OurWeek The Grant County Record in Grant County · Budget committee · 2025-08-07 · full transcript https://www.youtube.com/watch?v=0v-b67_t6uc Exported Fri, 14 Aug 2026 22:36:45 GMT Source: YouTube automatic captions. Copied into the combined index from the marion-city-council-indexed report; same text, key prefixed by body. These transcripts are machine-generated. They garble proper nouns badly — company and personal names especially. Watch the recording before repeating any name, number, or quotation. The video is the record. ============================================================================== Indexed at https://ourweek.in/grant-county/reports/grant-county-record 1:34 Okay. Good evening. 1:39 We're going to go ahead and get this meeting started. It is streaming uh live on YouTube right now since it's the entire council here. Today's August 7th, 1:48 2025. Mar and Common Council budget committee meeting. Our first uh for 2025 looking at 2026. 1:57 Thank you all the council members that came tonight. And I am going to go ahead and pass this over to the mayor in a 2:04 second. I will say that I would um kind of like to keep this meeting under two hours. Um trying to not make it long 2:13 exhaustive nights. If it needs to go over two hours, then I think it's probably best we move to another meeting if needed. So, um, we'll try and stay 2:23 within that range, but if we get done before two hours, that's fine as well. All right, Mayor. Yes. 2:28 Okay, sounds good. All right, I'm going to go and hand it over to you. 2:31 Okay. Um, well, what an honor it is to be on my second budget cycle now and work with you all, present um the city 2:38 budget. Thankful for the time um and listening and all the work that everyone has done to put into this. So tonight is going to be a little bit off of traditional how we did budget last year. 2:49 So today um tonight should I say we have Paige with us from Baker Tilly who's going to carry a lot of load tonight and a lot in in the presentation and explain 2:58 just um from budget 101 to um where our budget is and where our finances are and where uh how the Senate bill um senator 3:06 road a one has um will potentially affect the city. So tonight we'll spend a lot of time on that and engaging in questions around that and then um I 3:14 believe our budget books are complete and then um the idea is that you guys will have those either by um tomorrow or Monday and then on the second budget 3:22 committee meeting which is scheduled I believe two weeks from now we'll be in the more traditional stance where it'll be myself and all the department heads 3:30 here to um go through and pick that apart and um how you see fit. So I'm looking forward to working with you all. 3:36 So without further ado, I'll have Paige come up and run through our her presentation and then we'll be open for engagement and questions throughout the whole way. Thank you. 3:46 Thank you so much. Thank you for coming here, Paige. Yeah, just the red button. Thank you. 3:51 Thank you for having me. Um you'll be happy to know that my presentation is less than one hour 3:58 and this is a great precursor to your your budget meetings that are coming up. 4:03 I know you were all hopeful to get a budget book, but what I want to talk about tonight is um like a budget 101. 4:12 It's it's just a good refresher. I know many of you already know a lot about this, but this is a very good refresher. 4:17 And then I am going to touch a little bit on where you stand for 2026 and beyond in light of the new legislation. 4:26 So, are you going to show my 4:44 Okay. 4:46 So we we can go to the first slide. So the foundation of the budget process is the net assessed value. So that's the value 4:55 of all the real and personal property not only within the city but also within the county as a whole. Those property 5:02 values are determined um at the county level and actually the county auditor 5:10 will certify those values to the department of local government finance the DGF and they're supposed to do that by August one but I can tell you most 5:17 counties in the state right now are have not hit the August one deadline. um and we don't expect them to because of the changes in Senate enrolled act one. 5:27 There's lots of things that have to be updated, you know, at the county level, but hopefully sometime this month we 5:35 will get your net assessed values. Um, so while that's happening locally, you're working on the budgets and so you 5:42 will prepare the spending plans. The department heads will prepare the spending plans and the budget will be 5:49 input into gateway which is the Indiana government transparency portal. Anybody 5:56 from the public can log into Gateway and look at anything related to all taxing units within the state. But then there's 6:03 also a special login for the finance officers of each um taxing unit where they will input the budgets. So that happens July through October. 6:14 So after the budget is adopted and submitted via the gateway portal, um the DLGF, the state will review those 6:23 budgets and really they don't care about what you're spending your money on. 6:28 That's for state board of accounts to worry about. What they really are looking at is number one, did you follow the statutory process? Meaning, did you 6:38 submit a notice to taxpayers and gateway 10 days before your public hearing? Did you have the public hearing? Did you have the adoption? Did you follow those 6:45 statutory steps? So, that's the one thing. The second thing is, can you fund the budget that you're proposing with 6:52 the cash on hand plus the revenues we're estimating for that year? And it's important that you know that the DLGF, 7:00 it's not their responsibility to determine if your budget is a balanced budget, a deficit budget, if you're 7:08 going to spend every single dime in the bank account. That's not that's not their authority. Their authority is just what you presented cannot be funded. 7:17 That's it. So really where we come into play and we we assist the controllers's office is to make sure that you have a 7:25 balanced budget where you're not spending more than what you bring in in a given year because it's just like at home if you spend more than what your 7:32 paychecks are, you're either using your savings account or you're using credit cards or you're borrowing. So it's just like that. So that that's a very 7:41 important um thing that we need to look at. 7:43 Actually, one second. Yes. Just for people might be watching or in the audience, a lot of acronyms. So DLGF, for those of you that don't know, it 7:52 stands for the Department of Local Government Finance. So that is an actual Indiana Department. So when you hear us say DLGF, that is an Indiana Department that oversees local government finance. 8:04 Just want to clarify that. 8:05 Yeah, thank you. I'll try not to use those acronyms. 8:10 Um, and so once the budgets and the tax rates and the levies are certified, the the Department of Local Government 8:17 Finance will will certify the tax rates, the property tax rates. And that's very important because once the county gets 8:26 those tax rates, they can prepare the tax bills. Now, tax bills aren't prepared until sometime in April, 8:34 but it's important for you to know that there's there's these credits called circuit breaker credits, which I'm going to get to in a minute. Those credits are 8:43 not determined until the tax bills are calculated. So, we're, you know, we're going to talk about estimated circuit 8:50 breaker credits because it's just an estimate right now, but the actual circuit breakers are not calculated and known until April. And that's why 8:58 sometimes Municipalities have to make a course correction when they find out what those circuit breaker credits are in April. It's like, oh no, that was 9:05 either a lot more or a lot less than what we had anticipated. 9:11 Um, and then the final step of the budget process is the tax payments. So, of course, uh, property tax bills are 9:17 due May 10th and November 10th, and those distributions are made to the taxing units in June and December. So 9:26 property tax is your primary funding source, but you're only getting it basically twice a year. So again, I kind of go back to, you know, at home, we're 9:34 getting a paycheck sometimes twice a month or sometimes once a week. Here you're getting your primary revenue source only two times a year. So we have 9:43 to make sure that you have uh sufficient cash on hand, sufficient cash reserves to cover those times of of low cash flow. Next slide. 9:54 So, how does local government fund services? Well, it's not just property tax. Um, there's actually various 10:01 funding sources. Yes, property tax is the primary funding source. Local income tax comes in at a at a close second. And 10:08 then that is really just the tax on your adjusted gross income for the state of Indiana. There's also financial institutions tax, which is a bank tax. 10:19 And then there's vehicle excise and commercial vehicle excise tax. And those are the taxes that you pay when you go to the license branch to renew your 10:28 vehicle or register a new vehicle. Um that is actually distributed out to taxing units within the county. Other 10:36 taxes would be gas tax. So for you that would be motor vehicle highway and local road street. Those are derived from gas taxes. So the ga the taxes you pay at the gas pump. There's also wheel tax. 10:48 Some counties and some municipalities have adopted a wheel tax, and this county does have a county wheel tax, and 10:55 that's just a a fee per vehicle. Um, that is paid also at the license branch. 