UPCOMING FOR 2023.
UM, THEY HAD PROMISED TO GIVE EMPA MYSELF A UPDATE ON THAT IN JANUARY OF 2024.
IF THAT'S TRUE, JULY OF 2024 N KEMPO WILL POTENTIALLY HAVE TO PAY THAT TRUE UP TO DUKE, AND THEN WE'D BE BACK TO OCTOBER OF 2024, POTENTIALLY LOOKING AT ANOTHER $53 MILLION DECISION BY THE AGENCY.
AND SO THIS 53 MILLION, AGAIN, WITH 31 PARTICIPANTS IS, YOU SAID, ADDRESSED ACCORDING TO THE SIZE OR THE AMOUNT OF POWER THAT'S USED.
I, I'M ASSUME HERE SHORTLY, YOU'RE GONNA TELL US WHAT OUR, I FIGURED I WAS COMING VERY SOON HERE.
WHAT OUR SHERIFF'S GONNA BE, ARE WE, WE, OKAY SO FAR, OTHER THAN THE SHOCK, I JUST GOT ANOTHER QUESTION AND IT'S, IT IS BACK TO MY FIRST QUESTION FOR YOU.
IF, WHEN WE GET OUT OF OUR, OF THIS OBLIGATION THAT WE HAVE THE DEBT, DO WE STILL BUY POWER FROM ELECTRICITIES OR WOULD WE NEGOTIATE DIRECTLY? NO.
UM, WE, WHEN OUR DEBT SERVICES IS UP, WE WILL STILL BE PART OF THE CONTRACT.
THE FIRST EARLY OUT ON THE CONTRACT HAS TO BE NOTIFIED.
THIS MONTH, ELECTRIC CITIES IS PLANNING TO GIVE DUKE NOTICE THAT THEY WANT TO CONTINUE TO PARTICIPATE.
I ASKED THE QUESTION LAST WEEK, CAN ONE MEMBER OPT OUT OR DOES IT HAVE TO BE THE ENTIRE AGENCY OPT OUT? AND I WAS GIVEN THE ANSWER, THE ENTIRE AGENCY HAS TO OPT OUT.
SO I'VE BEEN TOLD NEW BERN CAN'T OPT OUT ON ITS OWN.
IT DOESN'T, I DON'T THINK I CLEARLY UNDERSTAND THAT ANSWER.
I DON'T THINK I'M SETTLED WITH THAT, THAT ANSWER.
UM, I THINK I NEED TO LOOK AT OUR OPTIONS.
SO THE ENTIRE DEBT BY, UH, THE POWER AGENCY MEMBERS IS DUE AT THE SAME TIME.
AND PAID UP ON THE SAME DAY? YES, SIR.
WHICH AT THE SAME TIME WOULD REDUCE AN ACCOUNTA, UM, MONTHLY WORKING CAPITAL OR UP, YOU KNOW, MONTHLY EXPENSES.
WE THEY'RE PASSING THROUGH THAT DEBT SERVICE, SO THEY WOULD NEED THAT MUCH LESS PER MONTH, ONE WOULD THINK.
SO THIS SLIDE, WHAT I'VE DONE IS I'VE TRIED TO, UH, INTERPRET ELECTRICITY'S DATA, THE PRESENTATION MATERIAL AND PUT IT INTO SOME SORT OF A, A, A SLIDE THAT, THAT I MIGHT BE ABLE TO SPEAK TO AND LEAD YOU THROUGH.
BUT BASICALLY TALKING ABOUT THE YELLOW HIGHLIGHTED AREAS COMING AT US IN 2024.
APRIL OF 2024 IS THE RIDER 1 20 22 POWER SUPPLY COST ADJUSTMENTS, WHICH IS EQUIVALENT TO ABOUT A 4.2% RATE INCREASE.
IT'S NOT A RATE INCREASE, IT'S A WRITER AND THAT'S EQUAL TO $3 MILLION.
BUT THEY OPTED TO DO THAT OVER TWO, OVER 24 MONTHS.
SO I'M SHOWING THE FIRST YEAR DUE IN APRIL OF 2024, $15 MILLION OR $1.5 MILLION THE SAME TIME.
THEY'RE FORECASTING A 3% RATE INCREASE EFFECTIVE APRIL 1ST, 2024, WHICH EQUATES TO ABOUT $1.1 MILLION.
AND THEN IN OCTOBER, AS I MENTIONED, OF 2024, WE STILL HAVE TO FIND OUT WHAT THE TRUE UP ON THE RIDER FOR 2023 POWER SUPPLY COSTS ARE.
THAT'S BE TO BE DETERMINED VERBALLY.
[01:15:01]
IN OCTOBER, IT'S ABOUT THIS, IT IS CLOSE TO ANOTHER $53 MILLION.WHAT THEY WERE SEEING BASED ON FUEL PRICE 2025 AND THEN, AND THEN APRIL, 2025.
WE GOTTA PAY THIS THE NEXT YEAR OF THAT FIRST RIDER.
