Lewiston Council to Delay Revaluation, Explore Tier 3 Budget Cuts

[0:03] Carl L. Sheline: Hello, and welcome to our Thursday evening Council Budget Workshop. We're joined here by Director Healy from Assessing and Administrator Kainrath. Yes, Director Healy, please kick us off. [0:18] Director Healy: Sure. Thank you very much, Mr. Mayor. Hopefully everybody can hear me all right. As we know, we're nearing the end of our revaluation that's been ongoing for three years. The results are becoming apparent. Obviously it's creating a lot of concern and for our property owners as well as the council and city hall workers. We were trying to find solutions to lessen the impact. Obviously as we discussed before, there was a shift for years. The commercial base was at a higher percentage in residential, and that has shifted during the revaluation. Some people will see significant tax increase, some people will actually see a little break, if you will. I had Tyler run some numbers, and there is approximately 48% that would have stayed the same or seen a minor reduction. That's minus any type of tax budget increase, of course. That means 52% would go up, which is the majority of the properties, obviously, and it would be mostly residential. So I understand that. So the administrator and deputy administrator asked me to look at a few different scenarios, a few different options, which we did. And I've heard the discussions about a possible phase in. So I asked, first of all, I asked Tyler, is it possible, can you do a phased in reevaluation? They said yes. Software modifications would be between five and ten thousand dollars. It's after that we start running into some cost. And I got four different scenarios that they ran. Can you move the mic closer to you for folks at home? You got it. So four different scenarios. The first we'll call Option A, statistical update of values in the years two and three with no informal hearings. Values would be indexed by property class, so we would adjust them by residential, commercial, industrial, apartments, and what have you. The cost of that would be between, excuse me, would be a hundred thousand in year 2, 104 in year 3. Option B, a statistical update of values in years 2 and 3 with informal hearings. Again, values to be indexed by property class, residential, commercial, utilities, and artificial intelligence values would be included as a backup. Estimated cost in year 2, $227,000. In year 3, $236,000. Option C, a statistical update of values in years 2 and 3 with informal hearings. This one, they would recommend stratifying the values by land use code, so we specifically go 101 is resident single-family residential, 102 two families, so and so forth and so on, so he's stratified by each and adjustments made to each class. That way, that would be between 288,000 year 2 and 299 5 in year 3. Option D is a full statistical update of values in years 2 and 3 with the informal hearings. It's essentially what we're doing now, but just extend it over the next couple of years to make sure nothing has changed dramatically. They again, they stated they could do it. I understand why the council would think about going this direction. It would certainly not be my recommendation. I think it's, it would be very confusing to the property owners. They'd be, I don't know if you had a chance to actually get to the document, the mortgage company. So one of the things that I put together, a pro and con document that I got from Tyler, and one of the things I said was mortgage companies would also have a hard time figuring out what the escrow should be for the taxes moving forward, and then it would put an undue burden on my staff. We'd be carrying this out over three or four years instead of just doing full implementation now, so my recommendation would be just move forward with it. It's been 38 years. I know it's difficult. I know it will be very difficult on the taxpayers, but at some point, we have to do it. Now, if we put it off, we're just delaying the inevitable. We don't know what's gonna happen with property values in the next couple of years, and we certainly don't know what's gonna happen with budgets in the next couple of years. If we move forward this year, we know, and every, you know, people would finally have that, the questions answered, whether they like it or not. They may not like it, but that would be, in my estimation, best way to move forward. [4:56] Scott A. Harriman: Counselor Herman, thank you. Thanks for bringing this forward. What are those costs? What are those costs for? So that, what they do is they [5:07] Director Healy: they would review all the sales date again, update the land and building schedules that they create the values with, and it would be based on market. Now, it's possible, it is entirely possible that the values created now may not change in the next couple years, but we don't know that. This would be a safety net to make sure, okay, we went through this whole process, let's make sure the values that we do finally end up with are reflective of market value, okay, I [5:32] Scott A. Harriman: Guess I guess I'm I thought that phasing in the revaluation meant figuring out all the values and then phasing in the increases to the taxes, right? So you're saying they would figure out all the values and then next year figure out all [5:46] Director Healy: the values again just to make sure that we're okay? So each year would be a phase in to get to the full value, right? So in each year they would do some type of study, ratio study analysis, and update of tables if needed to make sure that the values are still reflective. So wouldn't be just we just be making sure that the values that would dealing with now are reflective of market value at the end, because again we just don't know what's gonna happen, it could go down, right? We [6:11] Scott A. Harriman: don't know what's gonna happen with real estate values. Yeah, I understand that. I guess is there an option to just do the revaluation now and then phase in the phase in the tax changes? So one of the things I talked with the [6:26] Director Healy: administrator about to earlier was something that was done in this town of Brunswick, the kind of set a precedent on this, of they delayed their retail, they just delayed implementing for three years. Now I would certainly never recommend that because we'd be dealing with this over the next few years. If we delayed, we could still go through the process of the valuation notices, which is supposed to go out this week, could go out to the property owners, they would know what the new value is. We've got scenarios that we've got to predict what the tax rate is going to be, so we could supply that information to them and say here's where we're at, this is what your taxes would be if we implemented, but we're going to just delay and use our values from the current fiscal year and increase it based on if there was permits and what have you. It that way there it would give the property owners more time to prepare for what was coming. The downside of that, what scares me, is we don't know what the budgets gonna have, because right now there's a lot of pieces of this, and one is the reval and its impact on the values, and then there's the budget and it's increased on taxes. So and they you constantly Herman you mentioned this the other night, I was watching, you're right, the reval did have an impact as well. I ran a scenario on my own home, my taxes would have gone up about six hundred dollars without a budget increase, so unfortunately with the budget increase it's like twelve hundred. Yeah, okay. [8:09] Scott A. Harriman: I guess I may not be communicating my question very well, so [8:13] Carl L. Sheline: I'll let others try to get the answer. Tell us who should thank you. [8:20] David B. Chittim: Director Haley, what are the costs for option D? Option D is four hundred and four hundred sixteen thousand, so 400 year two, 416 in year three. Okay, thank you. And if I understand correctly, what the phase in would be, it's it's a different approach than I had envisioned. You would take all residences under option B, for example, all residential, and bring them up to full value in years two, in year two, and then in year three you would take all commercial and industrial. And so what we would do is as of the completion of this [8:57] Director Healy: reval this year, that's considered full value. Okay, we would implement a percentage of that increase over three years. Okay, [9:08] David B. Chittim: so that gradually takes the shift which we're expecting and distributes that over three years. But that's a relatively small component, if my calculations are correct, of the tax bill that people are going to be facing this year, which is driven primarily by the budget. If my valuation is going to go up 30 percent, this approach would say, okay, in year one it's going up 10 percent, in year two 20 percent, in year three 30 percent. That's correct. Correct. That doesn't change the tax levy. That doesn't change the amount of money the city needs to operate. So that means that we're going to have mill rates that are decreased in each of those three years. That's correct. That makes things even more confusing than they are now. [10:04] Director Healy: That's why I would not recommend phasing in because of the confusion created just exactly as you explained. [10:11] David B. Chittim: Okay. All right. Thank you. [10:16] Joshua L. Nagine: Thank you, Mr. Mayor. Thank you very much, Assessor. I've got a couple of questions about it. So the option A that you proposed basically costs $204,000 to implement. That is correct. The, when you talk about year two and year three, that's because year one would be no increase in taxes. Is that correct? Well, actually. Increase in value and new taxes collected by the valuation. [10:46] Director Healy: That's why I said year one is this year. [10:48] Joshua L. Nagine: Okay, so year one is this year. Right. [10:50] Director Healy: So we would phase in a percentage increase on each property class this year, next year, and then the year after. The other component is to make sure that our values that we are phasing in are still reflective of market value. Because there's two things that could happen. [11:09] Michael R. Roy: One, it could go up. [11:11] Director Healy: Two, they could go down, and I think if we miss that, then people are really