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[00:05:08]
Welcome to Spokane City Council a study session r our finances projections and forecasts so with that I'm going to turn you over to the Mayor and to Mr. Boston. Thank you. Council President. Yeah, that's got a relatively concise presentation here a little bit about federal and State outlook and what that means for us here in Spokane and our initial projections for where we're headed with our budget process. I'll just go bottom line up front here. It's not very good news. Most of the things are trending in a not great direction. There are a couple of exceptions to that which you'll see and so we're going to have our work cut out for us as we go into the this next budget season. So with that I'll turn it over to matt.
[00:06:07]
Yeah, thanks Mayor Council President so to reiterate we have a presentation that is going to go over just kind of some high level global influences that we're seeing some of the more granular impacts that are closer to home for us. Jake Miller, jessica Stratton and their teams put together this presentation to discuss our more acute issues that we're dealing with as well as kind of talk about how that impacts our long term. So our six year and generally as we lead up into the middle of the summer developing the budget that's when we like to talk about our six year projections. Obviously there's no crystal ball as we know when we look in the rearview mirror we've seen some pretty volatile years especially when we are in the middle of the summer. We thought we were dialed in terms of what we were going to see in the coming year and we had some rocky roads ahead. So with that said, I'm going to turn it over to jake to kind of kick things off and I will give him the remote like that melissa. So there's a handful of reasons why we're concerned going forward. Those include interest rates, higher interest rates or at least more expensive to borrow money beyond that inflation equation of good things cost more with inflation consumer confidence is lower and with that increased revenues. And then beyond that economic forecasts are looking a little bit more downward as of late. So getting a little bit more specific
[00:07:45]
About those pieces of information so CPI inflation in the most recent month was 3.5% down from 4.2% which is good but still above the target federal funds rate that was the Federal Reserve sets this rate at 3.63. It was kept flat during Wednesday's meeting which means interest rates are still elevated, still costs more to borrow than it might otherwise. GDP forecasting also slowing and we'll get something that looks into that. And then unemployment is also kind of teetering in the balance. It's still elevated. We'd like it to be lower but it's know this so the economic and revenue, the prc, the State agency Council that puts out revenue projections and their most recent projection from June has a very wide range of possibility. So on the pessimistic side all the way to the optimistic side, the wide range of 13.5% which to compare to what we're going to look at in a little bit our range 6.5% in the revenue. So therefore seeing quite a bit of uncertainty through between now and the end of 2028.
[00:09:00]
And can I ask a quick question there? Sorry, could you go back a bit? So there's both the economic revenue forecast Council that's a permanent body established at the State level to make projections on a quarterly basis for the State. And then I see there's also a governor's economic advisory Council. So both of those are included here. Yes. Yeah, the report includes both of them. Okay. Yeah. Generally the weighted average baseline and then the GCA portion are all very similar but you know they have certain assumptions built in that produce a really wide range on the pessimistic, pessimistic and optimistic side. So just because it's not typical you see like you see a line go up big oh that's good news. But in this case the baseline forecast is like unchanged revenue so unchanged revenue plus inflation is actually a difficult situation to be in.
[00:10:05]
It's really a bad situation and definitely look so let's move into the City's major financial pressures. There are many of them. The major ones include the Scraps contract for animal control protection, Spokane County jail costs supervisor speak about that many times Spokane united 911 that of the safety answering point fish out medical benefits collective bargaining with our unions and then inflationary impact over contracts and other expenses yeah I'm going to talk about Scraps for a little bit because you heard me on the dais a couple times here or sorry the platform in front of the dais so we had a Scraps contract for a while. I just historically you know ongoing where the City Spokane paid certain amount there's an annual amount this is the amount that you paid and then in 2025 the agreement changed so that it was variable depending on the actual Scraps expenses that are occurring.
[00:11:20]
And so every month we get a report from Scraps that says this is how much we spent, this is how much licensing revenue was received. This is the activity that City of Spokane has basically generated. And so in January it was 100 the actual invoice was 186,000 and it actually you know, clutch my pearls is like oh that's a lot. The activity was 58% the City of Spokane was generating so thankfully since then the monthly invoices have come down but we have still already spent 93% of our annual budget. So that is why on Tuesday I presented an SBO to close that funding gap. Yeah so that is the 2026 one time funding that I'm speaking about so I'll just add so we've been in conversation with the County on this and they've been productive conversations so I think we are moving in a positive direction with respect to talking through some of the issues that Council had concerns about before in terms of accountability and responsibility around about the policy issues around Scraps. But so I think there's positive momentum there but also talking through the whole issue of licensing how that's done, who knows about it? I think there's been I know my own personal experience is that
[00:12:56]
Used to be easy to read license your pet because you got notified and it just happened pretty regularly and for whatever reason that has sort of fallen apart. I think that the residents of Spokane we love our animals and I think people would also be happy to participate in a in that licensing process especially because we are very open to low income and senior discounts and things like that. So we're working on that side of the equation as well. So we don't see this is just something we have no control over but we want to engage councilmember Kafka and let's see who else is on the board now the advisory Council to Scraps luis Garcia and luis Garcia. So we have a couple of people representing the City on the advisory Council and we're in active conversations with the County on this topic. So point is asked are we anticipating from the County another increase or inflationary cost attaches contract? Well essentially they are treating this contract somewhat quite similar to the jail really it's like how many what's your population and that's the percent of the total costs that they are assessing and so clearly that means we want to engage on the
[00:14:35]
Cost side to do our due diligence there and we want to engage on the licensing side to make sure that is that communication is going out giving people the opportunity to do the right thing and license their pets and that but yes, I think we are in a little bit of a price taker position with respect to this contract. It's just going to make it hard to budget as well. Yes. I have to show some real grace biennium. Yes, it's a little bit harder to project because we're in this environment a little bit. It's an evolving environment put it that way. Yeah, exactly. This contract came about was finalized after the budget had been finalized so there was no way to actually put it. You plug it into the budget and obviously it's jessica stated we saw the SBO doubling the cost but it is a variable cost that we just don't have enough data to have a long term projection on as kate was mentioning. But conversations need to keep going. We need to be talking about the licensing side as well. So I'll talk quickly about the jail just because you've heard me talk about it many times and it's a perfect segue from our last slide it's another agreement that we have with the County. We have seen steady increases in terms of the overall cost of incarceration as well as a lesser degree increase in our
[00:16:20]
Overall ADP. The graph on the right shows what that looks like from 2021 to 2025. I will caveat it to say 2021 was kind of a different year because we were coming out of COVID so there wasn't growth really from 20 to 2021. But since then we have seen substantial growth in those years subsequent right and really looking at the 20 23 to 2024 and then the 24 to 2025 we have revenues that are a specialty that go into a special revenue fund that have now exceeded that revenue that was earmarked for specific specifically for these costs. Any questions on this slide as I know we've talked about it a lot. Councilmember Dillon yeah, just as a refresher so how do you break that down with ADP per bed costs so what is that average I guess per day, yes. So it's essentially taking all of the costs and looking at every single one of the costs that goes into jailing an individual and that is medical costs, that is food cost that is actual you know, employment costs for the guards and the other individuals that are working there. And then there is a significant amount of administrative overhead that comes from the County that many of those we really as a City do
[00:17:55]
Not have any voice whatsoever and I think that's that's what we've been talking about ever since the detention services audit came out last year talking about how we would like to have a voice in some of those larger contracts, especially the medical contract any of the reimburse amounts that we've talked about so other revenue pieces that offset that and I know maggie and others have been working on trying to push that conversation along as we're talking about the future because it's not just our jurisdiction that has this problem, it's all jurisdictions that are participating in this. Do we have an estimate of the number in terms of the overall the ADP that's the number. Well, the ADP is right. So that's the bed. So that's one eight and one that's our 127 is our average daily population but the cost per $254 $254 a day for what we would call a daily I would call it a daily rate.
