Council Work Session Meeting

1:09Do this. Thank you. OK, everyone. Sorry, a few minutes behind. Welcome to the Council meeting work session for May 12. Our meetings are public, and you're welcome to join us in person or by watching from the Council agenda page, Zoom or YouTube. I hope you continue to join us whichever manner you feel the most comfortable.

1:41This is a work session during which there is no public comment. You can join us on May 19 during our 7 p.m. formal meeting to share your comments. We, of course, welcome your feedback anytime by mail to PO Box 145476. Salt Lake City, Utah 8414. You can also email us at council.commons at slc.gov. Or you can call our 24-hour phone line 815357654.

2:13Every time that a comment comes through email or message or mail, I share with all of the council members. It is also posted at slc.gov slash council. Our first agenda item is the fiscal year 2026, 2027 budget administrations overview. And fiscal year 2026, 2027 administration revenue update. We're going to hear those two items together.

2:44And we're going to welcome May Beth Thompson, chief financial officer on Salt Lake City Wizard, to help us through this. OK, whoa. Salt Lake already has a wizard, and he sells necklaces.

3:06Budget wizard, yeah. Budget wizard. You can be the budget wizard. Sorry for that delay.

3:34So we're going to go over, highlight a few things at the very beginning. Then Lisa's going to discuss revenues. I will come back with expenditures. And stop us at any point in time if you have questions as we go forward with this. So next slide, please. So can I just want to highlight a few things on the proposed specifically general fund budget?

3:59There are $13.2 million in cuts across all general fund departments. There's a reduction of one-time funding for ongoing operations. We made strategic investments as increases for public safety, emergency response, and community services. We added a few staffs in the public demands in growing, in the public, where demand is growing.

4:27Eliminated or streamlined positions and programs no longer needed, resulting in 1.57 overall budget increase. That says 1.72, but it actually changed to only 1.57. Next slide, please. So the general fund revenue budget for FY 27 is $498 million. I just want to go over a couple of the major changes from the previous year so that you can see those highlights.

5:09The property tax category is increasing by about $18 million. As you know, this budget recommends a property tax increase of $13.5 million. The other portion of that increase is a $2.5 million estimated new growth. And we also have a 2.5 estimated revenue from the inland port. So those things are shown there. The sales tax, sales and use tax category is increasing by about $4.7 million.

5:42And I would say that the increase in sales tax is really mostly related to inflationary factors. It's not really a true growth of the sales and use tax, but an inflationary factor that was pretty conservative that we put into the budget here. The next category where you're seeing some increases is in licenses and permits.

6:05We are seeing increased business license applications. And in the permit area, we're projecting a one-time $2.3 million permit revenue coming in from the LDS Church for the North Temple Square reopening. One of the other areas in licenses and permits that you'll see an increase is we looked for many ways to increase revenues in this budget before the proposal of the property tax increase.

6:41And one of them is in this area in two places. We are proposing to license short-term rentals that are in approved zones. We previously haven't been licensing those, so this will give us a chance to license those. It's a small increase in revenue about $177,000. The other area here where there's an increase is in what we're proposing to do is expand the parking tax revenue to other parking lots that the city either owns or supports.

7:15Currently, mostly that revenue comes from the airport parking, so this would expand that about $500,000 in revenue. We're proposing from that. The other area that we're seeing an increase is in the area of fines. This is mostly related to parking fines. We did propose an increase to all parking fines in this budget with an emphasis on safety-related parking fines.

7:43So anything blocking an intersection, blocking a driveway, things like that are seeing a substantial increase. In parking meter collections, as you know, you guys approved an increase to parking meter rates and an expansion to the time that parking meters are in force. And we're seeing a really good success with those increases, so that revenue is projected to increase by about $1.7 million.

8:17A small increase to interest income just based on our pool funds. The other changes in this budget are really related to transfers, and last year we had quite a few one-time transfers in that we used to balance the budget. It's kind of one of our sources of pride this year is that we've reduced the amount or our reliance on one-time funds, including our use of fund balance.

8:42So the transfers, you'll see them reducing by about $13 million, and that's really us just reversing the transfers from last year. Also, our use of fund balance this year is reduced by about $8.6 million. Any questions? Yes. Thank you very much. Going back to these sales tax, I wanted to finish the whole revenue side house.

9:05The sales tax, is this consistent with what we've seen so far? You see, I know we're always flagging two months on the sales tax. But is this consistent $184 million and $188 million? Consistent what we're seeing right now as far as sales tax revenue is for this fiscal year? Yes. So we received December's numbers, and they came in a little bit higher, which allowed Andrew, who's not here, who's floating the Grand Canyon right now.

9:35That's why Lisa and I are here. Anyway, he increased that a little bit for fiscal year 2027 because of the result of our December numbers coming in at the end of March. So that's good news, but it's still keeping up with basically inflation. It's basically keeping up with just CPI. There's not any real new growth per se.

9:58It's just in the future. But that's what that's right. But it is consistent. That was really my question. Was it consistent with what we've seen so far just number wise? And so I appreciate that very much. Yeah. Thank you. Carlsen. I see here that we have the continued use of fund balance to help balance a budget for this year.

10:23Help me think about fiscal year 2028 and what might be available to us in terms of our fund balance. I know we're not even through 27 yet, but I'm thinking about in the future what options might be available to us in regards to fund balance, because it looks like we, almost for the past few years, have been drawing down from that account rather than adding to that account.

10:45We have. And the fund balance sits anywhere right with this budget between 12.07 and 12.78, I believe. I'll have to get you those numbers. They're online. So that's below the 13%. The council wants to stay at. Now, remember, this is projections. It does not include revenues coming in in fiscal 2026. It does not include also expenditures dropping from 2026.