going to be upset. [11:16] Joshua L. Nagine: And there was no scenario in which we just released the new valuations, didn't change the mill rate for a year, and then started to go forward? [11:26] Director Healy: That was my—the last thing that I mentioned was a delay of implementation for a year. we keep our current values our current FY 26 values increase them based on if you had a building permit or if you have new construction because that hasn't been put into the appraisal excuse me the assessing side the taxable side yet we can get caught up on that would not be that difficult for my staff to do I think it would be more difficult for my staff to implement something over [11:59] Joshua L. Nagine: three years. Understood. My concern, my major concern is that at this point, still no one knows, even if we had a hypothetical new mill rate, what their increase or decrease would be, right? And we know that the vast majority, or the majority, of residential housing is going to see an increase, sometimes substantial. Yes. And so because of the fact that we're well past the point when you can file a homestead exemption, and well past the point when you can apply for the senior tax credit, Fair and Fairness Act, that's why I'm concerned about something hitting us immediately, simply because, and some of the older housing stock with severely undervalued homes, I can tell you that my neighborhood has plenty of homes that are valued at somewhere between sixty eight thousand and eighty eight thousand dollars. The new valuations are going to be somewhere around 250 to 350. If they're, there's a few that I know that are two units that are occupied by one person, and so there's an opportunity, I think, with a delay in putting in this piece with good outreach to make sure that we're protecting folks that have that can take advantage of programs that are available right I'm sure you 're aware of how many people in the in the city have filed homestead exemptions and how many have not is that something that you do have that right now I want to say it's about 5,270 and so how many how many homes I want to say we have eight [13:31] Director Healy: thousand three hundred eighty eight single-family residential, so there's [13:35] Joshua L. Nagine: another 3,000 potentially that could apply for the home store extension. You [13:39] Director Healy: know, hit with the timing of it, because yep, you have to apply by April 1st. You [13:42] Joshua L. Nagine: Have to own the home before April 1st, so there's completely understood on that level. Do we have any idea of how many people have applied for the senior tax credit Fairness Act? Do we have, you have to talk to the state on that. They, it's part of the stendendum to the state income tax return. Gotcha. I completely agree that, you know, if you could just speak just really briefly to how long this process has taken and how much it's cost us so far to come to this point. So we had budgeted 580,000 for the [14:13] Director Healy: project, and it started three years ago, and we've got to the point now where the evaluation notices are supposed to be actually mailed next Friday. Tyler is waiting to hear from me tonight of to send the letter to the printers tomorrow. So but I love your [14:34] Joshua L. Nagine: Tyler, you're watching, hold on. So we, but that's where right in this space, so [14:40] Director Healy: we've gone through the full revaluation, the physical inspection part unfortunately didn't work out, so we went to a data mailer, that was all that information was entered into the system, they've done all of their sales analysis, they've done their commercial income and expense review, and all the tables [15:02] Joshua L. Nagine: the valuation tables are complete. Okay, I do think it's important that people get their new valuations as soon as they can. I think the question that I really have is whether or not we delay one year before we implement the full tax, or if we do a step plan, and I'm wondering if like it makes sense to put that forward as a referendum item, in all honesty, with the breakdown of what the cost will be if we do and do not, once people have their numbers and can actually make a decision. I just think it's tough for us to make us, you know, like a snap decision one way or the other when we haven't, it's gonna take a couple of months for people to digest it, and especially I'm, I'm considering the folks on fixed incomes, right, like if you are not expecting an increase in your, or even folks that are, you know, they're living to their means or in some cases above their means because things are very expensive right now, and if your escrow goes up, you know, $300 a month, that changes your family planning for all of the expenditures that you're putting forward. Same thing with the fixed incomes. And so I'm just trying to figure out a way that we can do this that allows our folks to prepare, because our community is one that the working poor still own property here. It's very rare, I think, for a lot of communities and the last thing I want to do is push them into situations where they're or it's not tenable for them to stay in their homes so there's [16:39] Director Healy: something I think it's kind of important for me to mention as far as state statute goes and the reason they do this is so there's no one to influence on values is the ultimate decision is the municipal assessor of how you value properties now what you the electives can say is why not give me the money you not getting 200 grand you're not getting 400 grand which then sends it back to me to say okay you can only do x or y either we delay or we implement like i said i it 's it's something the way It were the statutes worded is that I am an agent of the state of Maine even though I'm hired by municipal office right I work for the city but I'm an agent at state so that's that separation of so there's no undue influence on the assessing department the assessor to arrive at values that benefit certain people not that happens but that's why the separation is made that way it [17:38] Joshua L. Nagine: Ultimately so what you're saying does that directly relate to the concept of [17:42] Director Healy: Like a referendum for instance so what would the council could say is okay you've given us these options we're not going to fund it we're not going to give you 200 grand we're not going to give you 800 grand and then I have to say okay well like gives me two options either we implement or we delay and in speaking like I said my preference would still be to implement however the discussions we've had and like I said I just had this thing that came into my realization into my head today that we Can do this delay it one year people still get their values, they'll know what they're going to be assessed for, they're going to have a couple of months to argue whether that's good or not, we're going to have an estimated tax rate that they could multiply their value by, so they'll have a good idea moving forward what their taxes will be. Like I said, the part that I fear is we don't know what the budgets will be next year. And so you know if we don't don't implement and we end up with people seeing a significant increase this year and then a significant increase because [18:53] Bret Martel: The budgets went up again, but if we do the one-year delay, people are not, it's September of 27, it'll be the first tax bill with the new values. So that, good, that does give quite a bit of runway for people to know their new values and to prepare for what's coming. You know, it's over a year, so I think some of the, you know, the challenge, you know, we're facing right now is we're looking at some potentially large numbers for many people in this community to absorb in a very short amount of time, and so we do have an option, and you know, Director, you're not opposed to this option, I'm doing a one-year delay in the rollout of new values, and it does give at least a year plus for people to prepare. They know their new assessments, and they'll be able to have some time to at least prepare for what is coming. So but the point about what the budget is next year is a valid one. We could be looking at some potentially big numbers again, but so I think the one-year delay, a phase of new values, does accomplish some of the goals that I think we're trying to get at and addressing some of [20:00] Director Healy: the, scary numbers right on our doorstep. If I could just add, and would not be, this is not precedent setting, this is already been done by another municipality, correct? Yeah, and [20:13] Joshua L. Nagine: just to follow up on that, if we have, if we have a window of let's say a year for the expectation of these new taxes to fall into place, that actually does give people planning opportunities. AND IT ALSO CREATES AN OPPORTUNITY POSSIBLY IF WE WERE ABLE TO ENCOURAGE THIS IN SOME WAY. BUT THE ADU PROGRAMS EXIST, RIGHT? WE'VE GOT A LOT OF SENIORS THAT ARE LIVING IN FOUR-BEDROOM HOMES WITH TWO BATHS, RIGHT? ONE PERSON. RIGHT? AND, LIKE, YOU CAN OFFSET THE COSTS OF, THEY CAN'T TAP INTO THE EQUITY OF THEIR HOMES RIGHT NOW WITHOUT BEING HOMELESS. YOU KNOW? LIKE, THERE'S NO OTHER PLACE TO MOVE. They have to move into maybe a rental or into another community, right? And so, you know, I'd like to see any type of model that we can look at in order to move people into housing still in our community that they can afford and make sure that they're not crippled by a surprise. And so that, those are my concerns. So yeah, thank you. We're gonna need to give people some time. [21:23] Carl L. Sheline: So, you know, Christmas is right around the corner, and September 27th is coming even faster than that. So I were either need again going to need to do a phased-in approach, or we're gonna have to give people a year, you know, runway or delay here. I mean, that's just, that's just where we're at. But we need to give people time to plan. All right, back to you, Counselor Chittum. [21:50] David B. Chittim: Thank you, Mr. Mayor. So if we delay this for a year, we use the current values that everybody has on their property adjusted by building permits and so on. We have a mill rate now at 32.78. With the budgets that we're talking about, we're talking about a 10, 11, 12 increase on budget alone. So if we delay a year, our mill rates are going to go up to 36. Yeah, that's going to be a shock. The problem I see with delaying