SO THIS TABLE DOESN'T, I DON'T COMPOUND THE, THE RIDER FROM 2023, I JUST DON'T KNOW.
I DON'T HAVE THAT INFORMATION.
AND THEN, SO GOOD NEWS, 2025, THEY'RE NOT FORECASTING ANY RE RATE ADJUSTMENTS, BUT IN 20 JULY OF 2025, RIDER NUMBER EIGHT COMES OFF AND THAT'S AN EQUI ABOUT EQUIVALENT TO 8.7% RATE COST DECREASE.
TO US IT'S ABOUT 3.3, $3.4 MILLION.
UM, THAT COMES OFF, I'VE BEEN TRYING ALL ALONG TO GET US TO JULY OF 2025, UH, KNOWING THAT THAT COMES OFF AND THAT DUE TO INFLATIONARY MEASURES THAT WOULD EASILY BE ABSORBED IN OPERATING EXPENSES AS FOLKS ARE SEEING.
UM, BUT I'M STRUGGLING TO GET THERE.
UM, SO AT THE END OF THE DAY, I BROKE IT DOWN, YOU KNOW, INTO, YOU KNOW, FIVE YEAR FORECAST OVER THE NEXT FIVE YEARS.
UM, IT'S ABOUT 6.7% RATE INCREASE, $2.5 MILLION TOTAL COST ADJUSTMENT.
BUT THE REAL PRESSURE IS, IS IMMEDIATE.
IT'S, IT'S THIS APRIL, IT'S NEXT YEAR TO GET US TO JULY COMPUTER.
AM I TRYING INTERRUPT
SO CHARLIE, WHAT YOU JUST SAID, YOU'RE SAYING THAT FROM APRIL OF 2024 TO APRIL, 2025, YOU'RE TRYING TO GET US THERE.
YOU'RE SAYING YOU'RE NEEDING WHAT, THREE POINT SOMETHING MILLION DOLLARS? IS THAT WHAT YOU'RE SAYING? YES MA'AM.
UM, NOW THROUGH APRIL, 2024, I THINK WE SHOULD BE CONSIDERING POTENTIAL COSTS.
THESE POTENTIAL COST INCREASE IN RETAIL RATE ADJUSTMENTS.
THAT'S THE OBVIOUS THING TO DO.
UM, CONSIDER, UM, AS OUR FINANCE DIRECTOR MENTIONED, YOU KNOW, FIVE, 10 YEAR OPERATING EXPENSES OR CAPITAL NEEDS, INFLATIONARY PRESSURES HAVE A LONG-TERM PLAN, HAVE A, HAVE A FORECAST, HAVE A RATE PATH.
UM, I THINK THAT'S THE HEALTHY APPROACH.
UM, AND ALSO INCLUDE IN THOSE THOUGHTS ARE THE THINGS THAT I JUST MENTIONED IS IN SUMMARY, APRIL FOUR, FIRST OF 2024, RIDER NUMBER ONE FROM 2022, WHICH IS $1.5 MILLION FOR THE NEXT TWO YEARS.
APRIL 1ST, 2024, A 3% RATE INCREASE, WHICH ADDS ON ANOTHER $1.3 MILLION, POTENTIALLY ANOTHER $3 MILLION RIDER INCREASE IN 2023.
BEEN HEARING ME TALK ABOUT A SUBSTATION ELECTRIC CAPACITY SYSTEM IMPROVEMENT PROJECT.
OUR GENERATION FLEET IS AGING.
THERE IS PAYBACK WITH THE GENERATION.
UM, IT'S ABOUT A FIVE YEAR PAYBACK.
AND IT, AND ONCE WE PAY IT BACK, IT'S ABOUT $4 MILLION COST AVOIDANCE, UM, AFTER THAT.
SO IT'S A REALLY GOOD, GOOD INVESTMENT, BUT WE NEED, WE NEED TO HAVE THE CASH TO DO THAT, OR WE NEED TO HAVE THE, THE CAPACITY TO TAKE ON THAT DEBT SERVICE.
SO TO OUR FINANCE DIRECTORS TO POINT THAT FIVE, 10 YEAR FORECAST PLANNING OF HOW MUCH DO WE NEED TODAY? HOW MUCH DO WE NEED TOMORROW? I DON'T KNOW.
HOW MUCH DO WE NEED NEXT YEAR? HOW MUCH DO WE NEED NEXT YEAR? UM, I THINK THAT'S REALLY THE APPROACH.
SO CHARLES, GIVE GIVE AN IDEA.
UM, WHAT'S THAT MONTHLY THAT, UH, ONE POINT OR 125,000? YOU'RE ASKING ME TO DO MATH IN MY HEAD?
SO WE, IT, UH, WE DON'T HAVE IT IN THE OPERATING.
WE DON'T HAVE IT IN OUR BUDGET RIGHT NOW.
[01:20:01]
OPTION IS RAISE RATES.THAT'S THE MOST OBVIOUS AND THAT'S PROBABLY THE MOST HEALTHIEST APPROACH.