11:13So it could be higher. Last year we projected about a 12% fund balance. It came in at about, I'd have to opt to pull up the slide, but it came in higher. So it, most likely our fund balance will be higher than 12.4%, which is where we have it currently with the MRB. I think, can you speak to the other revenue items that the city will be investigating in advance of next year's budget?

11:44So I'm thinking of the transportation utility fee and potentially a venue tax. Those were both items that were too complex to put in place for this budget cycle, but I think would be on the table for a next year's budget balancing. Yes, so we've seen several cities around Utah that are actually proposing a transportation utility fee.

12:10Our study has been completed. But after reviewing how difficult it would be to implement, you have to put it on a public utilities billing system. And as we know, public utilities is going through transition right now. So in order to put it on the legacy system, it would cost us a lot of money and then we'll transfer it to the new system.

12:30But that is something that we will be working towards this next fiscal year, for fiscal year 2027, to hopefully the mayor will bring back in fiscal year 2028 as a revenue source. So I think that that will help so that we don't have to use as much fund balance next year to the tune of $18 million because we probably won't have $18 million next year.

12:53And I think Council Member Carlson, that was your point, is that will we have $18 million to use in fund balance? Probably not. And then the other one is looking at other taxes and really doing some investigation and getting down to the other things that the state statute allows us to charge that we haven't charged in the past.

13:14So between those revenue sources, I hope that we can reduce this fund balance next year in fiscal year 2028. I think it's always been the intent of the mayor that this was going to take a couple, if not three years, to get that fund balance or operational expenditures and revenues in balance. So we always knew it was going to take two to three years.

13:43Council Members? Okay. Next slide, please. You could skip that one. This is just kind of an overview of the changes I spoke about. This, a little history of property tax revenue, just so you can see graphically what our property tax is done. This was broken out by the major categories of property taxes. Next slide. Wanted to talk just a little bit about the property tax increase and its impact.

14:21The areas that are being affected by that property tax that we intend to use it for in this proposed budget, broken out by the fire department at about 1.8 public lands maintenance. Criminal justice, our youth and family division, also a portion for street lighting, a portion of it going to sustainability, a large portion, more than half going to capital improvement projects and some of it to our fleet maintenance.

14:57And if you move to the next slide, I broke the slide. Sorry, really quick before we move on to the next slide. I just wanted to flag this for council members. This is a little bit of a different process than we've had in the past. I think if you remember in the past, we kind of thought about the budget as a whole. You guys would make changes to the budget as a whole.

15:15And then depending on if the revenue was sufficient, that's what kind of taught us if we needed a tax increase. The way state legislation is now, the mayor is required and the council is required to adopt specifically what a property tax increase would be paying for. So ultimately in our budget adoption documents, you guys will have to be comfortable with whatever one, whatever that number adds up to, whether it's 13.5 million or something less and what it's paying for.

15:47Thanks, Jen. The next slide, please. So this is because CIP is the largest portion of that. I just wanted to highlight the projects that were selected in CIP to be funded by the property tax. We have 1.9 million, 1.8 million for vision zero quarters and safety improvements, 1.1 for facilities replacement removal. There's a million dollars for the city's 50% share of sugar house park culinary water line replacement, 950,000 for the Washington Park septic expansion, 627,000 for street reconstruction and 450 for urban trails, 300,000 for the Jordan Park sewer and storm water infrastructure improvements and 50,000 for bike racks throughout the city.

16:45Any questions about that? Next slide. A little graph here on our sales tax revenues and so you can see the history there and the small projected increase we have for FY27. Next slide. I think that last slide actually illustrates well how our fund balance grew significantly in the aftermath of 2020. I think the city took a very small C conservative approach to upsetting the sales tax budget and because our actuals were significantly higher than what was budgeted, that is all money that gets deposited in the fund balance.

17:29I think the same would be true this year. We take a conservative approach this year that will replenish our fund balance if those sales tax receipts actually come in higher. That's another way that fund balance can grow or not. Yeah, thanks, Jen. Next slide. This slide breaks down the gross point of sale tax receipts in the sectors where we're seeing those revenues come in.

17:54I do want to emphasize this is an estimate here based on the first few months of actuals that we have access to but it's following our typical trend that retail trade is the largest sector followed by wholesale trade and then restaurants and food sales. Any questions? Yeah, can you define for me what a whole? I think I know a wholesale trade is but if you could just define it for me.

18:23I have a good definition for that. Thanks. Wholesale trade is construction material that we use that we collect sales tax on. Any other questions on that slide? Next slide, please. I'll turn the time over to Mary Beth to talk to you about the expenditures. So this is the overall city expenditures. Last year or the current fiscal year we sat at $1.9 billion and in fiscal year 27 we sit at $2 billion.

19:08The general fund you can see likely to set on the revenue side is increasing $7.7 million. Airports increasing $115 million, public utilities $17 million, other funds at $12 million, internal service funds at $4 million. Capital improvement fund is decreasing and that's because we used several funding sources in fiscal year 2026 from one time fund balance examples would be transportation tax the fifth, right?

19:38So we went and took looked at their fund balance for that year and put it into CIP in fiscal year 2026. Next slide, please. So this is kind of showing you just in a pie chart what it looks like general fund obviously the three biggest contributors of the general fund the airport and public utilities. Next slide, please.

20:09So up the general fund some departments are seeing a decrease and some departments are seeing an increase that increases based on the information I provided earlier in the slide deck, right? Public safety, new FTEs. Public development has a decrease, a portion of that is personal services ledger. One of the things to note is that URS gave us our percentage rates and they decreased this year so that means if you look in key changes you will see a decrease in every single department under the retirement area specifically for non-contributory because their return on investments better so they can reduce our percentage to them.

20:56So that is a decent savings for us and a big win. Justice courts obviously looks very large here but 50% of this is from BA4 for the FTEs that we approved in BA4 because you have to capture that in your budget even though you captured it in budget amendment number four. You also have to bring that into your regular budget.