[00:18:57]
Yeah. Okay. And remember if you want we can refresh the link to the audit that we conducted which raises some policy questions, you know and one of those being even a partial day booking you were charged a full day rate and now the County would come back on the other side and they would say well sometimes people get charged with misdemeanors and felonies and they go on the County's side of the ledger and these are City misdemeanors. So I'll just ask is there any correlation with this increase into the ordinances we have passed? And that can be asked at a later time. But I think that's something we would like to know how the audiences are impacting this as well. Yeah I think we can dig into that data a little bit later. Okay. Just got to remind folks. Medical benefits this is another one for me. We've talked about medical benefits as an organization for the last year especially but we've really been talking about it at a national level for the last couple of years. We all know that medical costs are increasing nationally at an exponential level. The primary driver there is the the prescription drugs that we're seeing. We're seeing a lot of orphan drugs that are driving our costs up to very high rates. That said, as an
[00:20:40]
Average I mean we know that we are self-insured and our claims have increased on an average of 19% since 2023. Our actuarial recommendation for 2027 is 27%, just over 27% for 2026 it was 36% if you remember and 25% is actually what the City took on. There is a specific level of reserves that being a self-insured organization we have to have we have to maintain it's a requirement at the State level. We are just over that in the year end of 2025. But if we do not take the recommendations there is a high probability that we will not have that level of reserve balance there and we will have to prove to the State that we have a well-laid out plan to increase those reserves 27% in 2027 would cost the organization as a whole about $9 million. Now that's spread out that spread through the entire organization and spread through you know, the contributions between employee and employer. But I'll just you know we got to take a step back here and look at this. This is these are big numbers from 2020 for my first year in office 34 million to a possible 48 million and the this is not unique to us. This
[00:22:24]
Is clearly a national issue affecting all State and local governments but it's there's not a lot of room to move here I'm going to save. So I remember historically our benefits are kind of decided in the spring. So we're going to go with the numbers we have now the recommendation so these will where we decide this will become impactful in 2017. We're currently in conversations with the union groups right now as discussed we have been given the 27% as a break even analysis by our broker by Alliant. It's a little bit too early on to say where we're going to and exactly because in 2025 for example are very, very significant months were June, July, October and December those months were all north of 4 million dollars thus far are our most significant month that we have seen was April of this year. We had a very mild winter and so none of us have a crystal ball of what's going to happen for the rest of the year. We also know that there was some turmoil that was happening with the contract with Premier with multi care for some time so there could have been some hold out there.
[00:23:47]
There really are so many different variables to really try to come up with an accurate projection until we really have more data so that's where we're at. I mean last year it was rough. We started the year with a $13.5 million reserve balance. We ended the year with a $3 million reserve balance that was significant. That was the first year we had seen that for I think five years that low will decrease and it was just driven by substantial increase in medical costs and again driven by those pharmaceutical costs. So a lot of conversations that are happening with the different union groups that are participating in these plans and I know h. R. Well she couldn't make it today has been heavily involved in those discussions on an ongoing basis with both Alliant and the union groups health members and about this a while ago too but it's just very first revisiting this and being self-insured and looking at joining another insurance pool instead or what are we doing to buy reinsurance or other ways to deal with?
[00:25:02]
Yeah we are expecting costs. We are looking at other options. I would say if you go out into the private networks you're generally going to get a lesser of care than what we have provided to us right now and the rate increases are going to be pretty similar so you might get some immediate relief but long term you're going to have more pain because you're not going to have the same coverage and you're going to have pretty much the same rates that you're going to get. There are other insurance pools that are out there but I will say that globally and again on a smaller scale regionally everybody is facing a 7 to 12% year over year increase and they have been maintaining those for the last several years. So that is generally for a lesser degree of service in meeting a lesser reimbursement that they get for their medical care and we have a little bit of catching up to do because of the huge hit that we hit in 2025 of that just giant jump of 36% increase in rates or an increase in actuals activity in 2025. I'll add one editorial comment over time. I think the City maybe there were years when it was tough to do pay adjustments and so I think we ended up with a quite a large set of different plan options for different bargaining units
[00:26:47]
And that situation means that we it is not as efficient as if we had fewer options. So that is clearly something that is part of the bargaining process and all of that and so that is not something that can just you can't flip a switch on that especially people get used to a particular provider or a particular choice that they've made but we are having that dialog right now with our labor organizations representation every decision made to lower costs creates disruption to a bigger company and to the Mayor's point there are many different plans that are out there. Some that are representing only a specific union group which makes it challenging because when we do make some of these more global changes, all union groups have to make the agreement to it which makes it very, very difficult. So Alliant I will say has given us a myriad of different decision trees that we could go down some saving us as little as $100,000 in a year, some pushing up towards you know, the million dollar mark and again as you can probably imagine trying to get three different very diverse union groups that have very different workflow and quite frankly very different types of work that they're doing that are trying to agree to a universal plan and levers that they're trying
[00:28:27]
To pull. That's where we're at. All right. We'll talk a little bit about where we're at the collective bargaining. So one way in one form or another we're engaged in negotiations with or further along with the others. Local 29 to save those contracts ended at the end of 2024 so we'll do that proactive payment depending on the final agreement that was paid to them as they worked for 70. Their contract ended at the end of 2025. So there will be some sort of some retroactive aspect there as well. And then police and that would be contract of 2026. So there's still time but it's August so it might shocked me to end up in the 2026 to just something to keep in mind that this the outcome of these negotiated shifts will be massive for us financially. I mean general, the general fund, the vast majority of it is personnel expense so it will play a big role in the outcome of these projections more or less. So jake, I'll just say I think Council struggle because that to us I call it the black hole the bargaining unit. We have no idea at this point in time what that looks like. So it's been really difficult at least for me. I can't speak for all Council members but that unknown factor they're going for that will drive main decisions in the budget. So and then the back pay with that
[00:30:05]
Revenue will come from won't be as challenging for us to make difficult decisions going forward. So that's a legitimate concern for sure especially given kind of you know what these contracts have as annual growth rates. We've been really transparent about our goal which is to have our expenses not grow faster than our historical revenue growth. So there's this sort of 3% out there as a that's our historical revenue growth. There's lots of puts and takes there both in terms of money management prerogatives, medical as well as economic and non-economic factors. But on the economics side that's a goal that we have and that it's just a little hard to unpack it in the middle of the process. But that's not that would not characterize the last round of bargaining and there were some factors there that we're all aware of including COVID and other things. But that's where we're at in terms of this next round. Yeah, I would just caveat that as well with the fact that I mean to the Mayor's point, we had large inflation numbers which we were battling with and we still are today we had unprecedented large year over year cost of living just
[00:31:45]
Pay increases for these bargaining units and we had worse than average revenue growth during that same time. So the previous agreed upon contracts put us in a place where there was very few options to take to reduce costs when you know that 90% of your general fund expenditures are personnel putting us in a very precarious position walking into the door with Mayor Brown's administration. So we've been working our hardest to mitigate those costs whatever we can to try to find efficiencies and we're we're continuing to try to do that today we sat next to get steven here that said a little bit about peace out here and to answer some of the questions that came up.