11:01 Uh, riverboat wagering tax, you do get a small portion of that. So, the statute says that the first 33 million of 11:09 wagering tax comes off the top and then it gets distributed out to cities, towns, and counties. uh cigarette and alcohol beverage tax. 11:18 You get a little bit of that. That's not a big revenue stream. And then there's a bunch of local revenues. Uh licenses and 11:25 permits, charges for services, fines and fees like ordinance violations, building permits, earnings on investments. We've 11:33 seen a big jump in interest rates, but we don't obviously expect that to continue at the high levels they are now. 11:42 I have a question for you. You mentioned gas tax. Yes. I know the gas tax goes to the state. Um, but I don't correct me if I'm wrong. 11:51 That doesn't get then distributed to the local municipalities. Correct. It does. No, it does. How do we receive it? 11:57 So, you receive it in the form of MVH distributions and local road street distributions. So, it goes directly into your motor vehicle highway and your 12:05 local road and street funds. And there's a big distribution formula. Part of it has to do with how many road miles you have and part of it has to do with 12:13 population. But you're right, a big chunk is taken off the top and it goes to NDOT. 12:18 Well, I knew it went towards roads and motor vehicle stuff, but I I I thought you meant like it goes to a fund that's 12:26 directly in the city. So, yeah, I was like, I don't think we have a fund that gas tax goes straight into, but I Yeah, it circles back around into the city. I got you. It does. It sure does. 12:37 So the next slide, if you're interested, this is 2024 actual receipts for your major operating funds. So you can see that 17.5 million is property tax. 12:49 That's 53%. So over half of your revenues are coming from property tax. Local income tax is is second there. 12:57 That's 30% at $9.8 million. And then you've got the other smaller uh you know 13:04 gas tax, vehicle excise and other receipts. I think this chart is important because the changes in Senate enrolled act one and some other 13:12 legislation that just passed is going to affect property tax revenue and local income tax revenue. 13:22 Uh next slide. So property taxes property taxes are based on net assessed 13:29 value. The gross assessed value should be what you could sell the property for in the current market. Although I think 13:37 for the most part it is a little bit less than what you can sell your property for. But that said, your taxes 13:46 are based on a net assessed value. And what the property tax relief uh legislation did was to try to to lower 13:55 that net assessed value so that your taxable value is lower. So that would 14:02 hopefully um reduce the tax bill. Now, it remains to be seen how much the tax bill will be reduced. I've got an example in here of of some of the 14:10 numbers, but I think what's going to happen is yes, there will be some property tax relief, but also local 14:18 income taxes will go up. So, as far as the average household, I'm not sure there's going to be a whole lot of savings, but but we'll see what happens. 14:26 So, our property tax rate is applied to each $100 of net assessed value. So, basically, we take the net assessed 14:33 value, divide it by 100, multiply it by the tax rate, and that is the property tax levy that is generated. That's 14:41 different than some of our surrounding states where they they apply their property tax rate per 1,000. So we are per 100. 14:50 Moving on to the next slide. So as you probably know, all municipalities in the state, well really all taxing units in 14:58 the state are limited by how much they can raise in property tax. So even if you wanted another five million, 10 15:06 million, you you can't get it. You're limited. And you're limited by something called a maximum levy. 15:13 Um we do get a little bit of growth on that maximum levy every year. And it's based on really based on the economy. 15:22 It's based on a six-year average of non-farm personal income. But really what that means is it's based on how well the economy is doing. The 15:30 legislature limited that growth in 2024, 2025, and 15:36 2026 to 4%. Had they not placed those limitations in place, it would have been 5% growth last year, I'm sorry, in 2025, 15:46 and it would have been 5.5% in 2026. So, they did limit that growth again to try to help with property tax relief. 15:55 Um, what you all need to know is that the the amount that you can levy is not impacted by population, assessed values, 16:04 development, or local expenditure. So, in other words, here's a here's a misconception. People think, oh, there's all this development, you know, coming 16:13 on in the city or, you know, there's a new warehouse, whatever. Yes, that increases your assessed value, but it does not generate additional property 16:22 tax dollars unless that development is in a tiff area. So you're So here's what happens when your assessed value goes 16:29 up. It takes a lower tax rate to get that that amount of property tax that you're allowed to raise. That's really what happens is it adjusts the tax rate. 16:38 You don't get new revenue. 16:42 So can um just to clarify so let's just say you said aware let's use our example a warehouse comes to 16:50 town and builds a huge factory or warehouse and they contribute to the property taxes for the city of Marian 16:59 essentially that would help alleviate the property taxes for residences correct yes it would push down the tax so big developments can be good for the 17:07 residents it's great yes just wanted to get that out there Oh yes. As your assessed value grows, the rate comes down. But what also comes 17:15 down is the circuit breaker credits as well. So it helps you, it helps the taxpayers. Growth is good. Growth is good. Um the next slide, please. 17:26 So this is I'm showing you here what your maximum levy limitation is. So your 17:33 maximum levy is $23.6 million. That's in that first column. 17:39 And you can allocate your property tax levy to four funds. General, motor vehicle, highway, park, and aviation. 17:47 And during budget time is when you can make, you know, those allocations. If you need more in general, you can take 17:54 away from another fund or vice versa. So this is 2025. So your maximum levy is 23.6 million. That will grow by 4% in 18:04 2026. Now, that doesn't mean that you'll get that full growth, and I'm going to talk about that in a minute, but that has to do with circuit breaker tax 18:11 credits. Yes, we'll grow that 23.6 by 4%, but you're not going to collect all of that because of circuit breaker tax 18:18 credits. There are property tax levies that are outside those levy limits. Debt 18:25 service, anytime you have a a debt where you're going to levy a property tax to make those debt payments, that is 18:32 outside the levy limit. So that is a good way for you to get some large capital projects done and funded by 18:40 using that method. Your cumulative capital development fund is also outside the levy limit. So that's a great fund to have as well. So those total 895,000. 18:51 So all in the city is levying $24.5 million for 2025. 18:59 So if we move on to the next slide, this is how the state kind of works your budget. So you know they look at okay 19:08 you're leving 24.5 million per your budget and that is a combination of your maximum levy and those levies outside. 19:15 Now they need to look at okay what is your net assessed value. So for 2025 your net assessed value is just over $1 19:22 billion. So the rate comes last. We can't calculate the rate until we know your assessed value. So right now we 19:31 don't have the 2026 assessed value. So I I just want you to know that's kind of how things work. First is how much can 19:38 you levy? Second is what's the tax base and then third is this is your tax rate. 19:44 So 2.4222 that is your tax rate for 2025. 19:48 And if you go to the next slide you will see that your tax rate has actually gone down over the last five years. And the 19:56 reason it has gone down is because your net assessed value has gone up. This is a very typical chart that we are seeing 20:03 all across the state. So sometimes taxpayers think that the reason why their tax bill is going up is because you're increasing the rates or the 20:12 county's increasing the rates. But that isn't the case here. Your tax rate has actually gone down. What is causing tax 20:21 bills to go up by and large is the property value is going up. So I think that's very important for people to understand. 20:31 So just for clarity, it's not like the county assessor is just hitting a button and goes, "Ah, we need more money." Yeah. 20:38 These are all regulated, controlled. It's it's actually set by the state. 20:44 It is. It is set and controlled by the state. 20:49 So, next slide. So, now we're going to get into circuit breaker tax credits. 