21:22Here's office of reduction, the attorney's office, this 211 is also based on FTEs for prosecutor's office, in BA4 and then an additional two, prosecutors assistance in fiscal year 2027. Finance department is showing a decrease of 193 million, E911 is showing a decrease of 70. 50% of this is from telephone services that were provided three years ago but now since we've gone to VEC we no longer have to pay for that service so 50% of $350,000 of that is from that service.

22:09Public lands, this is majority of this sits as new property increases. The public services, the biggest portion of public services that $1 million is one contract where we have the clean team now, public services as bound efficiencies in that clean team so we could reduce the expenditures from a contract. Fire is full, that increase includes new firefighters for a new fire truck and police obviously that seems like a large number but remember that we have the biggest portion of that number right there is from the Utah-Himland port that is in budget amendment number five or 2.5 million of that is from there where they are requesting 13 new FTEs to help with the Westside operations.

23:09And is it accurate to say that those are essentially funded through the property tax that we are receiving from the Inland port transfer, is that right? Yes, so these are actually an agreement that we did with Utah-Himland port that actually giving us $2.5 million, roughly $2.5 million to $3 million on a yearly basis to fund these officers.

23:35It's a wash, correct. Next slide please. I think I've done some of this but let's talk a little bit further into some of the major changes. I'm sorry, Mr. Chair. I just want to kind of like emphasize that on that police house there's on that line at $7.7 million in whatever the percentage is but $2.5 million is coming from the Inland agreement or ordinance or bill on their tax increment.

24:15So we're getting 2.5 on the revenue side of the house and we're getting 2.5 on the expense side of the house so that $7 million is really closer to 4.5 million in expenditures. Yes. And I, because people will say oh that's a big jump there, yes it is but we're also getting paid for that. Not an increase in our expense.

24:40Correct. The other portion of this that is, there's two faults to this being very large. One is we have two SROs also in this budget. Those have a 50% offset in salaries. The other one is we have moved social workers out of non-departmental which I'm very excited about back into the police department so we no longer cover that expenditure inside non-departmental.

25:06It will sit in the police department. So those are the biggest reasons why it appears that it's a large number but really it's not as large as it appears because it's moving from department to department. At $2 million is social workers. So 2 million from social workers, 2.5 million from Utah and Newport, that's 4.5 million.

25:25The SROs are another 400,000 approximately. So as you continue, as I continue to talk about it, it just gets smaller. Next slide please. So one of the things that we looked at is vacancy savings. Vacancy savings in this fiscal year. So the administration has been preparing for this tough budget since January. They did a hiring freeze starting in January.

25:58They also did no raises with vacancy savings in January as well. That is going to attribute to a vacancy savings in the current fiscal year which you can see in key changes but what it does is it's basically a reduction to your fund balance. So that's part of that 18 million at 6.6 million. Part of it is vacancy savings but until that vacancy savings comes to fruition, I have to put it as a fund balance number until it comes to fruition after we do the reconciliation for next fiscal year.

26:32The other thing that the mayor has proposed in this budget is a vacancy savings for all departments in the general fund for the fiscal year 2027. So that means and that vacancy savings, we put it in vacancy savings but they can either hold a position vacant, they can use it through attrition or if they have to they can cover it through operational budget.

26:55One of the things that I say is you can't use above the line funding which is personal services funding for operational but you can use operational for personal services. So we have given the direction to the departments that however they choose to come up with that savings, that will be their choice. The other thing is the elimination of eight positions, three park rangers, three from finance and two from HR.

27:24We eliminated low use programs, we ended in reduced consulting and outreach contracts, that's the contract I was talking about in public services. Several departments reduced operating expenses for travel supplies tools, consolidated service contracts moving more work in house, reduced subsidies to programs that are no longer need no longer need them.

27:53So the $1 million for the clean contract, $1.3 million for the golf subsidy, we were subsidizing golf in general fund to the tune of $1.8 million. We will, we still have a transfer from the general fund to golf to the tune of $500,000 for their escrow payment. $622,000 was trimmed from public services costs and that ranges anywhere from travel to cleaning supplies.

28:22Police have a $715,000 vacancy savings, those are civilians, so that's a hold for civilians. 350 from 911 which we already talked about and then ending the high pass. So that totals approximately $13.2 million in vacancy savings. Next slide please. So we were talking about fund balance. So as you can see for fiscal year 2025, we had 25.8% that percent moved up to fiscal year 2026 in last year when we proposed the budget.

29:01We had it at about 12, I think 12.7. I'd have to confirm that but I think 12.7. But when you when you bring into account the revenues dropping to fund balance and the expenditures not being used, we had 25.8% which was our beginning fund balance percentage for fiscal year 2026. Right now we said it's 16.48% and in the MRB it's 12.4.

29:30One of the things that Jennifer and I spoke about yesterday is this fund balance number. So the 48, as you notice the 485 does not match with the 4.98 that the difference is the 13.5 million in property tax because I didn't know how to include it or exclude it with the new legislation. So I excluded it. The other thing is in that projected revenue is our fund balance number at 18 million.

29:59I don't believe that fund balance is a revenue. Right? It's a one time from our savings account it's not necessarily a revenue. So that's why I state that percentage could go anywhere from 12.07 to 12.78 based on what number you pick for your revenue starting value. Does that make sense? The other I think unique conundrum that the legislation created is that even if the council ends up approving the mayor's proposal going forward with 13.5 million, that money isn't real until after the truth and taxation hearing in August.

30:37And so it's not real until the first day of September. And so I guess, and maybe this is a question that we have to pose with the tax commission of like how do we, if we end up close to that 10% threshold where it actually is starting to affect our, and I hope we don't end up there, but if we do, which numbers are the legal ones that we have to abide by in terms of calculating.