THERE'S OTHER THINGS, UM, WE COULD TALK ABOUT.
UM, THE, BUT BEFORE WE DO, ALSO COMING UP IN JANUARY 24, UM, THE MPA RATE COMMITTEE'S GONNA GET TOGETHER AND I'M GONNA PETITION THEM ONCE AGAIN TO SUSPEND, UM, RIDER NUMBER ONE AND HAVE NMPA ABSORB IT.
I DON'T KNOW IF I'LL BE SUCCESSFUL OR NOT.
BUT THE RATE COMMITTEE WILL ALSO CONSIDER THE 2023 RIDER.
WE SHOULD HAVE UPDATES FOR POWER SUPPLY COSTS BETWEEN JULY AND DECEMBER, OR ACTUALLY FOR THE WHOLE YEAR.
WE SHOULD HAVE A PRETTY GOOD IDEA BY THEN.
WE'LL, THEY ALSO REVIEW THE CAMPUS WORKING CAPITAL AND HOW MUCH THEY HAVE TODAY.
UM, AND THEN AT THE SAME TIME WE'LL RECEIVE DUKE'S RATES THAT THEY'RE GONNA CHARGE US FOR 2024.
UM, AND THEN THE RATE COMMITTEE WILL, THEY'LL CONSIDER THOSE, THAT INFORMATION, THEY'LL MAKE A RECOMMENDATION.
THEN LATER IN THE MONTH, THEN THE KEMP BOARD TO BOARD OF COMMISSIONERS WILL GET BACK TOGETHER AGAIN AND, UM, THEY'LL CONSIDER THE RATE COMMITTEE'S RECOMMENDATION AND THEN THEY'LL ADOPT, UH, THE RATES FOR 2024.
IN YOUR, UM, CAREER HERE, HOW MANY TRUE UPS HAVE WE GONE THROUGH? THERE'S ONE EVERY YEAR.
I'VE BEEN HERE, UH, FIVE YEARS.
SO THERE'S THIS, THIS HAPPENS ANNUALLY.
I CAN LOOK LIKE I, I MENTIONED BEFORE THE LARGEST TRUE UP DEBT TRUE UP THAT WAS EVER THAT EVER OCCURRED WAS $1.6 MILLION.
SOUNDS LIKE SOME MISMANAGEMENT TO ME.
WAIT, THEY'RE NOT ONLY WAY OFF ONE YEAR.
IS THAT SOUNDS LIKE MISMANAGEMENT TO ME OR SOME BAD MANAGEMENT.
THEY'RE, THEY'RE BLAMING DUKE.
UM, THAT'S WHO I'D BE BLAMING TOO.
OF COURSE, I BLAME THEM IF THEY BLAME DUKE.
UM, YOU KNOW, SO THEY'RE SAYING IT'S BECAUSE OF ENERGY COSTS AND FUEL PRICE COSTS, RIGHT? FUEL HAS GONE UP.
UM, THERE, THERE'S SOME ASH HANDLING, THERE'S SOME OTHER THINGS IN THERE.
FUEL IS THE, IS THE DRIVING COMPONENT BETWEEN ENERGY AND CAPACITY.
UM, YOU KNOW, OVERALL I THINK THE, THE CONTRACTS ARE PERFORMING WELL.
WHEN I COMPARE THOSE CONTRACTS TO THE COST OF ENERGY TO THE COST OF CAPACITY, THEY'RE DOING VERY WELL.
IT'S HARD TO COMPETE AGAINST THOSE.
UM, WHAT I QUESTION IS THE ADMINISTRATION MANAGEMENT COST CONTROL, UM, AND AN OPPORTUNITY TO DO COST CUTTING ASSOCIATED WITH THE MANAGEMENT OF THOSE CONTRACTS.
UM, THIS IS A, I WOULD'VE PREFERRED, I THINK COMMUNITIES WOULD'VE PREFERRED TO HAVE A HIGHER, MORE BALANCED RATE SET THE EARLIER AND BE BUDGETED ON THAT THAN BE HIT WITH A, IN OUR CASE, A $3 MILLION ANNUAL TRUEUP.
THE, UM, ONE THING WE'RE LACKING HERE, MAYBE, I DON'T KNOW IF WE'RE LACKING OR NOT.
THE ONE THING THAT WE'RE WE DON'T HAVE HERE IS SOME COMMUNITIES PUT THESE RIDERS DIRECTLY INTO THEIR RETAIL RATES.
UM, I'VE DONE THAT BEFORE IN OTHER COMMUNITIES IN THE PAST.
ALWAYS COMES WITH SOME CRITICISM.
NOBODY, UH, PARTICULARLY, YEAH, I DON'T THINK IT, I THINK EITHER IN INDUSTRIAL, COMMERCIAL, RESIDENTIAL MARKET, IT DOESN'T REALLY MATTER.