for a year is that, especially if these letters go out, and I'm encouraging that they do, that's the whole purpose of delay is to give people a heads up, we're going to have a segment of the city that has been overtaxed based on the old assessments that now with a little bit of common sense is going to realize I'm still being overtaxed, but the city has the information to equalize my tax so that it becomes equitable. Does that open the city to any liability to any claims that and particularly you assessor Haley you 're an agent of the state how do how do we reconcile saying we know that you are overvalued here in the great scheme of things but we're gonna put it off for a year and we're gonna let you pay extra for a year that is a very valid point I did speak with Taylor [23:29] Director Healy: Burns, who's the assessor for Brunswick. They did have some appeals, they managed it. Problem is, we stood, in order to prevail on a set on an abatement, you have to prove that you're being treated unfairly at a ratio of 10% or more, right? So if our ratio is 38% or 40%, whatever it is for this, if we didn't do the reval, someone's gonna have to prove that they're being assessed at 50 or 60%, and that's gonna be difficult to do. It's one of those things, it's just extremely hard to prove that you're being assessed at a greater percentage than the average, which is 38%, because most properties, as we know, are going up roughly 180%. So it'd be difficult for someone to prove that they're being assessed at 60% right now, because that's just would be highly uncommon. Okay, I [24:27] David B. Chittim: didn't realize there was a threshold there, so it's not sent within the [24:32] Director Healy: relevant, the statute reads, and assessment that is within 10% of the [24:37] David B. Chittim: Relevant assessment ratios deemed to be within acceptable limits. Okay, all right, thank you for that. I have a couple more questions that aren't specifically germane to the rollout, the delay, the phasing, but they do relate to assessing and mill rates. Is it appropriate to address those now? I [24:59] Carl L. Sheline: guess in this context. Why don't you ask your questions and then we'll, we'll go from there. I will when I remember them. Okay, so right now we have before us, we have the option to delay at least one year and then or spend money to phase it in. What are we feeling like? We'll just go down the row here so that way we can give our assessor some direction. Yes, counselor from Ward one. Thank you, Mr. [25:34] Joshua L. Nagine: Mayor. One, I would suggest we definitely delay for a year to since this is a budget work session and this is a presentation and we're missing two members. We probably don't want to make a decision. It also gives us an opportunity to get some feedback from the folks that are going to be impacted by it. So I'm open to the phased approach. I'm also open if, I mean, the challenge is nobody actually knows what the impact is going to be, right? So like once they have a number and they can understand what the impact will actually be, I think that we'll have a better understanding of whether or not people will be able to swallow that in a one-year, two-year, three-year proposal. But I definitely think what we're talking about, three thousand single family homes in the community that haven't even applied for the homestead exemption, correct? Like we have to do our due diligence to make sure that we're communicating to everyone in the public to make sure that they take advantage of every single tax credit possibility that they have. We do mail every new [26:35] Director Healy: property when it gets a homestead exemption application, so we do try. Yeah, no, I understand, [26:41] Joshua L. Nagine: but I'm just thinking about like community-based approaches where we actually knock on people's doors and bug them. I'm not saying the city does that because I know it doesn't always work out and I know it didn't work out for Tyler Technologies, but like we have to, we have to reach out to the folks and be like, listen, you know, you are going to see an increase in your taxes for the, for the folks that will, and, there are programs in place that you should be taking advantage of in order to reduce that impact to you. Consignment [27:13] Scott A. Harriman: Thank you. I guess I'm still, I'm still wondering about the costs of phasing it in. You said we budgeted 580,000 for this process, and I don't understand why, if we've done all the calculations and valuations, why it costs two to four hundred thousand dollars to implement. [27:32] Director Healy: Those in a staggered way, so it would be additional work on Tyler's part to analyze the sales to update the tables. If need be, we could ask them not to do that. The downside is if the market does drop or go up dramatically, then that could be missed, right? So if we're just saying we're just gonna phase in these values and we're not gonna do anything else, if the market changes, we could have. [28:03] Scott A. Harriman: Some issues. Yeah, I guess I don't, I don't understand why that would be, you know, we haven't done this for 38 years. Why would it matter if the market changes in the next three years? Why don't we just phase in the values that we have now? [28:18] Director Healy: you're right we could do that the I don't we all remember what happened in 2008 I'm not saying that's gonna happen no one has a crystal ball but property values drop 50% in within a year and a half so if that happened and we were just phasing in the regular values that'd be a problem it [28:38] Scott A. Harriman: could also happen it next year if we do it all at once too so I just I don't see the connection so [28:45] Director Healy: The connection is once the system is set up the way it's meant to be, we've never been able to do adjustments in our database because the last reval was scrapped in 2006. So what we have is appraised, excuse me, assess values and then taxable values. We maintain two sets of values. The taxable are override, so we've never been able to use the system to adjust the taxable. We have to go into 12,000 parcels and adjust those. So once the reval is complete, if the market were to go down, we could do annual. Adjustments. So the phasing in and the implementation of the software would be specifically to do a phase in. If we completed the rebound, I said we're done with it, then I could do it based on. [29:35] Scott A. Harriman: Sales. So you'd basically be doing a reval every year, every year. I double a. [29:43] Director Healy: Oh, standards, International Association of Assessing Officer standards is once every four years. A lot of states do annual, a lot of states do three years. Maine is once in a 10-year period, which is just it doesn't make sense anymore. When they created that statute back in the 70s, maybe it worked then, but it certainly doesn't work now. It's way too long. New. [30:04] Bret Martel: Hampshire, for example, is five. [30:05] Scott A. Harriman: Years and the reason why we're not doing that currently is just because it's been so long since the last, so long, and also our system are, even though we [30:15] Director Healy: have a computer system mass appraisal program we can't use it 's meant to be used without manually it just doesn't make sense that we have to manually touch 12 000 parcels so [30:29] Carl L. Sheline: okay, if I may, Counselor, it sounds like there's a technological component to this as well. Anything further, Counselor? Counselor Roy, did you have something? THANK YOU, MR. MAYOR. [30:47] Michael R. Roy: MY THOUGHTS ARE KIND OF LIKE COUNSELOR HAERMAN'S IN A WAY. I MEAN, I THINK, YOU KNOW, WE HAVEN'T DONE THIS IN 30-PLUS YEARS, YOU KNOW? AND IF WE COME UP WITH A NUMBER AND WE IMPLEMENT THAT NUMBER AND WE SEE A YEAR DOWN THE ROAD THAT THE NUMBERS TANK OR EIGHT MONTHS DOWN THE ROAD, THEN WE COULD ADJUST FOR THAT IF WE HAD TO. BUT I MEAN, I JUST, I KIND OF share the same concerns as Counselor, but with that being said, I mean, I'm, I'm in for a delay, at least for a year. I mean, we can't right now, I don't think, with the way the numbers are and the budgets and all that stuff, I don't think we can implement this at all. I mean, we're going to put people out of their homes and it's the last thing I want to do. So Counselor Noble, I agree that we should wait. I don't, I don't know about phasing it in or doing it after a year. I want to talk to my constituents first and see what they think and have some other conversations with people who understand it probably a little bit [31:58] David B. Chittim: better than I do, so yeah, that's pretty much it. Counselor Chittum. Thank you, Counselor Roy just mentioned putting people out of their homes and I'm sure he meant that as a figure of speech because to my knowledge the city has never evicted anyone for non-payment of taxes. The process is that a lien is filed and your house is burdened and but you're not told you have to leave, you're not made homeless. So unless I'm mistaken, I'd like to put that whole concept to rest, that we're forcing people to leave their homes. If you make a conscious decision to sell your home because the taxes are too high, that's a little bit different, but the city is not going to go around knocking on doors and telling people you have to leave because you haven't paid your taxes. Am I correct in that? Yes. Thank you. As to delaying, you've addressed my question about the liability or the concerns the city might have by continuing what is an inequitable tax structure. Now we all know that we have the tools to fix that. And if we continue it, you've addressed my concerns about the exposure the city would have. Another concern I have is that economic development and the fact that we have got a mill rate that is as high as any in the state, I would surmise, will only go higher. We're now going to be charging 36, 3.6 percent of the value of your property. That's going to delay any economic development tools that we would see by reducing the mill rate to 15, 16, 17, whatever it falls out to be with a new budget. So that's an argument against delaying for a year. The only advantage to delaying, as I see it, from a monetary standpoint, is that the shift of burden is not affected, so that residents don't see that, in my view, relatively small incremental addition to the large ten, twelve, thirteen percent that we're talking about in the current budget. Is