20:54 And this is a very confusing concept, but they're here to stay. They've been around for a while. So, what is it? It it is a credit that limits the 21:02 taxpayers's total property tax bill. And it it's based on the gross value of the property. So, when I say, "Oh, that's a 21:10 1% property." That means I'm talking about residential homestead. And it means that your residential homestead is capped at 1% of the gross value. And I 21:19 will show an example that that will make it clearer. So when the county calculates your tax bill and you go 21:27 above that cap, the calculated tax bill is above that cap, then the countyy's going to issue a credit to you as a taxpayer. Well, that means you're not 21:35 paying your full tax bill because you're getting a credit. Pre-circuit breaker, you would have paid the whole tax bill as calculated. But now we have these 21:43 credits that are worked in. Um, so the result of all these credits being issued is that you don't collect your full amount of property tax levy. 21:54 So going to the next slide, here are the tax caps in the state of Indiana. And this is in our constitution now. So it would be very difficult to change. So I 22:03 think they are here to stay. But we have three levels of tax caps. We have residential homestead which is capped at 1% of gross assessed value. So if your 22:12 gross assessed value before deductions is $100,000, your maximum tax bill is $1,000. Now 22:19 there is there are times or situations where you could pay above that $1,000. 22:24 If a school has um had a like a voter referendum that the voters approved and they have a tax rate based on that voter 22:32 referendum, you have to pay that tax rate. that's not that is outside the circuit breaker cap. So there are circumstances you could pay above that 22:41 cap, but generally speaking, if there are no referendums, voter referendums, you should not be paying above the cap. 22:49 Um the 2% properties are other residential, rental, residential, and long-term care facilities. That's capped 22:57 at 2%, so they have a higher cap. And then everything else which is generally commercial, industrial and personal property is capped at 3%. 23:08 So the next slide is showing an example of this and this is an example based on the Marian Mill taxing district. So the 23:18 part of Marian that's in Mill Township, you've got like seven or eight taxing districts. I just picked one. So this is 23:24 a residential home value of $200,000. So that's the gross assessed value. After deductions, the taxable value is only 95,000. 23:36 And the reason that is is because you get a $48,000 standard deduction and then on top of that another 37.5%. 23:45 So we don't pay taxes on the 200,000. We pay taxes on the net value after deductions, which is 95,000. 23:56 The district tax rate for Marian Mill taxing district is 4.7858. 24:02 That includes the school, the library, the county, the city of Marian, a township. It includes all of those 24:10 together. At that tax rate, many taxpayers are hitting the caps, probably 24:17 most of them. So the t calculated tax bill is 45,547, but the credit that's going to be issued 24:26 is 25,547 so that this taxpayer doesn't go above the 2,000. So they're actually getting a 24:33 credit of more than what they're going to pay. So again, precircuit breaker, this taxpayer would have paid $4,547, 24:42 but they're not now. They're going to pay $2,000. So that credit has to be funded somehow. And it really is the way 24:48 it's funded is a reduction of your and everybody within the district's tax levy. So if you move on to the next 24:56 slide, you'll see how this one tax bill how these reductions are spread. So in Marian Millaxing District again, we have 25:05 Grant County, Marian City, Mil Township, Mrs. School, Gas City, Mil Township, Library, and East Central Solid Waste. 25:12 So all those rates combined. So how the how the loss is allocated is based on really the rates. So for example, the 25:21 city of Marian's tax rate is 50.6% of that total district rate. So the city of 25:28 Marian is going to get allocated 50% of that credit. So the higher your tax rate 25:35 within each of these taxing districts, the more you will get allocated in this uh shortfall in in property tax. 25:47 So moving on to the next slide. Now this is, you know, we're kind of bringing this all together now. Remember when I 25:55 said you are levying $24.5 million in 2025? 26:01 you are expected to collect only $18.5 million because 6,46,000 26:10 is returned to taxpayers in the form of credits. So without circuit breaker you would have collected 24.5 million 26:18 without or with circuit breaker you're going to collect 18.458 million. So the your non-collection 26:27 rate, what you're not going to collect is about 25% of what you levy. That's a big chunk. I mean, let's just say it simply. If we didn't have a world of 26:35 circuit breakers, you'd have an additional $6 million to operate. 26:40 But I will say the flip side is it put $6 million back into our taxpayers pockets. 26:45 That is correct. Circuit breakers are are a good way to to protect the taxpayer for sure. 26:54 um local income tax. The next slide. So here's where we start talking a little bit about the changes that came out of 27:02 legislation. So for years 2025 through 2027, we're operating under the current system and we it's still a tax applied 27:12 to the countywide adjusted gross income and everybody within the county pays the same rate. So that's the system we know 27:19 right now. But for years 2028 and beyond, at least based on what's currently passed in legislation, the tax 27:27 base will depend on the type of local income tax. So for instance, the county 27:33 can adopt their own local income tax that will bas be based on countywide adjusted gross income. Fire and EMS will 27:43 be based on countywide. Really, most of these are countywide, but let's get down to municipalities with a 3500 or less 27:52 population or I'm sorry, municipalities with 3500 population above. So, the larger municipalities like you, your tax 28:01 rate will be applied only to the adjusted gross income of those living within your municipality. That's a big 28:07 change. Municipalities under 3500 population will be based on the adjusted 28:14 gross income of the entire county minus those that are above are 3500 and above. 28:20 This is a a big change and it's going to be um a very complex calculation that the state will have to perform the 28:29 department of revenue and the department of local government finance. And here's another big change is that remember I said that everybody within the county is 28:38 paying the same rate. When this new structure comes into play, you could have people living within the city that 28:44 pays a different rate than those outside the city. 28:50 So this is this is very different. No single taxpayer, no matter where they live, can pay more than 2.9%. 28:58 So the county is going to have to figure out what the mix of the rates are. 29:03 Your 1.2% maximum that you can adopt is not affected. You can go to that. The county can't tell you you can't. The 29:11 county can go to their full 1.2%. So now we're at 2.4%. All these other ones have maximum rates, but if you add all of 29:19 them up, it's 3%. So somebody's going to have to make a decision, not you. I mean, you could go below your 1.2, to, 29:26 but the county is going to have to make sure that the other rates that they're adopting doesn't push it over the 2.9 because they can't by statute. 29:34 Quick question. Uh, I went through some training on this and I want some clarity. Maybe you can um verify this on the fire EMS lit. 29:42 Uh, from my understanding it's a 04% or 4%, sorry. Um, but the way that's 29:51 collected, it's or it's collected throughout the county, but then it's distributed to the county units, but also the local other governmental entities above 3500. 30:04 So, if that's being collected, the city could also see additional lit through the fire EMS. Is that correct? 30:11 Yeah. So, so the fire EMS has to be distributed to fire districts, fire territories, and municipal fire departments. 30:20 At the county's discretion, it can also go to township fire departments, and volunteer fire departments. Nothing in the statute right now says the county 30:29 gets any of that. I think that's a change that we're probably going to see because I think they meant for it to go to the county. But yes, you're right. 30:36 The city could see a share of that. 30:38 Absolutely. Well, the way I understood it was that they have to divide it up by population. 30:42 They do. It's by service area. I'm sorry, square mileage. Square miles of the service area and population. Yes, those two factors combined. 30:51 Do you do you foresee is there talk, do you know, down state them adding police to that because fire, 30:58 EMS, but there's nothing for public safety. Right now there right now there isn't, but there could be. The 31:06 last I heard with discussions uh at AIM and various places is that the legislature wants the municipalities and 31:15 the county to use their their municipal services rate or their county services rate to cover police. 31:24 Okay. Just they chose to Yes. just pick fire and EMS. 31:28 They want you to use your general services rate to cover that stuff. Do we have any projection yet on that? 31:36 What do we have, mayor, or do you have any numbers yet on what that fire mess? You're getting to that. 31:40 Well, I don't know that I have the fire EMS lit. We can we can calculate that for you, but I have your 1.2% lit. Yeah. Okay. 31:47 The fire and EMS lit is going to take some time to calculate because we got to get the service area, the square mileage of all those different uh fire providers and EMS providers and the population. 31:58 The population is not the issue. It's the square mileage because we'll have our own lit, which we currently do. 32:04 You Well, yeah, kind of. Um, but then we could potentially receive additional funding through that 4%. 