30:59So future us problem, but I think the finance department flagged I think a really important issue of how those numbers work and the timing of it. Mr. Chair, just go ahead. On that subject, so if that's true then can you start hiring people before that taxation? You have to wait until that to the taxation date. So the, we've always used 10 months based on the date that hey, you got your budget July 1st, it's going to take you two months to get a new hire.

31:31So we'd say 10 months for that first year of salary. Is it now, should it be eight months if it's going to take us a month and a half to get the tooth and taxation date? We put it in at 10. Yeah. And let me tell you because the majority of the FT's that are being funded are firefighters and the chief starts his new class, the middle of September.

31:50So it will be almost a true 10 months. We had that discussion with Chief Leib and it will be almost a true 10 months. Okay. Thanks. I do think though that that is the strategy that, and that we discussed at the Utah League of Cities and Towns as well, is to the extent that FTEs are funded by the property tax increase, we do hold off on funding them until September.

32:13I think the fact that half of the property tax increase is going into CIP is also helpful because you guys don't approve that until the end of August anyway. And so that kind of naturally is held off until September. And then the other expenditures I think will similarly sit in a restricted account and from an accounting perspective they'll figure out that magic.

32:33And so that things don't get spent until September. Go ahead. Can you remind me the council policy you're just best practice regarding fund balance percentages and at what limit does it affect our credit rating? So rating agencies like us to stay above 10%. Council likes to stay above 13%. Mary Beth Thompson speaking truly likes to stay between 15 and 18%.

33:05And I will say Mary Beth Thompson likes that because that's what I like. So if I had my comfort zone would sit at 15%. Council member Erica Carlson is inclined to agree with the higher fund balance because you never know what could happen. Next slide please. You know I think that's a good point that you know it's always like hard to like balance the need and you know where the money comes from and having a healthy savings account for the same time balancing the needs of the city and tax increases or not.

33:44And proposing a tax increase to tell the neighbors that we need a lot of savings just in case. It's also a hard sell but it's you know the prudent thing to do as well. So I think balancing all these decisions is always very rough but that information was very useful. And this is this you can do this more to the presentation right now.

34:09Okay. Any more last questions council members? Next question for now because I'm sure we're going to have more questions. Okay. Thank you. Thank you so much for the presentation. Council members we item number three which was fiscal year 2026, 2027 budget staff review is going to be adjusted to a future council meeting jumping to item number four which is the fiscal year 2026, 2027 budget finance the finance department.

34:45So welcome back. I'm glad that you you know let being leave too far. We're going to hear a little presentation for the finance department. Ben Ludd key is going to join you on the same. Yeah I was telling Lisa I'm like well we get everything done all at once. So that's terrific. So we're just going to highlight a few things in the finance department where our decreases were and where our increases are.

35:20This is our mission statement and so I won't read it to you but that is our mission statement. Next slide please. So kind of want to highlight some accomplishments. We along with several departments in the mayor's office in the city have established a six year capital asset plan. We are very very proud of this. It sits in the back of the CIP book and we'd love to come back to you and kind of show you that and tell you that during this budget process.

35:53Very exciting. Jennifer knows how long it's taken us to get a capital asset plan and I am completely thrilled with how well it has come to fruition and all of and thankful for all the departments that have helped us get this capital asset plan completed because it's been a lift. The other one is we have at this point in draft the financial strategic financial excellence strategic plan.

36:21So it's a finance plan. It goes through certain things like you know when you should bond you know how you should deal with your investments how you should budget how you should do accounting so it goes through all of that. And it also will create a creation of the city finance committee. That committee will work with the CIP committee in order to help with the funding sources as we move forward and it will also create a subcommittee for administrative audit so that they will be making the decisions on the plan.

37:00We've created a simplified pamphlet for the version of the budget book which is really exciting. We also don't have on here but hopefully we'll have in the next couple months a completed what we call PAFR which is a pamphlet ACHFRA so if you ever have to go through and look at the ACHFRA it's really boring. I mean it's really good to read if you want to go to sleep but the PAFR is something that is easily explainable to residents of Salt Lake City.

37:28It's about eight pages. I'm really excited a lot of larger cities have this. Houston, Atlanta, San Diego they all have a PAFR so we are close on getting that completed and we will be moving that along with the ACHFRA which we do in December 31st so that it can go to the GFOA for the GFOA Excellence Award. Out in administrative appeals process for civil citations this will help reduce the small claims at the Justice Courts and now those will be brought in house and the administrative appeals process will be in house so we don't have bogging down the small claim system and we implement a new investment software system.

38:21Next slide please. Some of the areas that we have found efficiencies is in work day. Work day has as painful as I look back two and a half years ago it was and all I wanted to do was cry every day. I'm not crying now and it has created great efficiencies and I'm really excited to see the system grow and mature. So with that we've decentralized accounts payable invoices so all invoices now are input through the departments which is exciting.

38:58They used to actually bring them to us and we used to input them and process them. Same thing with POs we would take the invoice and would match it to the golden rod on the P.O. and then we'd key it in. We don't have to do any of that anymore. That all sits inside the departments. The automation of the fixed asset depreciation calculation this used to take us months in the legacy system and now it takes us a week to do this depreciation schedule so that's very exciting as well.

39:29And then sales force contract management. So we did have a contract management system. I guess that's what you'll call it. But with the assistance of Cindy Liu, the recorder's office and procurement we now have a true contract management system. It's called ALMA where all contracts are routed through the system which also ensures that the recorder's office gets the information with all the proper signatures which is really exciting for all of us.

40:02Specifically when I've gone and done research and said where's this contract in the recorder's office in previous would say we don't have that contract. We're not sure where it is. This ensures that all contracts make it to the recorder's office and recorded properly. So that was a great team effort between the recorder's office and procurement.