that a fair statement? That is a fair statement, and I think we're kind of on [34:27] Director Healy: the same page. I am much more in favor of full implementation and having to deal with the fallout, but understanding what we're up against as far as, you know, people wanting to be able to have time to prepare for this, and that's why, in my mind, you know, I believe the options are delay or implement. I [34:52] David B. Chittim: I tend to agree with you, Director Haley, and my preference would be to implement, now, particularly if we're looking at any increased costs in the delay because of those factors that I've mentioned, and because I truly believe that the shift in equalizing the tax across all property of taxpayers in the city is, if we could get this number out, but we can't. I've tried previously. This did the differential in a resulting from the revaluation is relatively small in comparison with the differential resulting from the increase in budget. So that's why I think that I appreciate the concerns about giving people time to prepare and so on, but they're still going to be faced with a horrendous bill this year resulting exclusively from the budget. If we, if we implement the reval this year, we avoid having a another year of 30 plus mill rate, we avoid any minimal exposure to the city, and the cost of that is relatively small in comparison with the unavoidable costs that we're going to experience because of the budget inflation. [36:20] Carl L. Sheline: Councilor Chittim, so you're in favor of just implementing immediately, is that what I'm hearing? Yes. Oh. Yes. Back to Councilor Longchamps, I've asked the council how they feel about an implementation and or a phased-in approach. [36:41] Susan G. Longchamps: Yes. As I shared before, I definitely think we should delay this. As of right now, have all of, have residents received what their new [36:54] Director Healy: revals are no they're supposed to be mail next Friday the new valuation [36:58] Susan G. Longchamps: notices are being mailed next Friday the 24th so although we have known that this was coming right but no one actually knows what their number is to their property right that's correct so how can we just say okay in may this is what your new re evaluation is and this is how much you have to pay and then right away we start collecting that i just don't think that's fair typically when you buy a house you know how much it values at right before you purchase it so I think that we should delay this at least a year. I'd like to see two years, to be honest, but at least a year, because residents haven't even gotten what their houses are valued at now, and I don't think that's fair. I think it was a process. I'm not blaming anyone, but I do think we definitely should delay this a year. I'd like to see two if we can't phase it out. [38:06] Bret Martel: I'd just like to offer, and this is not to certainly not to disagree with our chief assessor, but I have been through this process, a citywide reval in other communities. You know, the one I was there for the whole period for was a community with a much higher median in household income than Lewiston, and it was a big deal there. It was controversial, there was a lot of public feedback, there was some outrage, it was a difficult process. I had not been 38 years there either, so I guess just some of my concern is you know lewiston as you know is a city where we do have a fair amount of working for as councilor daji mentioned we do have a fair amount of poverty we do have a lot of residents older residents on fixed incomes i think lewiston is a little bit different than some of the other communities certainly in the southern part of the state when implementing this i think there are some concerns about handing people very large tax bills in one year and i think we do have to be mindful of that so just again so i've done this before in other communities i think lewis is a bit different in the demographics that we have and i think if we're not mindful of that this could be a very difficult year for a lot of people So I'm not I'm certainly not trying to disagree with some of the other comments here. This has been a long process. We have been preparing for this, but I just think the demographics of the city are such that we do need to be, I think, mindful of the Implementation on the impacts in one year on people. [39:32] Carl L. Sheline: I Agree wholeheartedly. So I guess where I'm at, I think there's support for a further delay around the council, and then if the council, you know, obviously the phased-in approach, you know, the city incurs additional cost, and so I guess I would put to the council that either a year with phased-in or like Councillor Longchamps just mentioned to your delay without a phasing. All right, we're just gonna run around really quickly if we can just get councillor slots thoughts quickly on this, that would be great. Councilor Nagy. [40:14] Joshua L. Nagine: Thank you, Mr. Mayor. As I said before, I do think we need to sit with those numbers for a little bit and see what the community has to say, see what some of these increases might look like when we do the math out both ways. But I would be in favor of a one-year or a two-year delay. I am not opposed to either. And I'm also comfortable with the concept up to phasing it in on the on the ace scheme, which only costs 204 000 463 000 all the way up to 863 000 seems like a very excessive amount of money to put out in order to manage this. I would also say too, and I just want to make this clear, renters costs will go up, rents are going to go up, and they're not gonna get a bill. It's just gonna be like in September when landlords are adjusting their costs in order to provide. So that's another major concern. That's a huge pressure that renters do pay taxes in the form of rent. And so that cost basically threatens every type of housing that we have, almost every type of housing that we have. So those are my points. So I'm happy with whatever we decide. I'm fine with the two-year delay, but I really think that we need a little window before we make a real decision to hear from the people who get their numbers and say, okay, what does this actually mean to me? [41:47] Carl L. Sheline: Did you have anything for us to say, Councilor Longchamps? [41:52] Susan G. Longchamps: Again, I'd just share that I would like to see a delay. Two years would be, I think, much better. And the concern I would have with waiting until people receive it in the mail, if we wait for that to decide this and then when are we supposed to implement this, if we were to, when was it supposed to go into us so that the [42:18] Director Healy: Timeline now is valuation notices go out to the tax pay property owner, excuse me. They have six weeks to meet with Tyler to discuss their values. We do our tax commitment typically the end of July. Tax bills go out in August with a due date of September. So that's the timeline. So the values in full implementation [42:39] Susan G. Longchamps: would be used to send out the bills in August. Got it. So again, I would like to just share that I think we should delay this for a year, if not two years, and I think I think we've heard from the public loud and clear that this is really scaring a lot of people, and people are worried, and although the city does not necessarily evict people from their homes, we have people that if they just can't afford it, they're going to have to move elsewhere, right. So although it's not technically an eviction, it will feel that way to a lot of people. So I don't think we really need to wait personally, but that's just my opinion. [43:22] Scott A. Harriman: Councilor Harriman. Thank you. I did want to emphasize something Councilor Nijing mentioned about renters. So you know if a homeowner gets behind on their taxes, they're not gonna get kicked out of their home, but if the say the taxes on your duplex go up by $3,600, that's that's another $150 a month per tenant in rent immediately. So that will be a hardship for a lot of people. I also wondered about the letter that goes out, if we can clearly communicate to people, and I think counselor and aging mentioned this, I don't want to take credit, but if we can clearly communicate that the new value is not to be multiplied by the current mill rate, because that will confuse people. If I could add, that was [44:09] Director Healy: added to the letter and it's being sent to the printer tomorrow, but that was specifically put in bold right above the new assessments. Okay, yeah, thank you. And [44:18] Scott A. Harriman: then I also wonder if we could, if we could, I guess coming back to the beginning, if we could phase it in without doing the continued revaluations in between and incurring more costs, there could we just take the you know take the values that we have now and then implement them over three years maybe, without doing all the extra stuff that will cost more. [44:43] Director Healy: There would be some costs incurred, but we don't necessarily have to do statistical updates of value. However, the confusion is, I think there's going to be a lot of confusion if we did that approach. Not only, as I mentioned, with the taxpayers, mortgage companies, and then the additional staff, but this would spread it over to another three years on my staff, so. Okay. [45:07] Scott A. Harriman: And it can't be just, you know, it can't just be a table that, you know, you're at $100,000 now and next year it's $150,000 and the next year it's $200,000 and then finally it's $250,000 the third year or something. [45:20] Director Healy: Like I said, they can, for $5,000 to $10,000, they can adjust our software to do that. So it's more of not so much the cost as the confusion and the additional work that my team has to do. [45:33] Carl L. Sheline: Okay. Yeah. Councillor Roy now. [45:39] Michael R. Roy: I gotta watch what I gotta say. I mean, I some people got what I meant, the other people didn't get what I meant. I'm just gonna say, like, I know we don't go kick people out, but when you can't afford your taxes, you're either one forced to sell or two you leave your home. So that's what I meant when I said kick people out of their houses, just letting you know. [45:59] Carl L. Sheline: And that's been thrown around. We're not going to go back and forth. Please continue, Councillor Roy. [46:04] Michael R. Roy: I again I've already said