32:12 Yes. If the county does that. Yes. Correct. If the county does that. Yes. 32:17 Well, if the county implements the lit, that's up to them. 32:21 But if they do, then they have to distribute it based on population and square miles. That's correct. Yes. 32:28 So the next slide is just just for your information like where is the county at right now with their lit rates. So right 32:37 now Grant County has a total local income tax rate of 2.55%. 32:43 And that's made up of certified shares at 1.3%. Economic development.24%. 32:50 There is a property tax relief component of 1% and a special purpose of 0.01%. 32:58 These will all expire at the end of 2027 except for the special purpose local income tax. I think they did that for a 33:06 jail. That will not expire. But all these other ones will expire. And here's the one that causes us the greatest 33:12 concern is the property tax relief local income tax because that is helping to keep your circuit breakers down. This is 33:21 a credit that is funded by local income tax. It's a credit to the taxpayer. So this credit is applied first then the um 33:30 circuit breaker is applied. So we can see that by the time we get to 2028 33:38 early projections from legislative services shows that your circuit breaker losses jump way up. 33:46 So that is a concern for us. So just for sorry to interrupt again. 33:51 Sorry just for some clarity then. So, what I'm hearing and what I've learned is that there's property tax relief, but we're 34:00 going to be shifting the burden to those people that are working. Yes. Yes. 34:06 So, given the state having a budget cycle, Yes. 34:10 minimum of two legislative sessions and an election, how much faith do we put in 2028 numbers? And how much worry do we get? 34:23 I think I do think we should be worried. 34:27 I think that things could be changed, but listening to the speaker of the 34:34 house and other state reps, this is what they wanted. 34:39 So, I don't know how much change we will see. I think right now we're trying to provide as much data as we can to the 34:47 state house and to AIM the the um the you know city and town organization here 34:54 because we have got to let the legislature know what the effects are going to be of this. I mean there are 35:01 ome municipalities that will have to drastically cut services. 35:06 Um, I don't know if you saw the article at the city of Elcart, they could lose like millions of dollars. I think it was like $40 million dollars. That's a lot. 35:16 So, as these meetings occur, we've got to get the message out that this isn't doable in and a lot of municipalities. 35:28 Have you heard um why they wanted this? I mean, where what what brought this on? 35:33 What brought this on is taxpayers are saying that their tax bills are way too high and and understandable what was happening is values of properties were 35:41 going up. So why can't we just try to um limit the growth in net assessed value? 35:50 I mean they kind of did that here but it it's almost like to an extreme. What's going to happen is it's going to drive up tax rates, drive up circuit breakers, 35:58 and then the local income tax that that municipalities and counties can adopt for some municipalities and counties, that's not going to be enough to bridge that gap. 36:07 Yeah. To me, it's like they're playing like a shell game. They're making it look like this, but it's really going to be this election. 36:14 Yeah. Yeah. Yeah. 36:25 Don't forget to turn your mic on because nobody at home can hear you without it. 36:30 But no one at home can hear if your mic's off. Just so you know. Let me say it again. All right. 36:36 My theory and having worked in a leadership position down there for a couple years, there's a bunch of 36:44 people's election bill where they can say, "Yeah, we lowered property taxes." And then they leave it to the locals to 36:54 be potentially to be the bad guys by either cutting service or raising local taxes. And I may be wrong. I'll own that 37:03 if I am. But I'd put money that I'm not far off. 37:11 Okay, next slide. Who gave you that last word on that one? 37:18 Um, so just for your information, counties still can make changes to local income tax for 2026 and 2027 if if they 37:27 so choose. Now, your county has what is called a local income tax council. It's 37:34 like a phantom council and it's made up of the county unit and all the 37:40 municipalities and votes come in from this phantom council based on population. 37:50 So really the three units that have the most votes are is Grant County, Marian 37:56 City, and Gas City. So, you know, Marian and Gas City could get together and decide to make a change without the 38:04 county's involvement if if you wanted to, but other than that, I mean, Grant County could get together with I guess 38:12 you. They can't do it on their own is the point I'm trying to make here. Um, so that's just for your information. I have no I don't work with Grant County. 38:22 They have no idea if they're looking to do anything, but you should know that you kind of have a say in this. I mean, they're going to need if they want to 38:30 make a change, they kind of need for you to be involved in that in some way, but it would only be for 26 and 27 because 38:37 this just expires at the end of Yes. Yep. Yep. 38:42 So, now moving on to page anything else that says 28 at the end of 2027. 38:48 I told him remind him about the microphone. That's why he's repeating. 38:51 I'm telling you, people cannot hear at home unless you have a mic on. 38:55 So, the next slide um shows those maximum rates. We kind of already talked about this, but the county can adopt a 1.2% rate for their county services. 39:04 Fire protection and EMS4% non-municipal, so that would be for libraries and townships. 2%. Uh then 39:13 municipalities less than 3500 1.2% but then that 1.2% 2% gets distributed out to those small cities 39:21 and towns based on their population, but then you can adopt one at 1.2% just for 39:28 your municipality. So again, can't exceed 2 2.9, but if you add all those up, it comes out to be 3%. 39:37 Okay, page or the next slide. So, budget preparation, you know, we always tell taxing units that we work with to start with your revenues, and this city does. 39:48 We we help the controllers's office with revenue estimates. So, we've already prepared that for 2026, and I'm going to show you some of that here in a minute. 39:57 Then you just need to see, okay, well, now, how much can we afford? It's just like at home when we go out to buy a house or a car, you really need to figure out what you can afford before 40:05 you go out and make those purchases. So part of doing that is to review 2024 actual dispersements. How did you 40:12 perform against your budget? Uh review year-to- date through June 30th. 40:17 Hopefully department heads kind of looked at what they've spent so far this year. What capital do you need to build 40:24 in for 2026 and just kind of adjust from there. I think as we get further into this phase in of legislation, we're 40:32 going to have to be very mindful of prioritizing our services. what's going to be most important because if we have to start cutting, we're going to have to 40:39 figure out what is priority. What is what are our priorities? It's almost like zerobased budgeting. Let's start with what you absolutely have to have and add from there. 40:51 Uh next slide has to do with cash reserves. So this is a component that is uh sometimes missed during the budget process, but this city has done very 41:00 well the last few years in looking at cash reserves and making sure that you have strong reserves to cover you 41:08 through uh cash flow shortages. So we recommend that um ending cash in a major 41:17 operating fund should not fall below 15% of what you spend that year. And that's really only and a half months of 41:24 reserves. So that is the floor. Really, you want to be somewhere between 25 and 50%, 50% would give you six months of 41:33 reserves, which is ideal, but it's not a one-sizefits-all. It depends on what the fund is. Are you making payroll out of that fund, the size of your government? 41:44 There's lots of different factors that play into it, but again, we help analyze that for you to make sure that your 41:51 reserves are sufficient for each of your major funds. 41:56 Um, you should never use cash reserves for recurring costs. So, cash reserves, the appropriate use of that is for 42:04 capital outlays or one-time expenditures. You don't want to fund raises or new personnel with cash reserves because again it's just like at 42:13 home you're dipping into your savings account or you're borrowing or using credit cards. You don't want to get into that situation. 42:21 Next slide. So ways that we're going to start looking at, you know, bridging funding gaps. I know we're not really here at that level yet, but I'm thinking 42:29 that a lot of taxing units probably 27 28 are going to have to really take a look at their operations. Is there a better way to reallocate resources? 42:41 Um, I know that some municipalities are going to start looking at operational assessments. Are there better ways to provide services, more efficient ways to 42:50 provide services, government consolidation? I think some of the smaller cities and towns will have to start consolidating maybe with their 42:58 townships or maybe even township consolidation. 