[00:32:47]
These are the funding needs that we're going to need off the ground here. So about $6 million from the City alone. We need to have the funding is coming from the now one excise tax is about 1.3 billion there are the replacement funds that we're using as well 1.7 million and then approximately 4 million for the operations piece which includes the system that operations personnel. What timeframe is that 4 million is that from starting now to next year or anything it'll begin it begins now but also to be spread out through the end of this year and next year okay even towards the middle end of next year. Right. And so this talks a little bit about you know, basically when are we going to get an estimate of these initial start up costs? When do we are able to pay those back and hopefully going to become self-sufficient at that point?
[00:33:55]
So the album was executed at the end of this year, 2026. That's when we started getting that 1.3 million excise tax of 50% there in October. We've taken over the current section of the now one tax will come up to 100% at that point which roughly for about 2.6 million a year from that have a 30 point of years out will start dispatching that police side and I'm sorry start dispatching the fire side January 1st of 2027 and at that point we'll have 50% of the emergency communications tax and again that 100% of the amount of one tax so that would be roughly $5.6 million that come through those two sources. And then by January 1st e the start taking rolling out more calls for the City of Spokane. Of course this massive police and fire still will have 100% of that and we're indications tax and it's still at of the nine one tax so that's roughly $9 million there. The bottom chart shows you in 2026 the initial start up cost that funding from the City a lot this year because of our systems and making those changes to the building etc. There and then in 2027 you see where we start we still have a little bit of a deficit there. They're not new this year at 2028, 2029, 2013 as one members start seeing a
[00:35:32]
High side said them we can start paying back those the gap funding that we've been utilizing up until that point beginning in I'm sorry that sip loan was for five years or how many years but I can't remember it's a five years this is five years yet and again with discipline y next year we take advantage of that right yeah so as a reminder for everybody there is for our own internal debt there's two annual payments. There's one that happens mid-year, there's one that happens at the end of the year because we were able to delay the payment of some of the purchase of some of these and use different funding sources for some of the capital purchases. We were able to grab that debt payment that we had originally budgeted and put it into operations for 26 l right. So move on and talk a little bit about our financial outlook. So revenue projections there are three lines here. The top line is our optimistic scenario. Little darkest line is our expected scenario and the I ended up at the bottom of pessimism as a baseline. This is just revenue growth in line with our recent history which hasn't been outstanding particularly for sales tax. But you know the optimistic portion of that
[00:37:10]
Right there shows, you know, our year to date sales tax growth which has been better than expected. So if that were to continue particularly expense that but that's that top line would show and then pessimism the pessimistic portion there just shows a full on recession intergovernmental revenues scarce at that point sales taxes obviously decline. The expense graph is a little bit different. The pessimistic line here is the top one is much higher than the others. That pessimistic scenario is if we have the COVID era contracts continue that's basically what will happen which is entirely unsustainable. The expected the baseline basically we realign our labor costs with pre-pandemic growth rates that's the most important part here. And then we don't have a retroactive pay this for our part. So that's another important piece there as far as the optimistic portion goes, I yeah, it would be very helpful if inflation eases it doesn't necessarily look like we would get that but that would be helpful. It's not that helpful as you can see there we wanted to hear general fund forecast overall so these are the two expected lines compared together with each other. So you can see recent history revenue and expense have a line that generally out of necessity
[00:38:45]
We have to do we have to accomplish that and then you see 27 there and that's where we have a lot of unknowns but we do have a piece of startup costs that are a huge component. We have retroactive pay that will certainly be paid in that year. That's the major portion that you see that kind of like that. So to the extent we can control costs this is starting to look more sustainable. But yeah we have some work to do. It's not quite as bad as last say but still some work to do in terms of and this is just to say that we are not alone in that endeavor. As jake mentioned, we did close the gap last year and we made meaningful dents in future years because a lot of the solutions that we implemented weren't one time solutions. They were long term impacts. So there's still work but as we're seeing in Seattle, Tacoma, Vancouver and even just right across the river in the County, everybody's having those issues and to kind of a greater degree than our own Seattle obviously we pity them being half $1 billion in a deficit and looking at their next budget Tacoma $40 million deficit Vancouver $43 million deficit and even Spokane County just ticked theirs up to $30 million recently from 25. So it is a challenge but it is not a unique challenge that is
[00:40:25]
Faced in Washington State. A lot of that is driven by, you know, our 1% property tax growth coupled with the sales tax volatility that we're seeing. As jake mentioned, we have seen some you know, some positive movement which is also kind of a head scratcher because we're getting that positive movement despite now us getting information that led into the start of the iran war and we're still getting year over year positivity so you know, that would be wonderful if that remains. But we're obviously going to be conservative in our projections. I came to that and from what I can see based on economic data throughout the us is that up to 70% of sales tax increases are actually just reflecting inflation. When you look at the sales volume where they've been tracking that sales volume is down and so even in Washington State the sources I found show that sales volume is down so people are buying fewer things but they're paying substantially more for the things that they're buying and so most of our sales track sales data right now is still reflecting backward looking. So it's still reflecting tax refunds, things of that nature that temporary triggers to the economy. But a vast majority of what we're seeing why it's not trending off the sales tax receipts the way I certainly anticipated there would it's largely because even though transaction volume is down, the number of items being purchased is down. The overall cost is
[00:42:02]
You know, I think working with yeah I had mentioned that exact same thing last year and I mean good news is it's actually beating the inflationary amount just by a small amount and last year not only were we not beating inflation but we were below inflation. Right? So I mean there is some positivity in that but despite all that, you know, there is some good news mixed with all the challenges that we do have. All right. Moving forward, just kind of looking at the looking ahead. Go ahead, jake. So things will be monitoring as we go through the budget development process of the Federal Reserve. Does our borrowing costs before interest rates go down and be positive sales tax will be moderating just as we just discussed and then property taxes the County will be providing estimates on new construction from 2026 in the coming months. So that will largely define our property tax revenue for 2027. As far as upcoming budget milestones by the end of August the budget office will publish the draft of the capital improvement program Council review by October 5th we'll be delivering within our own budget that would be operating within budget and then November second the hard deadline is the first proposed 2027 2018 budget to Council and then November 18th is arbitrary and it's just in line with the start