40:21And it also reduced our record recording by about eight days. So adaptive planning is where we're moving to now. This is exciting and scary. We will be doing all of our budgets on adaptive planning across my fingers. I will have the MRB completed by October, the MRB for fiscal year 2027 in adaptive planning for October.

40:51What this means for council and council staff is that we will no longer be posting the MRB into workday because it's really not a real budget. It will all live in adaptive. Council staff will do all of their work in adaptive. We can create scenarios on demand and adaptive. It will be a very powerful tool. It's going to take a lot of work, but we have a great team that's very excited to start this work.

41:16We started it now with the personnel. Personnel right now is currently being done by Excel spreadsheet. So that will be very exciting to not have to do personnel by Excel spreadsheet any longer. Next slide, please. So our current budget is 13.6 and our cut scenario is 192,000. Total budget will be 13.4. Next slide, please.

41:46We have a revenue for interest income at 95k. We also have an expense offset to that revenue of 95k. That's for interest income and interest expense, mainly due to our investment and our investment company. Personal services are reduced by 168,000 and charges in service by 120,000. Next slide, please. I won't read through these.

42:13I'll kind of talk through them a little bit. All three of these positions have the reason that we put them on our 5% cut for the mayor is because of efficiencies. Two of them from workday efficiencies and one just because procurement does things very differently. So we put three FTEs cut from the finance department. Next slide, please.

42:45And then the other thing we did was we will be eliminating the contract with program based budgeting. We won't need that program based budgeting software package anymore because we're going to move it into adaptive. So adaptive along with our regular budgeting software will also be our program based budgeting software package.

43:06So we won't need a separate software package that we have to integrate into the systems. And then we did $20,000 in travel and training. Next slide, please. That's it? Go ahead and do it. That's my number. Thank you. I appreciate that. I remember three years ago, two and a half years ago when we discussed implementing workday.

43:30And we knew it was going to have some efficiencies, but we also knew it was going to be a lot of work beyond that. And also a lot of training and ongoing training so that we don't step back and go back to our spreadsheets and Excels and our pivot tables. And now we can use workday. And I appreciate that. You know, we're seeing that fruition in what you just presented here.

43:51You see that same efficiencies going through other departments as we get more mature or they already seen their efficiencies in their need for additional hours to do a job. I mean, either they're different people or they can do more in less hours and save money in other ways. That's a good question. I don't know at this point that we have reviewed that completely for me to give you an accurate answer.

44:19I think that specifically when it comes to the new adaptive or what we will call the budget software package, I think that they could see some efficiencies inside the departments because they won't be doing this manual Excel spreadsheet process, which I'm very excited about in that area. Yeah, because I'm thrilled that you as fine as you came up with and said, hey, we don't need this.

44:43I'm just looking at other departments. Is there other efficiencies that we're not seeing or they're not stating any. So maybe I think, you know, it's a lot of soft costs and it's also how you do things, right? I mean, you have to figure out how to do things a little differently, right? And where you can change and move things around.

45:10You know, one of the things with one of the positions that we eliminated was some redundancy between IMS and the finance department. And so, you know, I went to Zach and said, we're seeing some redundancies here. Can we team up so that we can create some efficiencies inside the finance and IMS department? So do I think that they're out there?

45:31Yeah, could I tell you what they are? I'm not sure. Okay. All right. Thank you very much, Bill. Council Member Corlissant. Clearly, I have a lot of questions. This is my first rodeo. So can you explain to me or just identify what I'm looking at the budget book, the increase in investment advisor fees expense? Like what is that expense?

45:57And help me understand how it is budget neutral? Yeah. So we do our investments two ways. The state invest a portion of our cash and then we also do our own investors. And that expense used to be just a direct offset. So it would be a direct, we'd net it with revenues. To be more transparent, we put the revenue in and the expense in.

46:23So you'll see a revenue for $95,000 in expense for our investment advisors. Thank you for clarifying that. Uh-huh. Council Member Beecher. I was just joking with Council Member Wharton that you could probably poison me, Marybeth, because when you speak, I trust it has been vetted so well and your team is so exceptional.

46:43So thank you for all the work I know this year, in particular was difficult. Um, on page 194 of our budget book, under funding sources, it looks like there's a new funding source that is going into effect this year. The property tax passed through fund. Can you explain to me what that is? Sure. So, um, I had an aha moment probably four weeks ago and I was like, holy smokes, how am I going to get the library there funding?

47:17Because the library no longer is a taxing entity and that's $33 million. One of the things that we've had a really hard time with and explaining is the revenues that we see inside our property taxes for the CRA. Now I'm going to have the revenues for the CRA. I'm going to have the revenues for the library. I'm going to have the revenues for Inlandport.

47:37I'm going to have the revenues for the convention hotel, which amounts to about $66 million. It over inflates our revenues. It also over inflates our expenses, but it's not very transparent. So we created a new fund that will roll up into the general fund that has both revenues and expenses that will offset the revenues for the library, for the CRA, for Inlandport, and for the convention hotel, you also have a direct expense offset.

48:06So if you looked at last year's budget, you would see our budget started at $512 million and this year it looks like it's at $498. It's because we pulled the CRA revenue out of there, put it into the property tax pass-through account and we also pulled the expenses out of there and put it into the property tax pass-through account.

48:26It's more transparent for us to see exactly how much money we have available to fund the expenditures inside the general fund. I really, really, really appreciate this because the authorities, as anyone who has seen my soapbox riding, knows is one of the things that they can't seem to get constituents to care about, although with MITA and the news, they're starting to care about them a little more.

48:50Thank you. This is a really, really helpful tool for explaining the constituents and separating out a little more clearly. Thank you. I think it became crystallized, especially this year after last year's interpretation by the tax commission that the library is not a separate taxing entity. So that became a very real challenge for the city to figure out how do we recognize that revenue without owning the revenue, so to speak, because it's not our revenue to own.