what I had to say. I'm at least a year if not two I'm. [46:09] Carl L. Sheline: Fine, thank you. Councillor Noble. I agree with. [46:14] Michael R. Roy: Everyone else. I think there needs to be a delay I'm one or two years and I don't. [46:20] Carl L. Sheline: Know what that's gonna look like. Councillor Herman, sorry if we can go back to you, what you're okay with the delay or where were you at? Yep, I'm okay of the delay. Okay, all right, Councilor Chiddom, did you still feel the same way? Yes I do. I think. [46:35] David B. Chittim: That delay is going to create more cost and more confusion, and I think that the impact of the reval alone, based on what I've seen, is small enough that people are going to get hit with a big chunk whether we delay or not this year because of the budget, and we're looking at, as I said, 10 11 12 13 % increases. So I'm in favor of immediate implementation. That makes me a minority of one, I guess, but that's the way I feel, and I feel strongly about it. I'd love a chance to convince other councilors of the rectitude, in my view, of that approach, but I respect the fact that this is a majority rule situation, and I've got seven other thinking people up here who have formed their own opinions. I would like to ask, and I think I asked this early on, I didn't get an answer in an email, one of the early letters drafts said that we're this will bring us to a hundred percent valuation the state requires truthlessly as it appears that valuations fall. Between 70 and 110 percent of market value, that's correct. And I thought there was discussion early on in this process, a year, maybe two years ago, that we were going to be shooting for a 90% rate so that we could accommodate fluctuations on either side. Is it in fact that we are shooting for 100% valuation this year? My [48:12] Director Healy: goal was never to be at 100%. We're not at 100%. We want to have room. We don't want to be over 110. So my target has always been 91 to 95%. At 91% we can [48:26] David B. Chittim: certify a hundred percent. Okay, full exemption values, okay. So that's the homestead exemption is $25,000 even if the market is 91%? That's correct. Okay, thank you. And one final question, in an earlier conversation, Director Haley, you and I had a conversation about sales chasing. Yes. It surprised me that when a home is sold, that doesn't become the market value and therefore the assessed value of the home. And you said there's a state law that prohibits that practice. [49:01] Director Healy: That's correct, that's called sales chasing. So if I assess a house for what it sells for, they do have a Proposition 13 in California where that's how they assess property. In the state of Maine, it is not legal to do that. We still have to look at what other similar situated properties are being assessed for, and if that means the house that sold for 300 should be assessed at 285 to 290, then that's where it's assessed. Conversely, if it sells for 300 [49:27] David B. Chittim: but the neighborhood says it should be 310, it should be 310. Okay, thank you. That seems like an awful lot of extra work for assessing departments across the state, but if that's, if that's what Augusta has deemed appropriate, then I guess I'm not one to argue with that yet. [49:48] Carl L. Sheline: Okay, just so we can provide clear direction to our assessor, what did, sorry, Administrator Kainrath. [49:56] Bret Martel: Yeah, let me just, the director did mention this before, so we're having this conversation, but I mean, as you know, under state law, this is Bill's decision, so obviously we're having this conversation. So it also is something that you're comfortable implementing, and I think from our conversations, you're comfortable with either a implementing as is now or a one-year [50:16] Carl L. Sheline: Boy, is that accurate? Thank you. Represented here are you well, so are you comfortable with the two-year delay I [50:28] Director Healy: Know I think I my recommendation would still be to fully implement the revaluation, but I listen, I understand exactly where you're coming from. At some point we have to we have to do it, we can't keep putting it off. Right now that state law doesn't have a lot of teeth in it for not doing a reveal, they're gonna adjust our tree growth reimbursements down. We don't I think we probably get five or six thousand dollars in tree growth reimbursement, so that's not the issue. My issue is that they didn't do it 2006 if we don't do it in 2026 and we don't do it in 2020 when are we actually gonna do it we need to do it we need to get it over with that the city needs this for equity purposes I was able to justify my mind again Brunswick's done it's not precedent-setting give people a time to understand where they're coming from what their values and what the impact would be and that would give them 15 months to get their heads around it so that's why I'm I would I would [51:41] Carl L. Sheline: accept that we could delay it a year. How did the rest of us feel about that? Councilor Long Champs, I'd [51:53] Susan G. Longchamps: like to see two, but I think since you are the one that makes that final decision, then I appreciate that you would consider one year. I'd still like to see two, but if that's all we have, then I think that's still some time, 15 months for people to adjust and start digesting that. And so we really don't have much of a choice, but at least we have one year, so thank [52:29] Carl L. Sheline: you. I don't know if you could sleep on two years, that'd be great, you know, without something like yeah the and I understand that a phasing approach presents issues and it you know cost the city additional money, you know, since runs like what did three I think two could be Yeah. At least considered. Councilor Harriman. [52:57] Scott A. Harriman: Yeah I did want to bring up also you mentioned we don't know what the budgets are going to do in the next few years, but I still don't you know if the budget goes up by 10%, presumably my taxes would go up by about 10%, but if my home is currently valued at eighty five thousand dollars but it's it would sell for over 300, granted that might not be the assessed value, my taxes are going to go up by a lot more than 10%. So I guess I don't see where the budget and the revaluation really play together, they're both things that will increase taxes on residential properties, but I feel like they're separate, they're just separate tracks, aren't they? So again what we're [53:46] Director Healy: Doing in a revaluation as we move closer to what we're doing in a revaluation is redistributing the tax burden. So I went at the same level, so yes, the implication will be that someone is going to see a tax increase. And as we mentioned, 180% is the average increase. So if you were 180 or less, and I said earlier, there's about 48% of our properties that were 180 or less, no increase in the budget, they would have seen taxes stay the same or go down. The other 52% who are above 180, it would vary. So 190, small increase. Mine went up 275%, so big increase. So yeah, they do tie together, but again, redistribution, revenue neutral, that's what a revaluation is. It's just, and no one ever wants to hear this, we want to make sure everyone's paying their fair share of the tax burden. That's all, okay. [54:49] Joshua L. Nagine: Councillor Nagy, yeah, it one, and I know I'm repeating myself, but the quicker people get their evaluations, the quicker we can have, I think, further conversation. If you're looking for me to say okay to one thing or another or another thing, what I wanted to see isn't necessarily what you're saying you're going to do anyway. So I think get those numbers out to folks as quick as we can, and you may actually be reconsidering after you hear from the constituency as well, because I'm sure they're gonna. Reach out to me, they're gonna reach out. [55:29] Director Healy: To a lot of folks. So again, the plan is still to move forward, evaluation notices go out, everyone has the opportunity to set up a time to speak with Tyler about their value. Some may think it's okay, some might think it's too high, so they'll have that opportunity at that point. And then we'll. [55:47] Joshua L. Nagine: Also have an opportunity to make sure that any available program that's available out there, they're, they're applying for and getting for this net for the upcoming tax year. So that again, senior tax credit Fairness Act and the, which also applies to renters and the homestead exemption. You are correct. [56:07] Director Healy: That is one program that renters can take advantage of, its property tax and rent fairness credit, so they can benefit from that even not being a property owner. But there's also the veterans exemption, which we encourage every veteran to apply for. And unfortunately, you also are blind, there was a blind exemption, they're not a lot, but every penny helps. So yeah, we just. [56:29] Joshua L. Nagine: We need to make sure that we're protecting our residents as much as we possibly can for the once I see increases. Administrator Ken Roth, you. [56:38] Carl L. Sheline: Can work with the communications team to get the word out on these programs. [56:44] David B. Chittim: Counselor Chittum, did you have your hand up? Yes, I did. I wanted to also put a plug in for looking at the extent that the city, the municipality, can forgive, give interest or penalties on late payments. I don't know if that's allowed under state law, but given the unusual circumstances, that may be a consideration. If that's a tool in our toolbox, we may want to look at that for a year or two years, I believe it is, say that would be. [57:15] Bret Martel: Finance Director, that's not so. Other communities I know have waived interest or made some. [57:20] Bryan Kaenrath: Some changes. Okay, so that so you as counsel during the budget process set the interest rate. So if you want to set the interest rate at 1%, you could set the interest rate at 1%. You can't and you can't increase it higher than what the state sets, but you can decrease it to what you prefer. Okay, thank you. I. [57:46] David B. Chittim: I realize that these costs, the two components being the revaluation, which will affect different people differently, and the budget, which will affect everybody identically. And I've made a point that my belief is that the budget is the main driver here. The reval is a relatively