NOBODY LIKES IT TO BE DONE ANNUALLY, ONCE A YEAR, GET THIS BOOM TRUE UP ON YOUR BILL AND YOUR BUDGET IS BLOWN BECAUSE YOU DIDN'T KNOW IF IT'S GONNA BE A CREDIT OR DEBIT.
DEBIT BECAUSE FUEL PRICES WENT UP AND DOWN.
UM, I'VE DONE IT MORE SUCCESSFULLY ON A MONTHLY BASIS WHERE, UM, THERE'S A POWER SUPPLY ADJUSTMENT CHARGE THAT'S FACTORED IN ON THE RETAIL SIDE AND EVERY MONTH IT EITHER GET A CREDIT OR A DEBIT AND IT, AND IT LEVELS OFF.
[01:25:01]
IT'S TOLERABLE.STILL IRRITATING TO CUSTOMERS STILL.
WE STILL HAVE TO ANSWER QUESTIONS ABOUT IT.
STILL ANNOYING, STILL COSTS REAL MONEY.
UM, BUT IT IS A WAY TO PASS THROUGH, UM, DIRECTLY WITHOUT RUNNING THE RISK OF OVER OR UNDERCHARGING ON THE RATES.
UM, THE TRICK TO THAT IS IF I CAN GET ELECTRICITIES NE KEMBA TO GIVE ME A MONTHLY TRIP UP, OTHERWISE I'M TRYING TO TRUE UP LAST YEAR'S ENERGY WITH LAST YEAR'S CONS PURCHASES WITH SOMEBODY THAT MAY NOT EVEN BE USING ELECTRICITY IN THAT FACILITY TODAY,
AND THEN I HIT 'EM WITH A FUEL ADJUSTMENTS CHARGE FOR ENERGY THAT WAS CONSUMED TWO YEARS AGO.
SO ONE OF THE THINGS I'VE BEEN, I'VE BEEN, UM, FOCUSING ON WITH ELECTRICITIES AND MPA IS EVEN IF, EVEN IF WE DON'T PASS IT ON, CAN WE GET TO A PLACE WHERE I GET A, I KNOW WHAT'S HAPPENING ON A MONTHLY BASIS, PLUS OR MINUS ON THE, ON THESE FUEL ADJUSTMENT CHARGES.
AND THEN THE LOCAL COMMUNITIES, WE CAN MAKE OUR OWN DECISION HERE.
WE CAN DO WHAT'S RIGHT FOR NEWBURGH.
UM, SO THAT'S ONE OF THE THINGS.
UH, WE CAN OBVIOUSLY, UM, YOU KNOW, GO WITH THE RETAIL RATE ADJUSTMENTS.
WE CAN TAKE A BROAD BRUSH APPROACH AND, YOU KNOW, I CAN CALCULATE PRETTY, PRETTY QUICKLY ON, YOU KNOW, HOW MUCH PER CUSTOMER DO I NEED TO COLLECT PER BILL TO MEET THIS OBLIGATION OF THESE, YOU KNOW, $4 MILLION, UM, CALL IT A FLAT RATE INCREASE.
I COULD ADD IT TO ENERGY OR I COULD ADD IT CAPACITY, COULD PUT IT RIGHT ON THE BASIC CUSTOMER SERVICE CHARGE.
OR IT COULD TAKE A MORE DETAILED APPROACH, DIVE IN AND REALLY LOOK AT THE COST OF SERVICE TO, FOR EACH RATE CLASS.
UM, AT THE END OF THE DAY, THEY BOTH SHOULD GET YOU TO THE REVENUE THAT YOU NEED TO COLLECT, UM, DEPENDING ON WHAT APPROACH YOU WANT TO WANT TO TAKE.
UM, SO YOU WOULD JUST DO A MONTHLY FUEL CHARGE ON ALL ACCOUNTS? WE'D HAVE TO, I'D HAVE TO COME BACK TO YOU.
I'D HAVE TO DESIGN SOMETHING, COME BACK TO YOU, PUT IT ON THE BILL ON THE RATES, AND THEN HAVE A WAY TO, TO ACCOUNT FOR THAT.
TO MEASURE IT, COUNT FOR IT, AND THEN PASS IT ON.
AND MOST LIKE, I'M SORRY, GO AHEAD.
AND MOST LIKELY IT WOULD COME DOWN TO PER KILOWATT HOURS.
SO IF I USE 900 KILOWATT HOURS THIS MONTH, IT'S A HALF A CENT CREDIT NEXT MONTH.
IT'S A ONE AND A HALF CENT ADDER, HOWEVER THE FUEL COSTS MOVE.
BUT THAT WOULD HAVE TO BE DRIVEN.
I'D HAVE TO GET THAT DATA OFF FROM ELECTRICITIES ON A MONTHLY BASIS.
DO THEY OFFER THAT? THEY'RE NOT OFFERING IT TO ME NOW, AND I'M, I'M, I HAVEN'T GIVEN UP ON IT.
IT WON'T, IT, WE'D STILL BE REALLY DIFFICULT TO FIX THIS AMOUNT TO GO BACK AND COLLECT THAT IN THE ARREARS FROM FOLKS.