[00:43:47]
E program for the of December the current billing estimate for when Council would adopt 4725 budget. So that's what we have to look forward to and you know I think that's a pretty clear picture where we're at. There's a high degree of uncertainty but as we get closer and closer we'll get more art, we'll be able to nail down at least the revenue side of the equation and then we'll be making, you know, challenging policy decisions to try to deal with the expense side. Exactly the revenue numbers that are going to be coming up, you know, with being three months in arrears and that being our most volatile that's that's the one that we have to wait to get a bit more information when we're looking year over year and then we'll have multiple meetings I think we switch to monthly meetings starting September leading into the budget season. So September, October, November we'll meet monthly and have ongoing conversations. Customer Dillon is one thing that would be helpful I'll just be open and honest on the revenue side is we're talking audience piece up as an example so the 911 excise tax you know I'm very interested I know some of those are as well about how do we make some adjustments to the State with that for example land lines are still part of the 911 excise tax people
[00:45:25]
Don't really use those not really sure how that's collected if there's an option to look at some different devices and that could be part of that 911 excise tax and what that would mean for our own efforts when you look at some of those chart adjustments over time and that money coming back from the 911 excise tax and building up these just to help I think look at what are some of the levers and what are some of the what ifs and some different revenue scenarios for these projections. Definitely and the 911 excise taxes is a great one to talk about because there's so many variables there that make it very challenging when you're talking about, you know, on the opposite of landlines you have mobiles, mobiles generally when you go into a cell phone store you oftentimes don't get a cell phone that is registered to your specific address. My City phone, for example, I think has a medical weight number when I call on deer park. So it's yeah, it's just very strange and how exactly is that being tracked by the department of revenue? You know, can we get better can we get more granular on where those calls are being made? You know there was many conversations when we were in the peace have discussions in and of itself of call origination, right. If we're talking about call origination, oftentimes the calls that are happening downtown at the core, right? How do we ping those cell phone towers and track
[00:47:03]
That? But it's it's a herculean lift to get all that information because d. R. Is facing the department of revenue is facing those same challenges as us from a capacity constraint. So getting that level of granularity is is a challenge for sure but absolutely happy to have more conversations on what would be helpful at the State level. I'll just say those piece out conversations all the municipalities that were around the table we're in agreement to be lobbying the State to change that because we all know that needs to be addressed as revenues come back to us. Yeah. Well and the other piece that you can talk about is the 311 or the you know, the non-emergent calls that are happening or the non-emergent services that are happening are oftentimes many times happening through a computer right where you're not having any mobile whatsoever but you still have that same service, that same piece of service individual that is responding and looking at that report and then filing it with the pd. So it's yeah, definitely all things that we're looking at. Any other questions? You know questions customer response. So I asked this committee on Tuesday about what are we looking at for the rest of 2026, what are we looking at okay for the rest of the year or whatever I guess it really is too early to tell.
[00:48:28]
I mean given all the variables that we just discussed revenue being you know, a large one, we are trending well with the limited information that we have from a sales tax perspective. We are trending below or above our expenses but a lot of that has to do with timing. But to jessica's point that she made in committee q3 is when a lot of our expenses seem to wrap up and we do have a contracts that are out there that are looking to I mean they're expired and so there is going to be some sort of monetary assumption that's that's in there somewhere and we have to be prepared that's going to happen. So for me to say yes, everything is good without any of that information would be pretty negligent. Any other questions? Customer account card business related I wonder where are our projections right now on all the time in particular obviously upon the safety the area there are we tracking well do we think there may be a spike between I would say jake and jessica can probably speak to it in more granular detail but I would say tracking relatively well, especially for from an hour for our perspective when you look at prior years I mean I think councilmember Cathcart you especially as well as Council President remember the years where we were seeing $9 million dollar coming through because of under budgeting public
[00:50:04]
Safety overtime? We're not in that position right now. Again, there are contracts that are still out there and we have to be cautious and say this is it but from an hour for our perspective we're looking very well. We'll just did have in our presentation the caution sign over time for fire. So we all saw that because it's it's fire season is proceeding so one or I expect that I'll just have to have the Mayor repeat herself these are challenging economic times for the City. Absolutely yeah we've we've definitely got our work cut out for us with a lot of competing priorities and not a lot of resources to allocate to those competing priorities and so that will we look at other are there other revenue sources outside the 911 that we've talked about that we should be looking at? And I know at some point malina will come into play on that and what those looks like. But are we are there any other potential opportunities on the table right now that we should be considering? Nothing that we've agreed to? Yeah. I mean there's there's there's options that are out there but I think it's it's going to be lengthy conversations with both Council and the administration and I know when I was talking to kate
[00:51:43]
That there are some internal conversations that are happening on Council side but I think determining where we're at is step one and then determining the gap is step two and then how we fill that gap whether it be expenses, revenues, combination of the two is step three. Tell us from the kakkar yeah, I was just asking if we are thinking about or looking at some revenue options that would fall to the Council to decide do you and I understand you have to make a decision on what you would like to pursue but do you have a sense of when you would try to bring that to us to start those discussions? And I think that emerges along the same lines as this timeline does definitely want to have a sense of a little more solid revenue estimate before we go there and I'd like to get some more certainty around the bargaining contracts then it all has to come together. So yeah, it's it is certainly sequential. I mean so the next couple of months yeah. Even when you put the capital improvement right at the top sorry to the operational that's I just raise this to say it would be nice to maybe say we're going to define the box early on and not necessarily wait till the day we adopted the biennial budget to also be adopting a potential change in revenue at the same time if we could do it sooner and start this conversation sooner I think you just mix all of that one. I'll just say the
[00:53:22]
Chatter on our side of the house is we do not want to pass a budget in December and then we're out of budget January window. We don't want to see some spells or some expenses coming up. We really want to be realistic going forward and not playing chess for lack of a better term with numbers to balance the budget and then come January we've got these other challenges right in our face certain get that would be help our team out a lot too yeah anything else or questions before the mare or matt all right you heard it here. The study session is adjourned. Thank you all.