49:18It's got to go back to the library for their operations. I think this is a nice way to just solve all of that challenge, all of that transparency challenge, but the library being a core of it. Is there any of the UFARE district revenue in here as well? No. Okay. It's only property tax, so it's not sales tax. It's not the telecoms, any of the other, it's just property tax because we are the taxing entity for the property tax for all of those areas.

49:48I just think it makes it more transparent. Yeah. There are several districts too, though, that, I mean, and I think UFARE is one. You asking me the question, asking the question is making me think that the legislation was written away where the revenue is directly given to them, not as an entity. So it doesn't come through the city, like the revenue for the CRA does.

50:10So it goes directly to UFARE, but all of those are just directed. We directed away from us. Council members, no more presentation. I think that, let me check that you're not next again. No, you're not. Thank you. Thank you for the presentation. I appreciate the time. Thank you, Council. The item number six also, which is the budget for sustainability department and the refuse fund will be adjusted to a future meeting.

50:45Also the changes that we made today, we decided to start it later. Then there is, we have a break, but will you be open to continuing the meeting? Is that okay, since it was been a short meeting so far? No, if the Justice Court is here yet, Michael was going to reach out to them. Have we heard back from them? Okay, we have not heard back from them yet.

51:11They actually might have court. So trying to extend some grace that maybe they're double booked. The impact schedule. That's just informational. And maybe I'll just take the opportunity to direct Council members. You can pull it up on online packet materials. It just has to appear at every meeting by state law. And it goes exactly through what Mary Beth covered in her overview.

51:40It calculates the percentage of increase, the impact on an average home, the impact on a million dollar business, and then what exactly that revenue would be used for. We will update that schedule if and when the Council decides to make changes to it. This was posted obviously on the online as required. Is that the only requirement of the law?

52:07It's required to be officially presented to the Council so that happened last Tuesday. And then it will appear on every work session where you guys are talking about the budget. So we'll have it on every work session essentially from here to June. We will have it as part of the materials for our budget public hearings.

52:25So it'll be part of the materials that the public could look at if they want to come and talk to you guys. And then the law requires you guys to adopt a version of this. So we will update it with whatever the Council ends up deciding in early to mid-June. And then that will, that notice will go to the tax commission and the county in advance of the August Truth and Taxation hearing.

52:52Or everything will finally be final. Okay. Definitely. I think that makes sense. But you know, that law that we were discussing, that triggered all of this new process this year is an interesting place for all municipalities to be right now. But I also know that we have, I have received my notice in my mailbox from the City Council telling us about the budget discussions.

53:25And you know, I know that this Council goes beyond, and the City goes beyond informing our neighbors about the budget and the impact and the proposed budget. So you know, what else do we do? Maybe that's an important little brief thing to highlight right now. I'll need to double check with our comms team. But I think I agree with you that we do a great job trying to make what is a pretty dense bit of information, very accessible and understandable for general public.

54:00We are talking about doing a second postcard for the second budget hearing. I'm not, I'm like hoping like who a pop senate corrects me if I'm wrong. I'm not positive about that. But in addition to the mailing that went out, what we're really hoping that people do is use our budget hub, our fiscal year 27 budget hub as the place for all information, as it updates, especially as council members continue your deliberations and your, so all of this information will be found on the budget hub if it's not there already.

54:34In fact, I'm pretty sure it's there already. And that is really the place where we're driving people to because it'll have the most updated information and the most updated kind of requirements. Hi, can you correct me? Where did we land on the extra mailing for that second hearing? So the communications team has the postcard ready.

54:57I think we were waiting to super confirm that it was not required in the state legislation. And then it's ready to go out if council members would like it to go out. But we don't need to do it because it was on the citywide mailer that the administration prepared. And how can neighbors access the budget hub? Is there a short address to that?

55:20Or is that very? Yes. And I can't remember which version is ours, but I can... I think that would be wonderful to list. Maybe this is the one, right? link.slc.gov slash slc fy27. Yes, yes. It is. It's on the agendas. It's on our homepage. Yes. Yes. Yes. Yes. Yes. And it is also the administration included on that postcard that was delivered to all city residents and property owners.

55:53So it is on there as well. Okay. That one works very well. So it's link.slc.gov slash slc fy27. And we have included it in all of our budget staff reports as well. So that if someone's reading a budget staff report, they'll see that link there. And yeah, I do think that'll be... That's the say... I mean, when anyone asks me where they can find most of the information about the budget, that's where I've just been telling people to go because I think it's most comprehensive.

56:23The administration also keeps a budget page live and updated with what the mayor's proposal is. And both the administration's page and the council's page are cross linked so that you can get back and forth and has the mayor's recommended budget information on their staff reports as they're updated and other engagement information, including a lot of more information on the utility bills and rate calculators and such like that.

56:52I think because we don't have the next item, the people present the next item, we should take a 10 minute break and see if we can make it happen. So I'll come back at 30. Thank you. We're reconvening as the City Council right now. We are reconvening as the City Council right now. We're going to move on to item number seven, which is the fiscal year 2026, 2027 budget discussion for the Justice Court welcoming to Michael Sanders' Council policy analyst to give us a short introduction and an introduction of the members of the table.

1:20:13Okay, great. Thank you, council. So the FY2027 Justice Court budget is proposed to be $7,530,063. This is an increase of about $1.2 million or a 19.90% increase. The budget includes continued funding for the nine FTEs approved in the FY26 budget amendment number four. Additionally, the budget proposes adding 10 months of funding for four judicial assistance and one Justice Court manager.

1:20:47This would bring the Justice Court's FTE count to 53. The additions amounts to $432,000 in funding, which would be contingent upon approval of a proposed property tax increase. Additionally information on diversion efforts, performance, measures, and workload can be found in your packets. There's policy questions located on the bottom portion of page two of the staff report.