YOU KNOW, SOMEBODY, I JUST MOVED INTO THIS HOUSE, I DIDN'T USE THAT ENERGY.
AND NOW I GOT THIS FUEL ADJUSTMENT CHARGE FOR SOMEBODY THAT WAS LIVING THERE FOR BEFORE ME.
AND THAT'S SOMETHING THAT WE ENCOUNTERED YEARS BACK, UM, WITH CUSTOMERS.
NOT SINCE YOU'VE BEEN HERE, BUT BEFORE THAT.
BEFORE YOU, YOU KNOW, IT, IT'S, IT'S KIND OF, UM, PART OF OUR INDUSTRY, MY INDUSTRY, UM, THE, THE SERVICE THAT WE PROVIDE, I UNDERSTAND IT, I GET IT BECAUSE I'VE BEEN DOING IT ALL MY LIFE.
BUT WE, WE, WE BUY POWER TODAY.
WE CHARGE FOR IT A MONTH FROM NOW.
AND IT GETS REALLY HARD TO LINE THINGS UP.
JUST LIKE YOU WERE FOLKS WERE TALKING ABOUT EARLIER.
YOU KNOW, ONE OF THESE REVENUES COMING IN FROM THIS AND IT GETS, IT GETS TOUGH TO BALANCE SO THAT YOU GOTTA FACTOR THAT INTO YOUR RATE DESIGN.
UM, YOU KNOW, HOW MUCH WORKING CAPITAL DO WE WANT? DO WE NEED TO BUILD WORKING CAPITAL? HOW MUCH, WHAT ARE OUR CAPITAL PROJECTS THAT WE HAVE COMING? WE CAN TAKE A REALLY CLOSE, I CAN TAKE A REALLY DETAILED LOOK AT IT.
I CAN GET A PRETTY BROAD BRUSH RAISE RATES ACROSS THE BOARD THIS AMOUNT AND WE'RE GOOD FOR TODAY,
BUT I'D PREFER TO GET US ON A RATE PATH SO THAT IT'S NOT THE SAME CONVERSATION EVERY YEAR.
[01:30:01]
I THINK, I THINK A LOT OF COMMUNITIES HAVE GOTTEN INTO THE HABIT OF, UM, BEING PREPARED FOR SINGLE DIGIT INCREASES ON A REGULAR BASIS RATHER THAN DOUBLE DIGIT INCREASES OVER A LONGER PERIOD OF TIME.AND IT, IF YOU FORECAST, IF YOU'RE FORECASTING PROPERLY, HOW MUCH REVENUES YOU NEED TO COLLECT, YOU CAN THEN DESIGN MORE FAVORABLE RATES AND TRY TO NOT OVERSHOOT OR UNDERSHOOT, UH, YOUR COST OF SERVICE.
AM I MAKING ANY SENSE? YES, YOU ARE.
I GUESS TO, TO GET TO SOME OF THE NEXT STEPS.
UM, SO ESSENTIALLY WHAT YOU'RE TELLING US, YOU HAVE 1.5 MILLION DUE ON APRIL 1ST, 2024.
SPREAD OUT OVER, SPREAD OUT OVER, I HAVE 3 MILLION DUE APRIL 1ST SPREAD OVER 24 MONTHS.
BUT ANNUALLY OR MONTHLY SPREAD? UH, 3 MILLION ANNUAL, 3 MILLION TOTAL SPREAD OVER 24 MONTHS.
1.5 MILLION SPREAD OVER 12 MONTHS.
AM I MAKING ANY SENSE? YES, YOU ARE.
I, I WAS, UH, I I HEARD A COUPLE OF TIMES ANNUAL AND THEN A COUPLE TIMES MONTHLY.
SO I WAS JUST TRYING MAKE SURE.
SO, UH, SO STARTING APRIL 1ST, YES, WE'RE GOING TO PAY THE 3 MILLION OVER THE TWO YEARS, WHICH ACCORDING TO THIS, IF WE DECIDE, UH, AT A FUTURE DATE, IT'S ABOUT A 3% RATE INCREASE ISH IF WE, IF WE CHOOSE THAT ROUTE.
NO, THAT 3% WILL BE MANDATED ON OUR POWER SUPPLY COSTS.
SO THAT'S GONNA HAPPEN ANYWAY.
THAT'S THE FORECAST THAT I'VE MOST RECENTLY RECEIVED.
WE'RE GETTING BACK TOGETHER IN JANUARY.
UM, I I WILL, THAT'S THE GRAD IN, UH, THE, THE DUKE RATE INCREASE THROUGH NEW KEMBA, IS THAT WHAT YOU'RE SAYING? OKAY.
THAT'S WHAT THEY WERE ANTICIPATING BACK IN OCTOBER.
WE'LL, THEY SHOULD ACTUALLY BE GETTING DUKE'S RATES RIGHT ABOUT NOW BY THE TIME THEY GET 'EM AND GET THE BOARD TOGETHER IN JANUARY, THEN WE'LL GET THAT INFORMATION.