43:01 Um hopefully we don't get to the point where we have to reduce headcount but already there are municipalities looking at vacant positions and just not filling them. 43:12 Um what are the ways to generate new revenue? So there is a municipal wheel tax that you can adopt. Um, you can 43:19 adjust your charges for services if it's been a while. Like some municipalities are looking at their fee schedules like for building permits and other fees and 43:28 is, you know, is it time to adjust those fees? I know that doesn't bring in a lot of money, but we need to kind of look at everything. And then food and beverage 43:36 tax, which this city has already implemented, so that's going to bring in some additional revenue there. And again, just prioritizing your budget. I already mentioned that. 43:46 So the next slide is prepare sustainable expense budgets. I want to repeat that again because this city at least the last two years I've been working with 43:55 you that has been your primary goal to have balanced budgets. So that is what's going to keep you sustainable into the 44:04 future and you'll be able to hopefully withstand some of these things that are coming out of the new legislation. 44:13 We can at least prepare for it. So if you go to the next slide now, this is the information I wanted to share with you related to the 2026 budget. So 44:22 again, we have we have already calculated your receipts. These are estimates right now and we will update as we get additional information, but 44:31 column A is where we think you will end this year in these major funds. 44:39 Transportation is negative, but that's going to get corrected. And transportation is probably always going to be negative because there's grants 44:46 that come in and the grants run a little bit behind. So, don't don't be so worried about that. Column B is the 44:54 estimated receipts for 2026. The piece we don't have yet that I wish I had tonight was um or is the local income 45:03 tax for 2026. So, the Department of Local Government Finance should be putting out those numbers by the end of next week. They will still be estimates. 45:12 So, but they won't change unless the county or you all change something that has to do with local income tax. So, we should have good numbers next week. 45:20 Right now in these numbers, we have just flatlined your local income tax. So, I'm hoping the receipts will be a little bit higher, but again, we just get 45:29 information as it comes in and we can update these accordingly. So, general fund 24,695 45:36 is what we're estimating right now. Um the budgets that have been turned in so far is 24.5 million. So you are better 45:46 than balanced. Um we're estimating an ending cash balance of 12.1 million which is 49%. That's very close to the 50% and remember I said that is ideal. 46:00 And if you go down through here, we were able to allocate property tax so that all of these other funds are balanced as 46:07 proposed right now. And again, I know you don't you don't have the budget books yet. And so this is very 46:13 preliminary, but um it looks really good and it it's hard to balance a budget. 46:20 Trust me, I know I work with a lot of cities and towns in the state. So um this is the goal. It's by no means 46:29 final, but this is just kind of a preview at what we've been working on. 46:34 And and you know, knowing also that your revenues are going to go down in 2026, 46:41 this builds that factor in your revenue going down from Senate Enrolled Act One. 46:46 I have a quick question. Yeah. Uh and maybe you're going to get to it. 46:50 Uh I I've heard several times that Senate enrolled act one isn't actually lowering 46:58 our revenue. It's just slowing the growth of it. Can you clarify that? 47:02 That is correct. So there's a couple things that it's doing. 47:08 Well, one, remember when I said that your levy growth would have been 5.5%. 47:13 Now it's 4%. So yes, it's not growing as much as it could. Um, also, 47:20 um, the circuit breakers are going to come in higher. You're right. It's not really lowering it except for when we get to 2020. I've got a good graph that'll show you what I'm talking about. 47:30 And I think that's what the legislature wants you to focus on is we're not taking revenue away. We're just slowing the growth. But the problem is slowing 47:39 the growth is going to have an impact on you because if your revenue is only growing let's say 1% per year but your 47:46 costs are growing three to 4% that's a gap that's a budgetary gap any way you want to shape it it's less more 47:54 it's right thank you and I've heard people say that at the state house too okay so so yes I totally agree with that 48:02 statement but I we also have to look at the big picture and the big picture is your revenue is not going to grow very 48:09 much. In fact, once we get to 2028, it does take a a dive. 48:15 Um, so again, very preliminary. Let's talk a little bit about the legislation in a little more detail. So, what's happening is, and you guys have probably 48:24 already heard this a million times, so I'm going to try to get through this quickly. I got 10 minutes. Well, you have an hour and 10 minutes. 48:31 I'm not time for anything else. I'm not gonna take that long. 48:33 Okay. So there was a bunch of restructuring. You can go to the next slide, please. There was a bunch of restructuring with the homestead deductions. It added additional credits. 48:44 It added deductions for 2% properties, which we've never had in the past. 2% properties, just as a reminder, are the 48:52 rental residential properties, the long-term care facilities, the agricultural properties. We've never had deductions on those before. So that's 49:00 going to lower those taxable net assessed values. good for the taxpayer, but it's going to drive down your net assessed value or or significantly slow 49:09 the growth. Um, and then again, what I said before, if those net assessed values um don't grow as rapidly as in 49:16 the past, your tax rates are going to start creeping back up along with your circuit breaker losses. That's just how it works. It's an inverse relationship. 49:25 So, I just wanted to give an analogy. 49:28 It's one of my favorite things to do is give analogies. So it's for those that are watching at home or listening. 49:33 So this is essentially equivalent to uh your cost of living and groceries going up 5% but your boss gives you a 1% raise. 49:42 Yep. 49:43 And you're like, well, how am I going to keep living if I'm only getting 1% raise, but everything around me is going up 5%. Is that correct? Yes. Yep. I would agree with that. 49:52 Just trying to make it understandable. Yep. 49:56 So going to the next slide. I here's kind of a chart of of what's happening. 50:01 So the standard deduction on a residential homestead is $48,000 as we sit here today. That's going to get phased out. So by the time we get to 50:10 2031, that'll be zero. But the what's happening is the supplemental homestead deduction, which is 37 a.5% of the value 50:19 of the property. It's going to get phased up. So by the time we get to 2031, the taxable value of the property will only be onethird of its value. 50:28 Basically, there's going to be a deduction of 66.7%. 50:34 Then there's some other credits and things that will be applied as well that will be helpful to the taxpayer. If you go to page 27, we kind of we picked a 50:44 home value that is actually the average home value in the state, not not here, just in statewide, 240,700. 50:53 So the taxable value in 2025 of that home value is 120,000. By the time we 50:59 get to 2031, the taxable value will be 80,000. 51:05 So, so yes, the tax bill will be based on a lower net assessed value, but the tax rate is certainly going to be higher by the time we get to there. 51:18 Oh, sorry, another question on this. Yeah. 51:21 Do you feel like this is a a fair adjustment for all income tax brackets or let's just say all all home values or 51:30 is this disproportionate to people with lower value homes versus higher value? 51:36 [Music] 51:37 I don't think I've really thought about that honestly. I don't think I've given that any thought. I mean I feel like 51:46 it is going to perhaps lower the tax bill for for any taxpayer, but I don't 51:53 think the reduction is going to be significant. 51:58 And and I really am interested and we are running models at Baker Tilly. We just haven't finished the model yet, but we want to know how's this going to 52:06 affect the average household because I want to see what it does to the tax bill and to the income tax. Like the average 52:14 household, how much of a savings will there be? 52:18 That's that's what I'm going to be interested. Another question for you. Do you uh is anyone at the state house passing these laws? Are they asking 52:26 Baker Chile for data or do you know where they're getting their data from? 52:30 So where they so the state house has legislative analysts that they get their data from, but they also use some data 52:38 from legislative the legislative services agency. But there are some things that they I don't believe they've 52:46 run any calculations on like the local income tax. I've not seen any calculations. We are doing that and we reached out to the state house. In fact, 52:54 we were we had an opportunity to go down and talk to um House Speaker Houston. 53:01 We we're trying to provide data to them if if they will accept it, but um that remains to be seen. They have legislative analysts. 53:12 They were interested in how we were calculating local income tax. So, we shared all that with them. we are happy to work with them and cooperate with them in any way. So, we've we've reached 53:20 out. Um, but I I think there's some things that they just simply haven't run. And I could be wrong. We did ask 53:28 legislative services if we could have some of their data because some of it is public, but other data they say that it's not public. 