Source: https://www.youtube.com/watch?v=i8y1H1ZMmhw
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[00:05:08]
Welcome to Spokane City Council a study session r our finances projections and forecasts so with that I'm going to turn you over to the Mayor and to Mr. Boston. Thank you. Council President. Yeah, that's got a relatively concise presentation here a little bit about federal and State outlook and what that means for us here in Spokane and our initial projections for where we're headed with our budget process. I'll just go bottom line up front here. It's not very good news. Most of the things are trending in a not great direction. There are a couple of exceptions to that which you'll see and so we're going to have our work cut out for us as we go into the this next budget season. So with that I'll turn it over to matt.
[00:06:07]
Yeah, thanks Mayor Council President so to reiterate we have a presentation that is going to go over just kind of some high level global influences that we're seeing some of the more granular impacts that are closer to home for us. Jake Miller, jessica Stratton and their teams put together this presentation to discuss our more acute issues that we're dealing with as well as kind of talk about how that impacts our long term. So our six year and generally as we lead up into the middle of the summer developing the budget that's when we like to talk about our six year projections. Obviously there's no crystal ball as we know when we look in the rearview mirror we've seen some pretty volatile years especially when we are in the middle of the summer. We thought we were dialed in terms of what we were going to see in the coming year and we had some rocky roads ahead. So with that said, I'm going to turn it over to jake to kind of kick things off and I will give him the remote like that melissa. So there's a handful of reasons why we're concerned going forward. Those include interest rates, higher interest rates or at least more expensive to borrow money beyond that inflation equation of good things cost more with inflation consumer confidence is lower and with that increased revenues. And then beyond that economic forecasts are looking a little bit more downward as of late. So getting a little bit more specific
[00:07:45]
About those pieces of information so CPI inflation in the most recent month was 3.5% down from 4.2% which is good but still above the target federal funds rate that was the Federal Reserve sets this rate at 3.63. It was kept flat during Wednesday's meeting which means interest rates are still elevated, still costs more to borrow than it might otherwise. GDP forecasting also slowing and we'll get something that looks into that. And then unemployment is also kind of teetering in the balance. It's still elevated. We'd like it to be lower but it's know this so the economic and revenue, the prc, the State agency Council that puts out revenue projections and their most recent projection from June has a very wide range of possibility. So on the pessimistic side all the way to the optimistic side, the wide range of 13.5% which to compare to what we're going to look at in a little bit our range 6.5% in the revenue. So therefore seeing quite a bit of uncertainty through between now and the end of 2028.
[00:09:00]
And can I ask a quick question there? Sorry, could you go back a bit? So there's both the economic revenue forecast Council that's a permanent body established at the State level to make projections on a quarterly basis for the State. And then I see there's also a governor's economic advisory Council. So both of those are included here. Yes. Yeah, the report includes both of them. Okay. Yeah. Generally the weighted average baseline and then the GCA portion are all very similar but you know they have certain assumptions built in that produce a really wide range on the pessimistic, pessimistic and optimistic side. So just because it's not typical you see like you see a line go up big oh that's good news. But in this case the baseline forecast is like unchanged revenue so unchanged revenue plus inflation is actually a difficult situation to be in.
[00:10:05]
It's really a bad situation and definitely look so let's move into the City's major financial pressures. There are many of them. The major ones include the Scraps contract for animal control protection, Spokane County jail costs supervisor speak about that many times Spokane united 911 that of the safety answering point fish out medical benefits collective bargaining with our unions and then inflationary impact over contracts and other expenses yeah I'm going to talk about Scraps for a little bit because you heard me on the dais a couple times here or sorry the platform in front of the dais so we had a Scraps contract for a while. I just historically you know ongoing where the City Spokane paid certain amount there's an annual amount this is the amount that you paid and then in 2025 the agreement changed so that it was variable depending on the actual Scraps expenses that are occurring.
[00:11:20]
And so every month we get a report from Scraps that says this is how much we spent, this is how much licensing revenue was received. This is the activity that City of Spokane has basically generated. And so in January it was 100 the actual invoice was 186,000 and it actually you know, clutch my pearls is like oh that's a lot. The activity was 58% the City of Spokane was generating so thankfully since then the monthly invoices have come down but we have still already spent 93% of our annual budget. So that is why on Tuesday I presented an SBO to close that funding gap. Yeah so that is the 2026 one time funding that I'm speaking about so I'll just add so we've been in conversation with the County on this and they've been productive conversations so I think we are moving in a positive direction with respect to talking through some of the issues that Council had concerns about before in terms of accountability and responsibility around about the policy issues around Scraps. But so I think there's positive momentum there but also talking through the whole issue of licensing how that's done, who knows about it? I think there's been I know my own personal experience is that
[00:12:56]
Used to be easy to read license your pet because you got notified and it just happened pretty regularly and for whatever reason that has sort of fallen apart. I think that the residents of Spokane we love our animals and I think people would also be happy to participate in a in that licensing process especially because we are very open to low income and senior discounts and things like that. So we're working on that side of the equation as well. So we don't see this is just something we have no control over but we want to engage councilmember Kafka and let's see who else is on the board now the advisory Council to Scraps luis Garcia and luis Garcia. So we have a couple of people representing the City on the advisory Council and we're in active conversations with the County on this topic. So point is asked are we anticipating from the County another increase or inflationary cost attaches contract? Well essentially they are treating this contract somewhat quite similar to the jail really it's like how many what's your population and that's the percent of the total costs that they are assessing and so clearly that means we want to engage on the
[00:14:35]
Cost side to do our due diligence there and we want to engage on the licensing side to make sure that is that communication is going out giving people the opportunity to do the right thing and license their pets and that but yes, I think we are in a little bit of a price taker position with respect to this contract. It's just going to make it hard to budget as well. Yes. I have to show some real grace biennium. Yes, it's a little bit harder to project because we're in this environment a little bit. It's an evolving environment put it that way. Yeah, exactly. This contract came about was finalized after the budget had been finalized so there was no way to actually put it. You plug it into the budget and obviously it's jessica stated we saw the SBO doubling the cost but it is a variable cost that we just don't have enough data to have a long term projection on as kate was mentioning. But conversations need to keep going. We need to be talking about the licensing side as well. So I'll talk quickly about the jail just because you've heard me talk about it many times and it's a perfect segue from our last slide it's another agreement that we have with the County. We have seen steady increases in terms of the overall cost of incarceration as well as a lesser degree increase in our
[00:16:20]
Overall ADP. The graph on the right shows what that looks like from 2021 to 2025. I will caveat it to say 2021 was kind of a different year because we were coming out of COVID so there wasn't growth really from 20 to 2021. But since then we have seen substantial growth in those years subsequent right and really looking at the 20 23 to 2024 and then the 24 to 2025 we have revenues that are a specialty that go into a special revenue fund that have now exceeded that revenue that was earmarked for specific specifically for these costs. Any questions on this slide as I know we've talked about it a lot. Councilmember Dillon yeah, just as a refresher so how do you break that down with ADP per bed costs so what is that average I guess per day, yes. So it's essentially taking all of the costs and looking at every single one of the costs that goes into jailing an individual and that is medical costs, that is food cost that is actual you know, employment costs for the guards and the other individuals that are working there. And then there is a significant amount of administrative overhead that comes from the County that many of those we really as a City do
[00:17:55]
Not have any voice whatsoever and I think that's that's what we've been talking about ever since the detention services audit came out last year talking about how we would like to have a voice in some of those larger contracts, especially the medical contract any of the reimburse amounts that we've talked about so other revenue pieces that offset that and I know maggie and others have been working on trying to push that conversation along as we're talking about the future because it's not just our jurisdiction that has this problem, it's all jurisdictions that are participating in this. Do we have an estimate of the number in terms of the overall the ADP that's the number. Well, the ADP is right. So that's the bed. So that's one eight and one that's our 127 is our average daily population but the cost per $254 $254 a day for what we would call a daily I would call it a daily rate.