SO, OKAY, SO GETTING BACK TO WHAT WE'RE TRYING TO FIGURE OUT.
SO WE WILL PROBABLY END UP WITH A 3% RATE INCREASE APRIL 1ST, AND THEN WE STILL HAVE TO FIGURE OUT HOW TO END UP PAYING FOR THE RIDER.
ONE DREW UP FOR 2022 AND THEN THE RIDER DREW UP FOR 2023, WHICH HADN'T BEEN DETERMINED YET.
SO, UM, SO I GET ALL OF THOSE COSTS.
I GUESS THE QUESTION THAT I POSED TO YOU IS, WHAT ARE YOU LOOKING FOR FROM THE BOARD TODAY? IS THIS JUST INFORMATION JU JUST INFORMATION.
SO CHARLIE'S GOING BE, UM, COMING BACK TO THE BOARD PROBABLY JAN AT SOME POINT IN JANUARY OR EARLY FEBRUARY, UH, WITH SOME RECOMMENDATIONS FOR THE BOARD TO REVIEW.
I DIDN'T WANNA STAND BEFORE I TRIED TO PUT MYSELF IN YOUR SHOES TO SOME EXTENT, AND I WOULDN'T WANT TO BE HERE APRIL 1ST AND ME TO GET TELLING YOU THIS AND ASKING YOU TO MAKE A DECISION ON IT.
I THINK WE ALL HAVE TIME TO THINK ABOUT IT.
UM, I STILL HAVE SOME MORE WORK TO DO WITH EMPA IN JANUARY.
UM, HOPEFULLY I'LL BE SUCCESSFUL.
DOES THIS RATE INCREASE HAVE TO BE APPROVED BY THE REGULATORY COMMISSION? IS IT CALLED FRAC? IS THAT WHAT NO, THE, THE WAY IT'LL GO IS THE RATE COMMITTEE, WHICH IS THE KEA MEMBERS I SERVE ON THE RATE COMMITTEE.
THEY'LL MAKE A RECOMMENDATION IN JANUARY AND THE KEA BOARDED COMMISSIONERS, WHICH I'M A COMMISSIONER, THEY'LL VOTE ON THE R COMMITTEE'S RECOMMENDATION AND THEN THE EMPAS BOARD OF COMMISSIONERS VOTE WILL GO TO THE ELECTRICITY'S BOARD OF DIRECTORS AND THEN THEY'LL MAKE THE FINAL VOTE.
THERE IS AN OPPORTUNITY TO, UM, UH, WE GENERALLY GET NOTICE WHEN THE RATES ARE CHANGED AND THERE'S A, I FORGET THE LEGAL TERM, BUT THERE'S A OPPORTUNITY TO, UH, OPPOSE.
UH, SO IT BECOMES A, THE, IT'S A LEGAL ANNOUNCEMENT OF WHAT THE RATES ARE CHANGING TO, AND THEN WE HAVE AN OPPORTUNITY TO, TO SPEAK ON THAT IF WE WANT TO.
WE'VE ALWAYS BEEN SILENT IN THE PAST THAT WHO DO YOU SPEAK TO? I MEAN, IF, IF DUKE ENERGY IS SAYING WE'RE GONNA RAISE THE RATES 3% AND WE, AND THE AGENCY SAYS, OH NO, YOU'RE NOT, YOU KNOW, WE VOTE AGAINST THAT.
[01:35:01]
MEMBER AGENCY ORGANIZATION.SO, UM, I THINK WE ALL HAVE A VOICE, UM, PARTICULARLY WITH OTHER COMMUNITIES.
UM, QUITE FRANKLY, I I, I'M PUZZLED BY THE VOTE WENT THIS WAY.
UM, I, I WOULD'VE, I WAS SURPRISED THAT THE OTHER COMMUNITIES ARE NOT SO JOHN OPPOSED TO IT.
AND THAT COULD ALL CHANGE BETWEEN NOW AND JANUARY BECAUSE I'VE BEEN, I'VE BEEN VOCAL ABOUT IT.
SO CHARLIE, APRIL OF 2024, WE ARE GONNA HAVE TO PAY THAT 1.5 MILLION ALL IN ONE LUMP SUM OR THEY CAN LET, WE CAN DO IT MONTHLY UNTIL THE NEXT PAYMENT IS DUE APRIL OF 2025.
IN THE MEANTIME, WE GET, MAY GET ANOTHER ONE IN OCTOBER OF 2024.
SO THAT'S WHERE I, I WAS GONNA WAIT AND SUMMARIZE.
SO, YOU KNOW, FOR THE PUBLIC, WHAT I'M HEARING IS WE MOST LIKELY WILL GET A 3% INCREASE IN RATES ON OUR COST.
AND THAT'S WHAT I'M SAYING ON OUR COSTS, WHICH WILL MOST LIKELY BE DEPENDING ON THE BOARD'S VOTE OF PASS THROUGH TO THE CUSTOMERS.