53:39 But I feel like it would be beneficial if you all had that data. There is a report, they put a report out on April 53:46 9th and that is publicly available and it's on the um general assembly's website, but I found that there was another report that some people are 53:54 getting that is dated in May and they would not supply that report. So when I say some people, some mayors are getting it. 54:04 I I just think if they've got new numbers, they should share because it looks better. The numbers look better. 54:10 But anyway, there's a there is an information deficit right now, honestly. 54:14 And I know all of you are trying to pass budgets and I get it and we're doing the best we can to provide as much data as possible, but there are so many moving 54:22 parts in this legislation. It's very very complex. Yeah, you you guys aren't the problem. You're doing great. 54:30 It's not. 54:31 We just need more more information from those that apparently have it. 54:37 Uh the next slide has to do with that those 2% property assessment deductions. 54:42 So yeah, those deductions are going to start ramping up. It's zero currently. 54:46 By 2031, onethird of the 2% properties will will be deducted. So that's a 54:53 that's a deduction we don't even have right now and it is going to ramp up through 2031. 54:59 Page 29 has to do with business personal property. So right now properties 80 or below 80,000 that's business personal 55:07 property is tax exempt. By the time we get to 2027 business personal property that's below 2 million will be tax exempt. 55:18 So there's going to be some taxpayers that will no longer have to pay property tax. Do you know how long it's been at 80%. No, I don't. 55:25 I'm just wondering are they just adjusting it for inflation from 20 years ago? 55:28 I don't Yeah, I don't I don't know. I really don't. 55:33 Uh, page 30. I'm not going to linger on this, just to let you know that had they not changed the or had they not limited 55:41 the levy growth, it would have been 5.5%. 55:45 For 2027, they haven't limited yet, but there's nothing to say they won't go in there and limit that growth. 55:53 Um, page 31. Okay, now we're getting into uh the estimated shortfall from Senate enrolled act one and this is 56:02 based on legislative services a report dated April 9th, 2025. 56:07 So this is and I call it a shortfall but this is this is kind of an increase in your circuit breaker credits. So we 56:16 showed you your circuit breaker credits in a previous slide. This is the 840,000 more of circuit breaker is expected in 56:24 2026, almost a million more in 2027 and then we go off a cliff in 2028. Remember I 56:31 said in 2028 the um property tax relief, local income tax expires at the end of 2027. That's going to drive up your 56:40 circuit breakers unless they do something to to make a change with that. 56:44 That's another $5 million on top of what your what your current reduction is 56:52 for circuit breaker page 32. Oh, we already talked about 56:59 this. This is the new local income tax structure and who can adopt each one of these. The county is going to have the ability to adopt all of them except 57:07 yours. So, you will have the ability to adopt your own and that will occur in 57:14 2027. So you'll have until October 1st of 2027 to adopt a lit for implementation in 2028. 57:27 So the next slide shows what the estimate is of that if you go all the way to the max. We just kept it in current numbers. 57:36 We didn't put any growth on it, but you could potentially have growth. But I wanted to compare apples to apples. So in 2025, 57:43 you have lit certified shares that goes into your general fund and that's about 7.5 million. You also have lit economic 57:52 development that goes in your seedit fund, your county economic development fund. That's about 1.5 million. So all of those combined is almost 9 million. 58:04 Based on current estimates, 1.2% will bring in $7.5 million. And those things that you're funding right now out of 58:12 economic development, you'll have to fund them out of general because that economic development is going to go away and the 7.5 will go into your general 58:21 fund and you'll have to pay for what you're using, you know, economic development for now. You'll have to just pay it out of your general fund. So 58:29 right now the projection again based on the estimated adjusted gross income 58:35 within the municipal city um that's lower. It's 1.45 million. 58:44 Yeah. Yes. 58:49 That that's if we pass the local income tax at it max. We still be that's still the short right there. 58:56 So if I hear this correctly So if I hear this correctly again, so we're 59:04 just want to understand this. So the state the state who has its own budget is 59:11 telling the local entities how to they're telling them how to control their tax revenue for their own budgets. 59:23 But then is telling us, "Oh, by the way, you can tax the people going to work more." Is that what I'm hearing? 59:32 So, even if I'm even if we establish a 1.2 lit, 59:39 okay, we're losing, we'll say we're we meaning the cities losing a 1.4 million, 59:47 but the people that are going to work every day are losing as well. Is that correct? they will likely pay a higher income tax rate. 59:54 Okay, just getting clarity. I just want this to be transparent so people hear it. 1:00:01 But we can't panic yet because politics being what it is, we've got two and a half years. 1:00:09 The problem though is that, you know, when when we look at projects, we're looking at, you know, raises potentially 1:00:16 with police and fire. We can't commit to anything until we know really where this is going to land. So it puts us all in a limbo for three years at least. 1:00:25 And u again that is so if we don't if the council refuses to pass any local income tax that loss is now 8.9 million. 1:00:35 So um yes. So, so when it when when 2027 gets here, that puts us, myself and and 1:00:45 the council, all of you guys in a situation where either we're going to pass a 1.2% local income tax or 1:00:51 experience a reduction of $9 million instead of the 1.4. 1:00:57 I mean, they're they're kind of forcing our hand. I mean, what what do you do? 1:01:01 You know, I mean, like you said, you can't lose $9 million. 1:01:05 So, just But but now, let me ask this. the state. 1:01:09 They didn't change anything on how they get their money though, right? Not that I'm aware of. Yeah, exactly. I didn't look at the state. 1:01:18 Well, we got a new cigarette tax. Yeah. 1:01:25 So, actually, real quick, that in 2028, I know the mayor said 8.9, but since let's just say we did not do a lit and we lost the 7.5 million. 1:01:36 Uh what percentage of that do we know what percentage of that uh what percentage of the budget that would be if we lost 7.5? 1:01:44 Um estimated in 2028. 1:01:47 I how much? 1:01:51 Your budget for the general fund is um 24. Yeah, I can't do math in my head. 1:01:59 24.5 million. 1:02:01 So about 35%. That's basically I don't know that's a bit I mean a lot of people 1:02:09 yes I would think that would be okay significant saying by the shell game they're saying hey look at what we're doing for your 1:02:17 property tax but your city can't function now because we're we're not giving them any money so you can live in 1:02:25 your nice home and have fun but don't go outside of it because there's nothing to do yeah I think this is a piece that we really need to provide information to 1:02:34 the state house and we baker Tilly will do as much of that as possible but you all probably need to share the information that 1:02:41 you know th this isn't doable I mean for the very the larger cities like yourself Fort Wayne South Bend they're already 1:02:50 having these meetings and it's getting into the newspaper and and it's getting recognized and noticed that this is going to be crippling to some 1:02:58 municipalities so I totally agree with what you said is we need to take a cautious approach. Will there be 1:03:06 changes? Yeah, maybe. But what will those changes be? I think you just need to take a cautious approach. What I mean, I don't see any other way to to 1:03:15 get around it. It's just And just for clarity one more time, if we don't pass the local income tax at 1.2%. 1:03:23 8.9 million was what we have to cut. That's assuming nothing changes. 1:03:30 Yes. As of now. Y which is about that's probably closer to what maybe 40% of our entire budget. 1:03:38 That's how many departments I don't know. Yeah. Okay. 1:03:44 So page or slide 34 kind of puts all this together. This is your actual and estimated revenues just for those major 1:03:53 funds. So 2025 35.1 million. 2026 is when we first start seeing the impact of 1:04:02 SEA1. And at least on current estimates, it does look like your revenue is going to go down to 34 million. But let me tell you, there's a little thing. 1:04:10 There's some stuff in play here. One is that you've been getting a supplemental local income tax for the past couple of years. We don't anticipate that for 1:04:19 2026. So, that's part of that loss. If you get one, great. But that's actually going to go away for sure starting in 1:04:26 2028. And that and you've gotten some good uh distributions of that. And then another factor is we do expect that um 1:04:36 interest rates will go down. So you may not get as much of the um interest income. So yes, we are being conservative on some of these numbers. 