small number. If we can give the people who are going to be exposed to these large increases in their tax bill every benefit, i.e., making sure they're aware of the programs that are available to them both locally and through the state, if we as a council can reduce the burden to the extent that we have in our power, that will help. I still, as a minority of one, urge that we implement this. [58:35] Carl L. Sheline: Immediately. Council Roy, did you ever hand up? Thank you, Mr. Mayor. Sorry about. [58:43] Michael R. Roy: That. One of the questions I had, I've asked this a couple years now, I believe. Can we as a municipality come up with our own exemption for maybe seniors or. [58:56] Director Healy: Anything like that? We can come up with a program. We did discuss this last year, that piggybacks off of the property tax infant rent Venus credit. We cannot not create an exemption on our own. Only the state legislatures have the power of taxation. But you can implement a property tax assistance program in a municipality. I was involved in the one that got implemented in the town of Cumberland. [59:19] Michael R. Roy: Good, okay, I just really wanna wrap our brains around that. I think I wanna see what we can do about that. I'll talk to the city, the administrator later. [59:32] Joshua L. Nagine: Councilor Nagy, I have two comments. One for the director. I do, we have the ability for setting the interest rate, to set it to particular types of parcels, or would it be overall? And so like for instance, if it was like owner-occupied, could we do that? It would be overall. It would be overall for all parcels. Okay, so that could be a concern. And the second thing I was just gonna to bring forward, and I think a couple of folks have mentioned it in certain places, but if we place, if I, for instance, if I put a deed covenant on my property that said the income level of, or a rental property for instance, the income level of this renter is this, or this house can only sell for this much, right, does that actually affect the valuation of the home [1:00:26] Director Healy: any restriction you put on a property that decreases someone's what we call the bundle of [1:00:31] Joshua L. Nagine: rights in that property would reduce the value, right? Okay, so I, it's, it's maybe a little bit abnormal now, but I know that it's been done before, and so that's another avenue that possibly could be explored for people who, we have some folks who, you know, they're living on fifteen thousand dollars a year, and that's, and they're still owning their home. So counselors, if I may [1:00:55] Carl L. Sheline: I think we could let administration determine everything that's available and help get the word out. Councillor Longchamps, did you have something as we're wrapping this up? Yes. [1:01:11] Susan G. Longchamps: And I'm sure you've already shared this, but what is the real consequence to pushing it to two years? [1:01:18] Director Healy: The real consequence is that we continue to have inequities, as we discussed. Right now, our ratio is likely to be, our certified ratio is likely to be under 40%, which means the homestead that we got that was 11,750 this year could be 10,750 in FY27. If the values continue to drop, then we have to keep making those types of adjustments. And as we mentioned, we already understand that there may be some inequities in our assessment. And my job as assessor is to make sure everyone was treated fairly and all assessments are equitable. So delaying the year, in my mind I'm saying, okay, we're giving people the opportunity to see their value, prepare themselves, understand where it's coming from. But then if I put it off any, I legally, I should be implementing it for revaluation, but I understand, and the short window between valuation notices is in tax bills. I can't completely understand that people need time, I get that, but if we put it off any longer, then it would be me knowingly adding another year to an inequitable [1:02:38] Susan G. Longchamps: Assessment does that make sense? So we'll have approximately 15 months after people receive their new revalve, correct? That is correct. [1:02:52] Carl L. Sheline: but our assessing director I think was going to sleep on it so we're gonna we're gonna get at least a year and then maybe two I think that's where we're at this very moment any final thoughts from either you director Healey or administrator cane rough on this not on this topic no i'm all set too thank you all right thank you all so much and thank you for your service to our city director healy director roy are you joining us up here moving to the second part of our workshop i guess that she's as director Roy's making her way up, director or sorry administrator Kane rath, I will let you kick things off. Sure, so at our last meeting at the [1:03:49] Bret Martel: council's direction we came up with some additional scenarios for amendments for reductions to the proposed budget beyond the 4.1 million savings that was already identified. So those were laid out again as we discussed at that meeting, a big piece of tier two and tier three, our current employee layoffs. Again we were directed to come back with bottom-line dollar figures as to obviously not discuss particular names or positions here in a public setting. At this point we are just getting to some numbers and seeing where everyone wanted to land. I will comment on the actual list of current employees developed that constitute these numbers. This list can be made available, it requires proper and legal employee notification before that obviously. We also in general certainly don't want anyone to learn that they're losing their job in the newspaper or by watching this meeting on tv. So we did have an initial conversation with legal about how to do this. There are some collective bargaining agreements, there's some language in there we have to be mindful of as well as employment law. I did also ask if the list can be provided to you in executive session, was advised that cannot at this point. So that's where we are as far as getting this actual list to you. So what it will involve is us working with legal, making sure we're doing everything in accordance with collective bargaining agreements, then the list could be public, but certainly we're going to also want to go one by one and advise All potential impacted employees that their position is up for discussion of elimination this year. I think that's the only right and proper thing to do, and according to our CBA's and state law. So but I do just want to say, I did ask if we could provide to you an executive session, in our city attorney advised that we cannot at this point. So we'll work through all of those proper protocols to do that with the goal of that in mind. But again, as for the moment, we were charged with coming up with some bottom line dollar figures, which we did our last meeting in the three tiers. So I think what we'd like to dig in more with tonight and probably next Tuesday is really just get a firm idea of where we are as far as interest in offering further amendments for cuts. We heard, I think, some opinions at the last meeting. I think we have some sense of where everyone is, but the clock is also ticking, and we do need to, if we are going to be going for example with tier 3 cuts, we also need to be mindful of there are a number of guidelines as well as timelines in cbas for anyone covered under a contract that we're going to have to get moving on and get this process going sooner rather than later. So if it involves tier one, there's no employee layoffs, that's different. But from what I think we're hearing, I think there may be a majority here that is in favor of tier three, from what we've heard, tier three or beyond. I think one counselor mentioned six, but you know, we're at least I think at tier three. But so we want to get I think more of an idea of that tonight, and then obviously that will set off a much larger process for us in working with legal, hr, are, and to come up with a process in order to notify potentially impacted employees and work through that. I'll also say we had initial discussion with legal again in the mechanics of how this would work. There are a couple different ways you could inform someone that their position is funded through the end of the fiscal year and then obviously would end, or you could offer a severance package and put them out immediately and they would get a severance package, and there'll be some other obviously legal instruments there in details. So that's for us to work through with attorneys, but again I think we just need some clear ideas of where we're going to land if It is in tier two or tier three. We need to get moving on some other pieces of this with legal and also to notify employees, and like I said, then we can, because I know there's interest, produce a list to everyone of who's impacted. But we obviously have to go through the proper legal channels and of course notify people just as human beings that their positions are up for elimination. Thank you, Administrator. [1:08:19] Carl L. Sheline: Kainrath, so yeah, where we're sitting right now, it appears that a majority of counselors are interested in at least tier three cuts. The question is, yeah, what are, it's tier three, I guess, what, how much, how much are we looking, if we're looking to cut beyond tier three, I would love to provide a number to administration this evening to work towards, because as Administrator Kenruth just mentioned, the clock is ticking on all of this, and this will require lots of conversations and time and so on and so forth. And yeah, so I guess we're gonna just do what we've been doing. We're gonna start with Ward one in terms of where we're at. Are we, are we fine with tier three? Are we looking to do more? Yes, as succinctly as possible, please. [1:09:12] Joshua L. Nagine: Thank you, Mr. Mayor. My position hasn't changed. I want to see three to a three and a half percent increase in the operating expenses, which will still leave us with about a 10% increase overall in the budget due to the county tax increase, the debt service increase, the reduction in revenue sharing, and the increase in the school budget. So for operating expenses, I want to see three to three and a half percent. I would be, I know that other folks are not leaning as heavily on the cuts, so I would, I would be able to stomach the