BUT THEN WHAT YOU ARE TELLING US, AND WHAT WE ALSO NEED TO CONTEMPLATE IS WE HAVE A POTENTIAL OF HAVING TO PAY UP TO $6 MILLION TRUE UP BETWEEN 2024 AND 2026 FOR ENERGY TO TWO DIFFERENT TRUE UPS, TWO DIFFERENT TRUE UPS.
BUT I'M TRYING TO SUMMARIZE FOR ENERGY ALREADY CONSUMED IN 2022 AND 2023.
BUT WE GOTTA FIGURE OUT HOW TO PAY THAT.
HEY, I CAME IN ON THE TAIL END OF THIS, UH, BECAUSE WHAT YOU JUST SAID, I'M GONNA HAVE TO HAVE SOME FURTHER DISCUSSION WITH YOU ABOUT, UM, BUT JUST FOR CLARIFICATION, OUR DEBT SERVICE IS, IS PAID FOR IN 2025.
AND THAT ANNUAL DEBT SERVICE AMOUNT IS ROUGHLY $3.3 MILLION.
ANNUALLY THAT WOULD COME OFF OUR, OUR OUR POWER UP SUPPLY EXPENSES.
HOPEFULLY I GOT YOU THROUGH IT WITHOUT TOO MUCH CONFUSION AND IT JUST KEPT IT TO THE, IT WAS VERY GOOD EXPLANATION.
AND I KNOW YOU'RE GONNA COME BACK WITH TO US WHEN WE HAVE OUR BUDGET RETREAT WITH MORE INFORMATION ON THIS, BUT, UM, FOR THE, UM, RATE ADJUSTMENT AT 3% NOW THAT'S WHAT YOU WERE SAYING THAT WE NEED TO TAKE A LOOK AT AS A, AS A, A BOARD OF CITY AS HOW WE GONNA INTRODUCE THAT RATE, PUT A POLICY IN PLACE, HOW ARE WE GONNA INTRODUCE THAT RATE MOVING FORWARD? IT'LL BE A CERTAIN AMOUNT THAT WE KNOW WE ARE GONNA HAVE YEARLY BASED ON, NO, NOT FOR THE RATE I WAS TALKING ABOUT THE RIDER.
AND, AND THE FUEL, WHAT I CALL A FUEL ADJUSTMENT CHARGE AT TRUE UP.
THE COST OF, OF ENERGY THAT WASN'T RECOVERED BY THE CAMPUS.
RATES, FUEL PRICES WENT UP, SHIPPING PRICES WENT UP, ASH HANDLING WENT UP.
UM, THE END OF THE YEAR, THEY DIDN'T HAVE, OUR RATES WEREN'T HIGH ENOUGH, SO THEY HAD TO MAKE UP THIS EXTRA MONEY.
THAT'S CALLED A FUEL ADJUSTMENT RIDER.
WE DON'T HAVE THAT IN OUR RATE.
RETAIL RATES, WE COULD CONSIDER THAT IT WOULD TAKE A, A, A RATE CHANGE.
I WOULD HAVE TO DESIGN SOMETHING, BRING IT BACK TO YOU FOR YOUR CONSIDERATION, PUT IT IN PLACE.
SOME COMMUNITIES HAVE IT IN PLACE, BUT THEY DON'T ALWAYS USE IT.
THEY ONLY USE IT WHEN IT'S NECESSARY, WHEN THEY FEEL IT'S NECESSARY.
UM, LIKE I SAID, OVER THE LAST EIGHT YEARS, THE OPS HAVE BEEN BETWEEN, UM, SOME OF 'EM HAVE BEEN CREDITS.
UM, THE LARGEST CREDIT WAS $9 MILLION, WHICH WENT BACK INTO WORKING CAPITAL.
UM, GREAT RAINY DAY FUND, UM, ON THE DEBT SIDE, $1.6 MILLION.
SO THAT WOULD BE A BENEFIT TO US, WOULDN'T IT? YEAH.
DON'T YOU THINK IT'S NOT A, WHEN YOU SPREAD THAT OVER 32 COMMUNITIES, IT'S NOT A LOT OF MONEY.
IT GETS ABSORBED IN INFLATIONARY COSTS.
BUT WHEN YOU TALK ABOUT, SO THOSE YEARS, IF WE HAD THAT FUEL ADJUSTMENT CHARGE, MOST LIKELY WE PROBABLY WOULDN'T HAVE PASSED IT ON AND IRRITATED OUR CUSTOMERS WITH THAT MONTHLY AGGRAVATION
[01:40:01]
OF, YOU KNOW, HALF A CENT MORE HERE OR THERE.UM, BUT NOW WE'RE TALKING $53 MILLION, YOU KNOW, SO THAT TO US IT'S $3 MILLION ANNUALLY.
THAT'S NOT SOMETHING THAT WE CAN ABSORB.
WE DON'T HAVE THAT MUCH ROOM IN OUR BUDGET, UM, TO ABSORB THAT, THAT TYPE OF COST INCREASE.