1:04:44 But if you go to 2027, you're just getting a little bit of an increase there and then 2028 is where it kind of drops. So that again very preliminary 1:04:53 numbers and we will uh once we get our model complete we're developing a property tax model that is supposed to 1:05:00 work in all of these various changes in sea1 and house bill 1427. We are going to update your numbers and we're maybe 1:05:09 two to three weeks away from there. I don't think much is going to change for 2026 but we really want to get a good picture of that 2028 1:05:18 cliff. But so I want you to know we are working on all that. This is kind of a work in progress, but I think we have some good estimates right now of at least where you'll be in 2026. 1:05:30 Um the last slide there's Can I ask one question real quick, please? Okay. Um slide 34. 1:05:39 This assumes we don't increase the lit to 1.2. 1:05:42 No, this does assume the Oh, it does 1.2. Yes, this assumes the full 1:05:49 it. Yes, just as the mayor had stated, I we went ahead and assumed the full 1.2, but 1:05:56 so also going back to the EMS and fire, there's a potential if the county does 1:06:03 the point4 that could help supplement some of that as well. 1:06:07 Yes. And we will provide you with numbers of that as well. It's just it's not a guarantee obviously because the county can decide if they want to do it 1:06:15 or not. We um we are going to be helping counties. We don't work with Grant County though, but in a lot of um 1:06:23 counties, we work with the county unit of government as well, just not here. 1:06:27 And we are going to help the county along with the municipalities determine what might be the best levels of local income tax because some counties don't 1:06:35 have to go to the max. So, we can help with that. If if if Grant County would like our help, we we would certainly be willing to help. Um but yes, we will at 1:06:44 least give you the data that you need to go talk to the county for instance. So we'll be able to tell you what your portion of the point4% fire EMS would be. 1:06:56 U the last slide just has to do with road funding. Uh probably the only thing that really applies to you well there's 1:07:03 a couple things. One is the top one where it says it reduces the percentage that counties and municipalities are required to allocate to MBH restricted. 1:07:12 So, right now you are required to put 50% of your motor vehicle highway gas 1:07:19 tax in a restricted fund and 50% in a non-restricted fund. If you meet these two qualifications, you can now just put 1:07:27 40% in the restricted and 60% in non-restricted. The two qualifications are you have to keep or maintain an 1:07:35 average pavement quality rating. It's called a pacer rating of at least six and no more than 15% of your roads are classified as being in failed condition. 1:07:46 So if you can meet those, which a lot of municipalities I work with do meet that um then they're allowing you to only 1:07:53 restrict 40%. And the restricted, by the way, just as a reminder, your restricted fund can only be used for construction, 1:08:00 reconstruction, and preservation of roads. So, it's sometimes hard to put personnel in there because you have to tie the personnel to 1:08:09 a specific project. So, some municipalities find it difficult to have that much restricted. 1:08:16 So, that's helpful to a certain extent. 1:08:18 I have a question on that. NH restricted and non. 1:08:21 Yes. And this is an authentic question, but can that money be used for alley resurfacing or is it have to be because I don't know 1:08:30 alleys are public, but are they not even unrestricted? You gota use your mic. Turn your mic on. 1:08:37 I thought that they told me that you couldn't use it for alleyways because they're not roadways. 1:08:43 I think that's I think that's correct, but I honestly I I think an attorney would need to interpret that. But I I 1:08:50 think you are correct because it is very specific. It says roads and I don't think an alley is considered a road. 1:08:57 I just wanted to check the restricted versus un and if there was Okay. 1:09:02 Maybe we could talk to our legislator and push that for a change. Yeah. 1:09:09 And then another piece that might I have a question. Oh, okay. 1:09:12 You mentioned that the the percentage of the roadway and the grading. Yes. How is that determined and when 1:09:18 your your um your highway superintendent or your your road and street superintendent should know the answer to that question? I don't unfortunately. 1:09:28 I think it I mean every it seems like every uh highway department person I've talked to immediately knows that number 1:09:35 off the top of their head. And I don't I I'm just not in I just don't know. 1:09:40 Well, they probably only know the number if it's a good number. Yes. Right. If it's bad, I don't know what it is. Exactly. 1:09:49 Um, and then you don't have a municipal wheel tax. The county has a wheel tax, but you could adopt a municipal wheel 1:09:56 tax here. And the they did put a little carrot in the um legislation that it's 1:10:04 not mandatory to have the municipal wheel tax to get the community crossing grant funds. That that was in a proposed piece that you had to adopt it. That's 1:10:11 no longer in there. But they are throwing out a little incentive that if you do adopt it, you could potentially get some additional grant monies based 1:10:19 on your road mileage. So again, not required, but and the way I understood way I heard was that if if you implement one, then you have access to any excess. 1:10:30 Yes. There you go. 1:10:31 That's assuming there's excess left from the state. Yes. Right. If there is excess, right? 1:10:36 And and I'm going to go back to that maybe the same answer. If we if we had a local municipal wheel tax, can that money be used for towards alley paving? 1:10:45 Yes, it can because that can be used for anything that your motor vehicle highway and local road street can be used for. 1:10:51 Not the restricted part, the non-restricted. So, yes. 1:10:55 And no, it didn't. 1:10:58 President Mckenley, I've I've got a a comment on that. 1:11:03 I tried to initiate the local uh wheel tax for this year. so we would have that additional money. And it was evidently shot down. 1:11:15 And with that being shot down, we lost $173,000 because we would have drawn more on that 1:11:24 wheel tax than we're getting from the county, but the deadline is September 1st. 1:11:31 How did we lose 173? Where' the 173 come from? Because if we have our own wheel tax, we gain more with the additional than what the county gives us. 1:11:41 Did that go into implement this year or next year with the go into if you implemented it by September 1st, you would start receiving 1:11:48 it in 2026, right? 1:11:50 Yeah, we would receive what's being charged, but you said 173. Where's that number coming from? 1:11:55 That was an additional amount from what we are getting right now. We were getting 583,000. 1:12:01 It was going to go up to 760ome thousand if we would implemented our own wheel. 1:12:08 500 from where? I'm just trying to understand the funds. The wheel tax. 1:12:12 Oh, so 500 from the state wheel tax from the county or county, I'm sorry, get county. This would give you additional money just through your own, but it had to be done by September 1st. 1:12:22 I already had a draft drawn up, but it was shot down. Go ahead, Councilman Brunner. 1:12:28 Question real quickly. You mentioned Fort Wayne and South Bend would be the two uh major cities that have already 1:12:35 started doing some things. What what are they doing right now? 1:12:38 They are having Baker Tilly run analysis to see how it's going to impact them. So the similar to what I did here, but we 1:12:46 once we get our property tax model built, they're going to have even better numbers at that point. So So again, it goes this all and I hear 1:12:55 what you're saying, Vice President Ford Ice. Um, I think we just wanted to understand more of where we're going 1:13:01 because before we were to implement any other, I hate to say the tax word. I think we wanted to understand this because I 1:13:10 don't want to kneejerk and go, "Oh, we're going to raise all your taxes and then, oh, actually, you know what? In 2026, they changed the legislation and 1:13:18 we're good now." So, I'm very very I hear what you're saying, but I'm very very hesitant to to do anything until we know the full 1:13:26 impact of this because I don't I just I just got to be very careful with it. And um it's unfortunate that we're in this position. I'll just say that. 1:13:37 But if I may comment on that, we weren't going to increase any taxes on the wheel tax. We were going to have our our own. 1:13:44 We were carving it out from the county. 1:13:46 it was going to remain the same as far as the rate of the the tax. We weren't going to increase any taxes. I want to 1:13:54 make that clear. We were just carving it out from the county and then we would get the additional. Also, with the 1:14:01 county wheel tax, we cannot use any on of that money for IDAC crossroads grants. We cannot take anything out of 1:14:09 the wheel tax and use it for our crossroads grants for IDAC. that has changed. So, we'll have to supplement 1:14:19 that from something else. And I've already talked to the controllers's office on that. So, we did supplement it this year for the 3.5 million on the 1:14:28 paving. And now, I believe it's decreased to a million on roads. Is that correct? On the grant, matching grant on the roads. 1:14:44 from 3 for a million and a half matching to just now a million to a million. So yeah, so we can't use any of the wheel tax for that. 1:14:57 Thank you for that. Appreciate it. Well, definitely have to look at all this very seriously. 