[00:18:57]
Yeah. Okay. And remember if you want we can refresh the link to the audit that we conducted which raises some policy questions, you know and one of those being even a partial day booking you were charged a full day rate and now the County would come back on the other side and they would say well sometimes people get charged with misdemeanors and felonies and they go on the County's side of the ledger and these are City misdemeanors. So I'll just ask is there any correlation with this increase into the ordinances we have passed? And that can be asked at a later time. But I think that's something we would like to know how the audiences are impacting this as well. Yeah I think we can dig into that data a little bit later. Okay. Just got to remind folks. Medical benefits this is another one for me. We've talked about medical benefits as an organization for the last year especially but we've really been talking about it at a national level for the last couple of years. We all know that medical costs are increasing nationally at an exponential level. The primary driver there is the the prescription drugs that we're seeing. We're seeing a lot of orphan drugs that are driving our costs up to very high rates. That said, as an
[00:20:40]
Average I mean we know that we are self-insured and our claims have increased on an average of 19% since 2023. Our actuarial recommendation for 2027 is 27%, just over 27% for 2026 it was 36% if you remember and 25% is actually what the City took on. There is a specific level of reserves that being a self-insured organization we have to have we have to maintain it's a requirement at the State level. We are just over that in the year end of 2025. But if we do not take the recommendations there is a high probability that we will not have that level of reserve balance there and we will have to prove to the State that we have a well-laid out plan to increase those reserves 27% in 2027 would cost the organization as a whole about $9 million. Now that's spread out that spread through the entire organization and spread through you know, the contributions between employee and employer. But I'll just you know we got to take a step back here and look at this. This is these are big numbers from 2020 for my first year in office 34 million to a possible 48 million and the this is not unique to us. This
[00:22:24]
Is clearly a national issue affecting all State and local governments but it's there's not a lot of room to move here I'm going to save. So I remember historically our benefits are kind of decided in the spring. So we're going to go with the numbers we have now the recommendation so these will where we decide this will become impactful in 2017. We're currently in conversations with the union groups right now as discussed we have been given the 27% as a break even analysis by our broker by Alliant. It's a little bit too early on to say where we're going to and exactly because in 2025 for example are very, very significant months were June, July, October and December those months were all north of 4 million dollars thus far are our most significant month that we have seen was April of this year. We had a very mild winter and so none of us have a crystal ball of what's going to happen for the rest of the year. We also know that there was some turmoil that was happening with the contract with Premier with multi care for some time so there could have been some hold out there.
[00:23:47]
There really are so many different variables to really try to come up with an accurate projection until we really have more data so that's where we're at. I mean last year it was rough. We started the year with a $13.5 million reserve balance. We ended the year with a $3 million reserve balance that was significant. That was the first year we had seen that for I think five years that low will decrease and it was just driven by substantial increase in medical costs and again driven by those pharmaceutical costs. So a lot of conversations that are happening with the different union groups that are participating in these plans and I know h. R. Well she couldn't make it today has been heavily involved in those discussions on an ongoing basis with both Alliant and the union groups health members and about this a while ago too but it's just very first revisiting this and being self-insured and looking at joining another insurance pool instead or what are we doing to buy reinsurance or other ways to deal with?
[00:25:02]
Yeah we are expecting costs. We are looking at other options. I would say if you go out into the private networks you're generally going to get a lesser of care than what we have provided to us right now and the rate increases are going to be pretty similar so you might get some immediate relief but long term you're going to have more pain because you're not going to have the same coverage and you're going to have pretty much the same rates that you're going to get. There are other insurance pools that are out there but I will say that globally and again on a smaller scale regionally everybody is facing a 7 to 12% year over year increase and they have been maintaining those for the last several years. So that is generally for a lesser degree of service in meeting a lesser reimbursement that they get for their medical care and we have a little bit of catching up to do because of the huge hit that we hit in 2025 of that just giant jump of 36% increase in rates or an increase in actuals activity in 2025. I'll add one editorial comment over time. I think the City maybe there were years when it was tough to do pay adjustments and so I think we ended up with a quite a large set of different plan options for different bargaining units
[00:26:47]
And that situation means that we it is not as efficient as if we had fewer options. So that is clearly something that is part of the bargaining process and all of that and so that is not something that can just you can't flip a switch on that especially people get used to a particular provider or a particular choice that they've made but we are having that dialog right now with our labor organizations representation every decision made to lower costs creates disruption to a bigger company and to the Mayor's point there are many different plans that are out there. Some that are representing only a specific union group which makes it challenging because when we do make some of these more global changes, all union groups have to make the agreement to it which makes it very, very difficult. So Alliant I will say has given us a myriad of different decision trees that we could go down some saving us as little as $100,000 in a year, some pushing up towards you know, the million dollar mark and again as you can probably imagine trying to get three different very diverse union groups that have very different workflow and quite frankly very different types of work that they're doing that are trying to agree to a universal plan and levers that they're trying
[00:28:27]
To pull. That's where we're at. All right. We'll talk a little bit about where we're at the collective bargaining. So one way in one form or another we're engaged in negotiations with or further along with the others. Local 29 to save those contracts ended at the end of 2024 so we'll do that proactive payment depending on the final agreement that was paid to them as they worked for 70. Their contract ended at the end of 2025. So there will be some sort of some retroactive aspect there as well. And then police and that would be contract of 2026. So there's still time but it's August so it might shocked me to end up in the 2026 to just something to keep in mind that this the outcome of these negotiated shifts will be massive for us financially. I mean general, the general fund, the vast majority of it is personnel expense so it will play a big role in the outcome of these projections more or less. So jake, I'll just say I think Council struggle because that to us I call it the black hole the bargaining unit. We have no idea at this point in time what that looks like. So it's been really difficult at least for me. I can't speak for all Council members but that unknown factor they're going for that will drive main decisions in the budget. So and then the back pay with that
[00:30:05]
Revenue will come from won't be as challenging for us to make difficult decisions going forward. So that's a legitimate concern for sure especially given kind of you know what these contracts have as annual growth rates. We've been really transparent about our goal which is to have our expenses not grow faster than our historical revenue growth. So there's this sort of 3% out there as a that's our historical revenue growth. There's lots of puts and takes there both in terms of money management prerogatives, medical as well as economic and non-economic factors. But on the economics side that's a goal that we have and that it's just a little hard to unpack it in the middle of the process. But that's not that would not characterize the last round of bargaining and there were some factors there that we're all aware of including COVID and other things. But that's where we're at in terms of this next round. Yeah, I would just caveat that as well with the fact that I mean to the Mayor's point, we had large inflation numbers which we were battling with and we still are today we had unprecedented large year over year cost of living just
[00:31:45]
Pay increases for these bargaining units and we had worse than average revenue growth during that same time. So the previous agreed upon contracts put us in a place where there was very few options to take to reduce costs when you know that 90% of your general fund expenditures are personnel putting us in a very precarious position walking into the door with Mayor Brown's administration. So we've been working our hardest to mitigate those costs whatever we can to try to find efficiencies and we're we're continuing to try to do that today we sat next to get steven here that said a little bit about peace out here and to answer some of the questions that came up.