I'M NOT TALKING ABOUT WHAT WE'RE CHARGING OUR CUSTOMERS GLAD TO BRING IN THE GOOD NEWS.
I, I'LL GO BACK, UH, UM, CLINIC KEA IN JANUARY AND, UH, LOBBY FOR OUR INTERESTS, VOTE FOR OUR INTERESTS, AND THEN, UH, UM, HOPEFULLY COME BACK WITH AN, AN UNDERSTANDING OF WHAT THEY'RE PLANNING TO RECOMMEND TO THE BOARD OF, UH, COMMISSIONERS AND DIRECTORS.
AND THEN THAT MIGHT GIVE US A BETTER, CLEAR VISION OF WHAT THE RATE PATH IS FOR US GOING FORWARD AT THAT POINT, YOU CAN, YOU CAN SHARE WITH US THE OTHER REPRESENTATIVES THAT SIT ON THE NICK KEMPO BOARD THAT WE CAN REACH OUT TO AND EXPRESS OUR THOUGHTS AND OPINIONS ON IT.
CORRECT? I I CAN DO THAT THIS AFTERNOON.
AND JUST WANNA, YOU, UH, ALL THE MEMBER AGENCIES VOTED THE ONLY ONE THAT VOTED AGAINST THIS, THAT WE'RE AWARE OF.
I WAS THERE FOR ALL THE VOTES.
I WAS, I MADE MOTION TO FOR SOMETHING DIFFERENT.
IT FELL WITH NO SUPPORT AND I WAS THE ONLY NO VOTE IN THE ROOM ON THE ACTION THAT THEY TOOK PUZZLING.
IT, IT'S ALL DRIVEN, IT'S ALL DRIVEN BY NEPA'S WORKING CAPITAL AND HOW MUCH WORKING CAPITAL ONE THINKS THEY NEED TO HAVE.
JANUARY OF 2023, THEY HAD $160 MILLION IN WORKING CAPITAL.
THEY NEED 40 TO 60 PER MONTH TO, TO PAY THEIR OBLIGATIONS.
THEIR MINIMUM WORKING CAPITAL BY POLICY IS $80 MILLION.
THIS TRUE UP CAME, THEY PAID THE TRUE UP IN JULY, JULY 1ST, 2023.
THEY PAID $53 MILLION AT THE END OF THAT.
THEY HAVE $110 MILLION WORKING CAPITAL TODAY, WHICH IS $30 MILLION ABOVE THE MINIMUM WORKING CAPITAL.
AND THEY'RE PROPOSING THAT WE PAY THEM BACK THE $53 MILLION.
I, AND I DON'T UNDERSTAND THAT.
THIS IS SOMETHING THAT THE MAYOR, SINCE HE HAD TO LEAVE AND PROBABLY NEEDS TO SIT DOWN WITH YOU AND HAVE A GOOD UNDERSTANDING OF WHAT'S GOING ON AND LET HIM CALL SOME OF THE MAYORS OF THE OTHER MEMBERS CITIES.
AND I THINK THAT'S, SEE IF WE CAN CHANGE THE MIND, WE WE CAN DO THAT.
AND WE CAN ALSO SHARE WITH OUR CUSTOMERS THAT NA KEA, THIS BOARD THAT REPRESENTS THEM, THEY CAN ALSO REACH OUT TO ALL OF THESE DIFFERENT MEMBERS ON HERE.
LIKE THEY REACH OUT TO US WHEN WE MAKE DECISIONS THAT THEY DON'T LIKE.
WE CAN LET THEM KNOW WHO THOSE FOLKS ARE.
'CAUSE I'M SURE IT'S PROBABLY PUBLIC RECORD, CORRECT? CORRECT.
IS THAT EVERYTHING MR. HUGHES? YES, SIR.
UNLESS YOU HAVE ANY QUESTIONS.
I THINK IT WAS BROUGHT UP, BUT THERE NEEDS TO BE SOMETHING ON HERE OTHER THAN I LIKE, AND I DON'T LIKE, THERE NEEDS TO BE SOMETHING ON HERE.
IT, IT WAS A SCALE OF ONE THROUGH THREE OR FOUR OR FIVE OR SOMETHING LIKE THAT.
AND SO, UM, THEY'RE GONNA SEND SOMETHING OUT ELECTRONICALLY TO EACH OF, AND MOST LIKELY BY THE FIRST OF NEXT WEEK.
AND MR. MAYOR, WE AGREED TO GET THIS BACK TO THEM BY THE FIRST MEETING IN JANUARY, BUT THE NEW ONE, RIGHT? THE, YEAH, THE NEW ONE.
SO SINCE WE HAVE CONCLUDED THE AGENDA FOR THIS MEETING, WE WILL ADJOURN AND THEN START A NEW MEETING AT SIX O'CLOCK.
SO IF THE BOARD IS READY, WE ENTERTAIN A MOTION TO ADJOURN.
ANY FURTHER DISCUSSION? HEARING NONE.