1:15:06 Well, that completes my presentation. 1:15:09 [Applause] 1:15:11 Thank you. 1:15:12 [Applause] 1:15:14 Thank you so much. Uh that was very informative and I think if uh I will say to the council members, if you have people with a lot of questions, tell 1:15:23 them go to our YouTube page. You can learn all about it because it's going to be on our YouTube page. Um this was uh very very beneficial. So 1:15:31 yeah, go ahead. Yeah, I think this was uh I wanted to do this on on purpose on our first budget committee meeting so everyone can understand where we are and 1:15:39 where we're headed so we can get in our minds um what needs to happen. Um again, I don't want us to Councilman Klein's 1:15:46 point, I don't want us to overreact so much right now that we just shut the city down is scared of what's going to happen in 2028 and it might not happen. 1:15:54 However, I want us to be aware and concerned enough to make decisions uh in 2027 if this legislation does stay in place. So, um that's what this was for. 1:16:04 Now, is there any other um follow-up questions for me? I believe the budget books are completed as you've seen. 1:16:10 Everything was balanced. Again, give our our team works very hard on that. 1:16:13 Everything is balanced. We're in good shape. Um we did a lot of changes as you'll see at the next meeting. We split some departments apart and moved some 1:16:20 things around. So, it was it was a lot of work and they did a great job on that and I think they should be ready to get those books tomorrow. You can come get your books 1:16:29 tomorrow or however you whatever the means we get them to you. I can't remember if we send them or you pick them up, but um your books be ready for pick up tomorrow and then we'll dive 1:16:37 into that at the next budget committee meeting. Are there any other follow-up questions for me regarding tonight? Yes. 1:16:44 Any way we can get that in digital uh the budget book emailed too as well or is it all paper only? 1:16:52 I think they put it together just a phys like actual Yeah, I think they put it together as a book. But I'm a digital guy too. 1:17:01 Yeah. Yeah. Other than that, I think it's just Excel. 1:17:04 Not the big will have those 1:17:16 on the 21st miscellaneous. 1:17:25 You don't have all right. 1:17:31 So, we're getting the department heads tomorrow and the complete one when you get the real numbers from DLGF, we'll 1:17:39 get these completed and know exactly where we're at. Thank you. Any other follow-up questions for me? 1:17:47 Yeah. So, we're not getting budget books tonight, just 1:17:57 Well, I appreciate all your time. uh thank you for working with us on this and um obviously this is one of the heaviest things we do all year. So it takes a lot of time and diligence. I 1:18:05 appreciate you for working hard and um spending time with us tonight and all the other I guess if we still have four more meetings um for this. So I'm 1:18:13 looking forward to working with you all if you have any questions. I'll make myself available. The controllers office is available and you know thank you again. Just real quick too, I want to 1:18:21 make sure so when we get the budget books for the council members, uh if we have questions about a particular department, how would you how would you like us to proceed with that? 1:18:31 Um so on our on our 21st meeting, all of them will be here in person. So you can ask um we could we can be here for two 1:18:39 hours or two and a half hours, three hours if you need. They'll all be here in person to ask any answer any questions you have regarding their budget. And if there's and there's more 1:18:46 clarifications for that, we can probably schedule more meetings if you would like. 1:18:50 Is it okay if we email you or email them if there's something ahead of time? I'm just trying to Yeah, I would say if you would need to 1:18:57 contact them ahead of the next meeting, just send an email to me uh with them attached like CC both of you. Okay, I got you. 1:19:06 Okay. 1:19:06 I'm just trying to just sometimes it's little things that we want to ask. So, um, but I would encourage the council members if you ask a little thing and 1:19:15 you get an answer, it probably means somebody else had that question and then maybe you share it at the next meeting, too. So, great. Anyone else? Any council members? 1:19:24 Vice President Ford, I I'm just curious if there's any way that we could have additional meetings instead of having one meeting on the 1:19:32 21st with all the department heads. I mean that that kind of gets very very lengthy and very entailed with every 1:19:40 single department head for one night if if we used to uh split those up, you know, with like three department heads a 1:19:48 night or and so we could answer all their questions and go over everything on their I think it's line items and Yeah. No, and I thought about that too. 1:19:56 We I talked to the mayor and I said we'll just schedule two now and see where things land. We can always schedule another one. let's get through 1:20:04 that second meeting and if the questions still aren't answered or we're it's we can definitely schedule a third one as well. I'm I'm open to that for sure. 1:20:13 It's just I don't want to overched it and then realize we don't need it anymore because we only need 48 hours to publish. So 1:20:21 um we will we'll just go to the next meeting. That's why I was asking about questions ahead of time. Sure. 1:20:27 Maybe we can knock things out. I was just thinking more for the public because if they're committee meetings then the public can show up. 1:20:34 Oh yeah, sure. I mean, we have to publish it notice. Yeah. 1:20:37 I would just encourage if anyone's watching or listening um to if you're not sure if we're having another one, contact the clerk's office. It's posted. 1:20:46 I put it on my Facebook page if we're having another budget committee meeting. 1:20:50 So, for sure, we're having the second one on August 21st. If we decide to have another one, we'll then come to this meeting. You'll know. and and if you're 1:20:59 absolutely not sure, ask any of your council members and they'll be able to let you know. But I'm not out it's not out of the realm to have another meeting 1:21:07 just kind of see where things land with questions. 1:21:09 So the 21st meeting you're going to have all the department heads here and we're going to go through everybody's budget on one night. 1:21:18 The the goal the goal of this is so when you get a budget book tomorrow, the goal is to try not to wait until the la till that actual meeting to ask the 1:21:25 questions. I make myself available and and we'll make ourselves available from the department to answer as many questions as you need. The hope is that 1:21:33 um we can work continuously over the next two weeks to get all those questions answered and not just wait till that night. Then when we come together, that'll be more so everybody 1:21:41 can answer the questions that you've already asked um in another setting. And I'll have and I have one-on- ones with everybody again I think next Friday. 1:21:50 And I and council members have been on for more than two years. My understanding is that previous process there wasn't as much access to 1:21:57 department heads. So maybe we needed more meetings. I'm not sure. But with the mayor being totally accessible 1:22:04 department heads, my hope is that we can get these things knocked out and then maybe do some followup at that meeting 1:22:12 as well. So um but yeah, it's not for a lack. We're not trying to not be transparent. We're just trying not to 1:22:18 have four three-hour meetings that just drag on and on. So, uh, I just encourage all of you if you got questions, email 1:22:26 the mayor, CC the department ahead and, uh, if you think it's something that's worth sharing with the rest of the council, share it at the next meeting. 1:22:33 If we get through the next budget meeting and we're like, oh, we got way more questions or more things come up, then we can definitely schedule another budget committee meeting for sure. 1:22:44 So, how how long how I'm sorry, how long is it going to be before we get the main budget meeting that you're going to have? I understand the department heads, 1:22:52 but I mean the main one with with with everything in it because these don't have the edit fund and everything else 1:22:59 detailed line item out. These are just department heads. So this is the big one. It's got all the edit funds and capital accumulative improvements. And so when what are we looking at on that? 1:23:10 How far before the 21st are we going to have this if we're going to sit down? 1:23:25 Okay. So, next week Okay. So, we won't know the line items 1:23:32 on the edit fund and the capital improvements and those 1:23:41 it's not going to be in the department heads book. 1:23:47 Yeah. the more you get to us ahead of time, it's we're going to save a lot of time and and questions. So, anything you have that's going to end up in that 1:23:55 book, scan it, email, whatever you can do, get it to us ahead of time. It'd be great. 1:24:02 Awesome. Anything else, Paige? Thank you really for putting this together and coming down because that that was a lot of good information and I'm going to see about getting you an 1:24:10 extra two weeks paid vacation. So, all right. Uh, any other questions? 1:24:18 Okay. 1:24:20 I don't think I don't I don't we don't do motions to close these meetings out. 1:24:23 It's been a hot minute. It's been a year. All right. We're journed.