[00:32:47]
These are the funding needs that we're going to need off the ground here. So about $6 million from the City alone. We need to have the funding is coming from the now one excise tax is about 1.3 billion there are the replacement funds that we're using as well 1.7 million and then approximately 4 million for the operations piece which includes the system that operations personnel. What timeframe is that 4 million is that from starting now to next year or anything it'll begin it begins now but also to be spread out through the end of this year and next year okay even towards the middle end of next year. Right. And so this talks a little bit about you know, basically when are we going to get an estimate of these initial start up costs? When do we are able to pay those back and hopefully going to become self-sufficient at that point?
[00:33:55]
So the album was executed at the end of this year, 2026. That's when we started getting that 1.3 million excise tax of 50% there in October. We've taken over the current section of the now one tax will come up to 100% at that point which roughly for about 2.6 million a year from that have a 30 point of years out will start dispatching that police side and I'm sorry start dispatching the fire side January 1st of 2027 and at that point we'll have 50% of the emergency communications tax and again that 100% of the amount of one tax so that would be roughly $5.6 million that come through those two sources. And then by January 1st e the start taking rolling out more calls for the City of Spokane. Of course this massive police and fire still will have 100% of that and we're indications tax and it's still at of the nine one tax so that's roughly $9 million there. The bottom chart shows you in 2026 the initial start up cost that funding from the City a lot this year because of our systems and making those changes to the building etc. There and then in 2027 you see where we start we still have a little bit of a deficit there. They're not new this year at 2028, 2029, 2013 as one members start seeing a
[00:35:32]
High side said them we can start paying back those the gap funding that we've been utilizing up until that point beginning in I'm sorry that sip loan was for five years or how many years but I can't remember it's a five years this is five years yet and again with discipline y next year we take advantage of that right yeah so as a reminder for everybody there is for our own internal debt there's two annual payments. There's one that happens mid-year, there's one that happens at the end of the year because we were able to delay the payment of some of the purchase of some of these and use different funding sources for some of the capital purchases. We were able to grab that debt payment that we had originally budgeted and put it into operations for 26 l right. So move on and talk a little bit about our financial outlook. So revenue projections there are three lines here. The top line is our optimistic scenario. Little darkest line is our expected scenario and the I ended up at the bottom of pessimism as a baseline. This is just revenue growth in line with our recent history which hasn't been outstanding particularly for sales tax. But you know the optimistic portion of that
[00:37:10]
Right there shows, you know, our year to date sales tax growth which has been better than expected. So if that were to continue particularly expense that but that's that top line would show and then pessimism the pessimistic portion there just shows a full on recession intergovernmental revenues scarce at that point sales taxes obviously decline. The expense graph is a little bit different. The pessimistic line here is the top one is much higher than the others. That pessimistic scenario is if we have the COVID era contracts continue that's basically what will happen which is entirely unsustainable. The expected the baseline basically we realign our labor costs with pre-pandemic growth rates that's the most important part here. And then we don't have a retroactive pay this for our part. So that's another important piece there as far as the optimistic portion goes, I yeah, it would be very helpful if inflation eases it doesn't necessarily look like we would get that but that would be helpful. It's not that helpful as you can see there we wanted to hear general fund forecast overall so these are the two expected lines compared together with each other. So you can see recent history revenue and expense have a line that generally out of necessity
[00:38:45]
We have to do we have to accomplish that and then you see 27 there and that's where we have a lot of unknowns but we do have a piece of startup costs that are a huge component. We have retroactive pay that will certainly be paid in that year. That's the major portion that you see that kind of like that. So to the extent we can control costs this is starting to look more sustainable. But yeah we have some work to do. It's not quite as bad as last say but still some work to do in terms of and this is just to say that we are not alone in that endeavor. As jake mentioned, we did close the gap last year and we made meaningful dents in future years because a lot of the solutions that we implemented weren't one time solutions. They were long term impacts. So there's still work but as we're seeing in Seattle, Tacoma, Vancouver and even just right across the river in the County, everybody's having those issues and to kind of a greater degree than our own Seattle obviously we pity them being half $1 billion in a deficit and looking at their next budget Tacoma $40 million deficit Vancouver $43 million deficit and even Spokane County just ticked theirs up to $30 million recently from 25. So it is a challenge but it is not a unique challenge that is
[00:40:25]
Faced in Washington State. A lot of that is driven by, you know, our 1% property tax growth coupled with the sales tax volatility that we're seeing. As jake mentioned, we have seen some you know, some positive movement which is also kind of a head scratcher because we're getting that positive movement despite now us getting information that led into the start of the iran war and we're still getting year over year positivity so you know, that would be wonderful if that remains. But we're obviously going to be conservative in our projections. I came to that and from what I can see based on economic data throughout the us is that up to 70% of sales tax increases are actually just reflecting inflation. When you look at the sales volume where they've been tracking that sales volume is down and so even in Washington State the sources I found show that sales volume is down so people are buying fewer things but they're paying substantially more for the things that they're buying and so most of our sales track sales data right now is still reflecting backward looking. So it's still reflecting tax refunds, things of that nature that temporary triggers to the economy. But a vast majority of what we're seeing why it's not trending off the sales tax receipts the way I certainly anticipated there would it's largely because even though transaction volume is down, the number of items being purchased is down. The overall cost is
[00:42:02]
You know, I think working with yeah I had mentioned that exact same thing last year and I mean good news is it's actually beating the inflationary amount just by a small amount and last year not only were we not beating inflation but we were below inflation. Right? So I mean there is some positivity in that but despite all that, you know, there is some good news mixed with all the challenges that we do have. All right. Moving forward, just kind of looking at the looking ahead. Go ahead, jake. So things will be monitoring as we go through the budget development process of the Federal Reserve. Does our borrowing costs before interest rates go down and be positive sales tax will be moderating just as we just discussed and then property taxes the County will be providing estimates on new construction from 2026 in the coming months. So that will largely define our property tax revenue for 2027. As far as upcoming budget milestones by the end of August the budget office will publish the draft of the capital improvement program Council review by October 5th we'll be delivering within our own budget that would be operating within budget and then November second the hard deadline is the first proposed 2027 2018 budget to Council and then November 18th is arbitrary and it's just in line with the start
[00:43:47]