1:21:10And with that, I'll yield the floor to the Justice Court. It's time to be with you today. I'm Jo Jo Liu. I'm currently presiding judge at the Justice Court. On behalf of Fairchild, our director, she apologizes for her absence. She is really very ill today. And so we will be standing on her behalf. I'm Belinda Hitchcock.

1:21:39I'm the financial manager of the Justice Court. And so there is a presentation which I will go over. I'm just going to hit the highlights. I want to make sure there's enough time for questions from the council members. So do I, Francis? Do I? Okay, next slide. So I think the council members are all aware of the mission of the Justice Court, what we're trying to achieve in terms of outcomes.

1:22:13Next slide. So this is in our annual report, I believe in briefing, also provided to the council some of our accomplishments that we wanted to highlight. This year includes all of those listed. I think this is perhaps too detailed to go into detail at this point. I'm very happy to circle back, provide any more details or texture for folks who are interested in any of these items.

1:22:43Next slide. And so there was, and I think this has previously been shared with the council at the time. The court came before it in terms of the budget, the year, your budget amendment. There has been many efforts to be able to find efficiencies, reorganize without having to ask for additional budget from the council prior.

1:23:12We also have found certain efficiencies. We have taken advantage in a lot of areas of grant funding without needing to be able to increase capacity without having to ask for additional funding from the city, other areas of efficiencies. Next slide. And this provides the overview as to what the request scenario is for this budget year.

1:23:37Next slide. Yeah. Alternatively on this. Just briefly on this one, this is just a more detailed explanation of the current budget and all the changes and then that's 7.5 million that was previously mentioned. So again, any questions when we circle back, I'd be happy to give you more detail. Next slide. These next two slides are just some bullet points on our need for the additional staff that we're asking for.

1:24:13This talks about the five additional staff. This is for 10 months of the year. And then the next slide talks about the additional operating expenses in relation to BA4 that we were given that increase our budget as well. These are mostly be used for things like interpreter, jury fees, things that are related to that sixth judge that we received budgeting for.

1:24:35Next slide. And so in terms of some of the changes that have been the underlying reason why the court has needed to come first for the major budget amendments and then now for the remaining items. We have a projected increase of 85% in criminal filings over that 10 year period. There's been a 37% increase as between July 25 and February 26.

1:25:06A projected increase of 170% in criminal case hearings during that 10 year period, 135% in hearings during that July 25 to February 26 period. Our criminal time to disposition has slowed. That's not a good thing. We aim to be disposing of cases consistent with the state standard of 95%. That has been steadily going downward because and it's correlated with the increase in the case that we have.

1:25:40Similarly with our criminal case clearance rate, we want to be at 100%. We're not close to that and that is been proportionally and it's correlated directly with our increase in case load. And I. Is that the last slide? Oh, okay. Charts and graphs on the next few slides. And so this is just a visual depiction of the changes in criminal case filings over that 10 year period.

1:26:13Next slide. This is a change in the number of hearings. So the reason why this is not a one on one is because as our system becomes over its capacity, each hearing becomes increasingly less efficient. The number of continuances that result, the number of touches that have to happen for any given case, sort of increases exponentially per case file.

1:26:42That's why you're seeing the number of hearings being greater than the number of increases in filings. Next slide. And then this is the staffing proposal. This is what it would look like. And what we've asked for here is I think represents the, I think it's the first one. And so you're right there. It's the bare minimum staffing.

1:27:15So the council had asked us to lay this out in terms of how we see the staffing that's necessary for the courts. We identified this has been quite some time as the bare minimum staffing is the staffing that we're asking for with a budget amendment plus what's being requested in this budget year. And so the ask for this fiscal year is just the remaining items on the bare minimum staffing.

1:27:44And with that, we're very happy to yield a forward to any questions. Council members? Yes, please. So thank you for this. And you guys have really done an incredible job of thoughtfully educating us and creating opportunities for us to both be on site with you to kind of see the constraints of even your current space related to the employees you have and walking through some of the data in more detail.

1:28:13And I'm really grateful for that. I think my question comes back to your last slide related to like we're at bare minimum staffing. And so the difference you see between that versus functional versus kind of what an ideal state would look like. Can you just help me kind of capture like what the differences are at those levels just for my awareness as we look not just to this fiscal year but also future fiscal years?

1:28:43So by definition, this requires a little bit of speculation and projection on our part, right? So there are certain factors that are more able to be predicted that things like population growth, things like if you look historically, what have been the changes in the growth at our court. That part of it is part of what is built in here.

1:29:08That if we are to expect the same kind of incremental growth at the time, then in order for us to not have to come back year after year but instead be planning out for more of a 5, 10 year horizon, then if we're able to capture functional or a more ideal staffing, then we anticipate that we don't need to come back anytime soon for additional FTEs.

1:29:33As you know, a lot of what matters for our caseload is entirely outside of our control. It has to do with policy that of course is not the business of the court. We only respond to the amount of cases that come before us. With that, it's not, you know, I don't have a crystal ball. I don't think anyone else does. I think I can say that I do feel optimistic that with a lot of the investments happening at the state level, at the city level, at the county level, in housing, behavioral health and most importantly coordination between the criminal justice partners, I really hope that we do see a decrease in the resources that we're asking from the city over time.

1:30:20I hope that we're really capturing that. And so in order to get there, right, because we're at a time of just an incredible large caseload and not yet capturing some of that problem solving and efficiencies that we hope to see over time and all the agencies need some extra capacity in order to even be involved in that problem solving, even to be able to involve in that collaboration.

1:30:48And so I think that the functional staffing represents where we would want to be to be able to fully capture the efficiencies that we hope really are going to be a part of the presentations to the council over time. I hope that answers your question. Yeah, thank you. No, I appreciate it. Especially just the context over not necessarily having hard data and using those estimates, but also being thoughtful about not wanting to be in the cycle of sitting in a chair a year after year being like, so now we need and now we need and really looking ahead.