three and a half, but I would really want the three. [1:09:57] Carl L. Sheline: Councilor Longchamps, do you have thoughts? [1:10:01] Susan G. Longchamps: Not right this moment. [1:10:03] Scott A. Harriman: Councilor Ehrman. Thank you. I had a couple questions on some things that came up on Tuesday. So in the, in the tier one scenario, it mentions cutting the LATC vehicle line, and someone had mentioned that there were other monies that they could use. Can you expand on that? So currently every year [1:10:27] Bryan Kaenrath: 50,000 was put in from fund balance, so I believe they have about 500,000 still in their reserve to cover any purchases of buses or any of the items that need to purchase, so they still have those funds available to them. That's not going away way. [1:10:48] Scott A. Harriman: Thank you. And is Auburn also reducing their budget by that amount? [1:10:53] Bryan Kaenrath: I am not currently aware of what Auburn is doing for them. We are still keeping their portion of our subsidy that we give them. We are not cutting that. This is just the additional portion that we usually give for the [1:11:08] Scott A. Harriman: vehicles. Yeah, because this is essentially a deposit into a savings account every year so that when the vehicles, when the buses reach the end of their life, then that money's there. And usually, Lewiston and Auburn put in the same amount each year to get there in seven years or ten years or whenever the buses wear out. So I wondered what the other monies were that were going to make up for that. [1:11:36] Bryan Kaenrath: We hold the funds until they need them. They have to purchase the items and then give us the bills. We don't give them the funds ahead of time. So currently there's $562,606.50 in that fund for them to use. [1:11:54] Scott A. Harriman: Is that just Lewiston's contribution? [1:11:57] Bryan Kaenrath: Correct. That's Lewiston's. Okay. [1:12:01] Scott A. Harriman: I guess I would just raise that as something that I wouldn't cut just because that's how we fund our buses, and that's sort of an ongoing thing that both cities do each year. I also had a question on the fuel price we got so we got our price for gasoline and diesel and that's that 's a contracted price I wondered if there are what are the terms of that contract as far as extreme prices and you know are there additional charges that the vendor can charge us or can they back out of the contract if there are certain price increases? [1:12:44] Bryan Kaenrath: No, we locked in at the fixed. We did not choose the port. There is one that you can choose where it's an amount plus the market. We chose the fixed amount. [1:12:57] Scott A. Harriman: So we're at, it was what, 249 for gas and 298 for diesel, I think? That's correct. Okay. Okay. So even though right now gas is over $4 and diesel is over $6 and still going up, even if it's $8 a gallon, we're still going to pay $249? [1:13:16] Bryan Kaenrath: Correct. We're locked in at that fixed. [1:13:18] Scott A. Harriman: It's for 12 months? [1:13:22] Bryan Kaenrath: For 12 months, correct. Okay. So it will be six months out of our fiscal year 27 and six months out of our fiscal year 28. [1:13:31] Scott A. Harriman: Okay. Okay, I think that's all I had for right now, thanks. [1:13:37] Carl L. Sheline: Council Herman, we are getting a sense from the council as to where we're at with cuts. Where are you, what is acceptable to you? [1:13:46] Scott A. Harriman: I still need more information on the proposed cuts before I'm able to make that decision. Councilor Roy? [1:14:02] Michael R. Roy: Like I said the other night, I think for me, you're looking at tier one which is a savings of a million twelve thousand five hundred fifteen they're around there and if you're looking at tier three you're only saving three hundred thousand i mean if we're going to cut positions i want to save millions i want to go for the gusto you know what i mean but i still i 'm not in favor of cutting positions if there are other are things we could do to cut costs and be all in favor of that i just i'm having a hard time putting bodies out of, out of jobs. But like I said, I mean, if the council wants to go a different route, I mean, I right now I'm just going to hold on my position. Counselor Noble, did you have thoughts? [1:15:00] David B. Chittim: Counselor Chittum, I've looked at the tiers one, two, and three. I even looked at tier six two, and the returns diminish as you go down. I'm looking at a differential now of minimal $33 a month is the effect that the difference between one and three would have on me personally. Now, all of a sudden, I'm looking at this in a different light, and I hear Councilor Longchamps in particular and Councilor Roy, unhappiness at cutting positions. On the other hand, we're looking at double-digit increases no matter where we go, and I think it's incumbent on us, and I feel strongly that we need to do what we can to reduce the tax burden. And for that reason, I'm going to back off Tier 6, but I do think that a hard look at the services that the city is offering would take us to Tier 3, even though the benefits, as Councilor Roy pointed out, appear to be minimal. The difference between saving $1 million and saving $700,000 is still $700,000 dollars, so I'm, I'm leaning now more toward tier three than even deeper cuts. [1:16:30] Carl L. Sheline: All right, so we have one second, council long transfer, we'll recap here. So yeah, we have four counselors who are considering cuts and or cuts that include staff positions. So right now I'm hearing, you know, without one of the counselors being here, I'm hearing support for tier three. Yeah, I'm not sure, counselor and aging, that I'm hearing support for, you know, the increase that would be required to get to three or three and a half. Yeah, I'd like to get to a point where we at least provide some guidance to staff before we, before we leave tonight. Yeah, we'll wrap around again, counselor and aging. [1:17:15] Joshua L. Nagine: the only point I'd like to make on that is that staff costs are the highest are the largest part of the budget that is always going to be the case staff costs are the largest part of the budget and so if we're talking about reducing the budget and making the budget more manageable if we do have to talk about staff costs unless we can enter into a magical land where we never give colas and people 's pay decreases over time which is just not realistic and so I just want to paint that for everybody. At the end of the day, if the cost of government is too much, yes, I want all the directors to go and look at their budgets, and I'm sure they have to figure out all the cuts they can make that don't involve staff, they to make sure that we're providing the essential services, not we're reducing the non-essential services, and we're running the budget is clean as we possibly can. But if we are ever going to start keeping our costs in check at all, we have, we do have to consider staff cuts until we increase our tax base so again I am strongly in favor of three to three and a half percent increase on the on the operating budget but I know that 's not going to pass so i'll be the voice of one councilman longchamps thank you mayor [1:18:42] Susan G. Longchamps: So our fund balance, we can't use any of it because we really don't have any. Correct, we have, what can you tell me how much we have in our fund balance? 10.1, which is what for a dollar amount? [1:19:27] Carl L. Sheline: I appreciate, as always, I appreciate counselors feedback. Thank you so much. So [1:19:40] Bryan Kaenrath: at the end of fiscal year 25, and that's what we go by, we had undesignated 18 million 716 74. So we take our revenues from our statement 4, which was 186 million 288 16, and that's how we do the percentage. So we have that at 18, 716, 75, which is 10.05, 10.1. [1:20:18] Carl L. Sheline: Yeah, I cannot recommend using fund balance. We're gonna be running out of that. [1:20:23] Susan G. Longchamps: Now, what if we sold, we can't use, like we have some properties that we know of that are currently on the market that after they're all sold is over a million dollars. We can't do anything with, so those properties, some of them are tax-acquired [1:20:46] Bryan Kaenrath: so anything up and beyond the legal fees and the employee fees goes back to the homeowner. What [1:20:58] Susan G. Longchamps: about 834 Main Street, is that city owned, is that the fire [1:21:04] Bryan Kaenrath: station? So we plan to use that to lower the cost of the LC IP for the new fire station, so that's already in that calculation, that's in your LC IP book, to lower that cost that we have to bond. Yeah. [1:21:20] Susan G. Longchamps: I'm just, you know, not really in favor of cutting positions for many reasons, but I do understand that we need to do everything we can to lower the tax, lower our taxes for our constituents. That is one of our goals, and from what I'm hearing from you guys, there's nothing else that we can do humanly possible besides cutting. Yes, so if I may, counselor. Well, no, please continue. That there just seems as though there's nothing that we can do, you know. We're really at the point, you know, as [1:22:04] Bret Martel: council and agents, that the majority of our budget is personnel, and so we're at the point where we are talking about personnel for significant further cuts. Yeah, [1:22:14] Susan G. Longchamps: and the majority here is saying, you know, that they want to cut positions, so there's really not much, not an argument that I really have to defend anything other than that. Thank you, Council Airman. I [1:22:35] Scott A. Harriman: I really don't HAVE ANYTHING FURTHER TO ADD UNTIL I LEARN WHAT IS IN AND OUT OF THE BUDGET. I CAN'T REALLY MAKE A [1:22:41] Carl L. Sheline: DECISION WITHOUT THAT INFORMATION. WHEN WE DISCUSSED ON THE PHONE, YOU INITIALLY TOLD ME YOU'RE SUPPORTIVE OF TIER THREE CUTS. IS THAT STILL ACCURATE? OR YEAH, THAT IS ACCURATE IN A OVERALL [1:22:59] Scott A. Harriman: SENSE, BUT I WOULD NEED TO KNOW WHAT THOSE, WHAT IS IN THE BUDGET AND WHAT'S NOT IN THE BUDGET BEFORE I MAKE A DECISION ON THAT. [1:23:08] Carl L. Sheline: THE MINISTER OUTLINED THE PROCESS FOR THAT. [1:23:12] Bret Martel: ARE WE TALKING ABOUT POSITIONS IN PARTICULAR? [1:23:16] Scott A. Harriman: YES. I MEAN, PEOPLE NEED, MY CONSTITUENTS HAVE CERTAIN CONCERNS AND I ALSO HAVE CERTAIN CONCERNS. AND I NEED TO KNOW, IS THIS A