E program for the of December the current billing estimate for when Council would adopt 4725 budget. So that's what we have to look forward to and you know I think that's a pretty clear picture where we're at. There's a high degree of uncertainty but as we get closer and closer we'll get more art, we'll be able to nail down at least the revenue side of the equation and then we'll be making, you know, challenging policy decisions to try to deal with the expense side. Exactly the revenue numbers that are going to be coming up, you know, with being three months in arrears and that being our most volatile that's that's the one that we have to wait to get a bit more information when we're looking year over year and then we'll have multiple meetings I think we switch to monthly meetings starting September leading into the budget season. So September, October, November we'll meet monthly and have ongoing conversations. Customer Dillon is one thing that would be helpful I'll just be open and honest on the revenue side is we're talking audience piece up as an example so the 911 excise tax you know I'm very interested I know some of those are as well about how do we make some adjustments to the State with that for example land lines are still part of the 911 excise tax people
[00:45:25]
Don't really use those not really sure how that's collected if there's an option to look at some different devices and that could be part of that 911 excise tax and what that would mean for our own efforts when you look at some of those chart adjustments over time and that money coming back from the 911 excise tax and building up these just to help I think look at what are some of the levers and what are some of the what ifs and some different revenue scenarios for these projections. Definitely and the 911 excise taxes is a great one to talk about because there's so many variables there that make it very challenging when you're talking about, you know, on the opposite of landlines you have mobiles, mobiles generally when you go into a cell phone store you oftentimes don't get a cell phone that is registered to your specific address. My City phone, for example, I think has a medical weight number when I call on deer park. So it's yeah, it's just very strange and how exactly is that being tracked by the department of revenue? You know, can we get better can we get more granular on where those calls are being made? You know there was many conversations when we were in the peace have discussions in and of itself of call origination, right. If we're talking about call origination, oftentimes the calls that are happening downtown at the core, right? How do we ping those cell phone towers and track
[00:47:03]
That? But it's it's a herculean lift to get all that information because d. R. Is facing the department of revenue is facing those same challenges as us from a capacity constraint. So getting that level of granularity is is a challenge for sure but absolutely happy to have more conversations on what would be helpful at the State level. I'll just say those piece out conversations all the municipalities that were around the table we're in agreement to be lobbying the State to change that because we all know that needs to be addressed as revenues come back to us. Yeah. Well and the other piece that you can talk about is the 311 or the you know, the non-emergent calls that are happening or the non-emergent services that are happening are oftentimes many times happening through a computer right where you're not having any mobile whatsoever but you still have that same service, that same piece of service individual that is responding and looking at that report and then filing it with the pd. So it's yeah, definitely all things that we're looking at. Any other questions? You know questions customer response. So I asked this committee on Tuesday about what are we looking at for the rest of 2026, what are we looking at okay for the rest of the year or whatever I guess it really is too early to tell.
[00:48:28]
I mean given all the variables that we just discussed revenue being you know, a large one, we are trending well with the limited information that we have from a sales tax perspective. We are trending below or above our expenses but a lot of that has to do with timing. But to jessica's point that she made in committee q3 is when a lot of our expenses seem to wrap up and we do have a contracts that are out there that are looking to I mean they're expired and so there is going to be some sort of monetary assumption that's that's in there somewhere and we have to be prepared that's going to happen. So for me to say yes, everything is good without any of that information would be pretty negligent. Any other questions? Customer account card business related I wonder where are our projections right now on all the time in particular obviously upon the safety the area there are we tracking well do we think there may be a spike between I would say jake and jessica can probably speak to it in more granular detail but I would say tracking relatively well, especially for from an hour for our perspective when you look at prior years I mean I think councilmember Cathcart you especially as well as Council President remember the years where we were seeing $9 million dollar coming through because of under budgeting public
[00:50:04]
Safety overtime? We're not in that position right now. Again, there are contracts that are still out there and we have to be cautious and say this is it but from an hour for our perspective we're looking very well. We'll just did have in our presentation the caution sign over time for fire. So we all saw that because it's it's fire season is proceeding so one or I expect that I'll just have to have the Mayor repeat herself these are challenging economic times for the City. Absolutely yeah we've we've definitely got our work cut out for us with a lot of competing priorities and not a lot of resources to allocate to those competing priorities and so that will we look at other are there other revenue sources outside the 911 that we've talked about that we should be looking at? And I know at some point malina will come into play on that and what those looks like. But are we are there any other potential opportunities on the table right now that we should be considering? Nothing that we've agreed to? Yeah. I mean there's there's there's options that are out there but I think it's it's going to be lengthy conversations with both Council and the administration and I know when I was talking to kate
[00:51:43]
That there are some internal conversations that are happening on Council side but I think determining where we're at is step one and then determining the gap is step two and then how we fill that gap whether it be expenses, revenues, combination of the two is step three. Tell us from the kakkar yeah, I was just asking if we are thinking about or looking at some revenue options that would fall to the Council to decide do you and I understand you have to make a decision on what you would like to pursue but do you have a sense of when you would try to bring that to us to start those discussions? And I think that emerges along the same lines as this timeline does definitely want to have a sense of a little more solid revenue estimate before we go there and I'd like to get some more certainty around the bargaining contracts then it all has to come together. So yeah, it's it is certainly sequential. I mean so the next couple of months yeah. Even when you put the capital improvement right at the top sorry to the operational that's I just raise this to say it would be nice to maybe say we're going to define the box early on and not necessarily wait till the day we adopted the biennial budget to also be adopting a potential change in revenue at the same time if we could do it sooner and start this conversation sooner I think you just mix all of that one. I'll just say the
[00:53:22]
Chatter on our side of the house is we do not want to pass a budget in December and then we're out of budget January window. We don't want to see some spells or some expenses coming up. We really want to be realistic going forward and not playing chess for lack of a better term with numbers to balance the budget and then come January we've got these other challenges right in our face certain get that would be help our team out a lot too yeah anything else or questions before the mare or matt all right you heard it here. The study session is adjourned. Thank you all.
[00:54:13]
Thank you. Thank you