1:31:26So that's helpful. Thank you. Council members, Council Member Beecher? I'm going to ask a question that might not be in your purview, but I was checking in non-departmental with the legal defenders. And so we know that even if you have enough judges and even if you were magically at that sustainable level, if we don't have the defense there, are you optimistic that what we're doing is going to be able, that we're investing strategically to make sure that your goals are achievable because of those factors outside of you as well?

1:32:05So my understanding is that the budget requests were made in coordination across the three agencies and so they line up with each other. And so to the extent to which the investments are being made as part of that package, then the answer is yes. I mean, it makes no sense to fund the Justice Court with having the work of the court is brought to us, is litigated.

1:32:31The problem solving happens largely in terms of the investigation that prosecutors are able to do, the work that LDA is able to do with their clients, their work together in crafting a global resolution, only then does it come before the court. And so those are really threshold resources. And then I understand the reason for separations, but are we able to coordinate a little more to find efficiencies on things like my constituents, their top two concerns when it comes to the courts are making sure that people have access to legal representation of their process.

1:33:06So that goes to the staffing part. And then the second one they said almost equally was connecting individuals to supportive services. And so in my district, we're all, you know, those are the things. Are we, have there been coordination to see if we can find efficiencies moving forward with that too? I know all of you over there care about the people who you interact with.

1:33:26Absolutely. I mean, I would say that our Criminal Justice Interagency Partners have a very strong historical relationship of collaboration. And I will also say that that's been increasingly harder to do and not because of personalities or people or the quality of relationships. It's just the stress on the system. Because, you know, to the extent to which there is low hanging fruit on solving problems, we have found those low hanging fruits.

1:33:54And so then as you're thinking about, okay, what's the next level in terms of how we can problem solve across our system? By definition, is going to be a pain point that is disproportionately born by one agency, depending on what the idea is, right? And historically, we've always been able to do that for each other. We've always been able to say, that's a great idea that does improve the system overall, the fact that it creates X amount of wear and tear.

1:34:21Now on these usual assistance, the court can offer because we want to solve problems for everybody. Everybody is not in a position to do that. And that's because of the case load. So then just one more. Does this bare minimum staffing get you to a place where you're able to take enough pressure off the system so that you can return to that not just day to day survival, but a little more strategic or would that is that where the functional staffing gives us?

1:34:49I think that I think we can make it work with a bare minimum. Could I add one thing on talking about the staffing and such that we were just talking about? We are also in the process of working on getting an NCS grant, which is going to be a five to ten year strategic plan for us to better lay out what our needs are going to be and how we can perform better.

1:35:11And we also want to just mention that over the past ten years that we're kind of at that period that we're talking about, we haven't added any FTEs. That's a good point. More Carson. I just wanted to really iterate some of the data points that stood out to me in your presentation. And a projected 85% increase in filings from what was that 2016 to 2026, a 37% increase in criminal case filings over the past year projected increase of 117% in criminal case hearings from 2026 to 2026 and zero increase in FTE since 2016.

1:35:55So I just wanted to point out that those are some statistics that really shall shock me a little bit in terms of the strain the system has been under. I definitely I would like to agree and I often focus on the balancing between the public defense and access to that and the prosecution balancing those two. But it's as important to make sure that the system works.

1:36:26You know, they have the resources to dedicate the time and the focus in an efficient way and doing it correctly. So it is unfortunate that we don't have the resources to at the moment to really give you all that you need. There's a lot of constraints right now. But we as the body we have many times talked about how important this is to us and to the residents of the city.

1:36:57So we definitely very supportive generally about the justice court requests right now. So certainly we're going to be debating and discussing more about the budget and making final decisions soon. Yes, go ahead. I kind of made an executive decision to flag whenever we are hearing from a department that is part of the property tax increase proposal that I'll make sure to flag that for you guys.

1:37:27So the justice court has two line items that are part of the property tax proposal totaling 430,000. There's related increases in the prosecutor's office for two legal assistance totaling 127,000 and then 961,000 in non-departmental for legal defenders. I think we talked about this as like a system wide needs. So that total amount in the property tax increase is 1.5 million.

1:37:55So that would be a placeholder for September one when that would become effective. So just disclosing that. I would like to flag maybe for a longer conversation about the needs, the physical needs of the courts. And I think this conversation has come to us quite often related to spacing, multiple departments and with the Leonardo and all of these old buildings coming back to the city.

1:38:27I think that this is the question that is probably beyond the justice courts alone. But I really would like a briefing at some point about how are we going to move all these legal pieces that are being point to the function of the city to find efficiencies. And certainly a question for costs and how we're going to make an argument to the residents of select city of what are we going to do here.

1:38:55Again, thank you so much for the presentation. Thank you for allowing us to move around the agenda today. We'll try our best here. Again, please share with all the stuff of the justice court that how valued they are from the city council. Thank you. Thank you. Thank you for your time. Council members, I think that concludes the items for discussion right now.

1:39:20But we have proposed a close meeting and I will need a motion for that. This is for the purpose of advice of council. We discussed collective bargaining strategies to discuss collective bargaining and strategy session to discuss pending and reasonable imminent litigation. Yes, and if you can add the personal and professional competence of an individual.

1:39:57You can't. You can't. You can't. Okay. Mr. Chair, I move that we enter a closed meeting for the purpose of discussing the public labor negotiations strategy of reasonably imminent litigation and to discuss the personal competency of an employee and to receive advice of council. Second, I have a motion by Council member Wharton on a second by Council member Dugan.

1:40:35I'm going to call the question. Council member Young. Aye. Council member Pietro. Aye. Council member Wharton. Council member Colson. Aye. The motion on goes unanimously close to the meeting. We are going to adjourn after that close session. Thank all those that have tuned in for this meeting.