FIREFIGHTER? IS THIS A PUBLIC WORKS WORKER? IS IT, YOU KNOW, WHAT ARE WE PROPOSING CUTTING? I mean, if you take a look at the school budget process, like last night, this is all done in the open, and it's all done transparently, and we can make decisions based on policy areas and areas where the department, you know, needs more help. We keep more positions there, areas where it's, you know, where it's not really working, then we might cut positions there. So I need to know what it is that I'm voting on before I can make a decision. [1:24:04] Bret Martel: Yeah, I think the difference is there, those positions were built into the initial budget proposal and the employees were notified that they would be discussed. I think our issue now is I'd like to get that list, but I cannot give it to an executive session per legal counsel. And then we have to just go through the proper process of notifying employees to do that. So I think the difference with the school department is because the superintendent built that into the initial budget proposal, and at that time I think notified those employees that they could be subject to layoffs. So like I said, if there's interest in going forward with one of the options that involves layoffs, we're going to get going as soon as possible to make that list available. But we do have to go through legal and with our collective bargaining agreements and make [1:24:51] Carl L. Sheline: sure we're doing it to the letter of the law. Thank you. Anything further, Councilman Herman? [1:24:58] Michael R. Roy: no right councillor roy final thoughts from you if i was sure like we're not the city's not going to drop services with cutting staff because right now i don't know i mean i'm hearing that you know we're lean in a lot of areas and I mean I 'm just looking at you know I really don't want to cut people's jobs but I understand you know the taxpayers need a break too and I just don't want to cut services like if we if we lose positions does that mean we're losing services and right now we don't have a whole lot of services like our roads really need repairs. I mean we just, our infrastructure is not good right now. So my concern is, if we start cutting positions, then we are gonna lose services in a lot of ways. That is my concern and I don't know if we can continue doing, I don't know. That's my concern. [1:25:59] Carl L. Sheline: Councilor Noble, did you have any thoughts at this point? [1:26:03] Michael R. Roy: I guess I feel a little bit like Susan where we have to cut people's jobs then. That's what we're going to have to do. Everything that i'm hearing from my constituents is that they just want lower taxes, they don't want to lose or be displaced from their homes, so trust that you know what you're doing with that. So tier three I guess is where i'm at. [1:26:30] David B. Chittim: Counselor, yes, the fund balance is a question that I'd like to revisit. We're at ten point oh five percent right now. Last year I believe we took the council took the fund balance down to nine point three, was it nine point nine point something, if my math is correct. One percentage drop from ten to nine would give the city general fund 1.8 million dollars. [1:27:07] Bryan Kaenrath: We removed all of the capital out of the budget, so what your question is to use fund balance for operating services, which isn't a good idea. I know it's not a good idea, it's not a good [1:27:20] David B. Chittim: idea to raise tack. I'm sorry I interrupted you. No, that's fine, thank you for correcting yourself. [1:27:24] Bryan Kaenrath: counselor please continue i just want to stress that because it is everything that's left in there 's no capital items whatsoever so and there's no one time for service that we're doing so you'll be using it for operating and if you get into that we're going to be worse off next year just like when we used more of the revenue sharing but this fiscal year now we're seeing the effect of that this year when they cut it I [1:28:00] David B. Chittim: Fully appreciate the conservative approach, and you have to take that conservative approach. I'm looking at a perfect storm of unusual situations and conditions. I would never, ever advocate that we use fund balance for operating expenses, but for the unusual circumstances we're facing this year. I think one of the things that we have to do, because recognizing that the taxpayers are going to look at a 10% increase in their taxes across the board at a minimum, one of the things we have to do is say this is a very painful year. year. Here are the things that we're doing so that we don't have a 10% increase next year and the year after that. I forget what our increase was last year, but it was not a comfortable one. I know the council was not happy at all, but recognizing that there are so many things outside of our control, wages being the principal one. Nobody up here wants to cut jobs, but it's a question, as I said the other night, of the residents of Lewis and the taxpayers in particular are going to have to face some pain because of the world that we live in, because of the fact that the county jail requires a million dollars more work, because of the fact that we've got, I consider, generous COLAs and steps, which I'm told are necessary in order for us to keep pace with wages in surrounding communities. So all of these are external factors over which we have no control, but they're conspiring to give us an untenable situation in which we're going to have to make the hard decision of is the pain that's going to be inflicted on the taxpayer going to be a reduction in services, or is it going to be an increase in taxes? As I said the other night, that's the balance we have to take, And my view is that the middle ground here is take 2% of our workforce, 8 people, and say, I'm sorry, you've done great work for the city, but we simply cannot afford to do this anymore. We have to turn the thermostat down from 60 to 58 degrees because that's the world we live in. So I'm not advocating that we get rid of people, but I don't see any other solution than to pile a financial burden, and we've all said we don't want to do that on the taxpayers. So tier 3, you're [1:30:39] Carl L. Sheline: asking me to shut up and put up. Tier 3, I appreciate that. Tier 3, yeah, I think that's where we're at right this second. Okay, so I just want to confirm, I [1:30:53] Bret Martel: mean, it seems clear there's, there's a majority consensus that we're looking at least, at least tier three cuts. I just want to confirm because, as I said, once we get this process started, it's not something you can put the genie sort of back in the bottle. We're gonna be informing employees on their livelihoods, and this is, once this is underway, it's underway. So I just, obviously we're not doing a passage, final passage of this budget until May 5th, but I just want to confirm that we have a majority consensus for at least two or three cuts. Maybe there are further amendments offered down the road for additional, but just for us to prepare, we're looking at least tier three. We should prepare for that. We should begin forming employees so we can produce a document, a list, obviously, and that's where we are. I just want to, because obviously, you know, information becomes available, people change their thinking, but it's just important for us to know because again, once we start this process with informing employees, [1:31:53] Carl L. Sheline: there's no going back on that. Yes, I mean, you bring up an excellent point. We're not passing this tonight, right, and counselors are, you know, are free to change their minds and have in the past, and but yeah, I think we're gonna take questions here in a second, but yeah, I think tier three is where we're at. I know some counselors wanted more, but I don't believe that there was enough to pass that, and so I don't want, you know, there's no support for tier six, a majority support for tier six, so I don't want asked, I don't want to ask staff to prepare, you know, some kind of worst-case scenario that it's not supported by a majority of the council, and council certainly offer further amendments with further reductions or changes to the budget once we're in an agenda, once we're in a meeting with the agenda item on the floor. Yes, counselor, and aging. [1:32:50] Joshua L. Nagine: Thank you, Mr. Mayor. I just wanted to quickly point out that, one, I don't want to cut jobs. I need a sustainable budget, and that means that we either need more revenues or we need to cut costs of government. As far as who we're cutting and how we're cutting, employees have rights. You're 100% correct, and the relationships between the city administrator, who is the day-to-day operational commander of the city, and the directors, those are the decisions that the paid professionals make. And do that's not our decision. We're telling you what we can afford. You make those decisions. And so I know it's not a comfortable place to be. I'm sorry that we're here, but I just wanted to point that out. And just one quick piece, we actually contract out all of our road maintenance. There's no employees that do it except for one, and he's great, but anyway. [1:33:42] Carl L. Sheline: Administrator Kanerath, Director Roy, I think we're set. Do you have any questions for us? [1:33:51] Bret Martel: No, I think we have an understanding. We will begin work on this immediately, and we'll have another meeting on Tuesday evening. I'll keep you updated as far as how quickly we're moving through this process. We'll definitely be talking with legal early next week and making sure we're doing this process as far as handling the employees, the notifications properly, and a roadmap for where we go, and we'll provide any available information when it's available as soon as we count, of course. Yeah, and I'd like [1:34:28] Carl L. Sheline: to also remind the council I think City Hall is closed in Patriot stays on in observation of patron state yes all right well thank you both very much and yes and i wanted to acknowledge that this you know despite our differences i yes i really do believe that none of us want to cut positions up here these are hard decisions to make and yeah that's why we're elected sometimes you need to make a hard decision i get it with that everyone have a wonderful evening Thank You councillors Thank You staff, and yeah, we will see everyone very soon.